Section 2.02. Results of Operations and Financial Condition.
At March 28, 2022, Elys Game Technology Corp. (the “Company”) issued a press release announcing certain expected financial results for its fiscal year ended
December 31, 2021. A copy of the press release is provided as Exhibit 99.1 to this current report.
The information contained in this Section 2.02 and in the press release attached as Exhibit 99.1 to this current report on Form 8-K is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934. , as amended, or otherwise subject to the responsibilities of this section or sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained in this Item 2.02 and in the press release attached as Exhibit 99.1 to this Current Report on Form 8-K shall not be incorporated by reference in any filing with the US Securities and Exchange Commission made by the Company, whether made before or after the date hereof, regardless of the language of general incorporation into such filing.
Item 8.01. Other Events.
At March 28, 2022the Company issued a press release in which it indicated, among other things, that the Company’s management expects revenues to increase by approximately 22% to approximately $45.5 millionsubject to final verification, for the year ended December 31, 2021 compared to approximately $37.3 million for the year ended December 31, 2020. Additionally, the company expects gross online gaming revenue to grow by around 74% to around $54.9 million for the year ended
December 31, 2021subject to final audit verification, against approximately $31.6 million for the year ended December 31, 2020.
The Company has also provided certain estimates regarding operating expenses, before impairment charges, which include selling, general and administrative expenses which are expected to be as follows:
Selling fees, which consist mainly of commissions paid to third parties
agents on the Company's B2C operations in Europe and calculated as a percentage
of turnover, of approximately $36.3 million increased by approximately 39% for
the fiscal year ended December 31, 2021 compared to approximately $26.1 million
in the prior year on the back of an increase in turnover of approximately 47%,
all of which is subject to final audit verification.
General and administrative expenses increased by approximately $5.3
million or 39% from approximately $13.8 million in 2020 to approximately $19.1
million in 2021, subject to final audit verification. The increase is a direct
result of the Company's entry into the U.S. market, including increased
expenses related to the acquisition and operation of Bookmakers Company US, LLC
and significant expenses incurred in both personnel costs and professional fees
to develop and establish a foothold in the U.S. market.
Impairment charges, which are non-cash, are provisionally estimated at $16 million for 2021, subject to final audit verification. It is estimated that these preliminary impairment costs include (i) an impairment of a European license of $4.8 millionmanagement focusing its efforts on we
and Canadian markets with their potential for future growth compared to the growth potential measured in more mature European markets; and (ii) an impairment of goodwill related to our recent we acquisition initially estimated at
$11.2 millionoffset by a decrease in future price supplements estimated at $12.3 milliondepending on the timing of the expected revenue growth of our recently acquired subsidiary, US Bookmakers Company, LLC.
The Company is in the process of finalizing its results for the year ended December 31, 2021 and the information provided in this Section 8.01 is based on currently available information, all of which is subject to final audit verification. The estimated preliminary financial results for fiscal year 2021 contained in this current report on Form 8-K contain forward-looking statements and are subject to the completion of management’s and audit committee’s final reviews and our other review procedures. financial closure and are therefore subject to change. You should not place undue reliance on such preliminary information and estimates, as they may prove to be materially inaccurate. Preliminary information and estimates have not been compiled or reviewed by our independent auditors and are subject to revision in the preparation of our financial statements as of and for the year ended December 31, 2021including all information required by we generally accepted accounting principles, and that our auditors perform their audit of these financial statements. Although we believe that such preliminary information and estimates are based on reasonable assumptions, actual results may vary and such variations may be material.
This press release contains certain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are identified by the use of the words “may”, “believe”, “anticipate”, “have intend”, “estimate”, “expect”, “may”, “continue”, “predict”, “potential”, “project” and similar expressions intended to identify forward-looking statements and include statements regarding the estimated increase in revenue, the estimated increase in gross revenue from web games, the estimated increase in revenue percentage, the estimated increase in general and administrative expenses, the Company continuing to incur expenses related to its expansion investment in the US market, earning further margin improvement in Multigioco’s B2C operations as the company expands its omnichannel distribution approach, rolling out ant the terrestrial channel of the company’s powerful Elys Gameboard technology in Europe on a B2B basis, establishing ourselves as one of the world’s leading end-to-end sports betting companies, aligning its product and service offerings with the needs of its B2B customers as well as B2C consumers to build an organization well-managed that is both highly profitable and sustainable, converting investments in technology into revenue-generating customer relationships in the we and
Canadadifficult for the first place in North America by combining our advanced technologies we designed sports betting technology with an industry giant
Lottomatica, anticipate significant near-term milestones and provide updates on these developments as they unfold. These forward-looking statements are based on management’s expectations and assumptions as of the date of this press release and are subject to a number of risks and uncertainties, many of which are difficult to predict, which could cause actual results differ materially from current expectations and assumptions from those expressed or implied by any forward-looking statement. Important factors that could cause actual results to differ materially from current expectations include, among others, the Company’s ability to successfully commence operations in the wethe regulatory environment in all jurisdictions in which we operate, the ability to increase market share in new and existing markets, the Company’s ability to quickly adapt to market conditions such as the current pandemic, the Company’s ability to achieve further margin improvement from Multigioco B2C operations as we expand our omnichannel distribution approach as planned, roll out the terrestrial channel of our powerful Elys Gameboard technology in Europe on a B2B basis as expected, establish ourselves as one of the leading end-to-end sports betting companies in the world, aligning our product and service offerings with the needs of our B2B customers as well as B2C consumers in order to build a well-run organization that is both highly profitable and sustainable, converting our investment in technology into revenue-generating customer relationships in the we and Canada
as expected, challenge for first place in North America by combining our advanced technologies we designed sports betting technology with an industry giant Lottomatica
as expected, the duration and extent of the COVID-19 outbreak worldwide, including the impact on national and local economies, and the risk factors described in the company’s annual report on Form 10- K for the year ended
December 31, 2020 and its subsequent filings with the US Securities and Exchange Commission, including subsequent periodic reports on Form 10-Q and current reports on Form 8-K. The information in this release speaks only as of the date of this release, and the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unforeseen events, except as required by law.
Item 9.01. Financial statements and supporting documents.
Number Exhibit Description
99.1 Press Release issued by Elys Game Technology, Corp. on March 28, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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