via NewMediaWire –
Golden Matrix Group Inc. (NASDAQ:GMGI),
developer, licensor and global operator of online gaming and
eCommerce platforms, systems and gaming content, today reported
financial results for its second fiscal quarter ended April 30,
2023.
- Q2 revenues of $10.3 million, an
increase of 21% on revenues of $8.5 million in the like year-ago
quarter.
- Q2 net income (loss) of
$(534,000) versus $586,984 in the like year-ago quarter.
- Adjusted Q2 ’23 EBITDA of
$452,000.*
- Revenues of $21.1 million in the
first six months of fiscal ‘23, an increase of 21% on revenues of
$17.4 million in the comparable year-ago period;
- Net income (loss) of $(977,000)
in the first six months versus $936,363 in the comparable year-ago
period.
- Adjusted first half ’23 EBITDA of
$1.3 million.*
- Cash and cash equivalents of
$15.7 million, current assets of $21.8 million, and total assets of
$34.8 million as of April 30, 2023.
- Total liabilities of $3.95
million, with only $9,000 non-current as of April 30, 2023.
- Working capital of $17.8 million
and current ratio of 5.5:1 as of April 30, 2023.
- Shareholders’ equity increased to
$30.9 million, up from $26.8 million on October 31, 2022
(FYE).
- Current operator and registered
user numbers of 710 and 7.2 million, respectively, in B2B
traditional business.
- Company’s B2C segment, RKings
Competitions, now has over 300,000 registered users on its
tournament platform.
- MEXPLAY, the company’s B2C
regulated casino in Mexico, launched marketing campaigns in March
and is showing strong month-on-month improvements in both numbers
of new customers and deposits.
The company said that revenue contributions from its B2B and B2C
(RKings, MEXPLAY) segments in Q2 ’23 were $3.8 million (37%) and
$6.5 million (63%), respectively.
According to Golden Matrix CEO Brian Goodman, “We are pleased
with the revenue contributions from our B2B and B2C segments in Q2,
which is traditionally our slowest quarter, and particularly in
light of certain technology issues that occurred at RKings.
Unfortunately, there had been some system failures when extreme
numbers of customers purchased tickets for several high-ticket
prize competitions, and this impacted both revenues and
profitability at RKings. Working with Amazon AWS, the technology
has now been upgraded to increase the performance and speed of
RKings’ servers and accommodate heightened levels of participation
by our players. Having that resolved, we remain confident in
RKings’ continued success in Great Britain and look forward to
introducing its scalable platform to additional geographic
markets.”
Mr. Goodman emphasized that the company, once again, was cash
flow positive in its quarterly results and that, with respect to
the reported net loss of $534,000, profitability in Q2 was impacted
by several factors, including a non-cash charge of $808,666 for
stock-based compensation and approximately $102,000 for
due-diligence expenses (primarily legal, accounting, travel)
associated with the anticipated acquisition of the MeridianBet
Group.
GMGI entered into a definitive agreement in January 2023 to
acquire the MeridianBet Group and its related companies. As
disclosed in this quarterly filing, the Company and MeridianBet
have verbally agreed to extend the date and modify additional terms
of the definitive agreement in order to facilitate the closing of
the transaction. We have plans to document a new definitive date
for closing via amendment in the near future.
Mr. Goodman noted that the MeridianBet Group, which is already
“extremely profitable,” has increased its year-to-date revenues
considerably. “This is a very exciting time in the history of our
company,” concluded Mr. Goodman. “We enter the second half of this
year with a strong balance sheet and two well-established
verticals, as well as a growing casino business in Mexico; and,
with the successful acquisition of the MeridianBet Group, the
combined enterprise will be generating multiple streams of gaming
revenue while providing players worldwide with the most popular
best-in-class products, including casino games and sports
betting.”
For additional information on Golden Matrix’s financial
performance, please refer to the company's Form 10-Q for the second
quarter ended April 30, 2023, available at
https://www.nasdaq.com/market-activity/stocks/gmgi/sec-filings or
www.sec.gov.
A summary of the Company's performance and highlights can be
found at www.goldenmatrix.com/highlights
* Adjusted EBITDA is a non-GAAP financial measure. See
also "Non-GAAP Financial Measures" and "Reconciliation of Net
Income (Loss) attributable to Golden Matrix Group Inc., to Adjusted
Earnings excluding Interest Expense, Interest Income, Amortization
Expense and Stock-based Compensation Expense" included in the
tables at the end of this release.
About Golden Matrix
Golden Matrix Group, based in Las Vegas NV, is an established
B2B and B2C gaming technology company operating across multiple
international markets. The B2B division of Golden Matrix develops
and licenses proprietary gaming platforms for its extensive list of
clients and RKings, its B2C division, operates a high-volume
eCommerce site enabling end users to enter paid-for competitions on
its proprietary platform in authorized markets. The company also
owns and operates MEXPLAY, a regulated online casino in Mexico.
Our sophisticated software automatically declines any gaming or
redemption requests from within the United States, in strict
compliance with current US law.
Non-GAAP Financial Measures
Adjusted EBITDA, which is disclosed above, is a “non-GAAP
financial measure” presented as a supplemental measure of the
Company’s performance. Adjusted EBITDA is not presented in
accordance with accounting principles generally accepted in the
United States, or GAAP. Adjusted EBITDA represents net income
(loss) before interest, taxes, depreciation and amortization, and
also excludes stock-based compensation expense. Adjusted EBITDA is
presented because we believe it provides additional useful
information to investors due to the various noncash items during
the period. Adjusted EBITDA is not recognized in accordance with
GAAP, is unaudited, and has limitations as an analytical tool, and
you should not consider it in isolation, or as substitutes for
analysis of the Company’s results as reported under GAAP. Some of
these limitations are: Adjusted EBITDA does not reflect cash
expenditures, or future requirements for capital expenditures, or
contractual commitments; Adjusted EBITDA does not reflect changes
in, or cash requirements for, working capital needs; Adjusted
EBITDA does not reflect the significant interest expense, or the cash
requirements necessary to service interest or principal payments,
on debt or cash income tax payments; although depreciation and
amortization are noncash charges, the assets being depreciated and
amortized will often have to be replaced in the future, and
Adjusted EBITDA does not reflect any cash requirements for such
replacements; and other companies in this industry may calculate
Adjusted EBITDA differently than the Company does, limiting its
usefulness as a comparative measure. The Company’s presentation of
these measures should not be construed as an inference that future
results will be unaffected by unusual or nonrecurring items. For
more information on these non-GAAP financial measures, please see
the section titled “Reconciliation of Net Income (Loss)
attributable to Golden Matrix Group, Inc., to Adjusted Earnings
excluding Interest Expense, Interest Income, Amortization Expense
and Stock-based Compensation Expense” included at the end of this
release. Estimated pro forma Adjusted EBITDA of the Company for the
FY2022 period, assuming the successful closing of the MeridianBet
acquisition as discussed above has not been reconciled to the
comparable GAAP financial measure because the reconciliation could
not be performed without unreasonable efforts.
Forward-Looking Statements
Certain statements made in this press release contain
forward-looking information within the meaning of applicable
securities laws, including within the meaning of the Private
Securities Litigation Reform Act of 1995 (“forward-looking
statements”). These forward-looking statements represent the
Company’s current expectations or beliefs concerning future events
and can generally be identified using statements that include words
such as “estimate,” “expects,” “project,” “believe,” “anticipate,”
“intend,” “plan,” “foresee,” “forecast,” “likely,” “will,” “target”
or similar words or phrases. These forward-looking statements are
subject to risks, uncertainties and other factors, many of which
are outside of the Company’s control which could cause actual
results to differ materially from the results expressed or implied
in the forward-looking statements, including, but not limited to,
the impact of the COVID-19 pandemic on the Company; the need for
additional financing, the terms of such financing and the
availability of such financing; the ability of the Company and/or
its subsidiaries to obtain additional gaming licenses; the ability
of the Company to manage growth; the Company’s ability to complete
acquisitions and the available funding for such acquisitions;
disruptions caused by acquisitions; dilution caused by fund
raising, the conversion of outstanding preferred stock and/or
acquisitions; the Company’s ability to maintain the listing of its
common stock on the Nasdaq Capital Market; the Company’s
expectations for future growth, revenues, and profitability; the
Company’s expectations regarding future plans and timing thereof;
the Company’s reliance on its management; the fact that the
Company’s chief executive officer has voting control over the
Company; related party relationships; the potential effect of
economic downturns, recessions, increases in interest rates and
inflation, and market conditions, decreases in discretionary
spending and therefore demand for our products, and increases in
the cost of capital, related thereto, among other affects thereof,
on the Company’s operations and prospects; the Company's ability to
protect proprietary information; the ability of the Company to
compete in its market; the Company’s lack of effective internal
controls; dilution caused by efforts to obtain additional
financing; the effect of current and future regulation, the
Company’s ability to comply with regulations and potential
penalties in the event it fails to comply with such regulations and
changes in the enforcement and interpretation of existing laws and
regulations and the adoption of new laws and regulations that may
unfavorably impact our business; the risks associated with gaming
fraud, user cheating and cyber-attacks; risks associated with
systems failures and failures of technology and infrastructure on
which the Company's programs rely; foreign exchange and currency
risks; the outcome of contingencies, including legal proceedings in
the normal course of business; the ability to compete against
existing and new competitors; the ability to manage expenses
associated with sales and marketing and necessary general and
administrative and technology investments; and general consumer
sentiment and economic conditions that may affect levels of
discretionary customer purchases of the Company's products,
including potential recessions and global economic slowdowns.
Although we believe that our plans, intentions and expectations
reflected in or suggested by the forward-looking statements we make
in this release are reasonable, we provide no assurance that these
plans, intentions or expectations will be achieved. Consequently,
you should not consider any such list to be a complete set of all
potential risks and uncertainties. More information on potential
factors that could affect the Company's financial results is
included from time to time in the "Special Note Regarding
Forward-Looking Statements," "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" sections of the Company's periodic and current filings
with the SEC, including the Form 10-Qs and Form 10-Ks, including,
but not limited to, the Company’s Annual Report on Form 10-K for
the year ended October 31, 2022 and its Quarterly Report on Form
10-Q for the quarter ended April 20, 2023. These reports are filed
with the SEC and available at www.sec.gov. All subsequent written
and oral forward-looking statements attributable to the Company or
any person acting on behalf of the Company are expressly qualified
in their entirety by the cautionary statements referenced above.
Other unknown or unpredictable factors also could have material
adverse effects on the Company’s future results. The
forward-looking statements included in this press release are made
only as of the date hereof. The Company cannot guarantee future
results, levels of activity, performance or achievements.
Accordingly, you should not place undue reliance on these
forward-looking statements. Finally, the Company undertakes no
obligation to update these statements after the date of this
release, except as required by law, and takes no obligation to
update or correct information prepared by third parties that are
not paid for by the Company. If we update one or more
forward-looking statements, no inference should be drawn that we
will make additional updates with respect to those or other
forward-looking statements.
Connect with us:Twitter -
https://twitter.com/GMGI_GroupInstagram -
https://www.instagram.com/goldenmatrixgroup/Golden Matrix
GroupContact: ir@goldenmatrix.com
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Golden
Matrix Group, Inc. and Subsidiaries |
|
|
Consolidated
Balance Sheets |
|
|
|
|
|
|
|
|
As
of |
As
of |
|
|
|
April
30, |
October
31, |
|
|
|
|
2023 |
|
|
2022 |
|
|
|
|
(Unaudited) |
(Audited) |
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
Cash |
$ |
15,753,813 |
|
$ |
14,949,673 |
|
|
|
Accounts receivable, net |
|
3,597,389 |
|
|
2,641,023 |
|
|
|
Accounts receivable – related parties |
|
322,443 |
|
|
413,714 |
|
|
|
Prepaid expenses |
|
183,771 |
|
|
84,372 |
|
|
|
Short-term deposit |
|
54,133 |
|
|
52,577 |
|
|
|
Inventory, prizes |
|
1,862,528 |
|
|
1,147,591 |
|
|
|
Total current assets |
$ |
21,774,077 |
|
$ |
19,288,950 |
|
|
|
|
|
|
|
|
Non-current
assets: |
|
|
|
|
Property, plant & equipment, net |
|
69,358 |
|
|
72,411 |
|
|
|
Intangible assets, net |
|
2,469,248 |
|
|
2,607,075 |
|
|
|
Operating lease right-of-use assets |
|
107,818 |
|
|
150,653 |
|
|
|
Goodwill |
|
10,381,710 |
|
|
10,452,324 |
|
|
|
Total non-current assets |
|
13,028,134 |
|
|
13,282,463 |
|
|
|
Total assets |
$ |
34,802,211 |
|
$ |
32,571,413 |
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts payable and accrued liabilities |
$ |
2,041,637 |
|
$ |
1,385,076 |
|
|
|
Accounts payable – related parties |
|
11,298 |
|
|
10,637 |
|
|
|
Accrued income tax liability |
|
564,944 |
|
|
324,147 |
|
|
|
Deferred revenues |
|
265,750 |
|
|
182,444 |
|
|
|
Deferred tax liability |
|
19,489 |
|
|
4,409 |
|
|
|
Current portion of operating lease liability |
|
103,251 |
|
|
95,085 |
|
|
|
Customer deposits |
|
303,246 |
|
|
109,328 |
|
|
|
Accrued interest |
|
123 |
|
|
123 |
|
|
|
Contingent liability |
|
628,220 |
|
|
573,197 |
|
|
|
Consideration payable – related party |
|
- |
|
|
30708 |
|
|
|
Total current liabilities |
|
3,937,958 |
|
|
2,715,154 |
|
|
|
|
|
|
|
|
Non-current
liabilities: |
|
|
|
|
Non-current portion of operating lease liability |
|
8,930 |
|
|
59,778 |
|
|
|
Total non-current liabilities |
|
8,930 |
|
|
59,778 |
|
|
|
Total liabilities |
$ |
3,946,888 |
|
$ |
2,774,932 |
|
|
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
Preferred stock: $0.00001 par
value; 20,000,000 shares authorized |
|
- |
|
|
- |
|
|
|
Preferred stock, Series B: $0.00001 par
value, 1,000 shares
designated, 1,000 and 1,000 shares issued and
outstanding, respectively |
|
- |
|
|
- |
|
|
|
Common stock: $0.00001 par value; 250,000,000 shares
authorized; 36,124,526 and 28,182,575 shares
issued and outstanding, respectively |
$ |
361 |
|
$ |
282 |
|
|
|
Additional paid-in capital |
|
56,496,550 |
|
|
51,677,727 |
|
|
|
Treasury stock, at cost (April 2023 – 14,594 shares) |
|
(32,322 |
) |
|
- |
|
|
|
Accumulated other comprehensive income (loss) |
|
42,855 |
|
|
(205,747 |
) |
|
|
Accumulated deficit |
|
(25,652,121 |
) |
|
(24,674,847 |
) |
|
|
Total shareholders’ equity of GMGI |
|
30,855,323 |
|
|
26,797,415 |
|
|
|
Noncontrolling interests |
|
- |
|
|
2999066 |
|
|
|
Total equity |
|
30,855,323 |
|
|
29,796,481 |
|
|
|
Total
liabilities and shareholders’ equity |
$ |
34,802,211 |
|
$ |
32,571,413 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Golden
Matrix Group, Inc. and Subsidiaries |
|
|
Consolidated
Statements of Operations and Comprehensive Income |
|
|
(Unaudited) |
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
|
|
|
April 30, |
|
April 30, |
|
|
|
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
10,091,272 |
|
$ |
8,273,169 |
|
|
$ |
20,682,308 |
|
$ |
16,915,028 |
|
|
|
Revenues-related party |
|
217,087 |
|
|
209,574 |
|
|
|
403,730 |
|
|
444,820 |
|
|
|
Total
revenues |
|
10,308,359 |
|
|
8,482,743 |
|
|
|
21,086,038 |
|
|
17,359,848 |
|
|
|
Cost of
goods sold |
|
(8,248,377 |
) |
|
(5,942,181 |
) |
|
|
(16,583,022 |
) |
|
(12,795,183 |
) |
|
|
Gross
profit |
|
2,059,982 |
|
|
2,540,562 |
|
|
|
4,503,016 |
|
|
4,564,665 |
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
G&A expense |
|
1,823,189 |
|
|
1,598,428 |
|
|
|
3,860,484 |
|
|
3,062,973 |
|
|
|
G&A expense- related party |
|
727,526 |
|
|
183,600 |
|
|
|
1,462,220 |
|
|
339,200 |
|
|
|
Total
operating expenses |
|
2,550,715 |
|
|
1,782,028 |
|
|
|
5,322,704 |
|
|
3,402,173 |
|
|
|
Income
(loss) from operations |
|
(490,733 |
) |
|
758,534 |
|
|
|
(819,688 |
) |
|
1,162,492 |
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
|
Interest expense |
|
(740 |
) |
|
- |
|
|
|
(1,738 |
) |
|
- |
|
|
|
Interest earned |
|
16,920 |
|
|
542 |
|
|
|
28,825 |
|
|
983 |
|
|
|
Foreign exchange gain |
|
13,101 |
|
|
114,153 |
|
|
|
33,314 |
|
|
198,829 |
|
|
|
Total other
income |
|
29,281 |
|
|
114,695 |
|
|
|
60,401 |
|
|
199,812 |
|
|
|
Net income
(loss) before tax |
|
(461,452 |
) |
|
873,229 |
|
|
|
(759,287 |
) |
|
1,362,304 |
|
|
|
Provision
for income taxes |
|
72,301 |
|
|
171,780 |
|
|
|
217,987 |
|
|
247,184 |
|
|
|
Net income
(loss) |
|
(533,753 |
) |
|
701,449 |
|
|
|
(977,274 |
) |
|
1,115,120 |
|
|
|
Less: Net
income attributable to noncontrolling interest |
|
- |
|
|
114,465 |
|
|
|
- |
|
|
178,757 |
|
|
|
Net income
(loss) attributable to GMGI |
$ |
(533,753 |
) |
$ |
586,984 |
|
|
$ |
(977,274 |
) |
$ |
936,363 |
|
|
|
|
|
|
|
|
|
|
|
Weighted
average ordinary shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
36,113,290 |
|
|
28,089,041 |
|
|
|
34,689,260 |
|
|
27,915,672 |
|
|
|
Diluted |
|
36,113,290 |
|
|
35,908,819 |
|
|
|
34,689,260 |
|
|
35,735,450 |
|
|
|
Net income
(loss) per ordinary share attributable to GMGI: |
|
|
|
|
|
|
|
Basic |
$ |
(0.01 |
) |
$ |
0.02 |
|
|
$ |
(0.03 |
) |
$ |
0.03 |
|
|
|
Diluted |
$ |
(0.01 |
) |
$ |
0.02 |
|
|
$ |
(0.03 |
) |
$ |
0.03 |
|
|
|
|
|
|
|
|
|
|
|
Statement of
Comprehensive Income: |
|
|
|
|
|
|
|
Net income
(loss) |
$ |
(533,753 |
) |
$ |
701,449 |
|
|
$ |
(977,274 |
) |
$ |
1,115,120 |
|
Foreign
currency translation adjustments |
|
96,343 |
|
|
(110,235 |
) |
|
|
248,602 |
|
|
(53,181 |
) |
|
|
Comprehensive income (loss) |
|
(437,410 |
) |
|
591,214 |
|
|
|
(728,672 |
) |
|
1,061,939 |
|
|
|
Less: Net
income (loss) attributable to noncontrolling interest |
|
- |
|
|
114,465 |
|
|
|
- |
|
|
178,757 |
|
|
|
Comprehensive income (loss) attributable to GMGI |
$ |
(437,410 |
) |
$ |
476,749 |
|
|
$ |
(728,672 |
) |
$ |
883,182 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net income (loss) to Adjusted
EBITDA |
|
|
|
|
|
|
|
|
|
|
Three Months Period Ended |
Six Months Period Ended |
|
|
|
April 30, 2023 |
April 30, 2022 |
April 30, 2023 |
April 30, 2022 |
|
|
Net income
(loss) |
$ |
(533,753 |
) |
$ |
701,449 |
|
$ |
(977,274 |
) |
$ |
1,115,120 |
|
|
|
+ Interest
expense |
|
740 |
|
|
- |
|
|
1,738 |
|
|
- |
|
|
|
- Interest
income |
|
(16,920 |
) |
|
(542 |
) |
|
(28,825 |
) |
|
(983 |
) |
|
|
+ Taxes |
|
72,301 |
|
|
171,780 |
|
|
217,987 |
|
|
247,184 |
|
|
|
+
Depreciation |
|
10,359 |
|
|
3,753 |
|
|
20,256 |
|
|
6,285 |
|
|
|
+
Amortization |
|
110,514 |
|
|
95,414 |
|
|
217,180 |
|
|
189,583 |
|
|
|
+
Stock-based compensation |
|
808,666 |
|
|
151,864 |
|
|
1,890,450 |
|
|
295,795 |
|
|
|
EBITDA |
$ |
451,907 |
|
$ |
1,123,718 |
|
$ |
1,341,512 |
|
$ |
1,852,984 |
|
|
|
|
|
|
|
|
|
Golden Matrix (NASDAQ:GMGI)
Historical Stock Chart
From Apr 2024 to May 2024
Golden Matrix (NASDAQ:GMGI)
Historical Stock Chart
From May 2023 to May 2024