Golden Matrix (GMGI)2025-03-24 11:45Acquisition and Investments - Golden Matrix Group acquired 100% of MeridianBet Group for a total consideration of $12 million in cash, $15 million in promissory notes, and 82,141,857 restricted shares of common stock[37]. - The Meridian Purchase Agreement includes deferred cash consideration of $18 million due by April 26, 2024, and contingent post-closing consideration of $5 million and 5 million restricted shares, contingent on certain conditions[38]. - The company acquired 100% ownership of Global Technology Group Pty Ltd for approximately $113,000, which holds an AGCC license expiring on December 10, 2024[29]. - Golden Matrix purchased an 80% interest in RKingsCompetitions Ltd for an undisclosed amount, with a buyout of minority owners costing $1,323,552 in restricted common stock[30][31]. - The Company entered into a Share Exchange Agreement to acquire an 80% ownership interest in Classics Holdings Co. Pty Ltd., with the transaction closing on August 21, 2024, and an effective date of August 1, 2024[54][58]. - The True-Up Amount related to the Classics acquisition was determined to be $518,650 as of February 17, 2025, and remains outstanding[56]. - The Classics Sellers may earn additional cash and stock consideration based on Classics' total net profit from the Closing Date until June 30, 2025, with a maximum earnout of AU$2,184,000 and 242,391 shares if profits exceed AU$3,500,000[57]. - The GM2 Asset Purchase Agreement involved issuing 4,166,667 shares of common stock and an earn-out payment based on revenues generated from the acquired asset[28]. Market Expansion and Operations - Golden Matrix's market expansion includes operations in over 15 jurisdictions across Europe, Africa, and Central and South America following the Meridian acquisition[37]. - The Company operates online sports betting, online casino, and gaming operations in over 15 jurisdictions across Europe, Africa, and Central and South America, employing approximately 1,200 personnel[62][63]. - The Company has approximately 700 company-owned or franchised betting shops, with about 250 owned by subsidiaries and 450 by franchisees, focusing on sports betting and online casino games[63]. - The Company operates in multiple international markets, which helps mitigate seasonal downturns in sports betting by promoting casino games, eSports, and virtual sports during quieter periods[111][112]. - The Company operates in multiple jurisdictions, holding licenses for sports betting and online operations in countries such as Serbia, Belgium, and Brazil[146][151][154]. Technology and Innovation - The Company's proprietary technology supports scalable systems across multiple jurisdictions and currencies, ensuring consistency in odds setting and risk management[64]. - The Company employs an omni-channel approach, allowing consumers to access offerings through various platforms, including mobile and desktop applications[65]. - The Company utilizes machine learning technologies to personalize the betting experience and continuously update odds, reducing the need for manual oversight[70][80]. - The Company has implemented an omni-channel approach, including iOS, Android, mobile browser, desktop, SMS, SST, and USSD, to cater to diverse customer preferences[81]. - The Company has ongoing investments in new products and technologies, which are inherently risky and may not yield adequate returns[216]. - The Company may face challenges in responding to rapid technological changes, which could adversely affect its financial condition[217]. - There are inherent risks in introducing new products or updated versions, including potential software errors from significant code rewrites[217]. - Customers may encounter difficulties during the upgrade process to newer technology platforms, potentially leading to revenue loss for the Company[217]. Financial Performance and Risks - The Company has faced various risks, including gaming fraud, technology failures, and foreign exchange risks, which could impact future performance[23]. - The Company's financial performance is influenced by global economic conditions, with rising interest rates and inflation creating uncertainty about consumer spending in the gaming and entertainment sectors[130]. - Net income attributable to the Company decreased by $15,182,787, or 111%, resulting in a net loss of $1,480,249 for the twelve months ended December 31, 2024, compared to net income of $13,702,538 for the same period in 2023[195]. - The Company anticipates needing to raise funding to repay $9,600,000 under the Secured Convertible Note and $20.2 million under the Facility Agreement, as well as post-closing obligations related to the Meridian Purchase Agreement[171]. - The Company may face significant costs related to legal fees for licensing applications and regulatory compliance[135]. - Economic downturns and adverse political conditions could negatively impact consumer demand for the company's products and services[169]. - The Company acknowledges risks related to regulatory changes that could negatively impact its operations and licensing status[166]. - The Company may experience significant dilution to existing shareholders if repayment amounts are made in shares of common stock[197]. Strategic Focus and Growth - The Company is focused on expanding its GM-X and GM-Ag Systems into Europe, the U.S., South America, and Africa, with plans to apply for a gaming license in the U.S.[94]. - The Company aims to maintain sufficient liquidity to fund operations and growth objectives, with plans to meet cash requirements through operations and sales of equity and debt securities[129]. - The Company has a growth strategy focused on strategic acquisitions, with plans to issue additional debt to fund these initiatives[129]. - The Company is committed to responsible gaming, offering tools for players to manage their gaming experiences[83]. - The Company has established revenue-sharing agreements with various third-party casino providers to enhance its gaming content offerings[72]. - The Company operates a B2B franchise model, licensing its proprietary sports betting technology to local partners, diversifying its revenue streams[77]. - The Company has a comprehensive intellectual property portfolio, including proprietary software and registered trademarks, which it believes provides a competitive advantage[107][109]. - The company plans to maintain organic revenue growth across all B2C markets and streamline operations to improve overall margins[138]. Competition and Market Position - The Company faces competition from various operators in its core markets, including Serbia, Montenegro, Malta, and Cyprus, and differentiates itself through advanced betting technologies and superior customer service[113][114][116]. - The Company has implemented strategic measures to protect the market for licensed operators, collaborating with local regulators to prevent unlicensed competition[121]. - The Company faces intense competition in the global entertainment and gaming industries, which may affect its market position and profitability[169]. - Competitors are continuously upgrading their product offerings, necessitating the Company to enhance its technology platform and service offerings[217]. - The Company has a diversified customer base across geographical locations, minimizing revenue instability tied to any specific customer group[122][124]. Financial Obligations and Capital Management - The consideration payable to the Meridian Sellers includes $19,870,460 in cash, with $9,870,460 due 12 months after closing and $10,000,000 due 18 months after closing, plus $15,000,000 in promissory notes due 24 months after closing[175]. - The Facility Agreement requires maintaining a net debt/EBITDA ratio of less than or equal to 3.0x, which was met as of December 31, 2024[185]. - The company has entered into an Equity Distribution Agreement allowing for the sale of up to $20 million in common stock, although no shares have been sold under this agreement to date[178][181]. - The principal balance of the Secured Convertible Note was $9,600,000 as of December 31, 2024, secured by a security interest over substantially all of the company's assets[190]. - The company has up to $8.5 million available for sale under its Equity Distribution Agreement to support potential acquisitions[136]. - The Company believes it has sufficient cash on hand to support operations for the foreseeable future, despite anticipated capital needs[214].