Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 07, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-39274 | |
Entity Registrant Name | GAN Limited | |
Entity Central Index Key | 0001799332 | |
Entity Incorporation, State or Country Code | D0 | |
Entity Address, Address Line One | 400 Spectrum Center Drive | |
Entity Address, Address Line Two | Suite 1900 | |
Entity Address, City or Town | Irvine | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92618 | |
City Area Code | (833) | |
Local Phone Number | 565-0550 | |
Title of 12(b) Security | Ordinary shares, par value $0.01 | |
Trading Symbol | GAN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 42,590,012 | |
Entity Information, Former Legal or Registered Name | Not applicable |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash | $ 41,788 | $ 39,477 |
Accounts receivable, net of allowance for doubtful accounts of $81 and $120 at September 30, 2022 and December 2021, respectively | 13,137 | 8,110 |
Prepaid expenses | 4,432 | 3,498 |
Other current assets | 3,503 | 3,337 |
Total current assets | 62,860 | 54,422 |
Capitalized software development costs, net | 16,089 | 14,430 |
Goodwill | 99,086 | 146,142 |
Intangible assets, net | 47,734 | 35,893 |
Other assets | 4,336 | 10,023 |
Total assets | 230,105 | 260,910 |
Current liabilities | ||
Accounts payable | 6,331 | 5,268 |
Accrued compensation and benefits | 5,927 | 10,961 |
Accrued expenses | 2,674 | 4,669 |
Liabilities to users | 8,946 | 8,984 |
Other current liabilities | 2,793 | 3,151 |
Total current liabilities | 26,671 | 33,033 |
Deferred income taxes | 2,087 | 1,791 |
Long-term debt | 27,855 | |
Content licensing liabilities | 19,612 | |
Other liabilities | 1,517 | 2,049 |
Total liabilities | 77,742 | 36,873 |
Shareholders’ equity | ||
Ordinary shares, $0.01 par value, 100,000,000 shares authorized, 42,559,977 and 42,250,743 shares issued and outstanding at September 30, 2022 and December 2021, respectively | 425 | 422 |
Additional paid-in capital | 327,327 | 319,551 |
Accumulated deficit | (127,152) | (76,360) |
Accumulated other comprehensive loss | (48,237) | (19,576) |
Total shareholders’ equity | 152,363 | 224,037 |
Total liabilities and shareholders’ equity | $ 230,105 | $ 260,910 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable allowance for credit loss, current | $ 81 | $ 120 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 42,559,977 | 42,250,743 |
Common stock, shares outstanding | 42,559,977 | 42,250,743 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Income Statement [Abstract] | |||||
Revenue | $ 32,120 | $ 32,268 | $ 104,581 | $ 93,736 | |
Operating costs and expenses | |||||
Cost of revenue | [1] | 9,435 | 10,801 | 31,598 | 29,876 |
Sales and marketing | 6,757 | 5,657 | 20,122 | 15,238 | |
Product and technology | 4,998 | 5,492 | 19,140 | 15,564 | |
General and administrative | [1] | 10,185 | 12,888 | 33,265 | 35,217 |
Impairment | 28,861 | ||||
Restructuring | 1,771 | ||||
Depreciation and amortization | 5,893 | 4,560 | 16,862 | 12,686 | |
Total operating costs and expenses | 37,268 | 39,398 | 151,619 | 108,581 | |
Operating loss | (5,148) | (7,130) | (47,038) | (14,845) | |
Interest expense, net | 1,450 | 2,521 | 1 | ||
Other income | (13) | (283) | |||
Loss before income taxes | (6,585) | (7,130) | (49,276) | (14,846) | |
Income tax expense | 356 | 1,548 | 513 | 3,201 | |
Net loss | $ (6,941) | $ (8,678) | $ (49,789) | $ (18,047) | |
Loss per share, basic and diluted | $ (0.16) | $ (0.21) | $ (1.18) | $ (0.43) | |
Weighted average ordinary shares outstanding, basic and diluted | 42,237,226 | 42,061,396 | 42,263,462 | 41,962,535 | |
[1]Excludes depreciation and amortization expense |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Net loss | $ (6,941) | $ (8,678) | $ (49,789) | $ (18,047) |
Other comprehensive loss, net of tax | ||||
Foreign currency translation adjustments | (12,201) | (4,904) | (28,661) | (11,939) |
Comprehensive loss | $ (19,142) | $ (13,582) | $ (78,450) | $ (29,986) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 365 | $ 203,842 | $ (45,766) | $ (2,877) | $ 155,564 | |
Beginning balance, shares at Dec. 31, 2020 | 36,635,362 | |||||
Net loss | (5,610) | (5,610) | ||||
Foreign currency translation adjustments | (9,478) | (9,478) | ||||
Share-based compensation | 1,632 | 1,632 | ||||
Issuance of ordinary shares upon exercise of share options | $ 1 | 314 | 315 | |||
Issuance of ordinary shares upon exercise of share options, shares | 108,222 | |||||
Issuance of ordinary shares as partial consideration in Coolbet acquisition | $ 53 | 106,630 | 106,683 | |||
Issuance of ordinary shares as partial consideration in Coolbet acquisition, shares | 5,260,516 | |||||
Fair value of replacement equity awards issued as consideration in Coolbet acquisition | 297 | 297 | ||||
Ending balance, value at Mar. 31, 2021 | $ 419 | 312,715 | (51,376) | (12,355) | 249,403 | |
Ending balance, shares at Mar. 31, 2021 | 42,004,100 | |||||
Beginning balance, value at Dec. 31, 2020 | $ 365 | 203,842 | (45,766) | (2,877) | 155,564 | |
Beginning balance, shares at Dec. 31, 2020 | 36,635,362 | |||||
Net loss | (18,047) | |||||
Foreign currency translation adjustments | (11,939) | |||||
Ending balance, value at Sep. 30, 2021 | $ 422 | 317,367 | (63,813) | (14,816) | 239,160 | |
Ending balance, shares at Sep. 30, 2021 | 42,182,774 | |||||
Beginning balance, value at Mar. 31, 2021 | $ 419 | 312,715 | (51,376) | (12,355) | 249,403 | |
Beginning balance, shares at Mar. 31, 2021 | 42,004,100 | |||||
Net loss | (3,759) | (3,759) | ||||
Foreign currency translation adjustments | 2,443 | 2,443 | ||||
Share-based compensation | 2,319 | 2,319 | ||||
Restricted share activity | $ 1 | (1) | ||||
Restricted stock activity, shares | 5,178 | |||||
Issuance of ordinary shares upon exercise of share options | 22 | 22 | ||||
Issuance of ordinary shares upon exercise of share options, shares | 6,396 | |||||
Ending balance, value at Jun. 30, 2021 | $ 420 | 315,055 | (55,135) | (9,912) | 250,428 | |
Ending balance, shares at Jun. 30, 2021 | 42,015,674 | |||||
Net loss | (8,678) | (8,678) | ||||
Foreign currency translation adjustments | (4,904) | (4,904) | ||||
Share-based compensation | 1,823 | 1,823 | ||||
Restricted share activity | ||||||
Restricted stock activity, shares | 2,590 | |||||
Issuance of ordinary shares upon exercise of share options | $ 2 | 489 | 491 | |||
Issuance of ordinary shares upon exercise of share options, shares | 164,510 | |||||
Ending balance, value at Sep. 30, 2021 | $ 422 | 317,367 | (63,813) | (14,816) | 239,160 | |
Ending balance, shares at Sep. 30, 2021 | 42,182,774 | |||||
Beginning balance, value at Dec. 31, 2021 | $ 422 | 319,551 | (76,360) | (19,576) | 224,037 | |
Beginning balance, shares at Dec. 31, 2021 | 42,250,743 | |||||
Net loss | (4,499) | (4,499) | ||||
Foreign currency translation adjustments | (4,264) | (4,264) | ||||
Share-based compensation | 1,316 | 1,316 | ||||
Accrued liability settled through issuance of shares | 444 | 444 | ||||
Restricted share activity | ||||||
Restricted stock activity, shares | 2,365 | |||||
Ending balance, value at Mar. 31, 2022 | $ 422 | 321,311 | (80,859) | (23,840) | 217,034 | |
Ending balance, shares at Mar. 31, 2022 | 42,253,108 | |||||
Beginning balance, value at Dec. 31, 2021 | $ 422 | 319,551 | (76,360) | (19,576) | 224,037 | |
Beginning balance, shares at Dec. 31, 2021 | 42,250,743 | |||||
Net loss | (49,789) | |||||
Foreign currency translation adjustments | $ (28,661) | |||||
Issuance of ordinary shares upon exercise of share options, shares | 375,416 | |||||
Ending balance, value at Sep. 30, 2022 | $ 425 | 327,327 | (127,152) | (48,237) | $ 152,363 | |
Ending balance, shares at Sep. 30, 2022 | 42,559,977 | |||||
Beginning balance, value at Mar. 31, 2022 | $ 422 | 321,311 | (80,859) | (23,840) | 217,034 | |
Beginning balance, shares at Mar. 31, 2022 | 42,253,108 | |||||
Net loss | (38,349) | (38,349) | ||||
Foreign currency translation adjustments | (12,196) | (12,196) | ||||
Share-based compensation | 2,659 | 2,659 | ||||
Accrued liability settled through issuance of shares | 469 | 469 | ||||
Repurchases of ordinary shares | (1,006) | (1,006) | ||||
Repurchases of ordinary shares, shares | (303,113) | |||||
Ordinary share retirement | $ (3) | 1,006 | (1,003) | |||
Issuance of ordinary shares upon exercise of share options | $ 1 | 394 | 395 | |||
Issuance of ordinary shares upon exercise of share options, shares | 125,416 | |||||
Ending balance, value at Jun. 30, 2022 | $ 420 | 324,833 | (120,211) | (36,036) | 169,006 | |
Ending balance, shares at Jun. 30, 2022 | 42,075,411 | |||||
Net loss | (6,941) | (6,941) | ||||
Foreign currency translation adjustments | (12,201) | (12,201) | ||||
Share-based compensation | 2,140 | 2,140 | ||||
Restricted share activity | $ 2 | (137) | (135) | |||
Restricted stock activity, shares | 159,859 | |||||
Issuance of ordinary shares upon exercise of share options | $ 2 | 323 | 325 | |||
Issuance of ordinary shares upon exercise of share options, shares | 250,000 | |||||
Issuance of ordinary shares upon ESPP purchases | $ 1 | 168 | 169 | |||
Issuance of ordinary shares upon ESPP purchases, shares | 74,707 | |||||
Ending balance, value at Sep. 30, 2022 | $ 425 | $ 327,327 | $ (127,152) | $ (48,237) | $ 152,363 | |
Ending balance, shares at Sep. 30, 2022 | 42,559,977 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash Flows From Operating Activities | ||
Net loss | $ (49,789) | $ (18,047) |
Adjustments to reconcile net loss to net cash (used in) from operating activities: | ||
Amortization of software and intangible assets | 15,837 | 11,888 |
Depreciation on property and equipment and finance lease right-of-use assets | 1,025 | 798 |
Amortization of debt discount and debt issuance costs | 280 | |
Share-based compensation expense | 5,671 | 5,774 |
Impairment of goodwill | 28,861 | |
Deferred income tax | 541 | |
Other | (22) | 432 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | (5,189) | (483) |
Prepaid expenses | (1,226) | 272 |
Other current assets | (265) | 226 |
Other assets | 2,552 | (9,123) |
Accounts payable | 1,730 | (1,255) |
Accrued compensation and benefits | (4,174) | 3,370 |
Accrued expenses | (1,689) | 3,906 |
Liabilities to users | 1,296 | 2,847 |
Other current liabilities | (387) | (460) |
Other liabilities | 1,389 | 1,205 |
Net cash (used in) provided by operating activities | (3,559) | 1,350 |
Cash Flows From Investing Activities | ||
Cash paid for acquisition, net of cash acquired | (92,454) | |
Expenditures for capitalized software development costs | (9,242) | (8,483) |
Payments for content licensing arrangements | (5,500) | |
Purchases of gaming licenses | (1,115) | (215) |
Purchases of property and equipment | (1,657) | (1,478) |
Net cash used in investing activities | (17,514) | (102,630) |
Cash Flows From Financing Activities | ||
Proceeds from issuance of long-term debt | 30,000 | |
Payments of offering costs | (604) | |
Proceeds from exercise of share options | 720 | 828 |
Proceeds from issuance of ordinary shares upon ESPP purchase | 169 | |
Principal payments on finance leases | (83) | |
Repurchases of ordinary shares | (1,006) | |
Payment of debt issuance costs | (2,425) | |
Net cash provided by financing activities | 27,458 | 141 |
Effect of foreign exchange rates on cash | (4,074) | (1,210) |
Net increase (decrease) in cash | 2,311 | (102,349) |
Cash and cash equivalents, beginning of period | 39,477 | 152,654 |
Cash and cash equivalents, end of period | 41,788 | 50,305 |
Supplemental Disclosure of Noncash Investing and Financing Activities: | ||
Intangible assets acquired in business acquisition included in current and long-term liabilities | 26,244 | |
Ordinary shares issued as partial consideration to acquire all the outstanding shares of Coolbet | 106,683 | |
Issuance of unvested share options in exchange for unvested share options of Coolbet | $ 297 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | NOTE 1 — NATURE OF OPERATIONS GAN Limited (the “Parent,” and with its subsidiaries, collectively the “Company”) is an exempted company limited by shares, incorporated and registered in Bermuda. GAN plc, the previous parent, began its operations in the United Kingdom (“U.K.”) in 2002 and listed its ordinary shares on the AIM, the London Stock Exchange’s market for smaller companies, in 2013. On January 1, 2021, the Company acquired all of the outstanding shares of Vincent Group p.l.c. (“Vincent Group”), a Malta public limited company doing business as “Coolbet”. Coolbet is a developer and operator of an online sports betting and casino platform that is accessible through its website in markets across Northern Europe, Latin America and Canada. The Company is a business-to-business (“B2B”) supplier of a proprietary gaming system, GameSTACK™ (“GameSTACK”), which is used predominately in the U.S. land-based casino industry. For its B2B customers, GameSTACK is a turnkey technology solution for regulated real money internet gambling (“real money iGaming” or “RMiG”), online sports gaming, and virtual simulated gaming (“SIM”). The Company is also a business-to-consumer (“B2C”) developer and operator of an online sports betting and casino platform, providing international users with access through www.coolbet.com to its sportsbook, casino games and poker products. The Company operates in two |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | NOTE 2 — BASIS OF PRESENTATION Basis of Presentation The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, in the opinion of management, of a normal recurring nature that are necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. The financial data and other financial information disclosed in these notes to the condensed consolidated financial statements related to these periods are also unaudited. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ended December 31, 2022 or for any future annual or interim period. The condensed consolidated balance sheet as of December 31, 2021 included herein was derived from the audited consolidated financial statements as of that date. The accompanying unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company’s significant accounting policies are included in “Note 3 – Summary of Significant Accounting Policies” of its 2021 Form 10-K. In addition to repeating some of these significant accounting policies, the Company has added certain new significant accounting policies during the nine months ended September 30, 2022, as described below. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Due to the inherent uncertainties involved in making estimates, actual results could differ from the original estimates, and may require significant adjustments to these reported balances in future periods. Principles of Consolidation The condensed consolidated financial statements include the results of the Parent and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Foreign Currency Translation and Transactions The Company’s reporting currency is the U.S. Dollar while the Company’s foreign subsidiaries use their local currencies as their functional currencies. The assets and liabilities of foreign subsidiaries are translated to U.S. Dollars based on the current exchange rate prevailing at each reporting period. Revenue and expenses are translated into U.S. Dollars using the average exchange rates prevailing for each period presented. Translation adjustments that arise from translating a foreign subsidiary’s financial statements from their functional currency to U.S. Dollars are reported as a separate component of accumulated other comprehensive loss in shareholders’ equity. Gains and losses arising from transactions denominated in a currency other than the functional currency are included in general and administrative expense in the condensed consolidated statements of operations as incurred. Foreign currency transaction and remeasurement gains and losses were a net gain (loss) of $ 684 (589) (494) (761) Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of its cash and trade receivables. At September 30, 2022, the Company held cash deposits in foreign countries, primarily in Northern Europe and Latin America, of approximately $ 33.0 Risks and Uncertainties Macroeconomic conditions can materially adversely affect the Company’s business, results of operations and financial condition. Recent adverse macroeconomic conditions, including inflation, higher interest rates, slower growth or recession, the strengthening of the U.S. dollar, and corresponding currency fluctuations can have an adverse material impact on the Company’s future results of operations, cash flows, and financial condition, particularly with respect to foreign currency adjustments relating to our international operations. Such conditions may also affect consumers’ willingness to make discretionary purchases, and therefore the Company, along with its casino operator customers, may experience a decline in wagering. A downturn in the economic environment can also lead to increased credit and collectibility risk on the Company’s trade receivables, limitations on the Company’s ability to issue new debt, and reduced liquidity. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Revenue Recognition Revenue from B2B Operations The Company’s revenue from its B2B operations are primarily from its internet gaming Software-as-a-Service platform, GameSTACK, that its customers use to provide real money internet gambling (“RMiG”), online sports gaming and simulated internet gaming (“SIM”) to its end users. The Company enters into contracts with its customers that generally range from three to five years and include renewal provisions. These contracts generally include provision of the internet gaming platform, content consisting of proprietary and third-party games, development services and support and marketing services. In certain cases, the contract may include computer hardware to be procured on behalf of the customer. The customers cannot take possession of the hosted GameSTACK software and the Company does not sell or license the GameSTACK software. The Company charges fees as consideration for use of its internet gaming system, game content, support and marketing services based on a fixed percentage of the casino operator’s net gaming revenue or net sportsbook win, at the time of settlement of an event for RMiG contracts, considered usage-based fees, or at the time of purchase for in-game virtual credit for SIM contracts. The determination of the fee charged to its customers is negotiated and varies significantly. Certain of these RMiG contracts provide the Company with a minimum monthly revenue guarantee in relation to the Company’s share of the casino operator’s net gaming revenue or net sportsbook win. At September 30, 2022 the remaining unsatisfied performance obligations related to fixed minimum guaranteed revenue totaled $ 0.5 The Company’s promise to provide the RMiG SaaS platform and content licensing services on the hosted software is a single performance obligation. This performance obligation is recognized over time, as the Company provides services to its customers in its delivery of services to the player end user. The Company’s customers simultaneously receive and consume the benefits provided by the Company as it delivers services to its customers. Usage based fees are considered variable consideration as the service is to provide unlimited continuous access to its hosted application and usage of the hosted system is primarily controlled by the player end user. The transaction price includes fixed and variable consideration and is billed monthly with the amount due generally thirty days from the date of the invoice. Variable consideration is allocated entirely to the period in which consideration is earned as the variable amounts relate specifically to the customer’s usage of the platform that day and allocating the usage-based fees to each day is consistent with the allocation objective, primarily that the change in amounts reflect the changing value to the customer. The Company’s internet gaming system, game content, support and marketing services are provided equally throughout the term of the contract. These services are made up of a daily requirement to provide access and use of the internet gaming system and support services to the customer over a period of time, as well as to provide marketing services, and not a specified amount of services. The series of distinct services represents a single performance obligation that is satisfied over time. Purchases of virtual credits within a transaction period on the SIM platform, generally a monthly convention, are earned over time, and are typically billed monthly upon the close of the respective period as the credit has no monetary value, cannot be redeemed, exchanged, transferred or withdrawn, represents solely a device for tracking game play during the month, does not obligate the Company to provide future services and the arrangements with the customer and player end user have no substantive termination penalty. In certain service agreements with its SIM customers, the Company receives fees for the purchases of in-game virtual credit made by end-users and remits payment to the SIM customer for their share of the SIM revenues. At September 30, 2022 and December 31, 2021, the Company has recorded a liability due to its customers for their share of the fees of $ 1,362 2,171 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) The Company uses third-party content providers in supplying game content in its performance of providing game content on its platform to its customers. A customer has access to the Company’s propriety and licensed game content and additionally, the customer can direct the Company to procure third-party game content on its behalf. The Company has determined it acts as the principal for providing the game content when the Company controls the game content, and therefore presents the revenue on a gross basis in the condensed consolidated statements of operations. When the customer directs the Company to procure third-party game content, the Company determined it is deemed an agent for providing such game content, and therefore, records the revenue, net of the costs of content license fees, in the condensed consolidated statements of operations. The Company also provides ongoing development services involving updates to the RMiG platforms for enhanced functionality or customization. Ongoing development services are typically billed monthly, at a daily rate, for services performed. Revenue from RMiG platform development services that are identified as distinct performance obligations and relate either to an asset the customer controls or from which the customer receives value are recognized over the period the services are performed. This revenue is measured using an input method based on effort expended, which uses direct labor hours incurred. As the performance obligation relates to the provision of development services over time, this method reflects the transfer of control as the Company performs the services. Separately, revenue generated from customers for development services that are not identified as distinct performance obligations are deferred over the license service term. In customer contracts that require a portion of the consideration to be received in advance or at the commencement of the contract, such amounts are recorded as a contract liability. Other services include the resale of a third-party computer hardware, such as servers and other related hardware devices, upon which the GameSTACK software is installed for its customers. These products are not required to be purchased in order to access the GameSTACK platform but are sold as a convenience to the customer. The Company procures the computer hardware on the customer’s behalf for a fee determined based on cost of the computer hardware plus a markup. The Company charges a hardware deployment fee which is a one-time fee for installation, testing and certification of the computer hardware at the gaming hosting facility. Revenue is recognized at the point in time when control of the hardware transfers to the customer. Control is transferred after the hardware has been procured, delivered, installed at the customer’s premises and configured to allow for remote access. The Company has determined that it is acting as the principal in providing computer hardware and related services as it assumes responsibility for procuring, delivering, installing and configuring the hardware at the customer’s location and takes control of the hardware, prior to transfer. Revenue is presented at the gross amount of consideration to which it is entitled from the customer in exchange for the computer hardware and related services. The Company generates revenue from time to time from the licensing of its U.S. patent, which governs the linkage of on-property reward cards to their counterpart internet gaming accounts together with bilateral transmission of reward points between the internet gaming technology system and the land-based casino management system present in all U.S. casino properties. The nature of the promise in transferring the license is to provide a right to use the patent as it exists. The Company does not have to undertake activities to change the functionality of the patent during the license period and the license has significant stand-alone functionality. Therefore, the Company recognizes the revenue from the license of the patent at the point in time when control of the license is transferred to the customer. Control is determined to transfer at the point in time the customer is able to use and benefit from the license. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Contracts with Multiple Performance Obligations For customer contracts that have more than one performance obligation, the transaction price is allocated to the performance obligations in an amount that depicts the relative stand-alone selling prices of each performance obligation. Judgment is required in determining the stand-alone selling price for each performance obligation. In determining the allocation of the transaction price, an entity is required to maximize the use of observable inputs. When the stand-alone selling price of a good or service is not directly observable, an entity is required to estimate the stand-alone selling price. Contracts with its customers may include platform and licensing of game content services, as well as development services and computer hardware services. The variable consideration generated from the platform and the licensing of game content is allocated entirely to the performance obligation for platform and licensing of game content services and the remaining fixed fees for development services and computer hardware would be allocated to each of the remaining performance obligation based on their relative stand-alone selling prices. The variable consideration relates entirely to the effort to satisfy the platform and licensing game content services and the fixed consideration relates to the remaining performance obligations which is consistent with the allocation objective. Revenue from Gaming Operations The Company operates the B2C gaming site www.coolbet.com outside of the U.S., which contains proprietary software and includes the following product offerings: sportsbook, poker, casino, live casino and virtual sports. The Company manages an online sportsbook allowing users to place various types of wagers on the outcome of sporting events conducted around the world. The Company operates as the bookmaker and offers fixed odds wagering on such events. When a user’s wager wins, the Company pays the user a pre-determined amount known as fixed odds. Revenue from online sportsbook is reported net after deduction of player winnings and bonuses. Revenue from wagers is recognized when the outcome of the event is known. The Company offers live casino through its digital online casino offering in select markets, allowing users to place a wager and play games virtually at retail casinos. The Company offers users a catalog of over 3,200 Peer-to-peer poker offerings allow users to play poker against one another on the Company’s online poker platform for prize money. Revenue is recognized as a percentage of the reported rake. Additionally, the Company offers tournament poker which allows users to buy-in for a fixed price for prize money. For tournament play, revenue is recognized for the difference between the entry fees collected and the amounts paid out to users as prizes and winnings. In each of the online gaming products, a single performance obligation exists at the time a wager is made to operate the games and award prizes or payouts to users based on a particular outcome. Revenue is recognized at the conclusion of each contest, wager, or wagering game hand. Additionally, certain incentives given to users, for example, that allow the user to make an additional wager at a reduced price, may provide the user with a material right which gives rise to a separate performance obligation. The Company allocates a portion of the user’s wager to incentives that create material rights that are redeemed or expired in the future. The allocated revenue for gaming wagers is primarily recognized when the wagers occur because all such wagers settle immediately. The Company applies a practical expedient by accounting for revenue from gaming on a portfolio basis because such wagers have similar characteristics, and the Company reasonably expects the effects on the financial statements of applying the revenue recognition guidance to the portfolio to not differ materially from that which would result if applying the guidance to an individual wagering contract. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Sales and Marketing Sales and marketing expense primarily consists of general marketing and advertising costs, B2C user acquisition expenses and personnel costs within our sales and marketing functions. Sales and marketing costs are expensed as incurred. Content Licensing Fees Content licensing fees are paid to third parties for gaming content which are expensed as incurred. Content licensing fees are calculated as a percentage of net gaming revenues in respect of the third-party games, as stipulated in the third-party agreements. Share-based Compensation Share-based compensation expense is recognized for share options and restricted shares issued to employees and non-employee members of the Company’s Board of Directors. The Company’s issued share options and restricted shares, which are primarily considered equity awards and include only service conditions, are valued based on the fair value of these awards on the date of grant. The fair value of the share options is estimated using a Black-Scholes option pricing model and the fair value of the restricted shares (restricted share awards and restricted share units) is based on the market price of the Company’s shares on the date of grant. Certain restricted share units awards issued to non-employee members of the Company’s Board of Directors permit shares upon vesting to be withheld, as a means of meeting the non-employee director’s tax withholding requirements, and paid in cash to the non-employee director. The Company additionally incurs share-based compensation expense under compensation arrangements with certain of its employees under which the Company will settle bonuses for a fixed dollar amount by issuing a variable number of shares based on the Company’s share price on the settlement date. These awards are classified as liability-based awards which are measured based on the fair value of the award at the end of each reporting period until settled. Related compensation expense is recognized based on changes to the fair value over the applicable service period Share-based compensation is recorded over the requisite service period, generally defined as the vesting period. For awards with graded vesting and only service conditions, compensation cost is recorded on a straight-line basis over the requisite service period of the entire award. Forfeitures are recorded in the period in which they occur. Loss Per Share, Basic and Diluted Basic loss per share is calculated by dividing the net loss by the weighted average number of ordinary shares outstanding during the year. In periods of loss, basic and diluted per share information are the same. Cash Cash is comprised of cash held at the bank and third-party service providers. The Company is required to maintain compensating cash balances to satisfy its liabilities to users. Such balances are included within cash in the condensed consolidated balance sheets and are not subject to creditor claims. At September 30, 2022 and December 31, 2021, the related liabilities to users was $ 8,946 8,984 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation. Depreciation is generally computed on a straight-line basis over the estimated useful lives of the assets. Maintenance and repairs are charged to expense in the period they are incurred. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts, and any gain or loss is included in the statement of operations. Capitalized Software Development Costs, net The Company capitalizes certain development costs related to its internet gaming platforms during the application development stage. Costs associated with preliminary project activities, training, maintenance and all other post implementation stage activities are expensed as incurred. Software development costs are capitalized when application development begins, it is probable that the project will be completed, and the software will be used as intended. The Company capitalizes certain costs related to specific upgrades and enhancements when it is probable that expenditures will result in additional functionality of the platform to its customers. The capitalization policy provides for the capitalization of certain payroll and payroll related costs for employees who spent time directly associated with development and enhancements of the platform. Capitalized software development costs are amortized on a straight-line basis over their estimated useful lives, which generally ranges from three five years Goodwill Goodwill represents the excess of the fair value of the consideration transferred over the estimated fair values of the identifiable assets acquired and liabilities assumed on the acquisition date. The Company has recorded goodwill primarily from its acquisition of Coolbet in January 2021. Goodwill is not amortized, but rather is reviewed for impairment annually (as of October 1st) or more frequently if facts or circumstances indicate that it is more-likely-than-not the fair value of a reporting unit may be below its carrying amount. The Company has determined that it has two reporting units: B2C and B2B. In its goodwill impairment testing, the Company has the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of the reporting unit, including goodwill, is less than its carrying amount prior to performing the quantitative impairment test. The qualitative assessment evaluates various events and circumstances, such as macro-economic conditions, industry and market conditions, cost factors, relevant events and financial trends that may impact a reporting unit’s fair value. If it is determined that the estimated fair value of the reporting unit is more-likely-than not less than its carrying amount, including goodwill, the quantitative goodwill impairment test is required. Otherwise, no further analysis would be required. If the quantitative impairment test for goodwill is deemed necessary, this quantitative impairment analysis compares the fair value of the Company’s reporting unit to its related carrying value. If the fair value of the reporting unit is less than its carrying amount, goodwill is written down to the fair value and an impairment loss is recognized. If the fair value of the reporting unit exceeds its carrying amount, no further analysis is required. Fair value of the reporting unit is determined using valuation techniques, primarily discounted cash flow analysis. ASC Topic 350 requires that goodwill be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company performed a qualitative and quantitative impairment test as of June 30, 2022 which resulted in an impairment to goodwill of $ 28.9 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Long-lived Assets Long-lived assets, except goodwill, consist of property and equipment, and finite lived acquired intangible assets, such as developed software, gaming licenses, trademarks, trade names and customer relationships. Intangible assets are amortized on a straight-line basis over their estimated useful lives. The Company considers the period of expected cash flows and underlying data used to measure the fair value of the intangible assets when selecting the estimated useful lives. Gaming licenses include license applications fees and market access payments in connection with agreements that the Company enters into with strategic partners. The market access arrangements authorize the Company to offer online gaming and online sports betting in certain regulated markets. These costs are capitalized and amortized on a straight-line basis over their estimated useful lives, beginning with the commencement of operations. The fair value of the acquired intangible assets is primarily determined using the income approach. In performing these valuations, the Company’s key underlying assumptions used in the discounted cash flows were projected revenue, gross margin expectations and operating cost estimates. There are inherent uncertainties and management judgment is required in these valuations. Long-lived assets, except goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company compares the undiscounted cash flows expected to be generated by that asset or asset group to their carrying amount. If the carrying amount of the long-lived asset or asset group are not recoverable on an undiscounted cash flow basis, an impairment charge is recognized to the extent that the carrying amount exceeds fair value. Fair value is determined through various techniques, such as discounted cash flow models using probability weighted estimated future cash flows and the use of valuation specialists. During the three and nine months ended September 30, 2022, there was no triggering event that would cause the Company to believe the value of its long-lived assets should be impaired. Liabilities to Users The Company records liabilities for user account balances. User account balances consist of user deposits, promotional awards and user winnings less user withdrawals and user losses. Legal Contingencies and Litigation Accruals On a quarterly basis, the Company assesses potential losses in relation to pending or threatened legal matters. If a loss is considered probable and the amount can be reasonably estimated, the Company recognizes an expense for the estimated loss. Estimates of any such loss are subjective in nature and require the evaluation of numerous facts and assumptions as to future events, including the application of legal precedent which may be conflicting. To the extent these estimates are more or less than the actual liability resulting from the resolution of these matters, the Company’s financial results will increase or decrease accordingly. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Debt Debt issuance costs incurred in connection with the issuance of new debt are recorded as a reduction to the long-term debt balance on the condensed consolidated balance sheets, and amortized over the term of the loan commitment as interest expense on the condensed consolidated statements of operations. The Company calculates amortization expense on capitalized debt issuance costs using the effective interest method in accordance with Accounting Standards Codification (“ASC”) 470, Debt. Fair Value of Financial Instruments The Company applies the provisions of ASC 820, Fair Value Measurements and Disclosures, which provides a single authoritative definition of fair value, sets out a framework for measuring fair value and expands on required disclosures about fair value measurement. Fair value represents the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company uses the following hierarchy in measuring the fair value of the Company’s assets and liabilities, focusing on the most observable inputs when available: ● Level 1 Quoted prices in active markets for identical assets or liabilities. ● Level 2 Observable inputs other than Level 1 quoted prices, such as quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active for identical or similar assets and liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 Valuations are based on the inputs that are unobservable and significant to the overall fair value measurement of the assets or liabilities. Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Valuation techniques used to measure the fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis as required by ASC 820, by level, within the fair value hierarchy as of September 30, 2022: SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES ON RECURRING BASIS Fair Value Level 1 Level 2 Level 3 September 30, 2022 Fair Value Level 1 Level 2 Level 3 Liability Contingent content liability $ 4,369 $ — $ — $ 4,369 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) The contingent content liability represents additional amounts which the Company expects to pay to Ainsworth Game Technology, a third-party gaming content provider (“the Content Provider”) if the Company’s total revenue generated from its content licensing arrangement with the Content Provider exceeds certain stipulated annual and cumulative thresholds during the contract term. The fair value of the contingent content liability is determined using Level 3 inputs, since estimating the fair value of this contingent content liability requires the use of significant and subjective inputs that may and are likely to change over the duration of the liability with related changes in internally generated anticipated games revenue as well as external market factors. The contingent content liability was valued using a Monte Carlo simulation based on management’s anticipated annual games revenue forecasts. The fair value of the contingent content liability was initially recognized in April 2022 in connection with its modified arrangement with the Content Provider on April 5, 2022 and is recorded within Content licensing liabilities within the condensed consolidated balance sheets. Contingent consideration is revalued at each reporting period. There were no significant changes to the value through September 30, 2022. Refer to Note 4 – Acquisition for further detail. Income Taxes The Company is subject to income taxes in the United States, U.K., Bulgaria, Israel, Canada, and Malta. The Company records an income tax expense for the anticipated tax consequences of the reported results of operations using the asset and liability method. Under this method, deferred income tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as for loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. The effect on deferred income tax of a change in tax rates are recorded in the period of the enactment. Deferred tax assets are reduced, through a valuation allowance, if necessary, by the amount of such benefits that are not expected to be realized based on current available evidence. In evaluating the Company’s ability to recover deferred tax assets in the jurisdiction from which they arise, all available positive and negative evidence is considered, including results of recent operations, scheduled reversals of deferred tax liabilities, |
ACQUISITION
ACQUISITION | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITION | NOTE 4 — ACQUISITION Content licensing agreement with Ainsworth Game Technology In the second quarter of 2021, the Company entered into a Content Licensing Agreement (the “Agreement”) with Ainsworth Game Technology, a third-party gaming content provider (the “Content Provider”) specializing in developing and licensing interactive games. The Agreement grants the Company exclusive rights to use and distribute the online gaming content in North America, and the Content Provider is committed to developing a minimum number of games for the Company’s exclusive use over a five-year term, subject to extensions. On April 5, 2022, the Company amended and restated the Agreement. In accordance with the restated arrangement, the Company amended certain commercial terms, which included obtaining the contractual right to lease the remote gaming servers, taking possession of the related software, and obtaining a service contract from the Content Provider for the duration of the arrangement. The total fixed fees remaining under the amended arrangement totaled $ 25.0 5.5 4.5 5.0 The amended and restated Agreement is accounted for as a business combination as the assets acquired and the liabilities assumed under the arrangement constitute a business in accordance with ASC 805, Business Combinations. Consideration transferred is comprised of the present value of the Company’s total expected fixed payments under the Agreement, the net assets recognized under the original agreement, as well as a contingent consideration. The following table summarizes the fair value of the consideration transferred: SUMMARY OF CONSIDERATION TRANSFERRED Present value of future fixed fee payments $ 18,808 Net assets recognized under original agreement 3,067 Contingent consideration 4,369 Total $ 26,244 The contingent consideration represents additional amounts which the Company expects to pay to the Content Provider if the Company’s total revenue generated from the arrangement exceed certain stipulated annual and cumulative thresholds during the contract term. The maximum amount of the payment is unlimited as it is determined based on the Company’s performance over the related games revenue over the arrangement term. The fair value of the contingent consideration is determined using Level 3 inputs, since estimating the fair value of this contingent consideration requires the use of significant and subjective inputs that may and are likely to change over the duration of the liability with related changes in internally generated anticipated games revenue as well as external market factors. The contingent consideration was valued using a Monte Carlo simulation based on management’s anticipated annual games revenue forecasts. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Identifiable assets and liabilities assumed at fair value were entirely comprised of intangible assets acquired as part of the content licensing arrangement. The fair values of intangible assets were estimated using inputs classified as Level 3 under the income approach using either the royalty income method (content licenses) or the multi-period excess earnings method (customer relationships). The Company has not yet finalized the purchase price allocation, which is pending further analysis of the net assets acquired, weighted average cost of capital assumptions, and certain Level 3 inputs used in the Monte Carlo simulation used to value the contingent consideration. Identifiable intangible assets, including their respective expected useful lives, and liabilities assumed were as follows: SUMMARY OF INTANGIBLE ASSETS ACQUIRED Estimated useful life (in years) Fair Value Content licenses intangible asset 4.6 $ 22,938 Customer relationships intangible asset 4.0 3,306 Acquired right of use lease asset 4.6 116 Acquired right of use lease liability 4.6 (116 ) Total identifiable net assets $ 26,244 In addition to these assets acquired, a service contract was entered into with the Content Provider valued at approximately $ 1.4 five years |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 5 — PROPERTY AND EQUIPMENT, NET Property and equipment, net is recorded in other assets in the condensed consolidated balance sheets at September 30, 2022 and December 31, 2021 and consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT Estimated Useful Life September 30, 2022 December 31, 2021 Fixtures, fittings and equipment 3 5 $ 3,791 $ 2,935 Platform hardware 5 1,651 2,054 Total property and equipment, cost 5,442 4,989 Less: accumulated depreciation (2,894 ) (2,444 ) Total $ 2,548 $ 2,545 Depreciation expense related to property and equipment was $ 312 260 926 717 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
CAPITALIZED SOFTWARE DEVELOPMEN
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET | 9 Months Ended |
Sep. 30, 2022 | |
Research and Development [Abstract] | |
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET | NOTE 6 — CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET Capitalized software development costs, net at September 30, 2022 and December 31, 2021 consisted of the following: SCHEDULE OF CAPITALIZED COMPUTER SOFTWARE COSTS, NET September 30, 2022 December 31, 2021 Capitalized software development costs $ 32,059 $ 26,127 Development in progress 2,528 5,910 Total capitalized software development, cost 34,587 32,037 Less: accumulated amortization (18,498 ) (17,607 ) Total $ 16,089 $ 14,430 At September 30, 2022, development in progress primarily represents costs associated with new proprietary content and enhancements to the B2B software platform. Amortization expense related to capitalized software development costs was $ 1,438 908 4,552 2,569 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 7 — GOODWILL AND INTANGIBLE ASSETS Goodwill The changes in the carrying amount of goodwill, by segment, for the nine months ended September 30, 2022 were as follows: SCHEDULE OF GOODWILL B2B B2C Total Balance at January 1, 2022 $ 72,230 $ 73,912 $ 146,142 Impairment (28,861 ) — (28,861 ) Effect of foreign currency translation (8,082 ) (10,113 ) (18,195 ) Balance at September 30, 2022 $ 35,287 $ 63,799 $ 99,086 The Company performs its annual goodwill impairment test as of October 1 and monitors for interim triggering events on an ongoing basis as events occur or circumstances change that would more likely than not reduce the fair value below its carrying amount. Goodwill is reviewed for impairment utilizing either a qualitative assessment or a quantitative goodwill impairment test. Due to the significant and sustained decline in share price and market capitalization of the Company since the Coolbet acquisition, interim quantitative goodwill impairment assessments were performed as of June 30, 2022 and September 30, 2022. The Company estimated the fair value of all reporting units utilizing both a market approach and an income approach (discounted cash flow) and the significant assumptions used to measure fair value include discount rate, terminal value factors, revenue and EBITDA multiples, and control premiums. The Company confirmed the reasonableness of the estimated reporting unit fair values by reconciling those fair values to its enterprise value and market capitalization. As a result of its interim impairment test performed as of June 30, 2022, the Company recognized an impairment to goodwill of $ 28.9 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Intangible Assets Definite-lived intangible assets, net consisted of the following: SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted September 30, 2022 Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology 3.8 $ 30,671 $ (13,792 ) $ 16,879 Third-party content licenses 4.6 22,938 (2,502 ) 20,436 Customer relationships 3.6 8,019 (3,162 ) 4,857 Trade names and trademarks 10.0 4,887 (1,089 ) 3,798 Gaming licenses 7.3 3,008 (1,244 ) 1,764 $ 69,523 $ (21,789 ) $ 47,734 Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average December 31, 2021 Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology 3.0 $ 27,390 $ (9,130 ) $ 18,260 In-process technology — 8,142 — 8,142 Customer relationships 3.0 5,460 (1,820 ) 3,640 Trade names and trademarks 10.0 5,699 (882 ) 4,817 Gaming licenses 6.4 2,219 (1,185 ) 1,034 $ 48,910 $ (13,017 ) $ 35,893 Acquired in-process technology consisted of a proprietary technical platform which was under development at the time of acquisition up until its completion in September 2022. Following its completion and the launch of GAN Sports, the developed technology was placed in service and is currently being amortized over an estimated useful life of 5 Amortization expense related to intangible assets was $ 4,135 3,356 11,285 9,319 Estimated amortization expense for the next five years is as follows: SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE Amount Remainder of 2022 $ 4,369 2023 17,611 2024 8,005 2025 7,996 2026 2,330 Thereafter 7,423 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | NOTE 8 — ACCRUED EXPENSES Accrued expenses consisted of the following: SCHEDULE OF ACCRUED EXPENSES September 30, 2022 December 31, 2021 Content license fees $ 1,480 $ 2,402 Other 1,194 2,267 Total $ 2,674 $ 4,669 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 9 — DEBT On April 26, 2022, a subsidiary of the Company entered into a fixed term credit facility (the “Credit Facility”) which provides for $ 30.0 1 9.5 October 26, 2026 The Company incurred $ 2.4 27.6 Debt Covenants The Credit Facility contains affirmative and negative covenants, including certain financial covenants associated with the Company’s financial results. The negative covenants include restrictions regarding the incurrence of liens and indebtedness, certain merger and acquisition transactions, asset sales and other dispositions, other investments, dividends, share purchases and payments affecting subsidiaries, changes in nature of business, fiscal year or organizational documents, transactions with affiliates, and other matters. The Company was in compliance with all financial covenants as of September 30, 2022. The Credit Facility contains customary events of default, including, among others: non-payments of principal and interest; breach of representations and warranties; covenant defaults; the existence of bankruptcy or insolvency proceedings; certain events under ERISA; gaming license revocations in material jurisdictions; material judgments; and a change of control. If an event of default occurs and is not cured within any applicable grace period or is not waived, the administrative agent and the lender are entitled to take various actions, including, without limitation, the acceleration of all amounts due and the termination of commitments under the Credit Facility. The carrying values of the Company’s long-term debt consist of the following: SCHEDULE OF LONG TERM DEBT Effective Interest Rate As of September 30, 2022 Credit Facility: Principal 13.28 % $ 30,000 Less unamortized debt issuance costs (2,145 ) Long-term debt, net $ 27,855 During the three and nine months ended September 30, 2022 the Company incurred $ 1,071 1,735 185 280 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 10 — SHARE-BASED COMPENSATION In April 2020, the Board of Directors established the GAN Limited 2020 Equity Incentive Plan (“2020 Plan”) which has been approved by the Company’s shareholders. The 2020 Plan initially provides for grants of up to 4,400,000 4 st 7,559,574 508,173 Share Options A summary of the share option activity as of and for the nine months ended September 30, 2022 is as follows: SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTION ACTIVITY Number of Shares Weighted Average Exercise Price Weighted Average Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2021 4,138,215 $ 13.05 8.05 $ 11,229 Granted 947,002 0.03 Exercised (375,416 ) 1.93 Forfeited/expired or cancelled (998,942 ) 15.29 Outstanding at September 30, 2022 3,710,859 $ 10.25 7.6 $ 1,756 Options exercisable at September 30, 2022 2,271,058 $ 8.44 6.97 $ 672 The Company recorded share-based compensation expense related to share options of $ 948 1,693 2,596 4,639 87 65 226 170 11,401 2.7 Share option awards generally vest 25 after one year and then monthly over the next 36 months thereafter and have a maximum term of ten years 947,002 944,002 0.01 0.13 8.00 4.13 11.49 Restricted Share Units Restricted share units are issued to non-employee directors and employees. For equity-classified restricted share units, the fair value of restricted share units is based on fair market value of the Company’s ordinary shares on the date of grant and is amortized on a straight-line basis over the vesting period. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) In January 2022, the Board of Directors approved the issuance of 108,720 four years 25 In March 2022, the Board of Directors approved the issuance of 1,117,437 four years 25 73,446 In June 2022, the Board of Directors approved the issuance of 28,754 four years 25 In August 2022, the Board of Directors approved the issuance of 34,659 four years 25 In September 2022, the Board of Directors approved the issuance of 50,317 four years 25 The Company withholds a portion of the restricted share units granted to its non-employee directors upon vesting in order to remit a cash payment to the directors equal to their tax expense. At September 30, 2022, the Company recognized a liability for outstanding and nonvested restricted share units held by non-employee directors of $ 148 The Company recorded share-based compensation expense related to restricted share units of $ 958 65 3,151 195 67 6,785 3.2 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) A summary of the restricted share unit activity as of and for the nine months ended September 30, 2022 is as follows: SCHEDULE OF SHARE BASED COMPENSATION, RESTRICTED STOCK UNIT ACTIVITY Number of Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2021 369,140 $ 10.78 Granted 1,413,333 5.23 Vested (213,245 ) 9.53 Forfeited or cancelled (73,622 ) 7.84 Outstanding at September 30, 2022 1,495,606 $ 5.86 Restricted Share Awards Restricted share awards are issued to non-employee directors and certain key employees. The value of a restricted stock award is based on the market value of the Company’s ordinary shares at the date of the grant. In December 2021, the Company issued 51,654 9.68 The Company recorded share-based compensation expense related to the restricted share awards of $ 41 125 770 194 1.2 Employee Bonuses Issued in Shares In 2021, the Company entered into agreements with certain executive employees which allowed for a portion, or all, of their annual bonus for the year ended December 31, 2021 to be paid in the form of the Company’s shares. During the nine months ended September 30, 2022 the Company settled $ 913 189,959 0.01 2020 Employee Stock Purchase Plan The Board of Directors established the 2020 Employee Stock Purchase Plan, or the ESPP, which was approved by the Company’s shareholders in July 2021. The ESPP is intended to qualify under Section 423 of the U.S. Internal Revenue Service Code of 1986, as amended. The ESPP provides initially for 300,000 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) The ESPP is designed to allow eligible employees to purchase ordinary shares, at quarterly intervals, with their accumulated payroll deductions. The participants are offered the option to purchase ordinary shares at a discount during a series of successive offering periods. The option purchase price may be the lower of 85 74,707 64 86 |
LOSS PER SHARE
LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
LOSS PER SHARE | NOTE 11 — LOSS PER SHARE Loss per ordinary share, basic and diluted, are computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period. Potentially dilutive securities consisting of certain share options, nonvested restricted shares and restricted share units were excluded from the computation of diluted weighted average ordinary shares outstanding as inclusion would be anti-dilutive, are summarized as follows: SCHEDULE OF ANTI-DILUTIVE STOCK EXCLUDED FROM COMPUTATION OF DILUTED EARNINGS PER SHARE 2022 2021 2022 2021 Three Months Ended Nine Months Ended 2022 2021 2022 2021 Share options 3,710,859 4,268,981 3,710,859 4,268,981 Restricted shares 34,436 — 34,436 — Restricted share units 1,495,606 2,590 1,495,606 2,590 Total 5,240,901 4,271,571 5,240,901 4,271,571 |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | NOTE 12 — REVENUE The following table reflects revenue recognized for the three and nine months ended September 30, 2022 and 2021 in line with the timing of transfer of services: SCHEDULE OF REVENUE RECOGNIZED IN LINE WITH THE TIMING OF TRANSFER OF SERVICES 2022 2021 2022 2021 Three Months Ended Nine Months Ended 2022 2021 2022 2021 Revenue from services delivered at a point in time $ 19,435 $ 22,621 $ 65,468 $ 64,030 Revenue from services delivered over time 12,685 9,647 39,113 29,706 Total $ 32,120 $ 32,268 $ 104,581 $ 93,736 Contract and Contract-Related Liabilities The Company has four types of liabilities related to contracts with customers: (i) cash consideration received in advance from customers related to development services not yet performed or hardware deliveries not yet completed, (ii) incentive program obligations, which represents the deferred allocation of revenue relating to incentives in the online gaming operations, (iii) user balances, which are funds deposited by customers before gaming play occurs and (iv) unpaid winnings and wagers contributed to jackpots. Contract related liabilities are expected to be recognized as revenue within one year of being purchased, earned or deposited. Such liabilities are recorded in liabilities to users and other current liabilities in the condensed consolidated balance sheets. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) The following table reflects contract liabilities arising from cash consideration received in advance from customers for the periods presented: SCHEDULE OF CONTRACT WITH CUSTOMERS 2022 2021 2022 2021 Three Months Ended Nine Months Ended 2022 2021 2022 2021 Contract liabilities from advance customer payments, beginning of the period $ 459 $ 1,811 $ 1,874 $ 1,083 Contract liabilities from advance customer payments, end of the period (1) 1,467 1,808 1,467 1,808 Revenue recognized from amounts included in contract liabilities from advance customer payments at the beginning of the period 250 179 775 121 (1) Contract liabilities from advance customer payments, end of period consisted of $ 479 740 989 1,067 |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 13 — SEGMENT REPORTING The Company’s reportable segments are B2B and B2C. The B2B segment develops, markets and sells instances of GameSTACK, GAN Sports, and iSight Back Office technology that incorporates comprehensive player registration, account funding and back-office accounting and management tools that enable the casino operators to efficiently, confidently and effectively extend their presence online in places that have permitted online real money gaming. The B2C segment, which includes the operations of Coolbet since January 1, 2021, develops and operates a B2C online sports betting and casino platform that is accessible through its website in markets across Northern Europe, Latin America and Canada. Information reported to the Company’s Chief Executive Officer, the CODM, for the purpose of resource allocation and assessment of the Company’s segmental performance is primarily focused on the origination of the revenue streams. The CODM evaluates performance and allocates resources based on the segment’s revenue and gross profit. Segment gross profit represents the gross profit earned by each segment without allocation of each segment’s share of depreciation and amortization expense, sales and marketing expense, product and technology expense, general and administrative expense, interest costs and income taxes. Summarized financial information by reportable segments for the three months ended September 30, 2022 and 2021 is as follows: SCHEDULE OF FINANCIAL INFORMATION FOR REPORTABLE SEGMENTS B2B B2C Total B2B B2C Total Three Months Ended September 30, 2022 2021 B2B B2C Total B2B B2C Total Revenue $ 12,685 $ 19,435 $ 32,120 $ 11,175 $ 21,093 $ 32,268 Cost of revenue (1) 2,173 7,262 9,435 3,583 7,218 10,801 Segment gross profit $ 10,512 $ 12,173 $ 22,685 $ 7,592 $ 13,875 $ 21,467 (1) Excludes depreciation and amortization expense GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) During the three months ended September 30, 2022 and 2021, one customer in the B2B segment individually accounted for 22.5 14.7 Summarized financial information by reportable segments for the nine months ended September 30, 2022 and 2021 is as follows: B2B B2C Total B2B B2C Total Nine Months Ended September 30, 2022 2021 B2B B2C Total B2B B2C Total Revenue $ 39,905 $ 64,676 $ 104,581 $ 34,349 $ 59,387 $ 93,736 Cost of revenue (1) 9,015 22,583 31,598 8,632 21,244 29,876 Segment gross profit $ 30,890 $ 42,093 $ 72,983 $ 25,717 $ 38,143 $ 63,860 During the nine months ended September 30, 2022 and 2021, one customer in the B2B segment individually accounted for 20.2 13.5 The following table presents a reconciliation of segment gross profit to the consolidated loss before income taxes for the three and nine months ended September 30, 2022 and 2021: RECONCILIATION OF CONSOLIDATED SEGMENT PROFIT TO CONSOLIDATED INCOME (LOSS) BEFORE INCOME TAXES 2022 2021 2022 2021 Three Months Ended Nine Months Ended 2022 2021 2022 2021 Segment gross profit (1) $ 22,685 $ 21,467 $ 72,983 $ 63,860 Sales and marketing 6,757 5,657 20,122 15,238 Product and technology 4,998 5,492 19,140 15,564 General and administrative (1) 10,185 12,888 33,265 35,217 Impairment — — 28,861 — Restructuring — — 1,771 — Depreciation and amortization 5,893 4,560 16,862 12,686 Interest expense, net 1,450 — 2,521 1 Other income (13 ) — (283 ) — Loss before income taxes $ (6,585 ) $ (7,130 ) $ (49,276 ) $ (14,846 ) (1) Excludes depreciation and amortization expense Assets and liabilities are not separately analyzed or reported to the CODM and are not used to assist in decisions surrounding resource allocation and assessment of segment performance. As such, an analysis of segment assets and liabilities has not been included in this financial information. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) The following table disaggregates total revenue by product and services for each segment: SCHEDULE OF DISAGGREGATION OF REVENUE BY PRODUCTS AND SERVICES FOR EACH SEGMENT 2022 2021 2022 2021 Three Months Ended Nine Months Ended 2022 2021 2022 2021 B2B: Platform and content license fees $ 9,988 $ 8,743 $ 31,208 $ 27,252 Development services and other 2,697 2,432 8,697 7,097 Total B2B revenue $ 12,685 $ 11,175 $ 39,905 $ 34,349 B2C: Sportsbook $ 7,763 $ 7,886 $ 28,023 $ 27,794 Casino 11,093 12,323 34,924 29,306 Poker 579 884 1,729 2,287 Total B2C revenue 19,435 21,093 64,676 59,387 Total revenue $ 32,120 $ 32,268 $ 104,581 $ 93,736 Revenue by location of the customer for the three and nine months ended September 30, 2022 and 2021 is as follows: SCHEDULE OF REVENUE BY LOCATION OF THE CUSTOMER 2022 2021 2022 2021 Three Months Ended Nine Months Ended 2022 2021 2022 2021 United States $ 10,320 $ 9,107 $ 33,531 $ 28,186 Europe 10,574 11,598 33,343 36,855 Latin America 9,492 9,854 32,910 23,711 Rest of the world 1,734 1,709 4,797 4,984 Total revenue $ 32,120 $ 32,268 $ 104,581 $ 93,736 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 14 — INCOME TAXES The Company’s effective income tax rate was (5.4)% (21.7)% (1.0)% (21.6)% Our country of domicile is Bermuda, which effectively has a 0% 0% |
RESTRUCTURING
RESTRUCTURING | 9 Months Ended |
Sep. 30, 2022 | |
Disclosure Restructuring Abstract | |
RESTRUCTURING | NOTE 15 — RESTRUCTURING In January 2022, we implemented a strategic reduction of our existing worldwide global workforce to simplify and streamline our organization and strengthen the overall competitiveness of our B2B segment. As a result of this initiative, we incurred $ 1.8 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 16 — COMMITMENTS AND CONTINGENCIES Legal Proceedings The Company may be subject to legal actions and claims arising from contracts or other matters from time to time in the ordinary course of business. Management is not aware of any pending or threatened litigation, which are considered other than routine legal proceedings. The Company believes the ultimate disposition or resolution of its routine legal proceedings will not have a material adverse effect on its financial position, results of operations or liquidity. Content Licensing Agreements In the second quarter of 2021, the Company entered into Content Licensing Agreements (the “Agreements”) with two third-party gaming content providers (“Content Providers”) specializing in developing and licensing interactive games. The Agreements grant the Company exclusive rights to use and distribute the online gaming content in North America. Each of the Content Providers is committed to developing a minimum number of games for the Company’s exclusive use over the five-year term, subject to extensions, of the respective Agreement. In exchange, the Company is required to pay fixed fees, totaling $ 48.5 8.5 On January 27, 2022, the Company served a termination notice, for cause, to a Content Provider as certain conditions precedent associated with the completion of contractual obligations had not been satisfied by the agreed upon period in 2021. In accordance with the agreement, termination for cause results in a return of the initial payment of $ 3.5 3.0 3.0 3.5 On April 5, 2022, the Agreement with the remaining Content Provider was amended and restated. Prior to the amendment, the Company accounted for the hosting arrangement as a service contract and expensed service fees of $ 1.5 25.0 5.5 4.5 5.0 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) The amended and restated Agreement is accounted for as a business combination. The consideration transferred in exchange for the identifiable intangible assets is comprised of the present value of the Company’s total expected fixed payments under the Agreement, the net assets recognized under the original agreement, as well as a contingent consideration. The contingent consideration represents additional amounts which the Company expects to pay to the Content Provider if the Company’s total revenue generated from the arrangement exceeds certain stipulated annual and cumulative thresholds during the contract term. The fair value of the contingent liability is determined using Level 3 inputs, since estimating the fair value of this contingent liability requires the use of significant and subjective inputs that may and are likely to change over the duration of the liability with related changes in internally generated anticipated games revenue as well as external market factors. The contingent consideration was valued using a Monte Carlo simulation based on management’s anticipated annual games revenue forecasts. The fair value of the contingent consideration was initially recognized upon execution of the amendment to the Agreement and is recorded within content licensing liabilities within the condensed consolidated balance sheet at September 30, 2022. Refer to Note 4 – Acquisition for further detail. At September 30, 2022 the present value of the remaining fixed fee payments remaining under the agreement of $ 15.2 4.4 0.4 0.8 Chile VAT Coolbet’s B2C casino and sports-betting platform is accessible in Chile. Since June 1, 2020, foreign digital service suppliers that provide services to individuals in Chile have been required to register for value-added tax (“VAT”) purposes. On September 20, 2021, the Company submitted an inquiry to the Chilean Tax Administration (“CTA”) for clarification on the basis to apply VAT. In December 2021, the CTA issued a general resolution as a response to another iGaming platform operator stating the Tax Administration’s position that fees paid by users for entertainment services provided through online gaming and betting platforms are subject to VAT in Chile. The CTA clarified its interpretation that the VAT tax rate of 19 On May 13, 2022, the CTA issued a resolution stating that unregistered foreign digital service providers will be subject to 19% withholding on payments through enforcement to issuers of credit cards, debit cards, and other forms of payment, effective August 1, 2022. On June 1, 2022 the CTA issued the first non-compliant list of unregistered foreign digital services providers to enact enforcement of this withholding; Coolbet was not named on this list. As of September 30, 2022 and through the date of filing, the Company has not received formal notification of any VAT liability due to the CTA. Comprehensive legislation for online gambling was filed in draft form to Chile’s Chamber of Deputies on March 7, 2022, which would allow for an unlimited number of licenses to be granted by Chile’s national casino gaming authority and establish a tax with a rate of 20 Due to the obligation being established by the governing law, a liability appears to be probable. However, the Company believes the application of VAT on gross customer deposits, as clarified by the CTA, does not represent a reasonable application of the law to the economic substance of the Company’s services. VAT calculated as currently contemplated would result in liabilities far in excess of actual earned revenues and would result in a material loss to the Company. The Company has engaged outside counsel to formally approach the CTA on behalf of the Company to attempt to agree upon a more reasonable application of the VAT law, taking into account the Company’s specific facts and circumstances. If any agreement is reached with the CTA, it is possible that the application would be applied retroactively to Coolbet’s Chilean activity as of June 1, 2020. As of September 30, 2022, the Company has not yet formally agreed on any application of the VAT law with the CTA. As a result, the Company has determined that a liability is not reasonably estimable as of September 30, 2022. However, if the Company and the CTA are able to agree on an application other than deposits, this could result in a material loss when considering the retroactive application. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Due to the inherent uncertainties involved in making estimates, actual results could differ from the original estimates, and may require significant adjustments to these reported balances in future periods. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the results of the Parent and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions The Company’s reporting currency is the U.S. Dollar while the Company’s foreign subsidiaries use their local currencies as their functional currencies. The assets and liabilities of foreign subsidiaries are translated to U.S. Dollars based on the current exchange rate prevailing at each reporting period. Revenue and expenses are translated into U.S. Dollars using the average exchange rates prevailing for each period presented. Translation adjustments that arise from translating a foreign subsidiary’s financial statements from their functional currency to U.S. Dollars are reported as a separate component of accumulated other comprehensive loss in shareholders’ equity. Gains and losses arising from transactions denominated in a currency other than the functional currency are included in general and administrative expense in the condensed consolidated statements of operations as incurred. Foreign currency transaction and remeasurement gains and losses were a net gain (loss) of $ 684 (589) (494) (761) |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of its cash and trade receivables. At September 30, 2022, the Company held cash deposits in foreign countries, primarily in Northern Europe and Latin America, of approximately $ 33.0 Risks and Uncertainties Macroeconomic conditions can materially adversely affect the Company’s business, results of operations and financial condition. Recent adverse macroeconomic conditions, including inflation, higher interest rates, slower growth or recession, the strengthening of the U.S. dollar, and corresponding currency fluctuations can have an adverse material impact on the Company’s future results of operations, cash flows, and financial condition, particularly with respect to foreign currency adjustments relating to our international operations. Such conditions may also affect consumers’ willingness to make discretionary purchases, and therefore the Company, along with its casino operator customers, may experience a decline in wagering. A downturn in the economic environment can also lead to increased credit and collectibility risk on the Company’s trade receivables, limitations on the Company’s ability to issue new debt, and reduced liquidity. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
Revenue Recognition | Revenue Recognition Revenue from B2B Operations The Company’s revenue from its B2B operations are primarily from its internet gaming Software-as-a-Service platform, GameSTACK, that its customers use to provide real money internet gambling (“RMiG”), online sports gaming and simulated internet gaming (“SIM”) to its end users. The Company enters into contracts with its customers that generally range from three to five years and include renewal provisions. These contracts generally include provision of the internet gaming platform, content consisting of proprietary and third-party games, development services and support and marketing services. In certain cases, the contract may include computer hardware to be procured on behalf of the customer. The customers cannot take possession of the hosted GameSTACK software and the Company does not sell or license the GameSTACK software. The Company charges fees as consideration for use of its internet gaming system, game content, support and marketing services based on a fixed percentage of the casino operator’s net gaming revenue or net sportsbook win, at the time of settlement of an event for RMiG contracts, considered usage-based fees, or at the time of purchase for in-game virtual credit for SIM contracts. The determination of the fee charged to its customers is negotiated and varies significantly. Certain of these RMiG contracts provide the Company with a minimum monthly revenue guarantee in relation to the Company’s share of the casino operator’s net gaming revenue or net sportsbook win. At September 30, 2022 the remaining unsatisfied performance obligations related to fixed minimum guaranteed revenue totaled $ 0.5 The Company’s promise to provide the RMiG SaaS platform and content licensing services on the hosted software is a single performance obligation. This performance obligation is recognized over time, as the Company provides services to its customers in its delivery of services to the player end user. The Company’s customers simultaneously receive and consume the benefits provided by the Company as it delivers services to its customers. Usage based fees are considered variable consideration as the service is to provide unlimited continuous access to its hosted application and usage of the hosted system is primarily controlled by the player end user. The transaction price includes fixed and variable consideration and is billed monthly with the amount due generally thirty days from the date of the invoice. Variable consideration is allocated entirely to the period in which consideration is earned as the variable amounts relate specifically to the customer’s usage of the platform that day and allocating the usage-based fees to each day is consistent with the allocation objective, primarily that the change in amounts reflect the changing value to the customer. The Company’s internet gaming system, game content, support and marketing services are provided equally throughout the term of the contract. These services are made up of a daily requirement to provide access and use of the internet gaming system and support services to the customer over a period of time, as well as to provide marketing services, and not a specified amount of services. The series of distinct services represents a single performance obligation that is satisfied over time. Purchases of virtual credits within a transaction period on the SIM platform, generally a monthly convention, are earned over time, and are typically billed monthly upon the close of the respective period as the credit has no monetary value, cannot be redeemed, exchanged, transferred or withdrawn, represents solely a device for tracking game play during the month, does not obligate the Company to provide future services and the arrangements with the customer and player end user have no substantive termination penalty. In certain service agreements with its SIM customers, the Company receives fees for the purchases of in-game virtual credit made by end-users and remits payment to the SIM customer for their share of the SIM revenues. At September 30, 2022 and December 31, 2021, the Company has recorded a liability due to its customers for their share of the fees of $ 1,362 2,171 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) The Company uses third-party content providers in supplying game content in its performance of providing game content on its platform to its customers. A customer has access to the Company’s propriety and licensed game content and additionally, the customer can direct the Company to procure third-party game content on its behalf. The Company has determined it acts as the principal for providing the game content when the Company controls the game content, and therefore presents the revenue on a gross basis in the condensed consolidated statements of operations. When the customer directs the Company to procure third-party game content, the Company determined it is deemed an agent for providing such game content, and therefore, records the revenue, net of the costs of content license fees, in the condensed consolidated statements of operations. The Company also provides ongoing development services involving updates to the RMiG platforms for enhanced functionality or customization. Ongoing development services are typically billed monthly, at a daily rate, for services performed. Revenue from RMiG platform development services that are identified as distinct performance obligations and relate either to an asset the customer controls or from which the customer receives value are recognized over the period the services are performed. This revenue is measured using an input method based on effort expended, which uses direct labor hours incurred. As the performance obligation relates to the provision of development services over time, this method reflects the transfer of control as the Company performs the services. Separately, revenue generated from customers for development services that are not identified as distinct performance obligations are deferred over the license service term. In customer contracts that require a portion of the consideration to be received in advance or at the commencement of the contract, such amounts are recorded as a contract liability. Other services include the resale of a third-party computer hardware, such as servers and other related hardware devices, upon which the GameSTACK software is installed for its customers. These products are not required to be purchased in order to access the GameSTACK platform but are sold as a convenience to the customer. The Company procures the computer hardware on the customer’s behalf for a fee determined based on cost of the computer hardware plus a markup. The Company charges a hardware deployment fee which is a one-time fee for installation, testing and certification of the computer hardware at the gaming hosting facility. Revenue is recognized at the point in time when control of the hardware transfers to the customer. Control is transferred after the hardware has been procured, delivered, installed at the customer’s premises and configured to allow for remote access. The Company has determined that it is acting as the principal in providing computer hardware and related services as it assumes responsibility for procuring, delivering, installing and configuring the hardware at the customer’s location and takes control of the hardware, prior to transfer. Revenue is presented at the gross amount of consideration to which it is entitled from the customer in exchange for the computer hardware and related services. The Company generates revenue from time to time from the licensing of its U.S. patent, which governs the linkage of on-property reward cards to their counterpart internet gaming accounts together with bilateral transmission of reward points between the internet gaming technology system and the land-based casino management system present in all U.S. casino properties. The nature of the promise in transferring the license is to provide a right to use the patent as it exists. The Company does not have to undertake activities to change the functionality of the patent during the license period and the license has significant stand-alone functionality. Therefore, the Company recognizes the revenue from the license of the patent at the point in time when control of the license is transferred to the customer. Control is determined to transfer at the point in time the customer is able to use and benefit from the license. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Contracts with Multiple Performance Obligations For customer contracts that have more than one performance obligation, the transaction price is allocated to the performance obligations in an amount that depicts the relative stand-alone selling prices of each performance obligation. Judgment is required in determining the stand-alone selling price for each performance obligation. In determining the allocation of the transaction price, an entity is required to maximize the use of observable inputs. When the stand-alone selling price of a good or service is not directly observable, an entity is required to estimate the stand-alone selling price. Contracts with its customers may include platform and licensing of game content services, as well as development services and computer hardware services. The variable consideration generated from the platform and the licensing of game content is allocated entirely to the performance obligation for platform and licensing of game content services and the remaining fixed fees for development services and computer hardware would be allocated to each of the remaining performance obligation based on their relative stand-alone selling prices. The variable consideration relates entirely to the effort to satisfy the platform and licensing game content services and the fixed consideration relates to the remaining performance obligations which is consistent with the allocation objective. Revenue from Gaming Operations The Company operates the B2C gaming site www.coolbet.com outside of the U.S., which contains proprietary software and includes the following product offerings: sportsbook, poker, casino, live casino and virtual sports. The Company manages an online sportsbook allowing users to place various types of wagers on the outcome of sporting events conducted around the world. The Company operates as the bookmaker and offers fixed odds wagering on such events. When a user’s wager wins, the Company pays the user a pre-determined amount known as fixed odds. Revenue from online sportsbook is reported net after deduction of player winnings and bonuses. Revenue from wagers is recognized when the outcome of the event is known. The Company offers live casino through its digital online casino offering in select markets, allowing users to place a wager and play games virtually at retail casinos. The Company offers users a catalog of over 3,200 Peer-to-peer poker offerings allow users to play poker against one another on the Company’s online poker platform for prize money. Revenue is recognized as a percentage of the reported rake. Additionally, the Company offers tournament poker which allows users to buy-in for a fixed price for prize money. For tournament play, revenue is recognized for the difference between the entry fees collected and the amounts paid out to users as prizes and winnings. In each of the online gaming products, a single performance obligation exists at the time a wager is made to operate the games and award prizes or payouts to users based on a particular outcome. Revenue is recognized at the conclusion of each contest, wager, or wagering game hand. Additionally, certain incentives given to users, for example, that allow the user to make an additional wager at a reduced price, may provide the user with a material right which gives rise to a separate performance obligation. The Company allocates a portion of the user’s wager to incentives that create material rights that are redeemed or expired in the future. The allocated revenue for gaming wagers is primarily recognized when the wagers occur because all such wagers settle immediately. The Company applies a practical expedient by accounting for revenue from gaming on a portfolio basis because such wagers have similar characteristics, and the Company reasonably expects the effects on the financial statements of applying the revenue recognition guidance to the portfolio to not differ materially from that which would result if applying the guidance to an individual wagering contract. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
Sales and Marketing | Sales and Marketing Sales and marketing expense primarily consists of general marketing and advertising costs, B2C user acquisition expenses and personnel costs within our sales and marketing functions. Sales and marketing costs are expensed as incurred. |
Content Licensing Fees | Content Licensing Fees Content licensing fees are paid to third parties for gaming content which are expensed as incurred. Content licensing fees are calculated as a percentage of net gaming revenues in respect of the third-party games, as stipulated in the third-party agreements. |
Share-based Compensation | Share-based Compensation Share-based compensation expense is recognized for share options and restricted shares issued to employees and non-employee members of the Company’s Board of Directors. The Company’s issued share options and restricted shares, which are primarily considered equity awards and include only service conditions, are valued based on the fair value of these awards on the date of grant. The fair value of the share options is estimated using a Black-Scholes option pricing model and the fair value of the restricted shares (restricted share awards and restricted share units) is based on the market price of the Company’s shares on the date of grant. Certain restricted share units awards issued to non-employee members of the Company’s Board of Directors permit shares upon vesting to be withheld, as a means of meeting the non-employee director’s tax withholding requirements, and paid in cash to the non-employee director. The Company additionally incurs share-based compensation expense under compensation arrangements with certain of its employees under which the Company will settle bonuses for a fixed dollar amount by issuing a variable number of shares based on the Company’s share price on the settlement date. These awards are classified as liability-based awards which are measured based on the fair value of the award at the end of each reporting period until settled. Related compensation expense is recognized based on changes to the fair value over the applicable service period Share-based compensation is recorded over the requisite service period, generally defined as the vesting period. For awards with graded vesting and only service conditions, compensation cost is recorded on a straight-line basis over the requisite service period of the entire award. Forfeitures are recorded in the period in which they occur. |
Loss Per Share, Basic and Diluted | Loss Per Share, Basic and Diluted Basic loss per share is calculated by dividing the net loss by the weighted average number of ordinary shares outstanding during the year. In periods of loss, basic and diluted per share information are the same. |
Cash | Cash Cash is comprised of cash held at the bank and third-party service providers. The Company is required to maintain compensating cash balances to satisfy its liabilities to users. Such balances are included within cash in the condensed consolidated balance sheets and are not subject to creditor claims. At September 30, 2022 and December 31, 2021, the related liabilities to users was $ 8,946 8,984 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation. Depreciation is generally computed on a straight-line basis over the estimated useful lives of the assets. Maintenance and repairs are charged to expense in the period they are incurred. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts, and any gain or loss is included in the statement of operations. |
Capitalized Software Development Costs, net | Capitalized Software Development Costs, net The Company capitalizes certain development costs related to its internet gaming platforms during the application development stage. Costs associated with preliminary project activities, training, maintenance and all other post implementation stage activities are expensed as incurred. Software development costs are capitalized when application development begins, it is probable that the project will be completed, and the software will be used as intended. The Company capitalizes certain costs related to specific upgrades and enhancements when it is probable that expenditures will result in additional functionality of the platform to its customers. The capitalization policy provides for the capitalization of certain payroll and payroll related costs for employees who spent time directly associated with development and enhancements of the platform. Capitalized software development costs are amortized on a straight-line basis over their estimated useful lives, which generally ranges from three five years |
Goodwill | Goodwill Goodwill represents the excess of the fair value of the consideration transferred over the estimated fair values of the identifiable assets acquired and liabilities assumed on the acquisition date. The Company has recorded goodwill primarily from its acquisition of Coolbet in January 2021. Goodwill is not amortized, but rather is reviewed for impairment annually (as of October 1st) or more frequently if facts or circumstances indicate that it is more-likely-than-not the fair value of a reporting unit may be below its carrying amount. The Company has determined that it has two reporting units: B2C and B2B. In its goodwill impairment testing, the Company has the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of the reporting unit, including goodwill, is less than its carrying amount prior to performing the quantitative impairment test. The qualitative assessment evaluates various events and circumstances, such as macro-economic conditions, industry and market conditions, cost factors, relevant events and financial trends that may impact a reporting unit’s fair value. If it is determined that the estimated fair value of the reporting unit is more-likely-than not less than its carrying amount, including goodwill, the quantitative goodwill impairment test is required. Otherwise, no further analysis would be required. If the quantitative impairment test for goodwill is deemed necessary, this quantitative impairment analysis compares the fair value of the Company’s reporting unit to its related carrying value. If the fair value of the reporting unit is less than its carrying amount, goodwill is written down to the fair value and an impairment loss is recognized. If the fair value of the reporting unit exceeds its carrying amount, no further analysis is required. Fair value of the reporting unit is determined using valuation techniques, primarily discounted cash flow analysis. ASC Topic 350 requires that goodwill be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company performed a qualitative and quantitative impairment test as of June 30, 2022 which resulted in an impairment to goodwill of $ 28.9 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
Long-lived Assets | Long-lived Assets Long-lived assets, except goodwill, consist of property and equipment, and finite lived acquired intangible assets, such as developed software, gaming licenses, trademarks, trade names and customer relationships. Intangible assets are amortized on a straight-line basis over their estimated useful lives. The Company considers the period of expected cash flows and underlying data used to measure the fair value of the intangible assets when selecting the estimated useful lives. Gaming licenses include license applications fees and market access payments in connection with agreements that the Company enters into with strategic partners. The market access arrangements authorize the Company to offer online gaming and online sports betting in certain regulated markets. These costs are capitalized and amortized on a straight-line basis over their estimated useful lives, beginning with the commencement of operations. The fair value of the acquired intangible assets is primarily determined using the income approach. In performing these valuations, the Company’s key underlying assumptions used in the discounted cash flows were projected revenue, gross margin expectations and operating cost estimates. There are inherent uncertainties and management judgment is required in these valuations. Long-lived assets, except goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company compares the undiscounted cash flows expected to be generated by that asset or asset group to their carrying amount. If the carrying amount of the long-lived asset or asset group are not recoverable on an undiscounted cash flow basis, an impairment charge is recognized to the extent that the carrying amount exceeds fair value. Fair value is determined through various techniques, such as discounted cash flow models using probability weighted estimated future cash flows and the use of valuation specialists. During the three and nine months ended September 30, 2022, there was no triggering event that would cause the Company to believe the value of its long-lived assets should be impaired. |
Liabilities to Users | Liabilities to Users The Company records liabilities for user account balances. User account balances consist of user deposits, promotional awards and user winnings less user withdrawals and user losses. |
Legal Contingencies and Litigation Accruals | Legal Contingencies and Litigation Accruals On a quarterly basis, the Company assesses potential losses in relation to pending or threatened legal matters. If a loss is considered probable and the amount can be reasonably estimated, the Company recognizes an expense for the estimated loss. Estimates of any such loss are subjective in nature and require the evaluation of numerous facts and assumptions as to future events, including the application of legal precedent which may be conflicting. To the extent these estimates are more or less than the actual liability resulting from the resolution of these matters, the Company’s financial results will increase or decrease accordingly. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
Debt | Debt Debt issuance costs incurred in connection with the issuance of new debt are recorded as a reduction to the long-term debt balance on the condensed consolidated balance sheets, and amortized over the term of the loan commitment as interest expense on the condensed consolidated statements of operations. The Company calculates amortization expense on capitalized debt issuance costs using the effective interest method in accordance with Accounting Standards Codification (“ASC”) 470, Debt. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company applies the provisions of ASC 820, Fair Value Measurements and Disclosures, which provides a single authoritative definition of fair value, sets out a framework for measuring fair value and expands on required disclosures about fair value measurement. Fair value represents the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company uses the following hierarchy in measuring the fair value of the Company’s assets and liabilities, focusing on the most observable inputs when available: ● Level 1 Quoted prices in active markets for identical assets or liabilities. ● Level 2 Observable inputs other than Level 1 quoted prices, such as quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active for identical or similar assets and liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 Valuations are based on the inputs that are unobservable and significant to the overall fair value measurement of the assets or liabilities. Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Valuation techniques used to measure the fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis as required by ASC 820, by level, within the fair value hierarchy as of September 30, 2022: SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES ON RECURRING BASIS Fair Value Level 1 Level 2 Level 3 September 30, 2022 Fair Value Level 1 Level 2 Level 3 Liability Contingent content liability $ 4,369 $ — $ — $ 4,369 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) The contingent content liability represents additional amounts which the Company expects to pay to Ainsworth Game Technology, a third-party gaming content provider (“the Content Provider”) if the Company’s total revenue generated from its content licensing arrangement with the Content Provider exceeds certain stipulated annual and cumulative thresholds during the contract term. The fair value of the contingent content liability is determined using Level 3 inputs, since estimating the fair value of this contingent content liability requires the use of significant and subjective inputs that may and are likely to change over the duration of the liability with related changes in internally generated anticipated games revenue as well as external market factors. The contingent content liability was valued using a Monte Carlo simulation based on management’s anticipated annual games revenue forecasts. The fair value of the contingent content liability was initially recognized in April 2022 in connection with its modified arrangement with the Content Provider on April 5, 2022 and is recorded within Content licensing liabilities within the condensed consolidated balance sheets. Contingent consideration is revalued at each reporting period. There were no significant changes to the value through September 30, 2022. Refer to Note 4 – Acquisition for further detail. |
Income Taxes | Income Taxes The Company is subject to income taxes in the United States, U.K., Bulgaria, Israel, Canada, and Malta. The Company records an income tax expense for the anticipated tax consequences of the reported results of operations using the asset and liability method. Under this method, deferred income tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as for loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. The effect on deferred income tax of a change in tax rates are recorded in the period of the enactment. Deferred tax assets are reduced, through a valuation allowance, if necessary, by the amount of such benefits that are not expected to be realized based on current available evidence. In evaluating the Company’s ability to recover deferred tax assets in the jurisdiction from which they arise, all available positive and negative evidence is considered, including results of recent operations, scheduled reversals of deferred tax liabilities, projected future taxable income, and tax-planning strategies. The Company records a valuation allowance to reduce its deferred tax assets to the net amount that it believes is more likely than not to be realized. The Company recognizes tax benefits from uncertain tax positions only if management believes that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. Although the Company believes that it has adequately provided for uncertain tax positions, no assurance can be given that the final tax outcome of these matters would not be materially different. Adjustments are made when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences would affect the provision for income taxes in the period in which such determination is made and could have a material impact on the Company’s financial condition and operating results. The Company recognizes penalties and interest related to income tax matters in income tax expense. |
Segments | Segments The Company operates in two |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In October 2021, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES ON RECURRING BASIS | The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis as required by ASC 820, by level, within the fair value hierarchy as of September 30, 2022: SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES ON RECURRING BASIS Fair Value Level 1 Level 2 Level 3 September 30, 2022 Fair Value Level 1 Level 2 Level 3 Liability Contingent content liability $ 4,369 $ — $ — $ 4,369 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
SUMMARY OF CONSIDERATION TRANSFERRED | The following table summarizes the fair value of the consideration transferred: SUMMARY OF CONSIDERATION TRANSFERRED Present value of future fixed fee payments $ 18,808 Net assets recognized under original agreement 3,067 Contingent consideration 4,369 Total $ 26,244 |
SUMMARY OF INTANGIBLE ASSETS ACQUIRED | SUMMARY OF INTANGIBLE ASSETS ACQUIRED Estimated useful life (in years) Fair Value Content licenses intangible asset 4.6 $ 22,938 Customer relationships intangible asset 4.0 3,306 Acquired right of use lease asset 4.6 116 Acquired right of use lease liability 4.6 (116 ) Total identifiable net assets $ 26,244 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment, net is recorded in other assets in the condensed consolidated balance sheets at September 30, 2022 and December 31, 2021 and consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT Estimated Useful Life September 30, 2022 December 31, 2021 Fixtures, fittings and equipment 3 5 $ 3,791 $ 2,935 Platform hardware 5 1,651 2,054 Total property and equipment, cost 5,442 4,989 Less: accumulated depreciation (2,894 ) (2,444 ) Total $ 2,548 $ 2,545 |
CAPITALIZED SOFTWARE DEVELOPM_2
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Research and Development [Abstract] | |
SCHEDULE OF CAPITALIZED COMPUTER SOFTWARE COSTS, NET | Capitalized software development costs, net at September 30, 2022 and December 31, 2021 consisted of the following: SCHEDULE OF CAPITALIZED COMPUTER SOFTWARE COSTS, NET September 30, 2022 December 31, 2021 Capitalized software development costs $ 32,059 $ 26,127 Development in progress 2,528 5,910 Total capitalized software development, cost 34,587 32,037 Less: accumulated amortization (18,498 ) (17,607 ) Total $ 16,089 $ 14,430 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF GOODWILL | The changes in the carrying amount of goodwill, by segment, for the nine months ended September 30, 2022 were as follows: SCHEDULE OF GOODWILL B2B B2C Total Balance at January 1, 2022 $ 72,230 $ 73,912 $ 146,142 Impairment (28,861 ) — (28,861 ) Effect of foreign currency translation (8,082 ) (10,113 ) (18,195 ) Balance at September 30, 2022 $ 35,287 $ 63,799 $ 99,086 |
SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS | Definite-lived intangible assets, net consisted of the following: SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted September 30, 2022 Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology 3.8 $ 30,671 $ (13,792 ) $ 16,879 Third-party content licenses 4.6 22,938 (2,502 ) 20,436 Customer relationships 3.6 8,019 (3,162 ) 4,857 Trade names and trademarks 10.0 4,887 (1,089 ) 3,798 Gaming licenses 7.3 3,008 (1,244 ) 1,764 $ 69,523 $ (21,789 ) $ 47,734 Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average December 31, 2021 Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology 3.0 $ 27,390 $ (9,130 ) $ 18,260 In-process technology — 8,142 — 8,142 Customer relationships 3.0 5,460 (1,820 ) 3,640 Trade names and trademarks 10.0 5,699 (882 ) 4,817 Gaming licenses 6.4 2,219 (1,185 ) 1,034 $ 48,910 $ (13,017 ) $ 35,893 |
SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE | Estimated amortization expense for the next five years is as follows: SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE Amount Remainder of 2022 $ 4,369 2023 17,611 2024 8,005 2025 7,996 2026 2,330 Thereafter 7,423 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCRUED EXPENSES | Accrued expenses consisted of the following: SCHEDULE OF ACCRUED EXPENSES September 30, 2022 December 31, 2021 Content license fees $ 1,480 $ 2,402 Other 1,194 2,267 Total $ 2,674 $ 4,669 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF LONG TERM DEBT | The carrying values of the Company’s long-term debt consist of the following: SCHEDULE OF LONG TERM DEBT Effective Interest Rate As of September 30, 2022 Credit Facility: Principal 13.28 % $ 30,000 Less unamortized debt issuance costs (2,145 ) Long-term debt, net $ 27,855 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTION ACTIVITY | A summary of the share option activity as of and for the nine months ended September 30, 2022 is as follows: SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTION ACTIVITY Number of Shares Weighted Average Exercise Price Weighted Average Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2021 4,138,215 $ 13.05 8.05 $ 11,229 Granted 947,002 0.03 Exercised (375,416 ) 1.93 Forfeited/expired or cancelled (998,942 ) 15.29 Outstanding at September 30, 2022 3,710,859 $ 10.25 7.6 $ 1,756 Options exercisable at September 30, 2022 2,271,058 $ 8.44 6.97 $ 672 |
SCHEDULE OF SHARE BASED COMPENSATION, RESTRICTED STOCK UNIT ACTIVITY | A summary of the restricted share unit activity as of and for the nine months ended September 30, 2022 is as follows: SCHEDULE OF SHARE BASED COMPENSATION, RESTRICTED STOCK UNIT ACTIVITY Number of Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2021 369,140 $ 10.78 Granted 1,413,333 5.23 Vested (213,245 ) 9.53 Forfeited or cancelled (73,622 ) 7.84 Outstanding at September 30, 2022 1,495,606 $ 5.86 |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
SCHEDULE OF ANTI-DILUTIVE STOCK EXCLUDED FROM COMPUTATION OF DILUTED EARNINGS PER SHARE | SCHEDULE OF ANTI-DILUTIVE STOCK EXCLUDED FROM COMPUTATION OF DILUTED EARNINGS PER SHARE 2022 2021 2022 2021 Three Months Ended Nine Months Ended 2022 2021 2022 2021 Share options 3,710,859 4,268,981 3,710,859 4,268,981 Restricted shares 34,436 — 34,436 — Restricted share units 1,495,606 2,590 1,495,606 2,590 Total 5,240,901 4,271,571 5,240,901 4,271,571 |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
SCHEDULE OF REVENUE RECOGNIZED IN LINE WITH THE TIMING OF TRANSFER OF SERVICES | The following table reflects revenue recognized for the three and nine months ended September 30, 2022 and 2021 in line with the timing of transfer of services: SCHEDULE OF REVENUE RECOGNIZED IN LINE WITH THE TIMING OF TRANSFER OF SERVICES 2022 2021 2022 2021 Three Months Ended Nine Months Ended 2022 2021 2022 2021 Revenue from services delivered at a point in time $ 19,435 $ 22,621 $ 65,468 $ 64,030 Revenue from services delivered over time 12,685 9,647 39,113 29,706 Total $ 32,120 $ 32,268 $ 104,581 $ 93,736 |
SCHEDULE OF CONTRACT WITH CUSTOMERS | The following table reflects contract liabilities arising from cash consideration received in advance from customers for the periods presented: SCHEDULE OF CONTRACT WITH CUSTOMERS 2022 2021 2022 2021 Three Months Ended Nine Months Ended 2022 2021 2022 2021 Contract liabilities from advance customer payments, beginning of the period $ 459 $ 1,811 $ 1,874 $ 1,083 Contract liabilities from advance customer payments, end of the period (1) 1,467 1,808 1,467 1,808 Revenue recognized from amounts included in contract liabilities from advance customer payments at the beginning of the period 250 179 775 121 (1) Contract liabilities from advance customer payments, end of period consisted of $ 479 740 989 1,067 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
SCHEDULE OF FINANCIAL INFORMATION FOR REPORTABLE SEGMENTS | Summarized financial information by reportable segments for the three months ended September 30, 2022 and 2021 is as follows: SCHEDULE OF FINANCIAL INFORMATION FOR REPORTABLE SEGMENTS B2B B2C Total B2B B2C Total Three Months Ended September 30, 2022 2021 B2B B2C Total B2B B2C Total Revenue $ 12,685 $ 19,435 $ 32,120 $ 11,175 $ 21,093 $ 32,268 Cost of revenue (1) 2,173 7,262 9,435 3,583 7,218 10,801 Segment gross profit $ 10,512 $ 12,173 $ 22,685 $ 7,592 $ 13,875 $ 21,467 (1) Excludes depreciation and amortization expense Summarized financial information by reportable segments for the nine months ended September 30, 2022 and 2021 is as follows: B2B B2C Total B2B B2C Total Nine Months Ended September 30, 2022 2021 B2B B2C Total B2B B2C Total Revenue $ 39,905 $ 64,676 $ 104,581 $ 34,349 $ 59,387 $ 93,736 Cost of revenue (1) 9,015 22,583 31,598 8,632 21,244 29,876 Segment gross profit $ 30,890 $ 42,093 $ 72,983 $ 25,717 $ 38,143 $ 63,860 |
RECONCILIATION OF CONSOLIDATED SEGMENT PROFIT TO CONSOLIDATED INCOME (LOSS) BEFORE INCOME TAXES | The following table presents a reconciliation of segment gross profit to the consolidated loss before income taxes for the three and nine months ended September 30, 2022 and 2021: RECONCILIATION OF CONSOLIDATED SEGMENT PROFIT TO CONSOLIDATED INCOME (LOSS) BEFORE INCOME TAXES 2022 2021 2022 2021 Three Months Ended Nine Months Ended 2022 2021 2022 2021 Segment gross profit (1) $ 22,685 $ 21,467 $ 72,983 $ 63,860 Sales and marketing 6,757 5,657 20,122 15,238 Product and technology 4,998 5,492 19,140 15,564 General and administrative (1) 10,185 12,888 33,265 35,217 Impairment — — 28,861 — Restructuring — — 1,771 — Depreciation and amortization 5,893 4,560 16,862 12,686 Interest expense, net 1,450 — 2,521 1 Other income (13 ) — (283 ) — Loss before income taxes $ (6,585 ) $ (7,130 ) $ (49,276 ) $ (14,846 ) (1) Excludes depreciation and amortization expense |
SCHEDULE OF DISAGGREGATION OF REVENUE BY PRODUCTS AND SERVICES FOR EACH SEGMENT | The following table disaggregates total revenue by product and services for each segment: SCHEDULE OF DISAGGREGATION OF REVENUE BY PRODUCTS AND SERVICES FOR EACH SEGMENT 2022 2021 2022 2021 Three Months Ended Nine Months Ended 2022 2021 2022 2021 B2B: Platform and content license fees $ 9,988 $ 8,743 $ 31,208 $ 27,252 Development services and other 2,697 2,432 8,697 7,097 Total B2B revenue $ 12,685 $ 11,175 $ 39,905 $ 34,349 B2C: Sportsbook $ 7,763 $ 7,886 $ 28,023 $ 27,794 Casino 11,093 12,323 34,924 29,306 Poker 579 884 1,729 2,287 Total B2C revenue 19,435 21,093 64,676 59,387 Total revenue $ 32,120 $ 32,268 $ 104,581 $ 93,736 |
SCHEDULE OF REVENUE BY LOCATION OF THE CUSTOMER | Revenue by location of the customer for the three and nine months ended September 30, 2022 and 2021 is as follows: SCHEDULE OF REVENUE BY LOCATION OF THE CUSTOMER 2022 2021 2022 2021 Three Months Ended Nine Months Ended 2022 2021 2022 2021 United States $ 10,320 $ 9,107 $ 33,531 $ 28,186 Europe 10,574 11,598 33,343 36,855 Latin America 9,492 9,854 32,910 23,711 Rest of the world 1,734 1,709 4,797 4,984 Total revenue $ 32,120 $ 32,268 $ 104,581 $ 93,736 |
NATURE OF OPERATIONS (Details N
NATURE OF OPERATIONS (Details Narrative) | 9 Months Ended |
Sep. 30, 2022 Integer | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 2 |
SCHEDULE OF FAIR VALUE OF ASSET
SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES ON RECURRING BASIS (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |
Contingent content liability | $ 4,369 |
Fair Value, Inputs, Level 1 [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Contingent content liability | |
Fair Value, Inputs, Level 2 [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Contingent content liability | |
Fair Value, Inputs, Level 3 [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Contingent content liability | $ 4,369 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) Integer | Sep. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) Integer | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Property, Plant and Equipment [Line Items] | ||||||
Net gain loss foreign currency transaction | $ 684 | $ (589) | $ (494) | $ (761) | ||
Revenue remaining performance obligation | 500 | 500 | ||||
Amounts due to customers current | $ 1,362 | $ 1,362 | $ 2,171 | |||
Number of third party gaming products available | Integer | 3,200 | 3,200 | ||||
Liabilities to users | $ 8,946 | $ 8,946 | $ 8,984 | |||
Finite lived intangible asset, useful life | 5 years | |||||
Goodwill impairment | $ 28,900 | $ 28,900 | ||||
Number of operating segments | Integer | 2 | |||||
Software and Software Development Costs [Member] | Minimum [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Finite lived intangible asset, useful life | 3 years | |||||
Software and Software Development Costs [Member] | Maximum [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Finite lived intangible asset, useful life | 5 years | |||||
Northern Europe And Latin America [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Cash deposits | $ 33,000 | $ 33,000 |
SUMMARY OF CONSIDERATION TRANSF
SUMMARY OF CONSIDERATION TRANSFERRED (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Business Combination and Asset Acquisition [Abstract] | |
Present value of future fixed fee payments | $ 18,808 |
Net assets recognized under original agreement | 3,067 |
Contingent consideration | 4,369 |
Total | $ 26,244 |
SUMMARY OF INTANGIBLE ASSETS AC
SUMMARY OF INTANGIBLE ASSETS ACQUIRED (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 26,244 |
Content Licenses [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets acquired, estimated useful life (in years) | 4 years 7 months 6 days |
Intangible assets | $ 22,938 |
Customer Relationships [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets acquired, estimated useful life (in years) | 4 years |
Intangible assets | $ 3,306 |
Right of use Lease Asset [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets acquired, estimated useful life (in years) | 4 years 7 months 6 days |
Intangible assets | $ 116 |
Right of use Lease Liability [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets acquired, estimated useful life (in years) | 4 years 7 months 6 days |
Intangible assets | $ (116) |
ACQUISITION (Details Narrative)
ACQUISITION (Details Narrative) - USD ($) $ in Millions | 9 Months Ended | |
Apr. 05, 2022 | Sep. 30, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Payment to acquire business | $ 25 | |
Payment of fixed fees | $ 5.5 | |
Assets acquired with expected future expenses | $ 1.4 | |
Assets acquired with expected future expenses term | 5 years | |
Content Licensing Agreement [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Payment to acquire business | $ 25 | |
Due in 2022 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Payment of fixed fees | $ 4.5 | |
2023 Through 2025 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Payment of fixed fees | $ 5 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, cost | $ 5,442 | $ 4,989 |
Less: accumulated depreciation | (2,894) | (2,444) |
Total | 2,548 | 2,545 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, cost | $ 3,791 | 2,935 |
Furniture and Fixtures [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment useful life | 3 years | |
Furniture and Fixtures [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment useful life | 5 years | |
Platform Hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, cost | $ 1,651 | $ 2,054 |
Property plant and equipment useful life | 5 years |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expenses | $ 312 | $ 260 | $ 926 | $ 717 |
SCHEDULE OF CAPITALIZED COMPUTE
SCHEDULE OF CAPITALIZED COMPUTER SOFTWARE COSTS, NET (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Research and Development [Abstract] | ||
Capitalized software development costs | $ 32,059 | $ 26,127 |
Development in progress | 2,528 | 5,910 |
Total capitalized software development, cost | 34,587 | 32,037 |
Less: accumulated amortization | (18,498) | (17,607) |
Total | $ 16,089 | $ 14,430 |
CAPITALIZED SOFTWARE DEVELOPM_3
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Research and Development [Abstract] | ||||
Amortization expense | $ 1,438 | $ 908 | $ 4,552 | $ 2,569 |
SCHEDULE OF GOODWILL (Details)
SCHEDULE OF GOODWILL (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Indefinite-Lived Intangible Assets [Line Items] | ||||
Balance at January 1, 2022 | $ 146,142 | |||
Impairment | (28,861) | |||
Effect of foreign currency translation | (18,195) | |||
Balance at September 30, 2022 | 99,086 | 99,086 | ||
Business to Business (B2B) [Member] | ||||
Indefinite-Lived Intangible Assets [Line Items] | ||||
Balance at January 1, 2022 | 72,230 | |||
Impairment | (28,861) | |||
Effect of foreign currency translation | (8,082) | |||
Balance at September 30, 2022 | 35,287 | 35,287 | ||
Business to Consumer (B2C) [Member] | ||||
Indefinite-Lived Intangible Assets [Line Items] | ||||
Balance at January 1, 2022 | 73,912 | |||
Impairment | ||||
Effect of foreign currency translation | (10,113) | |||
Balance at September 30, 2022 | $ 63,799 | $ 63,799 |
SCHEDULE OF FINITE-LIVED INTANG
SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Indefinite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 69,523 | $ 48,910 |
Accumulated Amortization | (21,789) | (13,017) |
Net Carrying Amount | $ 47,734 | $ 35,893 |
Weighted Average Amortization Period | 5 years | |
Developed Technology Rights [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 3 years 9 months 18 days | 3 years |
Content Licenses [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 4 years 7 months 6 days | |
Customer Relationships [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 3 years 7 months 6 days | 3 years |
Trademarks and Trade Names [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 10 years | 10 years |
License [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 7 years 3 months 18 days | 6 years 4 months 24 days |
Developed Technology Rights [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 30,671 | $ 27,390 |
Accumulated Amortization | (13,792) | (9,130) |
Net Carrying Amount | 16,879 | 18,260 |
Content Licenses [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 22,938 | |
Accumulated Amortization | (2,502) | |
Net Carrying Amount | 20,436 | |
Customer Relationships [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 8,019 | 5,460 |
Accumulated Amortization | (3,162) | (1,820) |
Net Carrying Amount | 4,857 | 3,640 |
Trademarks and Trade Names [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 4,887 | 5,699 |
Accumulated Amortization | (1,089) | (882) |
Net Carrying Amount | 3,798 | 4,817 |
License [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,008 | 2,219 |
Accumulated Amortization | (1,244) | (1,185) |
Net Carrying Amount | $ 1,764 | 1,034 |
In-Process Technology [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 8,142 | |
Accumulated Amortization | ||
Net Carrying Amount | $ 8,142 |
SCHEDULE OF FINITE-LIVED INTA_2
SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2022 | $ 4,369 |
2023 | 17,611 |
2024 | 8,005 |
2025 | 7,996 |
2026 | 2,330 |
Thereafter | $ 7,423 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill, impairment | $ 28,900 | $ 28,900 | |||
Intangible assets estimated useful life | 5 years | ||||
Amortization expense intangible assets | $ 4,135 | $ 3,356 | $ 11,285 | $ 9,319 |
SCHEDULE OF ACCRUED EXPENSES (D
SCHEDULE OF ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Content license fees | $ 1,480 | $ 2,402 |
Other | 1,194 | 2,267 |
Total | $ 2,674 | $ 4,669 |
SCHEDULE OF LONG TERM DEBT (Det
SCHEDULE OF LONG TERM DEBT (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Apr. 26, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | |||
Principal | $ 30,000 | $ 30,000 | |
Effective interest rate | 13.28% | ||
Less unamortized debt issuance costs | $ (2,145) | ||
Long-term debt, net | $ 27,855 |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Apr. 26, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Offsetting Assets [Line Items] | ||||
Debt principal amount | $ 30,000 | $ 30,000 | $ 30,000 | |
Interest rate | 9.50% | |||
Maturity date | Oct. 26, 2026 | |||
Debt issuance costs | 2,400 | 2,400 | ||
Credit facility amount | 27,600 | 27,600 | ||
Interest expense | 1,071 | 1,735 | ||
Amortization of debt issuance costs | $ 185 | $ 280 | ||
Interest Rate Floor [Member] | ||||
Offsetting Assets [Line Items] | ||||
Interest rate | 1% |
SCHEDULE OF SHARE-BASED COMPENS
SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTION ACTIVITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||
Number of Shares, Outstanding, beginning balance | 4,138,215 | |
Weighted Average Exercise Price, Outstanding, beginning balance | $ 13.05 | |
Weighted average contractual term, outstanding ending | 7 years 7 months 6 days | 8 years 18 days |
Aggregate intrinsic value, outstanding | $ 11,229 | |
Number of Shares, Granted | 947,002 | |
Weighted Average Exercise Price, Granted | $ 0.03 | |
Number of Shares, Exercised | (375,416) | |
Weighted Average Exercise Price, Exercised | $ 1.93 | |
Number of Shares, Forfeited/expired or cancelled | (998,942) | |
Weighted Average Exercise Price, Forfeited/expired or cancelled | $ 15.29 | |
Number of Shares, Outstanding, ending balance | 3,710,859 | 4,138,215 |
Weighted Average Exercise Price, Outstanding, ending balance | $ 10.25 | $ 13.05 |
Aggregate intrinsic value, outstanding | $ 1,756 | $ 11,229 |
Number of Shares, Options, exercisable at end of period | 2,271,058 | |
Weighted Average Exercise Price, Options, exercisable at end of period | $ 8.44 | |
Weighted average contractual term, option exercisable | 6 years 11 months 19 days | |
Aggregate intrinsic value, Options, exercisable at end of period | $ 672 |
SCHEDULE OF SHARE BASED COMPENS
SCHEDULE OF SHARE BASED COMPENSATION, RESTRICTED STOCK UNIT ACTIVITY (Details) - Restricted Stock Units (RSUs) [Member] | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of Shares Outstanding, Beginning Balance | shares | 369,140 |
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 10.78 |
Number of Shares, Granted | shares | 1,413,333 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | $ 5.23 |
Number of Shares, Vested | shares | (213,245) |
Weighted Average Grant Date Fair Value, Vested | $ / shares | $ 9.53 |
Number of Shares, Forfeited/expired or cancelled | shares | (73,622) |
Weighted Average Grant Date Fair Value, Forfeited/expired or cancelled | $ / shares | $ 7.84 |
Number of Shares Outstanding, Ending Balance | shares | 1,495,606 |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 5.86 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2022 | Aug. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Jan. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Apr. 30, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Shares granted | 947,002 | ||||||||||
Exercise price | $ 1.93 | ||||||||||
Weighted average grant date fair value of options | $ 0.13 | $ 8 | $ 4.13 | $ 11.49 | |||||||
Employee Bonuses [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Settlement of an employee liability | $ 913,000 | ||||||||||
Vested options | 189,959 | ||||||||||
Weighted average fair value, vested | $ 0.01 | ||||||||||
Capitalized Software Development Costs [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Capitalized computer software net | $ 67,000 | $ 67,000 | |||||||||
Share-Based Payment Arrangement, Option [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Capitalized computer software net | 948,000 | $ 1,693,000 | 2,596,000 | $ 4,639,000 | |||||||
Unrecognized compensation cost | $ 11,401 | 11,401 | $ 11,401 | ||||||||
Unrecognized compensation weighted average period | 2 years 8 months 12 days | ||||||||||
Restricted vested units, granted percentage | 25% | ||||||||||
Vesting term, description | after one year and then monthly over the next 36 months thereafter and have a maximum term of ten years | ||||||||||
Share-Based Payment Arrangement, Option [Member] | Software Development [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Capitalized computer software net | 87,000 | 65,000 | $ 226,000 | 170,000 | |||||||
Restricted Stock Units (RSUs) [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Capitalized computer software net | 958,000 | $ 65,000 | $ 3,151,000 | 195,000 | |||||||
Unrecognized compensation weighted average period | 3 years 2 months 12 days | ||||||||||
Unrecognized compensation cost | $ 6,785,000 | ||||||||||
Fair value of restricted stock | $ 5.23 | ||||||||||
Restricted Stock Units (RSUs) [Member] | Employees [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Restricted vested units, granted percentage | 25% | 25% | 25% | 25% | 25% | ||||||
Restricted ordinary shares | 50,317 | 34,659 | 28,754 | 1,117,437 | 108,720 | ||||||
Restricted vested units, term | 4 years | 4 years | 4 years | 4 years | 4 years | ||||||
Restricted Stock Units (RSUs) [Member] | Non-Employee Directors [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Restricted ordinary shares | 73,446 | ||||||||||
Accrued liability-classified share based compensation | $ 148,000 | 148,000 | $ 148,000 | ||||||||
Restricted Stock [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Capitalized computer software net | 41,000 | $ 125,000 | $ 770,000 | ||||||||
Unrecognized compensation weighted average period | 1 year 2 months 12 days | ||||||||||
Unrecognized compensation cost | $ 194,000 | $ 194,000 | $ 194,000 | ||||||||
Restricted Stock [Member] | Silverback Gaming [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Restricted ordinary shares | 51,654 | ||||||||||
Fair value of restricted stock | $ 9.68 | ||||||||||
2020 Equity Incentive Plan [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Granted ordinary shares | 7,559,574 | 7,559,574 | 7,559,574 | 4,400,000 | |||||||
Granted ordinary shares, increased percentage | 4% | ||||||||||
Granted ordinary shares, future issuance | 508,173 | 508,173 | 508,173 | ||||||||
2020 Plan [Member] | Share-Based Payment Arrangement, Option [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Shares purchased | 947,002 | ||||||||||
2020 Plan [Member] | Share-Based Payment Arrangement, Option [Member] | European Based Employees [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Shares granted | 944,002 | ||||||||||
Exercise price | $ 0.01 | ||||||||||
2020 Employee Stock Purchase Plan [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Employee stock purchase plan, description | The ESPP provides initially for 300,000 ordinary shares to be sold and increases on February 1, 2022 and on each subsequent February 1 through and including February 1, 2030, equal to the lesser of (i) 0.25 percent of the number of ordinary shares issued and outstanding on the immediately preceding December 31, or (ii) 100,000 ordinary shares, or (iii) such number of ordinary shares as determined by the Board of Directors | ||||||||||
Shares to be sold | 300,000 | ||||||||||
Purchase price, rate | 85% | ||||||||||
Shares issued employee stock purchase plan | 74,707 | ||||||||||
Share-based compensation expenses | $ 64,000 | $ 86,000 |
SCHEDULE OF ANTI-DILUTIVE STOCK
SCHEDULE OF ANTI-DILUTIVE STOCK EXCLUDED FROM COMPUTATION OF DILUTED EARNINGS PER SHARE (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 5,240,901 | 4,271,571 | 5,240,901 | 4,271,571 |
Share-Based Payment Arrangement, Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 3,710,859 | 4,268,981 | 3,710,859 | 4,268,981 |
Restricted Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 34,436 | 34,436 | ||
Restricted Stock Units (RSUs) [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 1,495,606 | 2,590 | 1,495,606 | 2,590 |
SCHEDULE OF REVENUE RECOGNIZED
SCHEDULE OF REVENUE RECOGNIZED IN LINE WITH THE TIMING OF TRANSFER OF SERVICES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total | $ 32,120 | $ 32,268 | $ 104,581 | $ 93,736 |
Transferred at Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | 19,435 | 22,621 | 65,468 | 64,030 |
Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | $ 12,685 | $ 9,647 | $ 39,113 | $ 29,706 |
SCHEDULE OF CONTRACT WITH CUSTO
SCHEDULE OF CONTRACT WITH CUSTOMERS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Revenue from Contract with Customer [Abstract] | |||||
Contract liabilities from advance customer payments, beginning of the period | $ 459 | $ 1,811 | $ 1,874 | $ 1,083 | |
Contract liabilities from advance customer payments, end of the period | [1] | 1,467 | 1,808 | 1,467 | 1,808 |
Revenue recognized from amounts included in contract liabilities from advance customer payments at the beginning of the period | $ 250 | $ 179 | $ 775 | $ 121 | |
[1]Contract liabilities from advance customer payments, end of period consisted of $ 479 740 989 1,067 |
SCHEDULE OF CONTRACT WITH CUS_2
SCHEDULE OF CONTRACT WITH CUSTOMERS (Details) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | ||
Contract with customer, liability | $ 1,467 | [1] | $ 459 | $ 1,874 | $ 1,808 | [1] | $ 1,811 | $ 1,083 |
Other Current Liabilities [Member] | ||||||||
Contract with customer, liability | 479 | 740 | ||||||
Other Liabilities [Member] | ||||||||
Contract with customer, liability | $ 989 | $ 1,067 | ||||||
[1]Contract liabilities from advance customer payments, end of period consisted of $ 479 740 989 1,067 |
SCHEDULE OF FINANCIAL INFORMATI
SCHEDULE OF FINANCIAL INFORMATION FOR REPORTABLE SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||||||
Segment Reporting Information [Line Items] | |||||||||
Revenue | $ 32,120 | $ 32,268 | $ 104,581 | $ 93,736 | |||||
Cost of revenue | [1] | 9,435 | 10,801 | 31,598 | 29,876 | ||||
Segment gross profit | 22,685 | 21,467 | 72,983 | 63,860 | |||||
Business to Business (B2B) [Member] | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenue | 12,685 | 11,175 | 39,905 | 34,349 | |||||
Cost of revenue | 2,173 | [2] | 3,583 | [2] | 9,015 | [3] | 8,632 | [3] | |
Segment gross profit | 10,512 | 7,592 | 30,890 | 25,717 | |||||
Business to Consumer (B2C) [Member] | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenue | 19,435 | 21,093 | 64,676 | 59,387 | |||||
Cost of revenue | 7,262 | [2] | 7,218 | [2] | 22,583 | [3] | 21,244 | [3] | |
Segment gross profit | $ 12,173 | $ 13,875 | $ 42,093 | $ 38,143 | |||||
[1]Excludes depreciation and amortization expense[2]Excludes depreciation and amortization expense[3]Excludes depreciation and amortization expense |
RECONCILIATION OF CONSOLIDATED
RECONCILIATION OF CONSOLIDATED SEGMENT PROFIT TO CONSOLIDATED INCOME (LOSS) BEFORE INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Segment Reporting [Abstract] | |||||
Segment gross profit | [1] | $ 22,685 | $ 21,467 | $ 72,983 | $ 63,860 |
Sales and marketing | 6,757 | 5,657 | 20,122 | 15,238 | |
Product and technology | 4,998 | 5,492 | 19,140 | 15,564 | |
General and administrative | [2] | 10,185 | 12,888 | 33,265 | 35,217 |
Impairment | 28,861 | ||||
Restructuring | 1,771 | ||||
Depreciation and amortization | 5,893 | 4,560 | 16,862 | 12,686 | |
Interest expense, net | 1,450 | 2,521 | 1 | ||
Other income | (13) | (283) | |||
Loss before income taxes | $ (6,585) | $ (7,130) | $ (49,276) | $ (14,846) | |
[1]Excludes depreciation and amortization expense[2]Excludes depreciation and amortization expense |
SCHEDULE OF DISAGGREGATION OF R
SCHEDULE OF DISAGGREGATION OF REVENUE BY PRODUCTS AND SERVICES FOR EACH SEGMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue from External Customer [Line Items] | ||||
Total revenue | $ 32,120 | $ 32,268 | $ 104,581 | $ 93,736 |
Business to Business (B2B) [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenue | 12,685 | 11,175 | 39,905 | 34,349 |
Business to Consumer (B2C) [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenue | 19,435 | 21,093 | 64,676 | 59,387 |
Platform And Content License Fees [Member] | Business to Business (B2B) [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenue | 9,988 | 8,743 | 31,208 | 27,252 |
Development Services And Other [Member] | Business to Business (B2B) [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenue | 2,697 | 2,432 | 8,697 | 7,097 |
Sportsbook [Member] | Business to Consumer (B2C) [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenue | 7,763 | 7,886 | 28,023 | 27,794 |
Casino [Member] | Business to Consumer (B2C) [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenue | 11,093 | 12,323 | 34,924 | 29,306 |
Poker [Member] | Business to Consumer (B2C) [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenue | $ 579 | $ 884 | $ 1,729 | $ 2,287 |
SCHEDULE OF REVENUE BY LOCATION
SCHEDULE OF REVENUE BY LOCATION OF THE CUSTOMER (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 32,120 | $ 32,268 | $ 104,581 | $ 93,736 |
UNITED STATES | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 10,320 | 9,107 | 33,531 | 28,186 |
Europe [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 10,574 | 11,598 | 33,343 | 36,855 |
Latin America [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 9,492 | 9,854 | 32,910 | 23,711 |
Rest Of The World [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 1,734 | $ 1,709 | $ 4,797 | $ 4,984 |
SEGMENT REPORTING (Details Narr
SEGMENT REPORTING (Details Narrative) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
One Customer [Member] | Revenue [Member] | B 2 B Segment [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Revenue percentage | 22.50% | 14.70% | 20.20% | 13.50% |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Effective income tax rate | (5.40%) | (21.70%) | (1.00%) | (21.60%) |
Statutory tax rate | 0% | |||
BERMUDA | ||||
Effective income tax rate | 0% | 0% | 0% | 0% |
RESTRUCTURING (Details Narrativ
RESTRUCTURING (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disclosure Restructuring Abstract | ||||
Restructuring charges | $ 1,771 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Apr. 05, 2022 | Mar. 07, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Apr. 25, 2022 | Jan. 27, 2022 | Jun. 30, 2021 | |
Product Liability Contingency [Line Items] | ||||||||||
Payment to acquire business | $ 25,000 | |||||||||
Payment of fixed fees | $ 5,500 | |||||||||
Contingent content liability | $ 4,369 | 4,369 | ||||||||
Interest expense | 1,450 | $ 2,521 | $ 1 | |||||||
Chilean Tax Administration [Member] | ||||||||||
Product Liability Contingency [Line Items] | ||||||||||
Value added tax rate | 20% | 19% | ||||||||
Due in 2022 [Member] | ||||||||||
Product Liability Contingency [Line Items] | ||||||||||
Payment of fixed fees | $ 4,500 | |||||||||
2023 Through 2025 [Member] | ||||||||||
Product Liability Contingency [Line Items] | ||||||||||
Payment of fixed fees | 5,000 | |||||||||
Content Licensing Agreements [Member] | ||||||||||
Product Liability Contingency [Line Items] | ||||||||||
Present value of remaining fixed fee payments | 15,200 | |||||||||
Contingent content liability | 4,400 | 4,400 | ||||||||
Interest expense | $ 400 | 800 | ||||||||
Service [Member] | ||||||||||
Product Liability Contingency [Line Items] | ||||||||||
Service fees | $ 1,500 | |||||||||
Licensing Agreements [Member] | ||||||||||
Product Liability Contingency [Line Items] | ||||||||||
Contractual obligation | $ 3,000 | $ 3,000 | $ 48,500 | |||||||
Initial payment | $ 3,500 | |||||||||
Impairment loss | $ 3,500 | |||||||||
Licensing Agreements [Member] | Execution [Member] | ||||||||||
Product Liability Contingency [Line Items] | ||||||||||
Payment of contractual obligation | $ 8,500 |