Golden Matrix (GMGI) - 2025 Q2 - Quarterly Report

Acquisition and Expansion - The company acquired 100% of MeridianBet Group on April 1, 2024, accounting for the transaction as a reverse merger [294]. - The company entered into a Share Exchange Agreement to acquire an 80% ownership interest in Classics Holdings Co. Pty Ltd., effective August 1, 2024 [331]. - The company is focused on expanding its deployment of gaming platforms into Europe, the U.S., South America, and Africa [322]. Market and Operations - The company operates in over 15 jurisdictions across Europe, Africa, and Central and South America, employing approximately 1,200 personnel and managing around 700 betting shops [296][297]. - The online betting market is experiencing significant growth, driven by the shift from physical betting shops to online platforms and increased mobile betting adoption [314]. - The sports betting offerings cover over 800 leagues, providing more than 11 million bets on over 20,000 sporting events each month, including in-play betting [301]. Financial Performance - Revenue increased by $17,872,466, or 72%, to $42,723,053 for the three months ended March 31, 2025, compared to $24,850,587 for the same period in 2024 [363]. - The company reported a net loss of $258,217 for the three months ended March 31, 2025, which was offset by increases in accounts payable and accrued liabilities [349]. - Adjusted EBITDA for the three months ended March 31, 2025, was $5,612,300, compared to $5,884,405 for the same period in 2024 [361]. Expenses and Costs - Cost of goods sold (COGS) rose by $11,368,435, or 159%, to $18,527,092 for the three months ended March 31, 2025, from $7,158,657 for the same period in 2024 [364]. - General and administrative expenses increased by $10,304,169, or 74%, to $24,301,978 for the three months ended March 31, 2025, from $13,997,809 for the same period in 2024 [366]. - Marketing expenses for Q1 2025 were $6,045,796, a 98% increase from $3,061,934 in Q1 2024, driven by marketing fees from Golden Matrix and increased budgets across all advertising channels [371]. Assets and Liabilities - The total assets of the company as of March 31, 2025, were $213,953,767, including $71,039,070 in goodwill and $56,465,858 in net intangible assets [343]. - As of March 31, 2025, the company had $29,661,926 in cash on hand and a working capital deficit of $16,077,344, compared to a deficit of $18,484,062 as of December 31, 2024 [335][344]. - The company had a total consideration payable of $70,000,000 to the former owners of MeridianBet Group, with $34,895,460 remaining as of March 31, 2025 [338]. Technology and Innovation - The company has developed 52 slot games in-house, available online where regulatory approval is granted, enhancing its gaming portfolio [304]. - The proprietary sports betting technology is crucial for operations, enabling online and offline betting across various geographies and regulatory demands [318]. - The integration of advanced Machine Learning technologies aims to personalize the betting experience and reduce the need for manual oversight [313]. Responsible Gaming - The company prioritizes responsible gaming by offering tools for deposit limits, time-outs, and self-exclusion options to empower players [323]. Other Financial Metrics - Interest expense surged by $1,466,989 or 33,562% to $1,471,360 in Q1 2025, mainly due to debt discount amortization and accrued interest on bank borrowings [374]. - Foreign exchange gain increased by $420,731 to $433,668 in Q1 2025, driven by favorable EUR/RSD/USD exchange rate fluctuations [376]. - The effective tax rate decreased to (38.4)% in Q1 2025 from 6.7% in Q1 2024, primarily due to changes in earnings and tax expenses mix [378].