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 first fiscal quarter ended January 31,
2024.
- Record quarterly revenues of $11.84 million, an increase of 10%
on revenues of $10.78 million in the like year-ago quarter.
- Q1 net income of $74,505 versus a loss of $(443,521) in the
like year-ago quarter. With foreign currency translation
adjustments, comprehensive income was $272,396 versus a loss of
$(291,262) in Q1 ’23.
- Adjusted Q1 ’24 EBITDA of $1.19 million.*
- Company achieves 9th consecutive quarter generating positive
cash flow from operations.
- Cash-on-hand of $17.29 million, current assets of $24.19
million, and total assets of $37.1 million as of January 31,
2024.
- Working capital of $19.5 million and current ratio of 5.2:1 as
of January 31, 2024.
- Shareholders’ equity at $32.15 million, up from $31.1 million
on October 31, 2023 (FYE).
- Current unique casino operations and registered user numbers
supported by our B2B gaming platforms of 808 and 8.3 million,
respectively.
- Company’s B2C segment, RKings Competitions, has over 338,000
registered users on its tournament platform.
- MEXPLAY, the company’s B2C regulated casino in Mexico, has
84,000 registered users.
- Subsequent Event: In February, the definitive proxy statement
on the proposed MeridianBet Group acquisition was sent to GMGI
shareholders, and a Special Meeting of Shareholders to approve the
transaction is set for March 19, 2024.
Revenue contributions from the company’s B2B and B2C (RKings,
MEXPLAY) segments in Q1 were $4.62 million (39%) and $7.22 million
(61%), respectively.
“We are exceptionally pleased with the company’s performance in
Q1 to kick-off the new fiscal year,” said Golden Matrix CEO Brian
Goodman. “We achieved positive GAAP earnings and adjusted EBITDA of
almost $1.2 million, we set multiple records, delivering our
highest ever quarterly results for Revenue, Total Assets,
Shareholder Equity and Cash-on-Hand.
The company is well-positioned for continued growth within its
B2B and B2C divisions.
We continue to make significant progress towards closing the
pending MeridianBet acquisition and look forward to working to
boost top-line growth and profitability once these two world class
businesses have been combined.”
For additional information on Golden Matrix’s financial
performance, please refer to the Company’s Form 10-Q for the first
fiscal quarter ended January 31, 2024, which has been filed with
the SEC today and is 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
attributable to Golden Matrix Group Inc., to Adjusted Earnings
excluding Interest Expense, Interest Income, Tax, Depreciation
Expense, 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 non-cash 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 non-cash 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.
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”). Words such as “strategy,” “expects,” “continues,”
“plans,” “anticipates,” “believes,” “would,” “will,” “estimates,”
“intends,” “projects,” “goals,” “targets” and other words of
similar meaning are intended to identify forward-looking statements
but are not the exclusive means of identifying these
statements.
Important factors that may cause actual results and outcomes to
differ materially from those contained in such forward-looking
statements include, without limitation, the ability of the parties
to close the Meridian Bet Purchase Agreement, as amended and
restated (the “ Purchase Agreement ”) on the terms set forth in,
and pursuant to the required timing set forth in, the Purchase
Agreement, if at all; the occurrence of any event, change or other
circumstances that could give rise to the right of one or all of
the shareholders of Meridian Bet Group or GMGI (collectively, the “
Purchase Agreement Parties ”) to terminate the Purchase Agreement;
the effect of such termination, including breakup and other fees
potentially payable in connection therewith; the outcome of any
legal proceedings that may be instituted against Purchase Agreement
Parties or their respective directors or officers; the ability to
obtain regulatory and other approvals and meet other closing
conditions to the Purchase Agreement on a timely basis or at all,
including the risk that regulatory and other approvals (including
the approval of Nasdaq for the continued listing of GMGI’s common
stock on Nasdaq post-closing) required for the Purchase Agreement
are not obtained on a timely basis or at all, or are obtained
subject to conditions that are not anticipated or the expected
benefits of the transaction; the ability of GMGI to obtain the
funding required to complete such acquisition, the terms of such
funding, potential dilution caused thereby and/or covenants agreed
to in connection therewith; the fact that the sellers have the sole
right to approve the funding required to be obtained in connection
with the acquisition and the terms thereof, and also have the sole
right to determine whether any portion of the Meridian Bet Group’s
cash on hand at closing may be used to pay a portion of the
purchase price payable by GMGI at the closing, which approvals they
may not provide and/or may condition on other events; the ability
to obtain approval by the GMGI’s shareholders; potential lawsuits
regarding the acquisition; potential adverse reactions or changes
to business relationships resulting from the announcement or
completion of the Purchase Agreement; the ability of GMGI to retain
and hire key personnel; the diversion of management’s attention
from ongoing business operations; the expected synergistic
relationships and cost savings from the transactions contemplated
by the Purchase Agreement; uncertainty as to the long-term value of
the common stock of GMGI following the closing of the Purchase
Agreement; the business, economic and political conditions in the
markets in which the Purchase Agreement Parties operate; the effect
on GMGI and its operations of the ongoing Ukraine/Russia conflict
and the conflict in Israel, high interest rates and inflation, and
risks of recessions; the need for additional financing, the terms
of such financing and the availability of such financing; the
ability of GMGI and/or its subsidiaries to obtain additional gaming
licenses; the ability of GMGI to manage growth; GMGI’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; GMGI’s ability to maintain the listing of its
common stock on the Nasdaq Capital Market (both before the closing
and after the closing); GMGI’s expectations for future growth,
revenues, and profitability; GMGI’s expectations regarding future
plans and timing thereof; GMGI’s reliance on its management; the
fact that GMGI’s chief executive officer has voting control over
the Company and the fact that the sellers will obtain voting
control over GMGI following the completion of the acquisition of
Meridian Bet; 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 services, and
increases in the cost of capital, related thereto, among other
affects thereof, on GMGI’s operations and prospects; GMGI’s ability
to protect proprietary information; the ability of GMGI to compete
in its market; the status of GMGI’s internal controls; dilution
caused by efforts to obtain additional financing; the effect of
current and future regulation, GMGI’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 GMGI’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 GMGI’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.
Other important factors that may cause actual results and
outcomes to differ materially from those contained in the
forward-looking statements included in this communication are
described in GMGI’s publicly filed reports, including, but not
limited to, under the “Special Note Regarding Forward-Looking
Statements,” “Risk Factors” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” sections
of GMGI’s periodic and current filings with the SEC, including the
Form 10-Qs and Form 10-Ks, including, but not limited to, GMGI’s
Quarterly Report on Form 10-Q for the quarter ended January 31,
2024, and future periodic reports on Form 10-K and Form 10‑Q. These
reports are available at www.sec.gov .
The Company cautions that the foregoing list of important
factors is not complete, and does not undertake to update any
forward-looking statements except as required by applicable law.
All subsequent written and oral forward-looking statements
attributable to GMGI or any person acting on behalf of any Purchase
Agreement Parties are expressly qualified in their entirety by the
cautionary statements referenced above. Other unknown or
unpredictable factors also could have material adverse effects on
GMGI’s future results. The forward-looking statements included in
this press release are made only as of the date hereof. GMGI cannot
guarantee future results, levels of activity, performance or
achievements. Accordingly, you should not place undue reliance on
these forward-looking statements. Finally, GMGI 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 is not
paid for by GMGI. 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.
Additional Information and Where to Find It
This communication does not constitute a solicitation of any
vote, proxy or approval in connection with the Purchase Agreement
or related transactions. In connection with the transactions
contemplated by the Purchase Agreement, GMGI filed with the
Securities and Exchange Commission (SEC) a definitive proxy
statement to seek shareholder approval for the Purchase Agreement
and the issuance of shares of common stock in connection with the
Purchase Agreement and certain other matters, which, has been sent
to the shareholders of GMGI seeking their approval of the
respective transaction-related proposals, as well as other
documents regarding the proposed transactions. This communication
is not a substitute for any definitive proxy statement or other
document GMGI has or may file with the SEC in connection with the
proposed transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO
READ THE DEFINITIVE PROXY STATEMENT, AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS TO THAT DOCUMENT AND ANY OTHER RELEVANT DOCUMENTS FILED
OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED BY THE PURCHASE AGREEMENT, WHEN THEY BECOME AVAILABLE,
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT GMGI AND THE
PURCHASE AGREEMENT AND THE PROPOSED PURCHASE TRANSACTION.
Investors and security holders may obtain copies of these
documents free of charge through the website maintained by the SEC
at www.sec.gov or from GMGI at its website,
https://goldenmatrix.com/investors-overview/ . Documents filed with
the SEC by GMGI will be available free of charge on the
“Investors,” “SEC Filings” page of our website at
https://goldenmatrix.com/investors-overview/sec-filings/ or,
alternatively, by directing a request by mail, email or telephone
to GMGI at 3651 Lindell Road, Suite D131, Las Vegas, NV 89103;
ir@goldenmatrix.com, or (702) 318-7548, respectively.
Participants in the Solicitation
The Company and certain of its respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the respective shareholders of GMGI in
respect of the transactions contemplated by the Purchase Agreement
under the rules of the SEC. Information about GMGI’s directors and
executive officers and their ownership of GMGI is available in the
Company’s Annual Report on Form 10-K filed with the SEC on January
17, 2024.
The sellers, Meridian Bet Group, and their respective directors,
managers, and executive officers may also be deemed to be
participants in the solicitation of proxies from GMGI’s
shareholders in connection with the Purchase Agreement. A list of
the names of such parties and information regarding their interests
in the Purchase Agreement will be included in the definitive proxy
statement for the Purchase Agreement when available.
Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the definitive proxy statement and other relevant materials to be
filed with the SEC regarding the Purchase Agreement when they
become available. Investors should read the definitive proxy
statement carefully when it becomes available before making any
voting or investment decisions. You may obtain free copies of these
documents from GMGI using the sources indicated above.
No Offer or Solicitation
This communication is for informational purposes only and is not
intended to and shall not constitute a proxy statement or the
solicitation of a proxy, consent or authorization with respect to
any securities or in respect of the Purchase Agreement and is not
intended to and shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy or subscribe for any securities or a solicitation of any vote
of approval, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of any such jurisdiction.
Connect with us:X - https://twitter.com/gmgi_officialInstagram -
https://www.instagram.com/goldenmatrixgroup/Golden Matrix
Groupwww.goldenmatrix.comContact: ir@goldenmatrix.com
Golden Matrix Group, Inc. and Subsidiary |
Consolidated Balance Sheets |
|
|
|
|
January
31, |
October 31, |
|
|
2024 |
|
|
2023 |
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
Cash |
$ |
17,292,978 |
|
$ |
17,100,280 |
|
Accounts receivable, net |
|
4,031,349 |
|
|
3,551,383 |
|
Accounts receivable – related parties |
|
296,472 |
|
|
331,246 |
|
Prepaid expenses |
|
142,992 |
|
|
103,271 |
|
Short-term deposit |
|
53,838 |
|
|
51,971 |
|
Inventory, prizes |
|
2,376,836 |
|
|
1,714,525 |
|
Total current assets |
$ |
24,194,465 |
|
$ |
22,852,676 |
|
|
|
|
Non-current assets: |
|
|
Property, plant & equipment, net |
|
40,139 |
|
|
46,447 |
|
Intangible assets, net |
|
2,145,137 |
|
|
2,245,341 |
|
Operating lease right-of-use assets |
|
335,702 |
|
|
56,643 |
|
Goodwill |
|
10,381,710 |
|
|
10,381,710 |
|
Total non-current assets |
|
12,902,688 |
|
|
12,730,141 |
|
Total assets |
$ |
37,097,153 |
|
$ |
35,582,817 |
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable and accrued liabilities |
$ |
2,865,859 |
|
$ |
2,847,653 |
|
Accounts payable – related parties |
|
3,627 |
|
|
12,921 |
|
Accrued income tax liability |
|
664,444 |
|
|
476,485 |
|
Deferred revenues |
|
130,560 |
|
|
108,106 |
|
Deferred tax liability |
|
19,748 |
|
|
18,819 |
|
Current portion of operating lease liability |
|
81,086 |
|
|
59,089 |
|
Customer deposits |
|
291,238 |
|
|
348,620 |
|
Accrued interest |
|
123 |
|
|
123 |
|
Contingent liability |
|
636,650 |
|
|
607,607 |
|
Total current liabilities |
|
4,693,335 |
|
|
4,479,423 |
|
|
|
|
Non-current liabilities: |
|
|
Non-current portion of operating lease liability |
|
257,077 |
|
|
- |
|
Total non-current liabilities |
|
257,077 |
|
|
- |
|
Total liabilities |
$ |
4,950,412 |
|
$ |
4,479,423 |
|
|
|
|
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;
36,615,932 and 36,162,932 shares issued and outstanding,
respectively |
|
366 |
|
|
362 |
|
Additional paid-in capital |
|
57,794,735 |
|
|
57,023,788 |
|
Accumulated other comprehensive income (loss) |
|
124,732 |
|
|
(73,159 |
) |
Accumulated deficit |
|
(25,773,092 |
) |
|
(25,847,597 |
) |
Total shareholders’ equity of GMGI |
|
32,146,741 |
|
|
31,103,394 |
|
Total liabilities and shareholders’ equity |
$ |
37,097,153 |
|
$ |
35,582,817 |
|
|
|
|
Golden Matrix Group, Inc. and Subsidiaries |
Consolidated Statements of Operations and Comprehensive
Income (Loss) |
(Unaudited) |
|
|
|
|
Three Months Ended |
|
January 31, |
|
|
2024 |
|
|
2023 |
|
|
|
|
Revenues |
$ |
11,778,656 |
|
$ |
10,591,036 |
|
Revenues-related party |
|
65,226 |
|
|
186,643 |
|
Total revenues |
|
11,843,882 |
|
|
10,777,679 |
|
Cost of goods sold |
|
(8,468,622 |
) |
|
(8,334,645 |
) |
Gross profit |
|
3,375,260 |
|
|
2,443,034 |
|
|
|
|
Costs and expenses: |
|
|
General and administrative expense |
|
2,336,792 |
|
|
2,037,295 |
|
General and administrative expense- related party |
|
759,264 |
|
|
734,694 |
|
Total operating expenses |
|
3,096,056 |
|
|
2,771,989 |
|
Gain (Loss) from operations |
|
279,204 |
|
|
(328,955 |
) |
|
|
|
Other income (expense): |
|
|
Interest expense |
|
(600 |
) |
|
(998 |
) |
Interest earned |
|
39,264 |
|
|
11,905 |
|
Foreign exchange gain |
|
18,817 |
|
|
20,213 |
|
Total other income (expense) |
|
57,481 |
|
|
31,120 |
|
Net income (loss) before tax |
|
336,685 |
|
|
(297,835 |
) |
Provision for income taxes |
|
262,180 |
|
|
145,686 |
|
Net income (loss) |
$ |
74,505 |
|
$ |
(443,521 |
) |
|
|
|
Weighted average ordinary shares outstanding: |
|
|
Basic |
|
36,276,139 |
|
|
33,311,667 |
|
Diluted |
|
38,779,778 |
|
|
33,311,667 |
|
Net income (loss) per ordinary share attributable to GMGI: |
|
|
Basic |
$ |
- |
|
$ |
(0.01 |
) |
Diluted |
$ |
- |
|
$ |
(0.01 |
) |
|
|
|
Statements of Comprehensive Income: |
|
|
Net income (loss) |
$ |
74,505 |
|
$ |
(443,521 |
) |
Foreign currency translation adjustments |
|
197,891 |
|
|
152,259 |
|
Comprehensive income (loss) |
$ |
272,396 |
|
$ |
(291,262 |
) |
|
|
|
Reconciliation of Net Income (loss) to Adjusted Earnings
excluding Interest Expense, Interest Income, Tax, Depreciation
Expense, Amortization Expense and Stock-based Compensation
Expense |
|
Three Month Periods Ended |
|
|
January 31, 2024 |
|
|
January 31, 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 |
|
|
|
|
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