- Q1 2023 revenues of $10,777,679, a 21.4% increase on revenues
of $8,877,105 in the like year-ago quarter.
- Net loss of $443,521 for Q1 2023, versus net income of $349,379
for Q1 2022.
- Adjusted EBITDA for Q1 2023 of $889,605* versus adjusted EBITDA
of $729,266* in Q1 2022.
- Cash and cash equivalents of $15,423,897 and total assets of
$34,383,085 as of January 31, 2023.
- Total liabilities as of January 31, 2023 of $3,866,696
comprising $3,828,963 in current liabilities and $37,733 in
non-current liabilities.
- Working capital (current) ratio: 5.54.
- GMGI shareholders’ equity of $30,516,389 on January 31, 2023,
up from $26,797,415 on October 31, 2022.
- Current gaming operator and registered user numbers of 710 and
over 7.2. million, respectively, in business-to-business (B2B)
traditional business.
- Business-to-consumer (B2C) segment – RKingsCompetitions Ltd. -
now has over 289,000 registered users on its tournament platform.
During the quarter, RKings became a wholly-owned subsidiary when
GMGI exercised its option to acquire the remaining 20 percent
non-controlling interest.
- On January 12, 2023, GMGI entered into a definitive agreement
to acquire MeridianBet Group and its related companies in a cash
and stock transaction valued at approximately $300 million.
Revenue contributions in Q1 ’23 from GMGI’s B2B and B2C segments
were $4,224,457 (39%) and $6,553,222 (61%), respectively.
A summary of the Company's performance and highlights can also
be found at www.goldenmatrix.com/highlights
The increase in total operating expenses – to $2,771,989 in Q1
’23 from $1,620,145 during the quarter ended January 31, 2022 - was
due primarily
to noncash charges totalling
$961,730 for stock-based compensation issued to
Company management, directors, employees and consultants which
contributed to a Q1 net loss of $(443,521) versus net income of
$349,379 in the like year-ago quarter.
“Despite a challenging economic climate worldwide, we are
pleased that our B2B and B2C segments continue to grow and gain
traction in their respective markets,” said Golden Matrix, CEO,
Anthony Brian Goodman, who continued, “Additionally, we are making
significant progress in preparing to enter new geographic markets
through MEXPLAY, our recently formed B2C casino platform in Mexico,
and through the anticipated acquisition of the MeridianBet Group
and its related companies which is expected to be completed, during
the first half of this year, subject to the completion of certain
conditions to closing, including funding and shareholder approval.
The MeridianBet acquisition is expected to position GMGI as a
profitable worldwide gaming company with significant growth
prospects, including the potential entry into regulated North
American markets, subject to applicable rules and regulations.”
For additional information on Golden Matrix’s financial
performance, please refer to the Company's Quarterly Report on Form
10-Q for the quarter ended January 31, 2023, 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.
* Adjusted EBITDA is a non-GAAP financial measure. See
also “Non-GAAP Financial Measures” and “Reconciliation of Net
Income 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.
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 below, 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
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 “Golden Matrix
Group, Inc. Reconciliation of Net Income to Adjusted Earnings
excluding Interest Expense, Interest Income, Tax, Depreciation
Expense, 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 (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
MeridianBet 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 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 ability to obtain approval
by GMGI’s shareholders on the expected schedule of the transactions
contemplated by the Purchase Agreement; 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 impact of the COVID-19 pandemic on GMGI; the
effect on GMGI and its operations of the ongoing Ukraine/Russia
conflict, increased interest rates, recessions and increased
inflation; 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; 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 GMGI; 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 GMGI’s operations and prospects; GMGI’s ability to protect
proprietary information; the ability of GMGI to compete in its
market; GMGI’s prior lack of effective 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
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 January 31,
2023. 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 plans to file with the
Securities and Exchange Commission (SEC) a proxy statement to seek
shareholder approval for the Purchase Agreement and the issuance of
shares of common stock in connection therewith, which, when
finalized, will be 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 proxy statement or other
document GMGI may file with the SEC in connection with the proposed
transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE
PROXY STATEMENT, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE
DOCUMENTS 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
GMGI’s Annual Report on Form 10-K for the year ended October 31,
2022.
The sellers, MeridianBet 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 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 proxy statement and other relevant materials to be filed with
the SEC regarding the Purchase Agreement when they become
available. Investors should read the 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:
Twitter - https://twitter.com/GMGI_Official
Instagram - https://www.instagram.com/goldenmatrixgroup/
Golden Matrix
Group
Contact: ir@goldenmatrix.com
|
|
|
|
|
|
Golden Matrix Group, Inc. and Subsidiaries |
|
|
Consolidated Balance Sheets |
|
|
|
|
|
|
|
|
As of |
As of |
|
|
|
January 31, 2023 |
October 31, 2022 |
|
|
|
(Unaudited) |
(Audited) |
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
15,423,897 |
|
$ |
14,949,673 |
|
|
|
Accounts receivable, net |
|
3,489,673 |
|
|
2,641,023 |
|
|
|
Accounts receivable – related parties |
|
355,356 |
|
|
413,714 |
|
|
|
Prepaid expenses |
|
274,688 |
|
|
84,372 |
|
|
|
Short-term deposit |
|
57,630 |
|
|
52,577 |
|
|
|
Inventory, prizes |
|
1,612,975 |
|
|
1,147,591 |
|
|
|
Total current assets |
$ |
21,214,219 |
|
$ |
19,288,950 |
|
|
|
|
|
|
|
|
Non-current assets: |
|
|
|
|
Property, plant & equipment, net |
|
78,484 |
|
|
72,411 |
|
|
|
Intangible assets, net |
|
2,568,519 |
|
|
2,607,075 |
|
|
|
Operating lease right-of-use assets |
|
140,153 |
|
|
150,653 |
|
|
|
Goodwill |
|
10,381,710 |
|
|
10,452,324 |
|
|
|
Total non-current assets |
|
13,168,866 |
|
|
13,282,463 |
|
|
|
Total assets |
$ |
34,383,085 |
|
$ |
32,571,413 |
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable and accrued liabilities |
$ |
2,098,290 |
|
$ |
1,385,076 |
|
|
|
Accounts payable – related parties |
|
28,941 |
|
|
10,637 |
|
|
|
Accrued income tax liability |
|
495,308 |
|
|
324,147 |
|
|
|
Deferred revenues |
|
137,889 |
|
|
182,444 |
|
|
|
Deferred tax liability |
|
4,712 |
|
|
4,409 |
|
|
|
Current portion of operating lease liability |
|
107,050 |
|
|
95,085 |
|
|
|
Customer deposits |
|
310,103 |
|
|
109,328 |
|
|
|
Accrued interest |
|
123 |
|
|
123 |
|
|
|
Contingent liability |
|
615,839 |
|
|
573,197 |
|
|
|
Consideration payable |
|
30,708 |
|
|
- |
|
|
|
Consideration payable – related party |
|
- |
|
|
30,708 |
|
|
|
Total current liabilities |
|
3,828,963 |
|
|
2,715,154 |
|
|
|
|
|
|
|
|
Non-current liabilities: |
|
|
|
|
Non-current portion of operating lease liability |
|
37,733 |
|
|
59,778 |
|
|
|
Total non-current liabilities |
|
37,733 |
|
|
59,778 |
|
|
|
Total liabilities |
$ |
3,866,696 |
|
$ |
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 and 40,000,000
shares authorized; 36,099,526 and 28,182,575 shares issued and
outstanding, respectively |
$ |
361 |
|
$ |
282 |
|
|
|
Additional paid-in capital |
|
55,690,495 |
|
|
51,677,727 |
|
|
|
Unearned compensation |
|
(2,611 |
) |
|
- |
|
|
|
Accumulated other comprehensive loss |
|
(53,488 |
) |
|
(205,747 |
) |
|
|
Accumulated deficit |
|
(25,118,368 |
) |
|
(24,674,847 |
) |
|
|
Total shareholders’ equity of GMGI |
|
30,516,389 |
|
|
26,797,415 |
|
|
|
Noncontrolling interests |
|
- |
|
|
2,999,066 |
|
|
|
Total equity |
|
30,516,389 |
|
|
29,796,481 |
|
|
|
Total liabilities and shareholders’ equity |
$ |
34,383,085 |
|
$ |
32,571,413 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Golden Matrix Group, Inc. and Subsidiaries |
|
|
|
Consolidated Statements of Operations and
Comprehensive Income |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
January 31, |
|
|
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
10,591,036 |
|
$ |
8,641,859 |
|
|
|
|
Revenues-related party |
|
186,643 |
|
|
235,246 |
|
|
|
|
Total revenues |
|
10,777,679 |
|
|
8,877,105 |
|
|
|
|
Cost of goods sold |
|
(8,334,645 |
) |
|
(6,853,002 |
) |
|
|
|
Gross profit |
|
2,443,034 |
|
|
2,024,103 |
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
General and administrative expense |
|
2,037,295 |
|
|
1,464,545 |
|
|
|
|
General and administrative expense- related party |
|
734,694 |
|
|
155,600 |
|
|
|
|
Total operating expenses |
|
2,771,989 |
|
|
1,620,145 |
|
|
|
|
Gain (Loss) from operations |
|
(328,955 |
) |
|
403,958 |
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
Interest expense |
|
(998 |
) |
|
- |
|
|
|
|
Interest earned |
|
11,905 |
|
|
441 |
|
|
|
|
Foreign exchange gain |
|
20,213 |
|
|
84,676 |
|
|
|
|
Total other income (expense) |
|
31,120 |
|
|
85,117 |
|
|
|
|
Net income (loss) before tax |
|
(297,835 |
) |
|
489,075 |
|
|
|
|
Provision for income taxes |
|
145,686 |
|
|
75,404 |
|
|
|
|
Net income (loss) |
|
(443,521 |
) |
|
413,671 |
|
|
|
|
Less: Net income attributable to noncontrolling interest |
|
- |
|
|
64,292 |
|
|
|
|
Net income (loss) attributable to GMGI |
$ |
(443,521 |
) |
$ |
349,379 |
|
|
|
|
|
|
|
|
|
|
Weighted average ordinary shares outstanding: |
|
|
|
|
|
Basic |
|
33,311,667 |
|
|
27,747,956 |
|
|
|
|
Diluted |
|
33,311,667 |
|
|
35,758,682 |
|
|
|
|
Net income (loss) per ordinary share attributable to GMGI: |
|
|
|
|
|
Basic |
$ |
(0.01 |
) |
$ |
0.01 |
|
|
|
|
Diluted |
$ |
(0.01 |
) |
$ |
0.01 |
|
|
|
|
|
|
|
|
|
|
Statements of Comprehensive Income: |
|
|
|
|
|
Net income (loss) |
$ |
(443,521 |
) |
$ |
413,671 |
|
|
|
|
Foreign currency translation adjustments |
|
152,259 |
|
|
57,054 |
|
|
|
|
Comprehensive income (loss) |
|
(291,262 |
) |
|
470,725 |
|
|
|
|
Less: Net income attributable to noncontrolling
interest |
|
- |
|
|
64,292 |
|
|
|
|
Comprehensive income (loss) attributable to
GMGI |
$ |
(291,262 |
) |
$ |
406,433 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to Adjusted
EBITDA |
|
|
|
|
|
|
|
|
Three Months Period Ended |
|
|
|
January 31, 2023 |
January 31, 2022 |
|
|
GAAP Net income (loss) |
$ |
(443,521 |
) |
$ |
413,671 |
|
|
|
+ Tax Expense |
|
145,686 |
|
|
75,404 |
|
|
|
+ Interest Expense |
|
998 |
|
|
- |
|
|
|
- Interest Income |
|
(11,905 |
) |
|
(441 |
) |
|
|
+ Depreciation Expense |
|
9,897 |
|
|
2,532 |
|
|
|
+ Amortization Expense |
|
106,666 |
|
|
94,169 |
|
|
|
+ Stock-based Compensation |
|
1,081,784 |
|
|
143,931 |
|
|
|
Non-GAAP Adjusted EBITDA |
$ |
889,605 |
|
$ |
729,266 |
|
|
|
|