Golden Matrix (GMGI) - 2024 Q1 - Quarterly Results

First Quarter 2024 Financial Highlights Q1 2024 Performance Overview Golden Matrix Group reported record Q1 FY2024 revenues of $11.84 million, a 10% YoY increase, achieving positive GAAP earnings and $1.19 million Adjusted EBITDA Revenue Contributions (Q1 FY2024) | Segment | Amount ($) | Percentage (%) | | :------ | :--------- | :------------- | | B2B | $4.62 million | 39% | | B2C | $7.22 million | 61% | | Total | $11.84 million | 100% | Q1 FY2024 Key Financial Highlights | Metric | Q1 FY2024 ($) | Q1 FY2023 ($) | YoY Change | | :---------------- | :------------ | :------------ | :--------- | | Revenues | $11.84 million | $10.78 million | +10% | | Net Income (Loss) | $74,505 | $(443,521)$ | N/A | | Adjusted EBITDA | $1.19 million | N/A | N/A | - The company achieved positive GAAP earnings and adjusted EBITDA of almost $1.2 million, setting multiple records for highest ever quarterly results in Revenue, Total Assets, Shareholder Equity, and Cash-on-Hand[2] - Significant progress is being made towards closing the pending Meridian Bet acquisition, which is expected to boost top-line growth and profitability[3][6] Key Financial and Operational Metrics The company demonstrated robust financial health with increased cash, assets, and equity, marking its 9th consecutive quarter of positive operating cash flow and growth in B2B and B2C user bases Financial Position (as of Jan 31, 2024) | Metric | Amount ($) | | :------------------ | :--------- | | Cash-on-hand | $17.29 million | | Current Assets | $24.19 million | | Total Assets | $37.1 million | | Working Capital | $19.5 million | | Current Ratio | 5.2:1 | | Shareholders' Equity| $32.15 million | - The company achieved its 9th consecutive quarter generating positive cash flow from operations[6] - Operational Metrics (as of Jan 31, 2024): * B2B gaming platforms: 808 unique casino operations, 8.3 million registered users * RKings Competitions (B2C): Over 338,000 registered users on its tournament platform * MEXPLAY (B2C regulated casino): 84,000 registered users[6] Company Overview Business Description Golden Matrix Group is an international B2B and B2C gaming technology company, developing proprietary platforms and operating high-volume eCommerce and regulated online casinos - Golden Matrix Group is an established B2B and B2C gaming technology company operating across multiple international markets[5] - The B2B division develops and licenses proprietary gaming platforms for its extensive list of clients[5] - The B2C division, RKings, operates a high-volume eCommerce site enabling end users to enter paid-for competitions on its proprietary platform in authorized markets, and MEXPLAY is a regulated online casino in Mexico[5] Regulatory Compliance The company strictly adheres to US law by automatically declining gaming or redemption requests originating from within the United States - The company's sophisticated software automatically declines any gaming or redemption requests from within the United States, in strict compliance with current US law[7] Consolidated Financial Statements Consolidated Balance Sheets As of January 31, 2024, total assets increased to $37.10 million, driven by current asset growth, with total liabilities slightly up and shareholders' equity reaching $32.15 million Consolidated Balance Sheet Highlights | Metric | Jan 31, 2024 ($) | Oct 31, 2023 ($) | Change ($) | | :------------------------ | :--------------- | :--------------- | :--------- | | Cash | $17,292,978 | $17,100,280 | +$192,698 | | Total Current Assets | $24,194,465 | $22,852,676 | +$1,341,789 | | Total Assets | $37,097,153 | $35,582,817 | +$1,514,336 | | Total Current Liabilities | $4,693,335 | $4,479,423 | +$213,912 | | Total Liabilities | $4,950,412 | $4,479,423 | +$470,989 | | Total Shareholders' Equity| $32,146,741 | $31,103,394 | +$1,043,347 | Consolidated Statements of Operations and Comprehensive Income (Loss) For Q1 2024, total revenues increased 10% YoY to $11.84 million, resulting in a net income of $74,505, a significant improvement from the prior-year net loss Consolidated Statements of Operations Highlights (Three Months Ended Jan 31) | Metric | 2024 ($) | 2023 ($) | YoY Change | | :-------------------------------- | :----------- | :----------- | :--------- | | Total Revenues | $11,843,882 | $10,777,679 | +10% | | Cost of Goods Sold | $(8,468,622)$ | $(8,334,645)$ | +1.6% | | Gross Profit | $3,375,260 | $2,443,034 | +38.1% | | Total Operating Expenses | $3,096,056 | $2,771,989 | +11.7% | | Net Income (Loss) | $74,505 | $(443,521)$ | N/A | | Comprehensive Income (Loss) | $272,396 | $(291,262)$ | N/A | Earnings Per Share (Three Months Ended Jan 31) | Metric | 2024 ($) | 2023 ($) | | :----- | :------- | :------- | | Basic | $0.00 | $(0.01)$ | | Diluted| $0.00 | $(0.01)$ | Reconciliation of Net Income to Adjusted EBITDA Q1 2024 Adjusted EBITDA reached $1.19 million, a significant increase from $0.89 million in the prior-year quarter, after adjusting for non-cash items and other expenses Adjusted EBITDA Reconciliation (Three Months Ended Jan 31) | Item | 2024 ($) | 2023 ($) | | :------------------------ | :----------- | :----------- | | Net income (loss) | $74,505 | $(443,521)$ | | + Interest expense | $600 | $998 | | - Interest income | $(39,264)$ | $(11,905)$ | | + Taxes | $262,180 | $145,686 | | + Depreciation | $9,894 | $9,897 | | + Amortization | $111,546 | $106,666 | | EBITDA | $419,461 | $(192,179)$ | | + Stock-based compensation| $770,951 | $1,081,784 | | Adjusted EBITDA | $1,190,412 | $889,605 | Non-GAAP Financial Measures Explanation Definition and Limitations of Adjusted EBITDA Adjusted EBITDA is a non-GAAP measure, excluding interest, taxes, depreciation, amortization, and stock-based compensation, serving as a supplemental performance indicator with inherent limitations, not a GAAP substitute - Adjusted EBITDA is a non-GAAP financial measure presented as a supplemental measure of the Company's performance, not in accordance with GAAP[8] - It represents net income (loss) before interest, taxes, depreciation and amortization, and also excludes stock-based compensation expense[8] - Adjusted EBITDA has limitations as an analytical tool, does not reflect cash expenditures or requirements for working capital, debt service, or asset replacement, and should not be considered in isolation or as a substitute for GAAP results[8] FORWARD-LOOKING STATEMENTS Disclaimer and Risk Factors This section contains forward-looking statements subject to risks and uncertainties, including the Meridian Bet acquisition, regulatory approvals, and economic conditions, cautioning investors against undue reliance - This press release contains forward-looking statements identified by words such as 'strategy,' 'expects,' 'continues,' 'plans,' 'anticipates,' 'believes,' 'would,' 'will,' 'estimates,' 'intends,' 'projects,' 'goals,' 'targets' and other words of similar meaning[9] - Actual results and outcomes may differ materially due to important factors, including the ability to close the Meridian Bet Purchase Agreement, regulatory and other approvals, funding requirements, and general business, economic, and political conditions[10][11] - The company cautions against undue reliance on these statements and undertakes no obligation to update them after the release date, except as required by applicable law[13] Additional Information and Legal Disclosures Proxy Solicitation and SEC Filings This communication is not a vote solicitation but directs investors to the definitive proxy statement filed with the SEC for shareholder approval of the Meridian Bet acquisition and related share issuance - This communication does not constitute a solicitation of any vote, proxy, or approval in connection with the Purchase Agreement or related transactions[14] - GMGI filed a definitive proxy statement with the SEC to seek shareholder approval for the Purchase Agreement and the issuance of shares of common stock in connection with the Purchase Agreement[14] - Investors and security holders are urged to read the definitive proxy statement and any other relevant documents filed or to be filed with the SEC, available free of charge through www.sec.gov or GMGI's investor relations website[14][15] Participants in the Solicitation The company's directors, executive officers, and Meridian Bet Group sellers may be deemed participants in the proxy solicitation, with interest details provided in the definitive proxy statement - The Company and certain of its respective directors and executive officers may be deemed to be participants in the solicitation of proxies from GMGI shareholders[16] - The sellers, Meridian Bet Group, and their respective directors, managers, and executive officers may also be deemed participants in the solicitation of proxies[17] - Information regarding their direct and indirect interests will be contained in the definitive proxy statement when it becomes available[17][18] No Offer or Solicitation This communication is for informational purposes only, not a proxy statement or securities offer, and no unlawful sale, issuance, or transfer of securities will occur - This communication is for informational purposes only and is not intended to constitute a proxy statement or the solicitation of a proxy, consent or authorization[19] - It is not intended to constitute an offer to sell or the solicitation of an offer to sell or buy any securities[19] - There shall be no sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification[19]