Core Insights - AGS, a global gaming supplier, launched its new slot family, Mariachi Fortunes Trio™, in a bi-state world premiere at Yaamava' Resort & Casino and Palms Casino Resort [1][4] Group 1: Launch Event - The launch event featured two themes: Fiesta de los Vivos™ at Yaamava' Resort & Casino and Fiesta de las Calacas™ at Palms Casino Resort, showcasing vibrant celebrations [2][3] - Both casinos transformed their floors into lively Mexico-style plazas with themed decorations, folklorico dancers, and live mariachi bands [3] Group 2: Game Features - Mariachi Fortunes Trio™ includes two energetic themes filled with colorful art, upbeat mariachi music, and festive symbols like piñatas and sombreros [6] - The game offers a triple-pot, hold-and-spin experience where players collect coins on mariachi characters' hats to unlock unique bonuses [6] Group 3: Company Background - AGS focuses on creating diverse gaming experiences and has expanded from the Class II Native American gaming market to become a leading commercial gaming supplier [8] - Yaamava' Resort & Casino is recognized as a AAA Five-Diamond rated destination and has received multiple awards for its gaming and dining experiences [9] - Palms Casino Resort is notable for being the first Las Vegas resort fully owned and operated by a Native American tribe, offering a mix of luxury accommodations and entertainment options [11]

Core Points - BlackRock, Inc. has notified Ageas that its shareholding has exceeded the legal threshold of 5%, currently standing at 7.78% as of July 1, 2025 [1] - The notification was due to the acquisition or disposal of control of an undertaking that holds a participating interest in Ageas [1] - Ageas is a Belgian international insurance group with a 200-year heritage, focusing on life and non-life insurance products, and operates primarily in Europe and Asia [4] Company Structure and Changes - Following the acquisition of HPS Investment Partners, BlackRock's group structure has changed, with BlackRock, Inc. contributing its equity interests in BlackRock Finance, Inc. and Global Infrastructure Management, LLC to a wholly owned subsidiary, BlackRock Saturn Subco, LLC [2] - The full chain of controlled undertakings through which BlackRock's holding is effectively held can be found on Ageas's investor website [1] Ageas Overview - Ageas operates successful insurance businesses in multiple countries including Belgium, the UK, Portugal, Türkiye, China, and several Southeast Asian nations, employing around 50,000 people [4] - The company reported annual inflows of EUR 18.5 billion in 2024, indicating a strong market presence [4]

Group 1 - The acquisition of Acromas Insurance Company Limited (AICL) by Ageas has been completed following the necessary regulatory approvals [1] - This acquisition marks the beginning of a 20-year partnership with Saga Services Limited for distributing personal lines Motor and Home insurance products [2] - The acquisition aligns with Ageas's Elevate27 strategy, focusing on the growing market of the ageing population, enhancing its position as a leading personal lines insurer in the UK [3] Group 2 - The total consideration for the acquisition is approximately GBP 67 million, to be paid between the acquisition and the operational start date of the partnership [4] - Ageas is a significant player in the European and Asian insurance markets, with a history of 200 years and annual inflows of EUR 18.5 billion in 2024 [5]

Core Insights - Brightstar Capital Partners has successfully acquired PlayAGS, Inc. for approximately $1.1 billion, with AGS stockholders receiving $12.50 per share in cash, resulting in AGS becoming a privately held company [2][3] Group 1: Acquisition Details - The acquisition was first announced on May 9, 2024, and has now closed following stockholder approval and regulatory clearances [2][3] - AGS's common stock will be delisted from the New York Stock Exchange (NYSE) as a result of the acquisition [2] Group 2: AGS Performance - AGS has experienced significant growth, doubling its global slot unit sales to over 6,100 units in the past three years [3] - The company has increased its online real-money gaming content revenue by over 150% and Table Products revenue by more than 50%, achieving three consecutive years of record revenue performance [3] Group 3: Strategic Vision - AGS's CEO, David Lopez, expressed optimism about the partnership with Brightstar, highlighting the potential for accelerated growth and innovation in gaming products [4] - Brightstar aims to leverage AGS's comprehensive product offerings and customer-centric culture to expand into new markets and enhance technological advancements in gaming [4] Group 4: Company Backgrounds - AGS is recognized as a global gaming company with a diverse product portfolio that includes slot machines, table products, and online gaming, focusing on customer success and player engagement [5] - Brightstar Capital Partners is a middle market private equity firm with $5 billion in assets under management, specializing in business services, industrials, consumer, and government services [6]

Core Insights - AGS has been recognized as one of the Best Companies to Work For by U.S. News & World Report for 2025–2026, ranking in the top 30 percent of 2,119 publicly traded companies evaluated [2][3] Company Recognition - AGS was selected based on employee reviews and strong workplace data, with eligibility requiring over 75 reviews on Glassdoor from 2021 to early 2025 [3] - The evaluation considered employee sentiment and six key workplace factors, including pay and benefits, work-life balance, job stability, comfort, belonging, and career opportunities [4] Additional Honors - AGS was also recognized as a 2025 Best and Brightest Companies to Work For in the Nation and in Atlanta, and named a Top Workplace in the U.S. by USA TODAY [5] Company Overview - AGS is a global gaming supplier focused on creating diverse gaming experiences, with a strong presence in the Class II Native American gaming market [7] - The company offers a wide range of products, including Class II and Class III slot machines, table games, real-money gaming platforms, and social casino solutions [7]

Group 1: Debt Issuance - Ageas SA/NV successfully placed its inaugural debt securities amounting to GBP 400 million in Senior Fixed Rate Notes maturing in December 2028, with a first call date in September 2028, generating substantial interest from UK institutional investors [1] - The Notes are issued in denominations of GBP 100,000 at a re-offer price of 99.963, with a fixed coupon rate of 4.75% payable annually, and the first coupon payment scheduled for December 2025 [1] Group 2: Ratings and Listing - Standard and Poor's assigned an A+ rating and Moody's assigned an A1 rating to the Notes [2] - Application has been made for the Notes to be listed on the official list of the Luxembourg Stock Exchange and to be admitted to trading on the Luxembourg Stock Exchange's Euro MTF market, with expected issuance and settlement on 1 July 2025 [2] Group 3: Company Overview - Ageas is a Belgian-rooted international insurance group with a heritage of 200 years, offering both Life and Non-Life insurance products tailored to customer needs, and engaged in reinsurance activities [3] - The company operates in Europe and Asia, representing a significant portion of the global insurance market, with successful businesses in multiple countries including Belgium, the UK, and China, among others [3] - Ageas employs approximately 50,000 people and reported annual inflows of EUR 18.5 billion in 2024 [3]

Company Overview - Ageas Re, the reinsurance arm of Ageas Group, has entered into a reinsurance agreement with Slovenian insurer Triglav Group to enhance its business portfolio and support Ageas's Elevate27 growth strategy [1][3] - Triglav Group is the largest insurance-financial group in the Adria region and operates in six countries, focusing on insurance and asset management [7] - Prima Assicurazioni, a rapidly growing insurtech company, has become the number one direct Motor insurance distributor in Italy since its inception in 2015, generating EUR 1.3 billion in gross written premiums in 2024 [2][6] Partnership Details - Under the agreement, Ageas Re will take an 80% Quota Share on the Prima business underwritten by Triglav Group starting in 2025 [2] - The partnership aims to leverage the tech-driven capabilities of Prima to achieve profitable growth in the attractive European Non-Life insurance market, which generates over EUR 15 billion in premiums [3] Financial Projections - Ageas Re anticipates inflows exceeding EUR 500 million from this transaction in 2025, with a projected Net Operating Result of around EUR 15 million spread over 2025 and 2026 [4] - The impact on Group Solvency is estimated to be no more than -4 points in 2025 [4] Strategic Alignment - The agreement aligns with Ageas's Elevate27 strategy, which focuses on profitable growth in the European Non-Life market [3][5] - Triglav Group aims to enhance its international recognition and expand beyond existing markets through this partnership [5][7]

Core Insights - AGS has been recognized as one of the Best and Brightest Companies to Work For® in the Nation and in Atlanta for the ninth consecutive year, highlighting its strong workplace culture and employee satisfaction [2][3][5] Company Recognition - The awards are based on an independent research-driven assessment of company practices and employee survey results, evaluating areas such as compensation, benefits, engagement, retention, and overall workplace well-being [3][4] - AGS received high marks for its focus on benefits, wellness, community involvement, and workplace creativity, surpassing the Best and Brightest benchmark [3] Employee Experience - The recognition reflects how employees feel about the company, indicating a consistent alignment with AGS's values over the years [4] - AGS's Metro Atlanta offices play a crucial role in its innovation and culture, contributing to both local and national recognition [4] Company Operations - AGS operates across multiple locations in the U.S., including Las Vegas, Reno, Scottsdale, Austin, and Oklahoma City, and has a global presence with teams in six countries outside the U.S. [4][6] - The company focuses on creating diverse gaming experiences and has established itself as a leading commercial gaming supplier [6]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part covers PlayAGS, Inc.'s unaudited financial statements, management's discussion, market risks, and internal controls [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents PlayAGS, Inc.'s unaudited condensed consolidated financial statements and detailed notes for Q1 2025 and Q4 2024 [CONDENSED CONSOLIDATED BALANCE SHEETS](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) The balance sheets present the company's financial position, detailing assets, liabilities, and stockholders' equity | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | **Assets** | | | | Total current assets | $180,220 | $177,683 | | Property and equipment, net | $82,363 | $80,145 | | Goodwill | $286,801 | $286,504 | | Intangible assets, net | $110,112 | $114,833 | | Total assets | $709,681 | $709,592 | | **Liabilities and Stockholders' Equity** | | | | Total current liabilities | $45,421 | $47,855 | | Long-term debt | $529,396 | $530,385 | | Total liabilities | $592,306 | $596,857 | | Total stockholders' equity | $117,375 | $112,735 | | Total liabilities and stockholders' equity | $709,681 | $709,592 | [CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20INCOME) The statements of operations detail the company's revenues, expenses, and net income over the reporting periods | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | | Total revenues | $94,825 | $95,973 | | Income from operations | $16,583 | $19,800 | | Interest expense | $12,117 | $13,980 | | Net income | $3,211 | $4,345 | | Total comprehensive income | $4,691 | $5,267 | | Basic income per common share | $0.07 | $0.11 | | Diluted income per common share | $0.07 | $0.10 | | Weighted average common shares outstanding (Basic) | 41,266 | 39,205 | | Weighted average common shares outstanding (Diluted) | 41,336 | 39,346 | [CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20STOCKHOLDERS'%20EQUITY) This statement outlines changes in stockholders' equity, including net income, stock-based compensation, and share repurchases | Metric | March 31, 2025 (in thousands) | March 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Balance at January 1, 2025/2024 | $112,735 | $67,667 | | Net income | $3,211 | $4,345 | | Foreign currency translation adjustment | $1,480 | $922 | | Stock-based compensation expense | $1,377 | $2,106 | | Stock option exercises | $457 | $50 | | Repurchase of common stock | $(1,885) | $(2,151) | | Balance at March 31, 2025/2024 | $117,375 | $72,939 | [CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) The cash flow statements summarize cash generated and used in operating, investing, and financing activities | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | | Net cash provided by operating activities | $26,553 | $26,325 | | Net cash used in investing activities | $(19,825) | $(15,272) | | Net cash used in financing activities | $(5,420) | $(21,666) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $1,319 | $(10,598) | | Cash, cash equivalents and restricted cash, end of period | $48,421 | $40,582 | [NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=8&type=section&id=NOTES%20TO%20THE%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) These notes provide detailed explanations of the company's accounting policies and specific financial line items [NOTE 1. DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=8&type=section&id=NOTE%201.%20DESCRIPTION%20OF%20THE%20BUSINESS%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note describes PlayAGS, Inc.'s business segments and outlines its significant accounting policies - PlayAGS, Inc. operates in three distinct segments: **Electronic Gaming Machines (EGM)**, **Table Products**, and **Interactive Games**, each involved in the design, development, acquisition, manufacturing, marketing, distribution, installation, and servicing of their respective product lines[20](index=20&type=chunk) Disaggregated Revenues by Segment (Three Months Ended March 31) | Segment | 2025 (in thousands) | 2024 (in thousands) | | :---------------- | :------------------ | :------------------ | | **EGM** | | | | Gaming operations | $53,428 | $53,799 | | Equipment sales | $29,175 | $33,452 | | Total EGM | $82,603 | $87,251 | | **Table Products** | | | | Gaming operations | $4,242 | $4,105 | | Equipment sales | $711 | $461 | | Total Table Products | $4,953 | $4,566 | | **Interactive** | | | | Gaming Operations | $7,269 | $4,156 | | Total Interactive | $7,269 | $4,156 | | **Total Revenue** | $94,825 | $95,973 | - The company has not adopted any new accounting pronouncements in the current period, and no recently issued accounting guidance is anticipated to have a significant material effect on the condensed consolidated financial statements[67](index=67&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk) [NOTE 2. PROPERTY AND EQUIPMENT](index=17&type=section&id=NOTE%202.%20PROPERTY%20AND%20EQUIPMENT) This note details the company's property and equipment, including gaming equipment and depreciation expense Property and Equipment, Net (in thousands) | Category | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Gaming equipment | $277,245 | $271,406 | | Other property and equipment | $29,991 | $28,708 | | Less: Accumulated depreciation | $(224,873) | $(219,969) | | **Total property and equipment, net** | **$82,363** | **$80,145** | - Depreciation expense for the three months ended March 31, 2025, was **$9.4 million**, a decrease from **$10.1 million** for the same period in 2024[70](index=70&type=chunk) [NOTE 3. GOODWILL AND INTANGIBLES](index=18&type=section&id=NOTE%203.%20GOODWILL%20AND%20INTANGIBLES) This note provides information on goodwill and intangible assets, including amortization expense Goodwill Carrying Amount (in thousands) | Segment | December 31, 2024 | Foreign Currency Adjustments | March 31, 2025 | | :-------- | :---------------- | :--------------------------- | :------------- | | EGM | $277,453 | $297 | $277,750 | | Table Products | $9,051 | - | $9,051 | | Interactive | $- | - | $- | | **Total** | **$286,504** | **$297** | **$286,801** | Intangible Assets, Net (in thousands) | Category | March 31, 2025 Net Carrying Value | December 31, 2024 Net Carrying Value | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Indefinite-lived trade names | $12,126 | $12,126 | | Trade and brand names | $139 | $154 | | Customer relationships | $25,134 | $27,431 | | Contract rights under development and placement fees | $5,203 | $6,581 | | Gaming software and technology platforms | $63,546 | $64,202 | | Intellectual property | $3,964 | $4,339 | | **Total intangible assets, net** | **$110,112** | **$114,833** | - Amortization expense related to intangible assets was **$9.8 million** for the three months ended March 31, 2025, compared to **$9.4 million** for the same period in 2024[73](index=73&type=chunk) [NOTE 4. ACCRUED LIABILITIES](index=19&type=section&id=NOTE%204.%20ACCRUED%20LIABILITIES) This note details the company's accrued liabilities, including salary accruals and deferred revenue Accrued Liabilities (in thousands) | Category | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Salary and payroll tax accrual | $12,474 | $12,375 | | Taxes payable | $2,699 | $3,366 | | Current portion of operating lease liability | $2,961 | $2,886 | | License fee obligation | $1,800 | $1,800 | | Placement fees payable | $1,587 | $3,086 | | Deferred revenue | $2,806 | $3,409 | | Accrued other | $8,254 | $7,071 | | **Total accrued liabilities** | **$32,581** | **$33,993** | [NOTE 5. LONG-TERM DEBT](index=20&type=section&id=NOTE%205.%20LONG-TERM%20DEBT) This note outlines the company's long-term debt, including term loans and revolving credit facilities Long-Term Debt (in thousands) | Category | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Term loans, net | $533,031 | $533,951 | | Finance leases | $2,970 | $3,022 | | Total debt | $536,001 | $536,973 | | Less: Current portion | $(6,605) | $(6,588) | | **Long-term debt** | **$529,396** | **$530,385** | - The First Lien Credit Facilities include a **$575.0 million** senior secured first lien term loan maturing on February 15, 2029, and a **$40.0 million** senior secured first lien revolving facility[80](index=80&type=chunk)[82](index=82&type=chunk) - An amendment to the First Lien Credit Agreement on February 5, 2024, reduced the applicable interest margin on the term loan and resulted in **$1.6 million** in loan costs expensed as loss on extinguishment and modification of debt[87](index=87&type=chunk)[88](index=88&type=chunk) [NOTE 6. STOCKHOLDERS' EQUITY](index=22&type=section&id=NOTE%206.%20STOCKHOLDERS'%20EQUITY) This note details common stock outstanding and the company's share repurchase program - As of March 31, 2025, there were **41,449,136 shares** of common stock outstanding[13](index=13&type=chunk)[90](index=90&type=chunk) - The company has a share repurchase program authorized for up to **$50.0 million**, with **$39.8 million** remaining available as of March 31, 2025. The program was extended to August 11, 2025[93](index=93&type=chunk) [NOTE 7. WRITE-DOWNS AND OTHER CHARGES](index=22&type=section&id=NOTE%207.%20WRITE-DOWNS%20AND%20OTHER%20CHARGES) This note explains write-downs and other charges recognized during the reporting period - For the three months ended March 31, 2025, the Company recognized **$0.6 million** in write-downs and other charges, primarily from the disposal of long-lived assets and impairment of intangible assets[95](index=95&type=chunk) - In contrast, the Company did not recognize any meaningful write-downs and other charges for the three months ended March 31, 2024[95](index=95&type=chunk) [NOTE 8. BASIC AND DILUTED INCOME](index=23&type=section&id=NOTE%208.%20BASIC%20AND%20DILUTED%20INCOME) This note presents basic and diluted income per common share and related calculations Basic and Diluted Income Per Common Share | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net income attributable to common stock | $3,036 | $4,019 | | Weighted average of common shares outstanding, basic | 41,266 | 39,205 | | Weighted average of common shares outstanding, diluted | 41,336 | 39,346 | | Basic income per common share | $0.07 | $0.11 | | Diluted income per common share | $0.07 | $0.10 | - Excluded from diluted EPS calculation for Q1 2025 were **425,286 restricted shares** subject to unmet performance vesting conditions[98](index=98&type=chunk) [NOTE 9. BENEFIT PLANS](index=23&type=section&id=NOTE%209.%20BENEFIT%20PLANS) This note describes the company's 401(k) plan and long-term incentive plans - The expense associated with the 401(k) Plan was **$0.6 million** for both the three months ended March 31, 2025, and 2024[99](index=99&type=chunk) - The 2014 Long-Term Incentive Plan (LTIP) was terminated in April 2024, with remaining awards active until vesting or exercise[100](index=100&type=chunk) - As of March 31, 2025, **1,753,135 shares** were available for issuance under the 2018 Omnibus Incentive Plan[102](index=102&type=chunk) [NOTE 10. STOCK-BASED COMPENSATION](index=24&type=section&id=NOTE%2010.%20STOCK-BASED%20COMPENSATION) This note details stock-based compensation expense and changes in equity awards Unrecognized Stock-Based Compensation Expense (in thousands) | Award Type | March 31, 2025 Unrecognized Compensation Expense | March 31, 2025 Expected Weighted Average Period to be Recognized (years) | | :------------------ | :------------------------------------------ | :---------------------------------------------------------- | | Stock Options | - | - | | Restricted Stock Units | $4,872 | 2.0 | | Phantom Stock Units | $4,237 | 1.3 | - No stock options were granted during the three months ended March 31, 2025, or 2024[106](index=106&type=chunk) Changes in Stock Options, Restricted Stock Units, and Phantom Stock Units Outstanding (March 31, 2025) | Category | Stock Options | Restricted Stock Units | Phantom Stock Units (Equity) | Phantom Stock Units (Liability) | | :-------------------------------- | :------------ | :--------------------- | :--------------------------- | :------------------------------ | | Outstanding as of Dec 31, 2024 | 570,839 | 1,061,184 | 1,511,660 | 210,416 | | Granted | - | 4,125 | - | - | | Exercised/Vested | 120,458 | 318,588 | 93,730 | - | | Canceled or forfeited | - | - | 24,721 | 3,589 | | Outstanding as of March 31, 2025 | 450,381 | 746,721 | 1,393,209 | 206,827 | [NOTE 11. INCOME TAXES](index=27&type=section&id=NOTE%2011.%20INCOME%20TAXES) This note explains the company's effective income tax rate and its components - The effective income tax rate for the three months ended March 31, 2025, was an expense of **30.7%**, compared to **13.2%** for the same period in 2024[118](index=118&type=chunk) - The difference from the federal statutory rate of **21.0%** in 2025 is primarily due to the lapse of statute for certain foreign tax attributes, net of tax credits[118](index=118&type=chunk) - The difference from the federal statutory rate in 2024 was primarily due to changes in the valuation allowance on deferred tax assets[118](index=118&type=chunk) [NOTE 12. COMMITMENTS AND CONTINGENCIES](index=27&type=section&id=NOTE%2012.%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines the company's legal proceedings, tax disputes, and merger-related challenges - The securities class action lawsuit, alleging violations of the Exchange Act and Securities Act, was dismissed by the lower court on February 13, 2024, and affirmed by the Ninth Circuit on March 27, 2025. The plaintiff intends to petition for rehearing en banc[124](index=124&type=chunk)[125](index=125&type=chunk) - A shareholder derivative lawsuit, piggy-backing on the class action, remains stayed pending the final resolution of the securities class action appeal[126](index=126&type=chunk) - The company is disputing an **$8.2 million** assessment from Mexican tax authorities (SAT) related to NAFTA compliance for imported EGMs, believing its documentation is sufficient. A restricted cash deposit has been made, and the company has not accrued any liability due to the inability to accurately estimate potential loss[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk) - Demand letters and two lawsuits have been filed by purported stockholders challenging disclosures in the proxy statement related to the Merger Agreement. The company believes its disclosures comply with law but voluntarily supplemented them to avoid nuisance[131](index=131&type=chunk) [NOTE 13. OPERATING SEGMENTS](index=30&type=section&id=NOTE%2013.%20OPERATING%20SEGMENTS) This note provides financial information for the company's EGM, Table Products, and Interactive operating segments - The company's operating segments (**EGM**, **Table Products**, **Interactive**) are evaluated based on revenues and segment Adjusted EBITDA, which is a non-GAAP measure excluding items like depreciation, amortization, and stock-based compensation[134](index=134&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk)[138](index=138&type=chunk) Segment Revenues and Adjusted EBITDA (Three Months Ended March 31, 2025, in thousands) | Segment | Total Revenues | Adjusted EBITDA | | :---------------- | :------------- | :-------------- | | EGM | $82,603 | $34,934 | | Table Products | $4,953 | $2,641 | | Interactive | $7,269 | $4,525 | | **Total** | **$94,825** | **$42,100** | Segment Revenues and Adjusted EBITDA (Three Months Ended March 31, 2024, in thousands) | Segment | Total Revenues | Adjusted EBITDA | | :---------------- | :------------- | :-------------- | | EGM | $87,251 | $39,681 | | Table Products | $4,566 | $2,406 | | Interactive | $4,156 | $1,932 | | **Total** | **$95,973** | **$44,019** | [NOTE 14. ACQUISITIONS](index=31&type=section&id=NOTE%2014.%20ACQUISITIONS) This note details the Merger Agreement for PlayAGS, Inc.'s acquisition by Brightstar Capital Partners - On **May 8, 2024**, PlayAGS, Inc. entered into a Merger Agreement to be acquired by affiliates of Brightstar Capital Partners[140](index=140&type=chunk) - Upon closing, each share of common stock will be converted into the right to receive **$12.50 in cash**[142](index=142&type=chunk) - Key closing conditions met include stockholder approval (**August 6, 2024**) and expiration of HSR waiting periods (**December 9, 2024**). The initial termination date was extended to **August 6, 2025**, with the merger expected to close by the **third calendar quarter of 2025**, subject to gaming regulatory approvals[143](index=143&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=33&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section analyzes PlayAGS, Inc.'s financial condition and results of operations for the reporting period [Overview](index=33&type=section&id=Overview) This overview describes PlayAGS, Inc.'s business, product lines, and recent merger agreement - PlayAGS, Inc. is a leading designer and supplier of **EGMs** and other gaming products, operating in three segments: **EGMs**, **Table Products**, and **Interactive**. The company has expanded its product line since 2014 to include Class III EGMs, table game products, and interactive products[144](index=144&type=chunk) - For the three months ended March 31, 2024, approximately **68% of revenue** was generated through recurring contracted lease agreements (revenue sharing or fee-per-day) or recurring revenue from Interactive gaming operations[144](index=144&type=chunk) - The company entered into a Merger Agreement on **May 8, 2024**, to be acquired by affiliates of Brightstar Capital Partners for **$12.50 per share** in cash, with the transaction expected to close by **Q3 2025**, subject to regulatory approvals[145](index=145&type=chunk)[146](index=146&type=chunk)[149](index=149&type=chunk) [Key Drivers of Our Business](index=36&type=section&id=Key%20Drivers%20of%20Our%20Business) This section identifies the primary factors influencing the company's revenue and expenses - Revenue is primarily driven by consumer spending on revenue share installed base, daily fees and selling prices of EGMs, revenue share percentages, customer capital budgets, replacement/expansion of casinos, new gaming jurisdictions, competitiveness of products, and macroeconomic factors[157](index=157&type=chunk) - Expenses are influenced by fluctuations in labor costs (productivity, overtime, training), component prices for gaming equipment, energy prices, costs of obtaining/maintaining gaming licenses, maintenance expenses, and tariffs/trade policy changes[157](index=157&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's consolidated financial performance Consolidated Statements of Operations (Three Months Ended March 31, in thousands) | Metric | 2025 | 2024 | $ Change | % Change | | :-------------------------------- | :----- | :----- | :------- | :------- | | Total revenues | $94,825 | $95,973 | $(1,148) | (1.2)% | | Total operating expenses | $78,242 | $76,173 | $2,069 | 2.7% | | Income from operations | $16,583 | $19,800 | $(3,217) | (16.2)% | | Interest expense | $12,117 | $13,980 | $(1,863) | (13.3)% | | Loss on extinguishment and modification of debt | $- | $1,636 | $(1,636) | (100.0)% | | Income before income taxes | $4,635 | $5,006 | $(371) | (7.4)% | | Income tax expense | $(1,424) | $(661) | $(763) | 115.4% | | Net income | $3,211 | $4,345 | $(1,134) | (26.1)% | - Gaming operations revenue increased by **$2.9 million** (**4.6%**) year-over-year, driven by growth in the Interactive segment (**$3.1 million**) and Table Products (**$0.1 million**), partially offset by a decrease in the EGM segment (**$0.4 million**) due to lower revenue per day[159](index=159&type=chunk) - Equipment sales decreased by **$4.0 million** (**11.9%**) due to a reduction of **198 EGM units** sold (**1,243 units** in 2025 vs. **1,441 in 2024**)[160](index=160&type=chunk) - Research and development expenses increased by **$2.3 million** (**21.3%**) primarily due to a **$2.5 million** increase in salaries and benefits[163](index=163&type=chunk) - Interest expense decreased by **$1.9 million** (**13.3%**) due to a lower interest rate from the term loan credit facility repricing and a decrease in outstanding debt principal[166](index=166&type=chunk) [Segment Operating Results](index=39&type=section&id=Segment%20Operating%20Results) This section analyzes the financial performance of each operating segment: EGM, Table Products, and Interactive - EGM segment revenues decreased by **5.3%** to **$82.6 million**, with gaming operations revenue down **0.7%** due to a **$0.86 decrease** in revenue per day (RPD) to **$25.52**, despite a **2.6% increase** in total installed base[177](index=177&type=chunk)[179](index=179&type=chunk) - EGM equipment sales decreased by **12.8%** due to **198 fewer units** sold, while the average sales price (ASP) increased by **5.6%** to **$21,787**[177](index=177&type=chunk)[180](index=180&type=chunk) - Table Products segment revenues increased by **8.5%** to **$5.0 million**, driven by a **3.3%** increase in gaming operations revenue due to a larger installed base (**5,800 units**, up **7.2%**) and a **54.2%** increase in equipment sales[182](index=182&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) - Interactive segment revenue surged by **74.9%** to **$7.3 million**, primarily due to a significant increase in Real Money Gaming (RMG) revenues from Canadian and U.S. operators, driven by more games live on online casino customer sites[187](index=187&type=chunk)[189](index=189&type=chunk) - Interactive Adjusted EBITDA increased by **134.2%** to **$4.5 million**, mainly attributable to the substantial revenue growth[187](index=187&type=chunk)[190](index=190&type=chunk) [TOTAL ADJUSTED EBITDA RECONCILIATION TO NET INCOME](index=43&type=section&id=TOTAL%20ADJUSTED%20EBITDA%20RECONCILIATION%20TO%20NET%20INCOME) This section reconciles Total Adjusted EBITDA to net income, detailing various adjustments Total Adjusted EBITDA Reconciliation (Three Months Ended March 31, in thousands) | Metric | 2025 | 2024 | $ Change | % Change | | :-------------------------------- | :----- | :----- | :------- | :------- | | Net income | $3,211 | $4,345 | $(1,134) | (26.1)% | | Income tax expense | $1,424 | $661 | $763 | 115.4% | | Depreciation and amortization | $19,185 | $19,439 | $(254) | (1.3)% | | Interest expense, net of interest income and other | $11,948 | $13,158 | $(1,210) | (9.2)% | | Loss on extinguishment of debt | $- | $1,636 | $(1,636) | (100.0)% | | Write-downs and other | $558 | $(24) | $582 | (2425.0)% | | Other adjustments | $1,441 | $429 | $1,012 | 235.9% | | Other non-cash charges | $2,236 | $2,269 | $(33) | (1.5)% | | Non-cash stock-based compensation | $2,097 | $2,106 | $(9) | (0.4)% | | **Total Adjusted EBITDA** | **$42,100** | **$44,019** | **$(1,919)** | **(4.4)%** | [LIQUIDITY AND CAPITAL RESOURCES](index=45&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses the company's cash position, credit facilities, and cash flow activities - As of March 31, 2025, the company had **$39.5 million** in cash and cash equivalents and **$40.0 million** available under its revolving credit facility, providing sufficient liquidity for the next twelve months[199](index=199&type=chunk) - Net cash provided by operating activities increased slightly by **$0.2 million** to **$26.6 million**, while net cash used in investing activities increased by **$4.6 million** to **$19.8 million**, primarily due to higher purchases of property and equipment and software development expenditures[202](index=202&type=chunk)[203](index=203&type=chunk)[204](index=204&type=chunk) - Net cash used in financing activities decreased significantly by **$16.2 million** to **$5.4 million**, mainly due to the absence of a **$15.0 million** voluntary debt principal payment made in the prior period[202](index=202&type=chunk)[205](index=205&type=chunk) [OFF-BALANCE SHEET ARRANGEMENTS](index=47&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS) This section confirms the absence of material off-balance sheet transactions or obligations - The company does not maintain any off-balance sheet transactions, arrangements, obligations, or relationships with unconsolidated entities that are reasonably likely to have a material current or future effect on its financial condition or results of operations[207](index=207&type=chunk) [CRITICAL ACCOUNTING POLICIES](index=48&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) This section addresses any material changes to the company's critical accounting policies - There were no material changes to the company's critical accounting policies during the three months ended March 31, 2025[208](index=208&type=chunk) [RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS](index=49&type=section&id=RECENTLY%20ISSUED%20ACCOUNTING%20PRONOUNCEMENTS) This section refers to disclosures regarding recently issued accounting pronouncements - Refer to Note 1. 'Description of the Business and Summary of Significant Accounting Policies' for disclosures regarding recently issued accounting pronouncements[209](index=209&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=50&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section discusses the company's exposure to market risks, including interest rate and foreign currency risks - No material changes occurred in the company's quantitative and qualitative disclosures about market risk during the three months ended March 31, 2025[210](index=210&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=51&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section reports on the effectiveness of the company's disclosure controls and internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[211](index=211&type=chunk) - There were no changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting during the fiscal quarter ended March 31, 2025[212](index=212&type=chunk) [PART II. OTHER INFORMATION](index=52&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part includes legal proceedings, risk factors, equity sales, defaults, and exhibits [ITEM 1. LEGAL PROCEEDINGS](index=52&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section incorporates information on legal proceedings by reference from the financial statement notes - Legal proceedings information is incorporated by reference from Note 12. 'Commitments and Contingencies' of the condensed consolidated financial statements[214](index=214&type=chunk) [ITEM 1A. RISK FACTORS](index=52&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section supplements existing risk factors with new considerations regarding international trade policies - The company is supplementing its risk factors with a new factor concerning international trade policies, including tariffs, sanctions, and trade barriers[215](index=215&type=chunk)[216](index=216&type=chunk) - These trade policies may adversely affect the business by raising material costs, reducing margins, impacting supply chains, harming competitive position, and exacerbating macroeconomic conditions like inflation and foreign exchange volatility[217](index=217&type=chunk)[218](index=218&type=chunk) - Ongoing uncertainty in trade policies can complicate strategic planning and increase legal and operational risks, particularly in international markets[219](index=219&type=chunk)[220](index=220&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=52&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section reports on any unregistered sales of equity securities or use of proceeds - None[222](index=222&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=53&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This section reports on any defaults upon senior securities - None[224](index=224&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=53&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company's operations - Not applicable[225](index=225&type=chunk) [ITEM 5. OTHER INFORMATION](index=53&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section contains any other information required to be disclosed - None[226](index=226&type=chunk) [ITEM 6. EXHIBITS](index=54&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including the Merger Agreement, organizational documents, certifications under Sarbanes-Oxley Act, and XBRL interactive data files - Exhibits include the Agreement and Plan of Merger (**Exhibit 2.1**), Certificate of Amended and Restated Articles of Incorporation (**Exhibit 3.1**), Amended and Restated Bylaws (**Exhibit 3.2**), Certifications pursuant to Section 302 and 906 of the Sarbanes-Oxley Act (**Exhibits 31.1**, **31.2**, **32.1**), and Inline XBRL documents (**Exhibits 101.INS to 101.DEF**, and **104**)[227](index=227&type=chunk) [SIGNATURES](index=55&type=section&id=SIGNATURES) This section contains the required signatures for the financial report - The report was signed on **May 8, 2025**, by **Kimo Akiona**, **Chief Financial Officer**, **Chief Accounting Officer**, and **Treasurer** of PlayAGS, Inc[232](index=232&type=chunk)

Core Insights - AGS has appointed Daniel "Dan" Marcus as Vice President of Product Management to enhance its slot products business and align product strategy across departments [2][3][4] Group 1: Appointment and Role - Dan Marcus will report to Mark DeDeaux and work with Jackson Floyd to address strategic objectives in the slot products sector [2] - His role includes managing the full lifecycle of AGS' slot portfolio, from roadmap development to sales enablement [3] - Marcus will also ensure cross-functional alignment among engineering, business development, and marketing to support market readiness [3] Group 2: Background and Experience - Marcus brings over 20 years of experience in the gaming industry, having held leadership positions at notable companies such as IGT and DraftKings [4] - His expertise includes product development, performance analytics, and go-to-market strategy, which will be crucial for AGS' growth [4] - Previous roles include overseeing commercial strategy for IGT's premium segment and founding Bally's performance consulting group [4] Group 3: Company Overview - AGS is a leading supplier in the global gaming industry, focusing on high-performing slot, table, and interactive products [2][6] - The company has a strong presence in the Class II Native American gaming market and aims to provide a diverse mix of gaming experiences [6] - AGS offers a comprehensive value proposition through its Class II and Class III slot products, table products, and real-money gaming platforms [6]