Financial Data and Key Metrics Changes - The company's full-year 2022 revenue increased by 15% to $142 million compared to $124 million in 2021, driven by both B2C and domestic B2B segments [33] - Cash increased by $4.1 million to $45.9 million in the quarter, attributed to strong results from the World Cup in the B2C segment [26] - Adjusted EBITDA loss was $0.4 million for the quarter, an improvement from a loss of $6 million in the prior year, although still negative [46] Business Line Data and Key Metrics Changes - In the B2C segment, active customers grew nearly 50% to 331,000 in the quarter, significantly boosted by the World Cup [45] - The B2B segment met internal revenue guidance but underperformed in profitability due to overconcentration on certain partnerships [13] - The company recorded $137 million in non-cash impairment charges in the quarter, affecting goodwill and intangible assets [28] Market Data and Key Metrics Changes - The company plans to leverage its success in Latin America to enter new regulated markets like Mexico, which has a large and growing total addressable market (TAM) of over $700 million [47] - The Ontario market was exited due to high competition and lack of a clear path to profitability, redirecting resources to higher-return markets [15][16] Company Strategy and Development Direction - The focus for 2023 is on markets with attractive growth profiles and scalability, with a strategy to concentrate resources on fewer, higher-potential opportunities [14] - The company is rolling out GameSTACK 2.0, which is expected to result in $10 million in annual cash savings [19] - A formal strategic review process has been initiated to evaluate options for value creation and improving profitability metrics [20][22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that financial performance did not meet expectations due to external factors and suboptimal execution [11] - There is uncertainty regarding 2023 guidance due to the ongoing strategic review process, but management expects to provide updates soon [22][23] - The company believes there is significant unrealized value in its proprietary technology and B2C business, which generated nearly $90 million in annual revenue [21] Other Important Information - The principal debt balance remained at $30 million as of year-end and the quarter [39] - The company is in compliance with financial covenants associated with its term loan but may face potential violations in the future [30][31] Q&A Session Summary Question: Plans for Super RGS and resource allocation - Management confirmed there is no plan to shutter the Super RGS business line but will reallocate resources to an exclusive content distribution deal to save $15 million [4] Question: Changes to the agreement with Incredible Technologies - Management stated there was no exclusive agreement with Incredible Technologies and continues to distribute their games [5] Question: Increase in OpEx despite cost efficiency focus - The increase in product and technology expenses was attributed to impairment-related accounting changes [6][7] Question: Future guidance and EBITDA expectations - Management is unable to provide EBITDA guidance at this time due to the strategic review process [56] Question: Retention rates of new customers acquired during the World Cup - Management indicated that retention rates have outperformed industry expectations, with significant stickiness observed in the Coolbet offering [53]

GAN Limited (NASDAQ:GAN) Q3 2022 Earnings Conference Call November 14, 2022 4:30 PM ET Company Participants Robert Shore - Vice President of Investor Relations Dermot Smurfit - Chief Executive Officer Karen Flores - Chief Financial Officer Conference Call Participants Cassandra Lee - Jefferies Chad Beynon - Macquarie Ryan Sigdahl - Craig-Hallum Capital Group Operator Greetings, and welcome to the GAN’s Third Quarter 2022 Earnings Conference Call. At this time all participants are in a listen-only mode. A br ...

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Q3 2022 net loss narrowed, but a nine-month goodwill impairment widened losses, decreased assets, and increased liabilities [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $230.1 million due to goodwill impairment, while liabilities rose to $77.7 million, driven by new debt and content licensing obligations Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$230,105** | **$260,910** | | Cash | $41,788 | $39,477 | | Goodwill | $99,086 | $146,142 | | **Total Liabilities** | **$77,742** | **$36,873** | | Long-term debt | $27,855 | $— | | Content licensing liabilities | $19,612 | $— | | **Total Shareholders' Equity** | **$152,363** | **$224,037** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q3 2022 revenue was flat at $32.1 million with a reduced net loss, while the nine-month period saw revenue growth but a larger net loss due to a significant impairment charge Q3 Statement of Operations (in thousands) | Metric | Q3 2022 | Q3 2021 | | :--- | :--- | :--- | | Revenue | $32,120 | $32,268 | | Total operating costs and expenses | $37,268 | $39,398 | | Operating loss | $(5,148) | $(7,130) | | Net loss | $(6,941) | $(8,678) | | Loss per share, basic and diluted | $(0.16) | $(0.21) | Nine Months Statement of Operations (in thousands) | Metric | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | | Revenue | $104,581 | $93,736 | | Impairment | $28,861 | $— | | Total operating costs and expenses | $151,619 | $108,581 | | Operating loss | $(47,038) | $(14,845) | | Net loss | $(49,789) | $(18,047) | | Loss per share, basic and diluted | $(1.18) | $(0.43) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months of 2022, cash from operations turned negative, while financing activities provided $27.5 million, resulting in a $2.3 million net increase in cash Nine Months Cash Flow Summary (in thousands) | Cash Flow Activity | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(3,559) | $1,350 | | Net cash used in investing activities | $(17,514) | $(102,630) | | Net cash provided by financing activities | $27,458 | $141 | | **Net increase (decrease) in cash** | **$2,311** | **$(102,349)** | | **Cash and cash equivalents, end of period** | **$41,788** | **$50,305** | - Financing activities were driven by **$30.0 million** in proceeds from the issuance of long-term debt, partially offset by **$2.4 million** in debt issuance costs and **$1.0 million** in share repurchases[24](index=24&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail a content licensing business combination, a $28.9 million goodwill impairment, a new $30.0 million credit facility, and a potential VAT liability in Chile - The company operates in two segments: **B2B** (supplying gaming systems like GameSTACK™) and **B2C** (operating the Coolbet online sports betting and casino platform)[28](index=28&type=chunk) - An amended content licensing agreement with Ainsworth Game Technology was accounted for as a business combination, with total consideration of **$26.2 million**, including a contingent consideration component valued at **$4.4 million**[88](index=88&type=chunk)[89](index=89&type=chunk) - A goodwill impairment of **$28.9 million** was recognized in the B2B segment as of June 30, 2022, following a quantitative assessment triggered by a significant and sustained decline in the company's share price and market capitalization[96](index=96&type=chunk)[97](index=97&type=chunk) - In April 2022, a subsidiary entered into a **$30.0 million** secured term loan facility with a floating interest rate, maturing in October 2026[102](index=102&type=chunk) - The company faces a probable but not reasonably estimable VAT liability in Chile related to its Coolbet B2C operations, where the Chilean Tax Administration's position is that VAT applies to gross customer deposits[150](index=150&type=chunk)[153](index=153&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q3 2022 revenue slightly decreased to $32.1 million due to B2C currency headwinds, while Adjusted EBITDA improved to $2.1 million and a new loan supports growth [Consolidated Results of Operations](index=37&type=section&id=Consolidated%20Results%20of%20Operations) Q3 revenue was flat as B2B growth was offset by a B2C currency-driven decline, while nine-month operating loss widened due to a goodwill impairment Q3 2022 vs Q3 2021 Results (in thousands) | Metric | Q3 2022 | Q3 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $32,120 | $32,268 | (0.5)% | | Cost of revenue | $9,435 | $10,801 | (12.6)% | | General and administrative | $10,185 | $12,888 | (21.0)% | | Operating loss | $(5,148) | $(7,130) | (27.8)% | | Net loss | $(6,941) | $(8,678) | (20.0)% | Nine Months 2022 vs 2021 Results (in thousands) | Metric | Nine Months 2022 | Nine Months 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $104,581 | $93,736 | 11.6% | | Impairment | $28,861 | $— | n.m. | | Restructuring | $1,771 | $— | n.m. | | Operating loss | $(47,038) | $(14,845) | n.m. | | Net loss | $(49,789) | $(18,047) | n.m. | - The decrease in Q3 General and Administrative expense was primarily due to **$1.3 million** in foreign exchange transaction gains from the strengthening U.S. Dollar[172](index=172&type=chunk) [Segment Operating Results](index=42&type=section&id=Segment%20Operating%20Results) B2B segment revenue grew 13.5% in Q3 2022, while B2C revenue fell 7.9% due to unfavorable currency exchange rates Q3 Segment Performance (in thousands) | Segment | Metric | Q3 2022 | Q3 2021 | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **B2B** | Revenue | $12,685 | $11,175 | 13.5% | | | Segment gross profit | $10,512 | $7,592 | 38.5% | | **B2C** | Revenue | $19,435 | $21,093 | (7.9)% | | | Segment gross profit | $12,173 | $13,875 | (12.3)% | Nine Months Segment Performance (in thousands) | Segment | Metric | Nine Months 2022 | Nine Months 2021 | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **B2B** | Revenue | $39,905 | $34,349 | 16.2% | | | Segment gross profit | $30,890 | $25,717 | 20.1% | | **B2C** | Revenue | $64,676 | $59,387 | 8.9% | | | Segment gross profit | $42,093 | $38,143 | 10.4% | [Non-GAAP Financial Measures](index=44&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA improved to $2.1 million in Q3 2022 and doubled to $6.4 million for the nine-month period, reflecting better core operating performance Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | Q3 2022 | Q3 2021 | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(6,941) | $(8,678) | $(49,789) | $(18,047) | | Adjustments | $9,034 | $7,808 | $56,199 | $21,253 | | **Adjusted EBITDA** | **$2,093** | **$(870)** | **$6,410** | **$3,206** | [Key Performance Indicators](index=45&type=section&id=Key%20Performance%20Indicators) B2B Gross Operator Revenue and B2C Active Customers grew significantly in Q3 2022, though the B2B Take Rate declined Key Performance Indicators | KPI | Q3 2022 | Q3 2021 | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | :--- | :--- | | B2B Gross Operator Revenue (in millions) | $277.8 | $214.8 | $858.6 | $650.5 | | B2B Take Rate | 4.6% | 5.2% | 4.6% | 5.3% | | B2C Active Customers (in thousands) | 261 | 199 | 435 | 306 | | B2C Marketing Spend Ratio | 23% | 15% | 21% | 14% | | B2C Sports Margin | 6.6% | 6.8% | 7.0% | 7.9% | - The increase in B2B Gross Operator Revenue was driven by the expansion of existing clients into new jurisdictions like Connecticut and Ontario, Canada, and new customer launches in Michigan[211](index=211&type=chunk) - The number of B2C Active Customers grew primarily due to successful customer acquisition in Latin America and high customer retention[217](index=217&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is supported by $41.8 million in cash and a new $30.0 million credit facility, which management deems sufficient for the next twelve months - In April 2022, the company secured a **$30.0 million** term loan, receiving net proceeds of **$27.6 million** to support its capital allocation plan[226](index=226&type=chunk)[229](index=229&type=chunk) - During the nine months ended September 30, 2022, the company repurchased **$1.0 million** of its own shares under its share repurchase program[226](index=226&type=chunk) Nine Months Cash Flow Summary (in thousands) | Cash Flow Activity | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(3,559) | $1,350 | | Net cash used in investing activities | $(17,514) | $(102,630) | | Net cash provided by financing activities | $27,458 | $141 | | **Net increase (decrease) in cash** | **$2,311** | **$(102,349)** | [Quantitative and Qualitative Disclosures about Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, the company is not required to provide these disclosures - The company is classified as a smaller reporting company and is therefore not required to provide quantitative and qualitative disclosures about market risk[240](index=240&type=chunk) [Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were deemed ineffective as of September 30, 2022, due to ongoing material weaknesses in internal control over financial reporting - Management concluded that disclosure controls and procedures were **not effective** at the reasonable assurance level as of September 30, 2022[243](index=243&type=chunk) - Material weaknesses persist in internal controls related to: - Accounting for capitalized software development costs[246](index=246&type=chunk) - Revenue recognition for contracts with significant customization[247](index=247&type=chunk) - Inadequate segregation of duties and user access controls in financial reporting systems[248](index=248&type=chunk) - Remediation plans are ongoing and include formalizing policies, enhancing management review controls, and implementing proper segregation of duties[249](index=249&type=chunk)[250](index=250&type=chunk) [PART II - OTHER INFORMATION](index=51&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently party to any litigation expected to have a material adverse effect on its business - The company is not currently involved in any legal proceedings expected to have a **material adverse effect** on its business, financial condition, or operating results[254](index=254&type=chunk) [Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) Key risks include reliance on unregulated B2C markets, evolving tax legislation, and adverse macroeconomic conditions impacting international operations - A significant portion of B2C revenue comes from markets without a local licensing scheme (e.g., Latin America), and the potential adoption of new regulations could increase costs or require cessation of operations[257](index=257&type=chunk)[258](index=258&type=chunk) - Evolving tax legislation in key B2C markets could result in additional tax liabilities that materially affect financial results[259](index=259&type=chunk)[260](index=260&type=chunk) - Adverse macroeconomic conditions, including inflation, rising interest rates, and the strengthening U.S. dollar, pose a material risk to the company's international operations, consumer spending, and financial condition[261](index=261&type=chunk) [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) A $5.0 million share repurchase program was extended, with no shares repurchased in Q3 2022 and $4.0 million remaining available - The company has a share repurchase program authorizing up to **$5.0 million** in purchases, which was extended and set to expire on November 3, 2022[262](index=262&type=chunk) - **No shares were repurchased** during the three months ended September 30, 2022[263](index=263&type=chunk) The remaining authorized amount for repurchase was **$4.0 million** as of the end of the quarter[263](index=263&type=chunk) [Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents and required certifications

GAN Limited (NASDAQ:GAN) Q2 2022 Earnings Conference Call August 15, 2022 4:30 AM ET Company Participants Robert Shore – Vice President of Investor Relations & Capital Markets Dermot Smurfit – Chief Executive Officer Karen Flores – Chief Financial Officer Conference Call Participants David Bain – B. Riley Securities Aaron Lee – Macquarie Group Ryan Sigdahl – Craig-Hallum Capital Group Robert Shore [Call Starts Abruptly] GAN’s second quarter 2022 earnings release issued today after the market close and is po ...

Financial Performance - Total revenue increased by 2% year-over-year to $35 million, or 10% on a constant currency basis for Q2 2022[6, 23] - B2B revenue reached a record of $14.2 million, a 36% year-over-year increase, with SaaS or recurring revenues increasing 13% year-over-year[6, 29] - B2C active customers increased 39% year-over-year to 260,000, although revenue was impacted by FX and European headwinds[6, 35] - The company reported an AEBITDA of positive $1.3 million for Q2 2022[6, 23] - Net loss was $38.349 million, which includes a $28.861 million impairment charge[23, 37, 38] Revised Outlook - Revised 2022 revenue guidance to $142.5 million - $152.5 million, with B2C segment at $90 million - $95 million and B2B segment increased to $52.5 million - $57.5 million[8] - Revised 2022 AEBITDA guidance to $10 million - $15 million, with a reduced flow-through impact of 40% due to additional cost optimization[8] Strategic Initiatives - GAN Sports is generating positive feedback, with a robust live launch schedule expected in 2023[7] - The company is implementing GameSTACK 2.0 to drive efficiencies and deliver a superior product, targeting $10 million in annualized cost savings[9] - Coolbet reached a milestone of one million registered customers on its gaming platform on August 7th[7]

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents GAN Limited's unaudited condensed consolidated financial statements for Q2 and H1 2022, including balance sheets, operations, and cash flows, with detailed accounting notes [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Q2 2022 saw total assets decrease to $246.0 million, liabilities rise to $77.0 million, and a $28.9 million goodwill impairment led to a $38.3 million net loss Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$246,018** | **$260,910** | | Cash | $49,075 | $39,477 | | Goodwill | $105,737 | $146,142 | | **Total Liabilities** | **$77,012** | **$36,873** | | Long-term debt | $27,670 | $— | | **Total Shareholders' Equity** | **$169,006** | **$224,037** | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Q2 2022 | Q2 2021 | H1 2022 | H1 2021 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $34,967 | $34,350 | $72,461 | $61,468 | | Operating Loss | $(37,768) | $(2,767) | $(41,890) | $(7,715) | | Impairment | $28,861 | $— | $28,861 | $— | | Net Loss | $(38,349) | $(3,759) | $(42,848) | $(9,369) | | Loss per Share | $(0.91) | $(0.09) | $(1.01) | $(0.22) | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net cash (used in) from operating activities | $(4,187) | $3,137 | | Net cash used in investing activities | $(12,510) | $(102,524) | | Net cash provided by (used in) financing activities | $26,965 | $(321) | | **Net increase (decrease) in cash** | **$9,598** | **$(100,568)** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Details **B2B** and **B2C** operations, a **$28.9 million** goodwill impairment, a new **$30 million** debt facility, and a **$1.8 million** workforce restructuring - The company operates in two segments: **B2B**, supplying its GameSTACK™ iGaming system to U.S. casinos, and **B2C**, operating the Coolbet online sports betting and casino platform internationally following its acquisition in January 2021[25](index=25&type=chunk)[26](index=26&type=chunk) - An amended content licensing agreement with Ainsworth Game Technology was accounted for as a business combination, with total consideration of **$26.2 million**, comprising future fixed payments, net assets, and contingent consideration[88](index=88&type=chunk)[89](index=89&type=chunk) - A significant and sustained decline in the company's share price and market capitalization triggered an interim goodwill impairment test, resulting in a **$28.9 million impairment charge** to the B2B reporting unit[97](index=97&type=chunk)[98](index=98&type=chunk) - In April 2022, a subsidiary entered into a **$30.0 million** secured term loan facility with a floating interest rate of 3-month SOFR + 9.5%, maturing in October 2026[106](index=106&type=chunk) - In January 2022, the company implemented a workforce reduction to streamline its B2B segment, incurring restructuring charges of **$1.8 million** for the first six months of 2022[147](index=147&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Discusses Q2 and H1 2022 financial performance, highlighting revenue growth, a significant net loss due to goodwill impairment, segment results, KPIs, and liquidity [Consolidated Results of Operations](index=39&type=section&id=Consolidated%20Results%20of%20Operations) Q2 2022 revenue grew 1.8% to **$35.0 million**, but a **$28.9 million** goodwill impairment led to a **$38.3 million** net loss, with similar trends for H1 Q2 2022 vs Q2 2021 Financial Performance (in thousands) | Metric | Q2 2022 | Q2 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $34,967 | $34,350 | 1.8% | | Total operating costs | $72,735 | $37,117 | 96.0% | | Impairment | $28,861 | $— | n.m. | | Net loss | $(38,349) | $(3,759) | n.m. | H1 2022 vs H1 2021 Financial Performance (in thousands) | Metric | H1 2022 | H1 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $72,461 | $61,468 | 17.9% | | Total operating costs | $114,351 | $69,183 | 65.3% | | Impairment | $28,861 | $— | n.m. | | Net loss | $(42,848) | $(9,369) | n.m. | - The significant increase in net loss for both Q2 and H1 2022 was primarily caused by a **$28.9 million goodwill impairment charge** within the B2B segment, recognized due to a sustained decline in the company's market capitalization[178](index=178&type=chunk)[191](index=191&type=chunk) [Segment Operating Results](index=44&type=section&id=Segment%20Operating%20Results) Q2 2022 B2B revenue grew **36.5%** to **$14.2 million**, while B2C revenue decreased **13.2%** to **$20.8 million** due to lower sports margins Segment Performance - Q2 2022 vs Q2 2021 (in thousands) | Segment | Revenue (Q2 2022) | Revenue (Q2 2021) | Change (%) | Gross Profit (Q2 2022) | Gross Profit (Q2 2021) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | B2B | $14,150 | $10,368 | 36.5% | $11,211 | $8,061 | 39.1% | | B2C | $20,817 | $23,982 | (13.2)% | $13,293 | $15,933 | (16.6)% | Segment Performance - H1 2022 vs H1 2021 (in thousands) | Segment | Revenue (H1 2022) | Revenue (H1 2021) | Change (%) | Gross Profit (H1 2022) | Gross Profit (H1 2021) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | B2B | $27,220 | $23,174 | 17.5% | $20,378 | $18,125 | 12.4% | | B2C | $45,241 | $38,294 | 18.1% | $29,920 | $24,268 | 23.3% | [Non-GAAP Financial Measures](index=47&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA for Q2 2022 was **$1.3 million**, a decrease from Q2 2021, while H1 2022 saw a slight increase to **$4.3 million** Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | Q2 2022 | Q2 2021 | H1 2022 | H1 2021 | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(38,349) | $(3,759) | $(42,848) | $(9,369) | | Impairment | $28,861 | $— | $28,861 | $— | | Depreciation and amortization | $6,556 | $4,132 | $10,969 | $8,126 | | Share-based compensation | $2,715 | $2,174 | $4,336 | $3,665 | | **Adjusted EBITDA** | **$1,346** | **$3,539** | **$4,317** | **$4,076** | [Key Performance Indicators](index=48&type=section&id=Key%20Performance%20Indicators) Q2 2022 B2B Gross Operator Revenue increased to **$283.0 million**, B2C Active Customers rose to **260,000**, but B2C Sports Margin declined to **7.1%** Key Performance Indicators Comparison | KPI | Q2 2022 | Q2 2021 | H1 2022 | H1 2021 | | :--- | :--- | :--- | :--- | :--- | | B2B Gross Operator Revenue (in millions) | $283.0 | $221.4 | $580.8 | $435.6 | | B2B Take Rate | 5.0% | 4.7% | 4.7% | 5.3% | | B2C Active Customers (in thousands) | 260 | 187 | 347 | 225 | | B2C Sports Margin | 7.1% | 9.7% | 7.2% | 8.4% | [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2022, cash was **$49.1 million**, supplemented by a new **$30 million** credit facility and an active share repurchase program - The company secured a new **$30.0 million** credit facility in April 2022 to provide additional flexibility for investments and its share repurchase program[229](index=229&type=chunk)[232](index=232&type=chunk) - Cash and cash equivalents stood at **$49.1 million** as of June 30, 2022[233](index=233&type=chunk) - During Q2 2022, the company repurchased **$1.0 million** of its own shares under its authorized share repurchase program[229](index=229&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) GAN Limited is exempt from this disclosure requirement due to its status as a smaller reporting company - The company is exempt from this disclosure requirement due to its status as a smaller reporting company[242](index=242&type=chunk) [Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of June 30, 2022, due to persistent material weaknesses in financial reporting and control environment - Management concluded that disclosure controls and procedures were **not effective** as of June 30, 2022, due to existing material weaknesses[246](index=246&type=chunk) - Material weaknesses persist in controls over accounting for capitalized software development costs, revenue recognition, and the overall control environment (e.g., segregation of duties, user access rights)[247](index=247&type=chunk)[248](index=248&type=chunk)[249](index=249&type=chunk)[250](index=250&type=chunk) - The company is continuing its remediation efforts, which include formalizing policies, enhancing management reviews, and implementing controls to segregate duties, but these efforts were not complete as of the reporting date[251](index=251&type=chunk)[252](index=252&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to have a material adverse effect on its financial position or operations - Management does not believe any current legal proceedings will have a **material adverse effect** on the company's business[256](index=256&type=chunk) [Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) Significant B2C revenue from unregulated markets in Latin America and Northern Europe poses risks from evolving regulations and tax laws - A significant portion of **B2C revenue** comes from "unregulated" markets, primarily in Latin America and Northern Europe[259](index=259&type=chunk)[260](index=260&type=chunk) - The company faces risks from potential changes in gaming regulations and evolving tax legislation in these key international markets, which could **materially impact financial results**[260](index=260&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company re-authorized a **$5.0 million** share repurchase program, buying back **303,000 shares** for **$1.0 million** in Q2 2022 - The Board of Directors re-authorized and extended the company's **$5.0 million share repurchase program**, which expires on November 3, 2022[263](index=263&type=chunk) Share Repurchase Activity (Q2 2022) | Period | Total Shares Repurchased | Weighted Average Price Paid per Share | Total Value (in thousands) | | :--- | :--- | :--- | :--- | | April 2022 | — | $— | $— | | May 2022 | — | $— | $— | | June 2022 | 303,000 | $3.32 | ~$1,000 | | **Total** | **303,000** | **$3.32** | **~$1,000** | [Exhibits](index=56&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Form 10-Q, including corporate documents, a credit agreement, and CEO/CFO certifications

GAN Limited (NASDAQ:GAN) Q1 2022 Earnings Conference Call May 16, 2022 4:30 PM ET Company Participants Robert Shore - Head of IR & Capital Markets Dermot Smurfit - President and CEO Karen Flores - EVP and CFO Conference Call Participants Chad Beynon - Macquarie David Katz - Jefferies LLC Ryan Sigdahl - Craig-Hallum Capital Group Operator Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to GAN's Q1 2022 Earnings Conference Call. [Operator Instructions] Please note, this conference ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File No. 001-39274 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 GAN Limited (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorpor ...

Financial Performance - GAN Limited reported a net loss of $30.6 million for the year ended December 31, 2021, compared to a net loss of $20.2 million for 2020, reflecting the inclusion of Coolbet's financial results for the entire period [224]. - Revenue for the year ended December 31, 2021, was $124.2 million, an increase of $89.0 million from $35.2 million in 2020, primarily driven by B2C operations [258]. - The increase in revenue included $40.1 million from the Coolbet acquisition, $32.4 million from Latin America, and $9.3 million from platform and content license fees in the U.S. [260]. - B2B revenue increased by $10.4 million to $45.6 million in 2021, a growth of 29.6% compared to 2020 [270]. - B2C revenue reached $78.6 million in 2021, with a gross profit of $48.8 million, representing a gross margin of 62.1% [274]. - Adjusted EBITDA for 2021 was a loss of $2.8 million, compared to a loss of $2.3 million in 2020 [278]. - The effective tax rate for 2021 was 0.7%, reflecting a tax benefit of $0.2 million, compared to a tax expense of $0.4 million in 2020 [268]. Operational Growth - The company increased its global headcount from 440 employees at January 1, 2021, to 682 employees at December 31, 2021, indicating a significant investment in operational support [223]. - The company expects to improve profitability through increased revenues from organic growth of existing casino operators and expansion into newly regulated jurisdictions [231]. - The company aims for revenue expansion from the rollout of its Super RGS content offering to B2C operators who are not already clients [231]. - B2C active customers increased to 394,000 in 2021, up from 158,000 in 2020, indicating significant growth in user engagement [280]. Acquisitions and Investments - GAN Limited acquired Coolbet for a total purchase price of $218.1 million, which included a cash payment of $111.1 million and the issuance of 5,260,516 ordinary shares valued at $106.7 million [230]. - A follow-on public offering in December 2020 raised gross proceeds of $98.5 million, which were used to fund the acquisition of Coolbet [229]. - The company raised gross proceeds of $62.4 million from its U.S. IPO in May 2020, with net proceeds of $55.3 million [228]. - Capital expenditures increased to $14.0 million in 2021 from $5.9 million in 2020, with $11.6 million allocated to internally developed software [293]. - The company entered into a Content Licensing Agreement with a third-party provider for $30.0 million, enhancing its gaming content offerings [289]. Expenses and Costs - Cost of revenue was $41.4 million for 2021, an increase of $30.9 million from 2020, mainly due to B2C operations' gaming costs [261]. - Sales and marketing expenses rose to $22.3 million, an increase of $17.2 million from the previous year, with $14.9 million attributed to B2C operations [262]. - General and administrative expenses increased by $24.1 million, with $16.6 million related to Coolbet and additional costs for legal, recruiting, and compliance [264]. - An impairment charge of $3.5 million was recorded in 2021 due to a termination notice served to a content provider [266]. - Depreciation and amortization expense was $16.8 million, an increase of $13.6 million from 2020, primarily due to the acquisition of Coolbet [267]. Cash Flow and Financing - Cash on hand was $39.5 million as of December 31, 2021, sufficient to meet working capital needs for at least the next twelve months [295]. - Net cash used in operating activities decreased by $1.3 million to $(5,003) thousand, a 21.2% improvement compared to $(6,348) thousand in 2020 [300]. - Net cash used in investing activities increased by $100.8 million to $(106,674) thousand, primarily due to $92.7 million for the acquisition of Coolbet [302]. - Net cash provided by financing activities decreased by $154.5 million to $169 thousand, largely due to the absence of proceeds from previous public offerings [303]. - The net decrease in cash was $(113,177) thousand, a decline of 179.5% compared to an increase of $142,375 thousand in 2020 [300]. - The company has no current credit facilities or debt arrangements, raising concerns about future financing availability [298]. Awards and Recognition - GAN Limited's B2B segment won three awards from EGR North America in 2021, highlighting its expertise in delivering gaming solutions [221]. - Coolbet won two awards at the International Gaming Awards in 2021, recognizing its impact in the mobile sports betting industry [222]. Future Outlook - The company expects continued growth in sales and marketing expenses as it seeks to attract additional end-users in the B2C segment [262]. - The company expects to launch an integrated B2B sportsbook technology solution in North America in Q4 2022 [291]. - Future taxable profits assessments for deferred tax assets rely heavily on estimates based on historical results and business forecasts [253]. - B2B Take Rate decreased to 4.9% in 2021 from 6.4% in 2020, influenced by a shift in revenue sources and increased promotional bonuses [283].

GAN Limited (NASDAQ:GAN) Q4 2021 Earnings Conference Call March 22, 2022 4:30 PM ET Company Participants Robert Shore - VP of IR and Capital Markets Dermot Smurfit - President and CEO Karen Flores - EVP and CFO Conference Call Participants Chad Beynon - Macquarie David Bain - B. Riley Securities FBR Cassandra Lee - Jefferies Ryan Sigdahl - Craig-Hallum Greg Gibas - Northland Capital Markets Operator Greetings, and welcome to GAN's Q4 Fiscal Year Earnings Conference Call. At this time, all participants ...