Golden Matrix Group Inc

Previous wording

Društvo Sa Ograničenom Odgovornošću “Meridianbet” Društvo Za Proizvodnju, Promet Roba I Usluga, Export Import Podgorica, a private limited company formed and registered in and under the laws of Montenegro (“Društvo”)(“Meridian Montenegro”). Meridian Montenegro operates in the sports betting and gaming industry in Montenegro.

Current wording

Društvo Sa Ograničenom Odgovornošću “Meridianbet” Društvo Za Proizvodnju, Promet Roba I Usluga, Export Import Podgorica, a private limited company formed and registered in and under the laws of Montenegro (“Društvo”)(“Meridian Montenegro”) operates in the sports betting and gaming industry in Montenegro.

Previous wording

The MeridianBet Group offers a diverse and multifaceted portfolio of betting options that extends beyond traditional sports betting. The MeridianBet Group offers a portfolio of gaming products including casino games, slots, roulette, and other random number generator (RNG) games. The MeridianBet Group also owns its own casino development studio, which has thus far produced 42 slot games, which are available online, where regulatory approval is granted, catering to customers on its proprietary casino platform. RNG games are games in which the outcome is determined by a random element generated by a computer algorithm. These games rely on chance rather than skill or strategy to determine the results.

Current wording

The MeridianBet Group offers a diverse and multifaceted portfolio of betting options that extends beyond traditional sports betting. The MeridianBet Group offers a portfolio of gaming products including casino games, slots, roulette, and other random number generator (RNG) games. The MeridianBet Group also owns its own casino development studio, which has thus far produced 52 slot games, which are available online, where regulatory approval is granted, catering to customers on its proprietary casino platform. RNG games are games in which the outcome is determined by a random element generated by a computer algorithm. These games rely on chance rather than skill or strategy to determine the results.

Previous wording

The MeridianBet Group understands that player preferences and market dynamics can vary significantly. To address these differences across the group’s many jurisdictions, they have implemented several unique features and tailored offerings, including:

Current wording

The MeridianBet Group understands that player preferences and market dynamics can vary significantly. To address these differences across the group’s many jurisdictions, it has implemented several unique features and tailored offerings, including:

Previous wording

Resources Material to theMeridianBet Group***’s Business***

Current wording

Resources Material to the MeridianBet Group’s Business

Previous wording

Data providers: Given that the essence of sports betting revolves around accurate and real-time data, data providers are a critical resource for the MeridianBet Group. It relies on third-party data providers who deliver real-time sports data, statistical information, and analytical insights. This data underpins the companies’ sportsbook offering and feeds into the dynamic odds-setting and risk management systems the brand uses. The availability of this data and the reliability of the providers are crucial for the daily operation of the MeridianBet Group’s business.

Current wording

Data providers: Given that the essence of sports betting revolves around accurate and real-time data, data providers are a critical resource for the MeridianBet Group. The MeridianBet Group relies on third-party data providers who deliver real-time sports data, statistical information, and analytical insights. This data underpins the companies’ sportsbook offering and feeds into the dynamic odds-setting and risk management systems the brand uses. The availability of this data and the reliability of the providers are crucial for the daily operation of the MeridianBet Group’s business.

Previous wording

The MeridianBet Group operates within a diverse regulatory environment across key markets. In general, gambling activities are controlled by a specific regulatory authority in each country, usually as a separate and autonomous public body. Such regulatory bodies are generally, in turn, subject to the authority of the subject county’s Ministry of Finance or equivalent. These regulatory bodies are responsible for supervising the granting and revocation of licenses, inspecting retail premises and digital conditions of websites designated for providing betting and gaming services, and ensuring compliance with rules and regulations.

Current wording

The MeridianBet Group operates within a diverse regulatory environment across key markets. In general, gambling activities are controlled by a specific regulatory authority in each country, usually as a separate and autonomous public body. Such regulatory bodies are generally, in turn, subject to the authority of the subject country’s Ministry of Finance or equivalent. These regulatory bodies are responsible for supervising the granting and revocation of licenses, inspecting retail premises and digital conditions of websites designated for providing betting and gaming services, and ensuring compliance with rules and regulations.

Previous wording

Fourth Amendment to Amended and Restated Sale and Purchase Agreement of Share Capital**and Related Transactions

Current wording

Fifth Amendment to Amended and Restated Sale and Purchase Agreement of Share Capital

Previous wording

We had $32,829,744 of cash on hand as of June 30, 2024. We believe our cash on hand is sufficient to meet our current working capital and capital expenditure requirements for a period of at least twelve months. We will continue to evaluate our long-term operating performance and cash needs and we believe we are well positioned to continue to fund the long-term operations of our business.

Current wording

We had $38,404,951 of cash on hand as of September 30, 2024. We believe our cash on hand is sufficient to meet our current working capital and capital expenditure requirements for a period of at least twelve months. We will continue to evaluate our long-term operating performance and cash needs and we believe we are well positioned to continue to fund the long-term operations of our business.

Previous wording

See “NOTE 15 – LONG TERM LIABILITIES” in the notes to the financial statements included under “Item 1. Financial Statements” for more details of the Facility Agreement.

Current wording

See “NOTE 15 – LONG TERM LIABILITIES” in the notes to the financial statements included under “Item 1. Financial Statements”, for more details.

Previous wording

The Company had a possible holdback payment of approximately $632,100 (GBP 500,000) as part of the consideration for the acquisition of RKingsCompetitions Ltd. (“RKings”). The holdback is contested by the Company and currently subject to ongoing claims.

Current wording

The Company had a possible holdback payment of approximately $670,650 (GBP 500,000) as part of the consideration for the acquisition of RKingsCompetitions Ltd. (“RKings”). The holdback is contested by the Company and currently subject to ongoing claims.

Previous wording

The Company had $32,829,744 of cash on hand at June 30, 2024 and total assets of $191,537,719 ($48,555,378 of which were current assets) and working capital of $10,467,915 as of June 30, 2024. Included in total assets at June 30, 2024 was $58,188,969 of goodwill and $46,987,624 in net intangible assets, as discussed in greater detail above under “NOTE 8 – INTANGIBLE ASSETS– SOFTWARE, LICENSES, TRADEMARKS, DEVELOPED TECHNOLOGY, CUSTOMER RELATIONSHIPS, AND NON-COMPETE AGREEMENTS”, in the notes to the financial statements included under “Item 1. Financial Statements”.

Current wording

The Company had $38,404,951 of cash on hand at September 30, 2024 and total assets of $213,491,765 ($56,669,115 of which were current assets) and a working capital deficit of $12,722,152 as of September 30, 2024. The working capital deficit was mainly due to $14,300,000 post-closing share consideration included in the current liabilities. Included in total assets at September 30, 2024 was $64,129,542 of goodwill and $53,221,603 in net intangible assets, as discussed in greater detail above under “NOTE 8 – INTANGIBLE ASSETS– SOFTWARE, LICENSES, TRADEMARKS, DEVELOPED TECHNOLOGY, CUSTOMER RELATIONSHIPS, AND NON-COMPETE AGREEMENTS”, in the notes to the financial statements included under “Item 1. Financial Statements”.

Previous wording

The increase in cash of $12,424,448 between June 30, 2024, and December 31, 2023, was mainly due to the proceeds from loans and borrowings.

Current wording

The increase in cash of $17,999,655 between September 30, 2024, and December 31, 2023, was mainly due to the proceeds from loans and borrowings.

Previous wording

Cash flows from operating activities include net income adjusted for certain non-cash expenses, and changes in operating assets and liabilities. Non-cash expenses for the six months ended June 30, 2024, mainly include stock-based compensation, amortization expenses on intangible assets, and depreciation on property plant and equipment.

Current wording

Cash flows from operating activities include net income adjusted for certain non-cash expenses, and changes in operating assets and liabilities. Non-cash expenses for the nine months ended September 30, 2024, mainly include stock-based compensation, amortization expenses on intangible assets, and depreciation on property plant and equipment.

Previous wording

The Company generated cash from operating activities of $2,553,394 during the six months ended June 30, 2024, due primarily to $4,289,337 of net income, $1,638,052 of stock-based compensation, $2,355,366 of amortization expenses, and $2,028,263 of depreciation expenses, which was offset by a $2,395,597 decrease in accounts payable, a $3,739,539 decrease in taxes payable, and a $1,017,633 increase in prepaid expenses.

Current wording

The Company generated cash from operating activities of $7,317,099 during the nine months ended September 30, 2024, due primarily to $669,019 of net income, $3,252,803 of stock-based compensation, $4,317,523 of amortization expenses, and $3,173,473 of depreciation expenses, which was offset by a $1,131,848 increase in inventories, a $3,903,981 decrease in taxes payable, and a $2,030,489 increase in accounts receivable.

Previous wording

The Company generated cash from operating activities of $10,157,330 during the six months ended June 30, 2023, due primarily to $8,365,992 of net income, $936,652 of amortization expenses, and $1,739,496 of depreciation expenses, which was offset by a decrease in other liabilities of $1,020,264.

Current wording

The Company generated cash from operating activities of $15,319,404 during the nine months ended September 30, 2023, due primarily to $11,886,052 of net income, $1,357,453 of amortization expenses, and $2,670,258 of depreciation expenses, which was offset by a decrease in other liabilities of $976,082.

Previous wording

During the six months ended June 30, 2024, cash used in investing activities was $11,186,276, which was primarily due to $23,000,000 consideration paid to the former owners of MeridianBet Group in connection with the Purchase, $4,025,569 spent on intangible assets, and the $1,523,493 spent on property, plant and equipment, and partially offset by $17,355,360 in cash assumed from investment in Golden Matrix. During the six months ended June 30, 2023, cash used in investing activities was $5,421,949, which was primarily due to $2,712,604 spent on intangible assets, and $2,704,167 spent on property, plant and equipment.

Current wording

During the nine months ended September 30, 2024, cash used in investing activities was $21,706,531, which was primarily due to $23,294,833 of consideration paid to the former owners of MeridianBet Group in connection with the Purchase, $4,452,143 of consideration paid to acquire Classics, $9,598,234 spent on intangible assets, and the $3,979,633 spent on property, plant and equipment, and partially offset by $17,355,360 in cash assumed from investment in Golden Matrix. During the nine months ended September 30, 2023, cash used in investing activities was $7,727,874, which was primarily due to $4,261,243 spent on intangible assets, and $3,470,626 spent on property, plant and equipment.

Previous wording

During the six months ended June 30, 2024, cash provided by financing activities was $23,166,197, which was primarily due to proceeds from loans of $25,451,100, attributable to the Unicredit Bank facility, Hipotekarna Bank facility and the Igor Salindrija borrowing, which was offset by repayment of lease of $1,266,056. During the six months ended June 30, 2023, cash used in financing activities was $2,111,725, which was primarily due to repayment of lease of $1,174,356 and payments of dividends of $937,369.

Current wording

During the nine months ended September 30, 2024, cash provided by financing activities was $32,716,355, which was primarily due to proceeds from loans of $26,870,400, attributable to the Unicredit Bank facility, Hipotekarna Bank facility and the Igor Salindrija borrowing, and proceeds from convertible note and warrant of $9,685,305, relating to the Senior Convertible Note and Lind Warrants, discussed in greater detail above in the notes to consolidated financial statements under “Note 15 – Long Term Liabilities—Lind Global Asset Management VIII LLC Securities SPA / Promissory Note”, which was offset by repayment of lease of $1,928,562 and repayment of debt of $1,174,383. During the nine months ended September 30, 2023, cash used in financing activities was $3,063,919, which was primarily due to repayment of lease of $1,644,714 and payments of dividends of $1,419,205.

Previous wording

The Company had a net increase in cash of $12,424,448 for the six months ended June 30, 2024, which is mostly attributable to the proceeds from loans and borrowings as discussed above.

Current wording

The Company had a net increase in cash of $17,999,655 for the nine months ended September 30, 2024, which is mostly attributable to the proceeds from loans and borrowings as discussed above.

Previous wording

Three months ended June 30, 2024, compared to the three months ended June 30, 2023.

Current wording

Three months endedSeptember* 30,2024, compared to the three months endedSeptember** 30, 2023.***

Previous wording

The following table summarizes the consolidated results of operations for the interim periods indicated, and the changes between the periods. Effective on April 1, 2024, the Company acquired 100% of the MeridianBet Group (the “Purchase”), which was accounted for as reverse merger. As a result, the historical financial information below represents the accounts of MeridianBet Group. Golden Matrix’s operations before the Purchase were excluded prior to April 1, 2024, the effective closing date of the Purchase.

Current wording

The following table summarizes the consolidated results of operations for the interim periods indicated, and the changes between the periods. Effective on April 1, 2024, the Company acquired 100% of the MeridianBet Group (the “Purchase”), which was accounted for as a reverse merger. As a result, the historical financial information below represents the accounts of MeridianBet Group. Golden Matrix’s operations before the Purchase were excluded prior to April 1, 2024, the effective closing date of the Purchase.

Previous wording

Revenue. Revenue increased by $16,836,432, or 75%, to $39,415,242 for the three months ended June 30, 2024, from $22,578,810 for the three months ended June 30, 2023. The increase was primarily attributable to the acquisition of Golden Matrix, which contributed $14,252,859 of revenues in the three months ended June 30, 2024. $9,656,962 of the revenues were from prize competitions, and $4,238,457 of the revenues were from resale of third-party gaming content, both of which did not exist until the acquisition of Golden Matrix. Revenues from online casino increased by $1,681,356, or 20%, to $10,108,595 for the three months ended June 30, 2024, from $8,427,239 for the three months ended June 30, 2023, mainly due to the increase in the offer of online casino games from different providers to 1500+, the launch of the new game "Super Heli" from the Company’s studio Expanse, which became the top 10 most popular game in the second quarter of 2024, and revenues from online sports betting increased by $867,511, or 11%, to $8,985,332 for the three months ended June 30, 2024, from $8,117,821 for the three months ended June 30, 2023, mainly due to our marketing campaigns, including marketing around the European football/soccer Championship in June 2024. Revenues from retail sports betting and retail casino increased by $336,207, or 6%, to $5,656,849 for the three months ended June 30, 2024, from $5,320,642 for the three months ended June 30, 2023, mainly due to the increase in the offer of the brand new slot machines (120) and favorable retail sports results during the month of June 2024, thanks to the European football/soccer championship.

Current wording

Revenue. Revenue increased by $18,782,672, or 85%, to $40,992,329 for the three months ended September 30, 2024, from $22,209,657 for the three months ended September 30, 2023. The increase was primarily attributable to the acquisition of Golden Matrix, which contributed $15,236,661 of revenues in the three months ended September 30, 2024. $10,938,900 of the revenues were from prize competitions and trade promotions, and $3,821,287 of the revenues were from resale of third-party gaming content, both of which did not exist until the acquisition of Golden Matrix. Revenues from online casino increased by $2,698,704, or 30%, to $11,604,744 for the three months ended September 30, 2024, from $8,906,040 for the three months ended September 30, 2023, mainly due to the increase in the offer of online casino games from different providers to 1500+, the integration of our Play'n GO provider, the launching of the new game "Super Heli" from the Company’s studio Expanse, which became a top 3 most popular game in the third quarter of 2024, and revenues from online sports betting which increased by $922,896, or 12%, to $8,549,379 for the three months ended September 30, 2024, from $7,626,483 for the three months ended September 30, 2023, mainly due to our marketing campaigns, including marketing around the European football/soccer Championship in June/July 2024 and the Olympic Games in August/September 2024. Revenues from retail sports betting and retail casino increased by $290,026, or 6%, to $5,293,516 for the three months ended September 30, 2024, from $5,003,490 for the three months ended September 30, 2023, mainly due to the increase in the offer of the brand new slot machines (120) and impact of the European football/soccer championship during June/July 2024.

Previous wording

COGS. Costs of goods sold increased by $11,688,786, or 193%, to $17,729,700 for the three months ended June 30, 2024, from $6,040,914 for the three months ended June 30, 2023. The increase was primarily attributable to the acquisition of Golden Matrix, which contributed $10,907,450 to COGS in the three months ended June 30, 2024. A total of $7,594,850 of the COGS was from prize competitions, and $3,188,858 of the COGS was from resale of third-party gaming content, both of which did not exist until the acquisition of Golden Matrix on April 1, 2024. COGS from online casino, online sports betting, retail casino and retail sports betting increased by $829,798 in total, or 14%, to $6,679,922 for the three months ended June 30, 2024, from $5,850,124 for the three months ended June 30, 2023, mainly due to the increase in the variable amounts of gaming tax and software fee costs which were in line with the increase in income from online casinos, online sports betting, retail casinos and retail sports betting.

Current wording

COGS. Costs of goods sold increased by $12,472,474, or 204%, to $18,589,162 for the three months ended September 30, 2024, from $6,116,688 for the three months ended September 30, 2023. The increase was primarily attributable to the acquisition of Golden Matrix, which contributed $11,206,705 to COGS in the three months ended September 30, 2024. A total of $8,077,127 of the COGS was from prize competitions, and $3,068,880 of the COGS was from resale of third-party gaming content, both of which did not exist until the acquisition of Golden Matrix on April 1, 2024. COGS from online casino, online sports betting, retail casino and retail sports betting increased by $1,304,315 in total, or 22%, to $7,235,478 for the three months ended September 30, 2024, from $5,931,163 for the three months ended September 30, 2023, mainly due to the increase in the variable amounts of gaming tax and software fee costs which were in line with the increase in income from online casinos, online sports betting, retail casinos and retail sports betting.

Previous wording

Gross profit. Gross profit increased by $5,147,646, or 31%, to $21,685,542 for the three months ended June 30, 2024, from $16,537,896 for the three months ended June 30, 2023. The $3,345,409 increase in gross profit was due to the acquisition of Golden Matrix. Gross profit from online casino increased by $1,226,044 or 20%; gross profit from online sports betting increased by $603,234, or 10%, and gross profit from retail sports betting and retail casino increased by $225,998, or 6% for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The increase in the gross profit was mainly due to the increase in the revenues as discussed above.

Current wording

Gross profit. Gross profit increased by $6,310,198, or 39%, to $22,403,167 for the three months ended September 30, 2024, from $16,092,969 for the three months ended September 30, 2023. The $4,029,956 increase in gross profit was due to the acquisition of Golden Matrix. Gross profit from online casinos increased by $1,883,857 or 29%; gross profit from online sports betting increased by $572,736, or 10%, and gross profit from retail sports betting and retail casino increased by $150,718, or 4% for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The increase in the gross profit was mainly due to the increase in the revenues as discussed above.

Previous wording

General and administrative expenses (G&A). General and administrative expenses increased by $8,950,125, or 71%, to $21,560,430 for the three months ended June 30, 2024, from $12,610,305 for the three months ended June 30, 2023. General and administrative expenses consisted primarily of stock-based compensation, depreciation expenses, amortization expenses, salary and wages, professional fees, marketing expenses, rents and utilities.

Current wording

General and administrative expenses (G&A). General and administrative expenses increased by $10,516,288, or 82%, to $23,379,550 for the three months ended September 30, 2024, from $12,863,262 for the three months ended September 30, 2023. General and administrative expenses consisted primarily of stock-based compensation, depreciation expenses, amortization expenses, salary and wages, professional fees, marketing expenses, rents and utilities.

Previous wording

Stock-based compensation (within G&A) for the three months ended June 30, 2024, were $1,558,296, compared to $0 for the three months ended June 30, 2023, a $1,558,296 increase from the prior period, which was due mainly to the RSUs granted to employees and directors of the Company, as well as shares issued for services during the period.

Current wording

Stock-based compensation (within G&A) for the three months ended September 30, 2024, was $1,644,916, compared to $0 for the three months ended September 30, 2023, a $1,644,916 increase from the prior period, which was due mainly to the RSUs granted to employees and directors of the Company, as well as shares issued for services during the period.

Previous wording

Amortization expense for the three months ended June 30, 2024, were $1,913,047, compared to $475,689 for the three months ended June 30, 2023, a $1,437,358, or 302% increase from the prior period, which was due mainly to the amortization of the new intangible assets recognized as a result of the acquisition of Golden Matrix.

Current wording

Amortization expenses for the three months ended September 30, 2024, were $1,962,157, compared to $420,801 for the three months ended September 30, 2023, a $1,541,356, or 366% increase from the prior period, which was due mainly to the amortization of the new intangible assets recognized as a result of the acquisition of Golden Matrix.

Previous wording

Salaries and wages for the three months ended June 30, 2024, were $5,253,249, compared to $3,565,357 for the three months ended June 30, 2023, a $1,687,892 or 47% increase from the prior period, which was due partially to $749,561 of salaries paid to employees of Golden Matrix after the acquisition. Salaries paid to employees of the MeridianBet Group increased by $938,331, which was due mainly to increased headcount to both support revenue growth and to enable the entry into new markets for the current period, compared to the prior period.

Current wording

Salaries and wages for the three months ended September 30, 2024, were $5,706,182, compared to $3,662,999 for the three months ended September 30, 2023, a $2,043,183 or 56% increase from the prior period, which was due partially to $974,179 of salaries paid to employees of Golden Matrix after the acquisition. Salaries paid to employees of the MeridianBet Group increased by $1,069,004, which was due mainly to increased headcount to both support revenue growth and to enable the entry into new markets for the current period, as well as an increase in employee salaries, compared to the prior period.

Previous wording

Professional fees for the three months ended June 30, 2024, were $1,238,223, compared to $512,095 for the three months ended June 30, 2023, a $726,128 or 142% increase from the prior period, which was due partially to the $354,928 of professional fees of Golden Matrix after the acquisition in connection with potential acquisitions, fund raising and accounting fees. Professional fees of MeridianBet Group increased by $371,200, which was mainly due to legal and audit services, in connection with the acquisition with Golden Matrix.

Current wording

Professional fees for the three months ended September 30, 2024, were $992,009, compared to $425,336 for the three months ended September 30, 2023, a $566,673 or 133% increase from the prior period, which was due partially to the $263,216 of professional fees of Golden Matrix after the acquisition in connection with acquisitions of Classics, fund raising and accounting fees. Professional fees of MeridianBet Group increased by $303,457, which was mainly due to consulting services, as well as legal and audit services, in connection with the acquisition with Golden Matrix.

Previous wording

Marketing expenses for the three months ended June 30, 2024, were $4,458,004, compared to $3,097,410 for the three months ended June 30, 2023, a $1,360,594 or 44% increase from the prior period, which was due partially to the $626,050 marketing fees from Golden Matrix after the acquisition in connection with prize competition in UK, online casino business in Mexico, and resale of gaming content in Asia Pacific region. Marketing expenses of MeridianBet Group increased by $734,544, primarily driven by our focused efforts around the European football/soccer championship (EURO 2024, June/July '24). We invested in new video content on YouTube, TV commercials, billboards, and strategic sponsorships. Additionally, our expanded online campaigns on Facebook and Google, along with organizing trips for our customers, reflect our traditionally rooted commitment to investing in customer engagement and brand visibility.

Current wording

Marketing expenses for the three months ended September 30, 2024, were $5,211,173, compared to $2,825,878 for the three months ended September 30, 2023, a $2,385,295 or 84% increase from the prior period, which was due partially to the $1,475,352 marketing fees from Golden Matrix after the acquisition in connection with prize competition in UK, trade promotion in Australia and online casino business in Mexico, and resale of gaming content in Asia Pacific region. Marketing expenses of MeridianBet Group increased by $909,943, primarily driven by our focused efforts around the European football/soccer championship (EURO 2024, June/July '24) and the Summer Olympic Games in August/September ‘24. We invested in new video content on YouTube, TV commercials, billboards, and strategic sponsorships. Additionally, our expanded online campaigns on Facebook and Google, along with organizing trips for our customers, reflect our traditionally rooted commitment to investing in customer engagement and brand visibility.

Previous wording

Rents and utilities for the three months ended June 30, 2024, were $1,749,529, compared to $1,310,410 for the three months ended June 30, 2023, a $439,119 or 34% increase from the prior period, which was mainly due to the opening of 15 new betting shops in Montenegro, which contributed to the growth of rent and utility costs, as well as the general increase in heating, electricity, telephone and internet costs, due to inflationary trends.

Current wording

Rents and utilities for the three months ended September 30, 2024, were $1,566,555, compared to $1,470,856 for the three months ended September 30, 2023, a $95,699 or 7% increase from the prior period, which was mainly due to the opening of new betting shops, which contributed to the growth of rent and utility costs, as well as the general increase in heating, electricity, telephone and internet costs, due to inflationary trends.

Previous wording

Foreign exchange loss. The foreign exchange loss increased by $39,074, or 42%, to $131,458 for the three months ended June 30, 2024, from $92,384 for the three months ended June 30, 2023.

Current wording

Foreign exchange loss. The foreign exchange loss increased by $(585,243), to $(219,060) for the three months ended September 30, 2024, from a gain of $366,183 for the three months ended September 30, 2023. This increased loss was primarily due to the depreciation of the USD against the Euro and GBP, currencies in which the Company holds liabilities.

Previous wording

Other Income*.*Other income is related to income from marketing services for third-party advertising in MeridianBet Group betting shops, sale of fixed assets, value-added-tax (VAT) refunds, income from compensation for damages, income from reduction of liabilities and other income that is not directly related to the Company's core activity. For the three months ended June 30, 2024, and 2023, other income amounted to $509,759 and $312,637, respectively. The increase of $197,122 for the three months ended June 30, 2024, versus the three months ended June 30, 2023, is attributable to other operating income from the franchise partners such as marketing services, customer support services, staff training services etc.

Current wording

Other Income.* *Other income is related to income from marketing services for third-party advertising in MeridianBet Group betting shops, sale of fixed assets, value-added-tax (VAT) refunds, income from compensation for damages, income from reduction of liabilities and other income that is not directly related to the Company's core activity. For the three months ended September 30, 2024, and 2023, other income amounted to $495,654 and $219,145, respectively. The increase of $276,509 for the three months ended September 30, 2024, versus the three months ended September 30, 2023, is attributable to other operating income from the franchise partners such as marketing services, customer support services, staff training services etc.

Previous wording

Provisionforincome taxes . The provision for income tax increased by $106,728, or 26%, to $524,969 in the three months ended June 30, 2024, from $418,241 in the three months ended June 30, 2023. The increase in the provision for income tax was mainly due to the prize competitions in UK, which had $297,204 of income taxes during the three months ended June 30, 2024, and which were not acquired until April 1, 2024.

Current wording

Provision for income taxes. The provision for income tax increased by $1,547,389, or 489%, to $1,864,122 in the three months ended September 30, 2024, from $316,733 in the three months ended September 30, 2023. The increase in the provision for income tax was mainly due to (a) $1,468,472 income tax accrued for dispute detailed inNOTE 21 - COMMITMENTS AND CONTINGENCIES, and (b) the prize competitions in UK and trade promotions in Australia, which had $168,810 of income taxes during the three months ended September 30, 2024, and which were not acquired until April 1, 2024.

Previous wording

Net income (loss) attributable to noncontrolling interest. Net income (loss) attributable to noncontrolling interest in the acquired entity is measured at their proportionate share of the acquired entity’s and for (a) Bit Tech Tanzania in the percentage of 10%, (b) Meridian Gaming Peru in the percentage of 24.5%, and (c) Fair Champions Meridian Cyprus in the percentage of 49%. For the three months ended June 30, 2024, and 2023, net income (loss) attributable to noncontrolling interest amounted to $(42,299) and $90,290, respectively.

Current wording

Net income (loss) attributable to noncontrolling interest. Net income (loss) attributable to noncontrolling interest in the acquired entity is measured at their proportionate share of the acquired entity’s and for (a) Bit Tech Tanzania in the percentage of 10%, (b) Meridian Gaming Peru in the percentage of 24.5%, (c) Fair Champions Meridian Cyprus in the percentage of 49%, and (d) Classics Holding Pty Ltd Australia in the percentage of 20%. For the three months ended September 30, 2024, and 2023, net income attributable to noncontrolling interest amounted to $109,935 and $41,771, respectively. The increase was primarily due to the profits from Classics which the Company acquired in August 2024.

Previous wording

The following table summarizes the consolidated results of operations for the interim periods indicated, and the changes between the periods. Effective on April 1, 2024, the Company acquired 100% of the MeridianBet Group, which was accounted for as reverse merger. As a result, the historical financial information below represents the accounts of MeridianBet Group. Golden Matrix’s operations before the Purchase were excluded prior to April 1, 2024, the effective closing date of the Purchase.

Current wording

The following table summarizes the consolidated results of operations for the interim periods indicated, and the changes between the periods. Effective on April 1, 2024, the Company acquired 100% of the MeridianBet Group, which was accounted for as a reverse merger. As a result, the historical financial information below represents the accounts of MeridianBet Group. Golden Matrix’s operations before the Purchase were excluded prior to April 1, 2024, the effective closing date of the Purchase.

Previous wording

Revenue. Revenue increased by $18,750,707, or 41%, to $64,265,829 in the six months ended June 30, 2024, from $45,515,122 in the six months ended June 30, 2023. The increase was primarily attributable to the acquisition of Golden Matrix Group, Inc. (before the Purchase), which contributed $14,252,859 of revenues in the three months ended June 30, 2024. $9,656,962 of the revenues were from prize competitions, and $4,238,457 of the revenues were from resale of third-party gaming content, both of which did not exist until the acquisition of Golden Matrix effective on April 1, 2024. Revenues from online casino increased by $3,873,301, or 24%, to $19,895,899 for the six months ended June 30, 2024, from $16,022,598 for the six months ended June 30, 2023, mainly due to the increase in the offer of online casino games from different providers to 1500+, the launch of the new game "Super Heli" from the Company’s studio Expanse, which became the top 10 most popular game in the second quarter of 2024, and revenues from online sports betting increased by $939,400, or 6%, to $17,898,195 for the six months ended June 30, 2024, from $16,958,795 for the six months ended June 30, 2023, mainly due to our marketing campaigns, including around the European football/soccer Championship in June 2024.

Current wording

Revenue. Revenue increased by $37,533,379, or 55%, to $105,258,158 for the nine months ended September 30, 2024, from $67,724,779 for the nine months ended September 30, 2023. The increase was primarily attributable to the acquisition of Golden Matrix, which contributed $29,489,520 of revenues in the nine months ended September 30, 2024. $20,595,862 of the revenues were from prize competitions and trade promotions, and $8,059,744 of the revenues were from resale of third-party gaming content, both of which did not exist until the acquisition of Golden Matrix. Revenues from online casinos increased by $6,572,005, or 26%, to $31,500,643 for the nine months ended September 30, 2024, from $24,928,638 for the nine months ended September 30, 2023, mainly due to the increase in the offer of online casino games from different providers to 1500+, the launch of our integrated Play'n GO provider, the launch of the new game "Super Heli" from the Company’s studio Expanse, which became a top 3 most popular game in the third quarter of 2024, and revenues from online sports betting which increased by $1,862,296, or 8%, to $26,447,574 for the nine months ended September 30, 2024, from $24,585,278 for the nine months ended September 30, 2023, mainly due to our marketing campaigns, including marketing around the European football/soccer Championship in June 2024 and the Summer Olympic Games in August/September ‘24. Revenues from retail sports betting and retail casino increased by $231,371, or 1%, to $16,381,424 for the nine months ended September 30, 2024, from $16,150,053 for the nine months ended September 30, 2023, mainly due to the increase in the offer of the brand new slot machines (120) and favorable retail sports results during the month of June 2024, thanks to the impact of the European football/soccer championship during June/July 2024.

Previous wording

COGS. Costs of goods sold increased by $13,061,785, or 110%, to $24,888,357 for the six months ended June 30, 2024, from $11,826,572 for the six months ended June 30, 2023. The increase was primarily attributable to the acquisition of Golden Matrix, which contributed $10,907,450 of COGS in the six months ended June 30, 2024. $7,594,850 of the COGS were from prize competitions, and $3,188,858 of the COGS were from resale of third-party gaming content, both of which did not exist until the acquisition of Golden Matrix, effective on April 1, 2024. COGS from online casino, online sports betting, retail casino and retail sports betting increased by $2,165,568 in total, or 19%, to $13,631,701 for the six months ended June 30, 2024, from $11,466,133 for the six months ended June 30, 2023, mainly due to the increase in the variable amounts of gaming tax and software fee costs which were in line with the increase in income from online casinos, online sports betting, retail casinos and retail sports betting.

Current wording

COGS. Costs of goods sold increased by $25,534,259, or 142%, to $43,477,519 for the nine months ended September 30, 2024, from $17,943,260 for the nine months ended September 30, 2023. The increase was primarily attributable to the acquisition of Golden Matrix, which contributed $22,114,155 to COGS in the nine months ended September 30, 2024. A total of $15,671,977 of the COGS was from prize competitions, and $6,257,738 of the COGS was from resale of third-party gaming content, both of which did not exist until the acquisition of Golden Matrix on April 1, 2024. COGS from online casinos, online sports betting, retail casinos and retail sports betting increased by $3,469,920 in total, or 20%, to $20,867,181 for the nine months ended September 30, 2024, from $17,397,261 for the nine months ended September 30, 2023, mainly due to the increase in the variable amounts of gaming tax and software fee costs which were in line with the increase in income from online casinos, online sports betting, retail casinos and retail sports betting.

Previous wording

Gross profit. Gross profit increased by $5,688,922, or 17%, to $39,377,472 for the six months ended June 30, 2024, from $33,688,550 for the six months ended June 30, 2023. The $3,345,409 increase in gross profit was due to the acquisition of Golden Matrix and gross profit generated by Golden Matrix during the six months ended June 30, 2024, following the acquisition of Golden Matrix on April 1, 2024. Gross profit from online casino increased by $2,507,823 or 21% and gross profit from online sports betting increased by $342,582, or 3%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase in the gross profit was mainly due to the increase in the revenues as discussed above.

Current wording

Gross profit. Gross profit increased by $11,999,120, or 24%, to $61,780,639 for the nine months ended September 30, 2024, from $49,781,519 for the nine months ended September 30, 2023. The $7,375,365 increase in gross profit was due to the acquisition of Golden Matrix. Gross profit from online casinos increased by $4,385,372 or 24% and gross profit from online sports betting increased by $918,981, or 5%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The increase in the gross profit was mainly due to the increase in the revenues as discussed above.

Previous wording

General and administrative expenses. The general and administrative expenses increased by $10,624,478, or 43%, to $35,558,239 for the six months ended June 30, 2024, from $24,933,761 for the six months ended June 30, 2023. The general and administrative expenses consisted primarily of stock-based compensation, depreciation expenses, amortization expenses, salary and wages, professional fees, marketing expenses, rents and utilities.

Current wording

General and administrative expenses (G&A). General and administrative expenses increased by $21,140,766, or 56%, to $58,937,789 for the nine months ended September 30, 2024, from $37,797,023 for the nine months ended September 30, 2023. General and administrative expenses consisted primarily of stock-based compensation, depreciation expenses, amortization expenses, salary and wages, professional fees, marketing expenses, rents and utilities.

Previous wording

Stock-based compensation (within G&A) for the six months ended June 30, 2024, were $1,558,296, compared to $0 for the six months ended June 30, 2023, a $1,558,296 increase from the prior period, which was due mainly to the RSUs granted to employees and directors of the Company, as well as shares issued for services during the period.

Current wording

Stock-based compensation (within G&A) for the nine months ended September 30, 2024, was $3,203,212, compared to $0 for the nine months ended September 30, 2023, a $3,203,212 increase from the prior period, which was due mainly to RSUs granted to employees and directors of the Company, as well as shares issued for services during the period.