ELYS GAME TECHNOLOGY, DISCUSSION AND ANALYSIS OF THE MANAGEMENT OF THE COMPANY ON THE FINANCIAL POSITION AND RESULTS OF OPERATIONS (form 10-Q)

0
This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of Section 27A of the Securities Act, and Section 21E of the
Exchange Act. All statements other than statements of historical fact could be
deemed forward-looking statements. Statements that include words such as "may,"
"might," "anticipate," "estimate," "expect," "project," "intend," "plan,"
"believe," "pro forma" or the negative of these words or other words or
expressions of and similar meaning may identify forward-looking statements. For
example, forward-looking statements include any statements of the plans,
strategies and objectives of management for future operations, including the
execution of integration and restructuring plans and the anticipated timing of
filings; any statements concerning proposed new products, services or
developments; any statements regarding future economic conditions or
performance; statements of belief and any statement of assumptions underlying
any of the foregoing. Factors that might cause such differences include, but are
not limited to, those discussed in our Annual Report on Form 10-K/A for the year
ended December 31, 2020 filed with the Securities and Exchange Commission on
April 13, 2021 under the heading "Risk Factors" and the Risk Factors as
described in Item 1A of this Quarterly Report on Form 10-Q for the quarter
ended
September 30, 2021.



Overview



Except as expressly stated, the financial condition and results of operations
discussed throughout the Management's Discussion and Analysis of Financial
Condition and Results of Operations are those of Elys Game Technology, Corp. and
its consolidated subsidiaries.



We currently provide our gaming services in Italy through our subsidiary,
Multigioco Srl ("Multigioco"), which operations are carried out via both
land-based or online retail gaming licenses regulated by the Agenzia delle
Dogane e dei Monopoli ("ADM") that permits us to distribute leisure betting
products such as sports betting, and virtual sports betting products through
both physical, land-based retail locations as well as online through our
licensed website www.newgioco.it or commercial webskins linked to our licensed
website and through mobile devices. Our Austria Bookmaker license that is
regulated by the Austrian Federal Finance Ministry ("BMF") permits us to operate
online sports betting in certain European jurisdictions outside of Italy through
our subsidiary Ulisse GmbH ("Ulisse") under the free-trade principles
incorporated within bilateral Intra-EU trade agreements that refers to all
trade, including e-commerce transactions in most goods, services and products
between member states of the European Union ("EU").



We also provide Gaming services in the US market via our recently acquired
subsidiary Bookmakers Company US, LLC in certain licensed states where we offer
bookmaking and platform services to our customers. Our intention is to focus our
attention on expanding the US market. We recently began operation is Washington
DC through a Class B Managed Service Provider and Class B Operator license to
operate a sportsbook within the Grand Central Bar and Grill located in the Adams
Morgan area of Washington, D.C., and in October 2021 we entered into an
agreement with Ocean Resort Casino in Atlantic City to commence operations in
the state of New Jersey in March 2022.



Additionally, we are a global gaming technology company which owns and operates
a betting software designed with a unique "distributed model" architecture
colloquially named Elys Game Board (the "Platform") through our Odissea
subsidiary. The Platform is a fully integrated "omni-channel" framework that
combines centralized technology for updating, servicing and operations with
multi-channel functionality to accept all forms of customer payment through the
two distribution channels described above. The omni-channel software design is
fully integrated with a built in player gaming account management system,
built-in sports book and a virtual sports platform through our VG subsidiary.
The Platform also provides seamless application programming interface
integration of third-party supplied products such as online casino, poker,
lottery and horse racing and has the capability to incorporate e-sports and
daily fantasy sports providers.



Our corporate group is based in North America, which includes an executive suite
situated in San Francisco, California and a Canadian office in Toronto, Ontario
through which we carry-out corporate activities, handle day-to-day reporting and
U.S. development planning, and through which various employees, independent
contractors and vendors are engaged.



For the period ended September 30, 2021, transaction revenue generated through
our subsidiaries Multigioco and Ulisse consisted of wagering and gaming
transaction income broken down to: (i) spread on sports bet wagers, and (ii)
fixed rate commissions on casino, poker, lotto and horse racing wagers from
online based betting web-shops and websites as well as land-based retail betting
shops located throughout Italy; while our service revenue generated by our
Platform is primarily derived from bet and wager processing through Multigioco
and Ulisse. Since the majority of Ulisse Data Transmission Centers (CTD)
locations were not expected to re-open after the COVID-19 related lockdowns in
Italy subside, management decided to simplify our Italian footprint by focusing
our investment towards the Multigioco operations and discontinued Ulisse
presence in Italy during Q2-2021 and focusing Ulisse operations to online
operations in Austria and other potential European regions.



                                       36










We believe that our Platform is considered one of the newest betting software
platforms in the world and our plan is to expand our Platform offering to new
jurisdictions around the world on a B2B basis, including expansion through
Europe, South America, South Africa and the developing market in the United
States. During the year ended December 31, 2020 and the nine months ended
September 30, 2021, we also generated service revenue from royalties through
authorized agents by providing our virtual sports products through our VG
subsidiary and generated service revenues through the provision of bookmaking
and platform services through our recently acquired subsidiary, Bookmakers
Company US, LLC. We intend to leverage our partnerships in these countries to
cross-sell our Platform services to expand the global distribution of our
betting solutions.



Recent Developments



Impact of COVID-19


As a result of the global outbreak of the COVID-19 virus, on March 8, 2020 the
Italian government issued a decree which imposed certain restrictions on public
gatherings and travel, and closures of physical venues that included betting
shops, arcades and bingo halls across Italy. Accordingly, we had temporarily
closed all betting shop locations throughout Italy as a result of the decree
until May 4, 2020. Subsequently, on March 10, 2020 the Italian government
imposed further restrictions on travel throughout Italy as well as transborder
crossings and had either postponed or cancelled most professional sports events
which had an effect on the Company's overall sports betting handle and revenues
and negatively impacted the Company's operating results.



On June 19, 2020 all land-based betting shops, including corner locations such
as coffee shops throughout Italy temporarily reopened until November 2020 when
the Italian government imposed new lockdowns that were lifted on June 14, 2021.
The closing of physical betting shop locations did not affect our online and
mobile business operations which has mitigated some of the impact. Due to the
high percentage of vaccinations administered in Italy, we do not anticipate
further severely restrictive lockdowns.



We anticipate that COVID-19 will continue to negatively impact our operating
results in future periods, and we expect that a significant number of locations
will not re-open after the COVID-19 related lockdowns in Italy subside. Since
the duration and scope of the COVID-19 outbreak worldwide, including the impact
to the local economies and retail business is not precisely determinable at this
time, management decided to close our Ulisse operations in Italy during Q2 2021,
while focusing investments on growing our more familiar Multigioco brand, the
result of which management believes has reduced the complexity and improve the
efficiency of our gaming operations in Italy.



Expansion and New Markets


Development of operations in the United States

On July 15, 2021, we completed the acquisition of Bookmakers Company US LLC dba
US Bookmaking ("USB") in accordance with the terms of the Membership Purchase
Agreement that we entered into on July 5, 2021 with the members of USB (the
"Sellers"), making USB a wholly owned subsidiary of the Company. USB's
management team includes a long time sports book operator Victor Salerno, with
over 40 years of experience in the Nevada sports book business managing risk for
over 100 properties and who was inducted into the American Gaming Association's
Gaming Hall of Fame in 2015 and SBC's Hall of Fame in 2020; Bob Kocienski, CEO,
with over 40 years of experience in the gaming industry including oversight on
the sports books at several high profile casinos; Robert Walker, Director of
Bookmaking, with over 30 years of experience in managing sports books at several
casinos including the Stardust, Mirage, and the MGM; and John Salerno, Director
of Operations and Compliance with over 20 years of experience. USB currently
operates in 4 states (New Mexico, Colorado, North Dakota and Michigan) providing
services to 6 clients (Sky Ute Casino Resort, Santa Ana Star Casino, Isleta
Resort & Casino, Santa Claran Hotel & Casino, Odawa Casino, and 4 Bears Casino)
with pending operations in 2 additional states (Washington, DC and Iowa).



Pursuant to the terms of the Purchase Agreement, the consideration paid for all
of the equity of USB was $6 million in cash plus the issuance of 1,265,823
shares of our common stock having a value of $6,000,000 based upon a price of
$4.74 per share which was the volume weighted average closing price of the stock
for the 90 trading days preceding the closing date. The Sellers will have an
opportunity to receive up to an additional $38 million plus a potential premium
of 10% (or $3.8 million) based upon achievement of stated adjusted cumulative
EBITDA milestones during the next four years, payable 50% in cash and 50% in
Elys stock at a price equal to volume weighted average price of our common stock
for the 90 consecutive trading days preceding January 1 of each subsequent
fiscal year for the duration of the earnout period ending December 31, 2025,
subject to obtaining shareholder approval, if the aggregate number of shares to
be issued pursuant to the Purchase Agreement exceed 4,401,020 and with a cap of
5,065,000 on the aggregate number of shares to be issued. Any excess not
approved by shareholders or exceeding the cap will be paid in cash.





                                       37










The Purchase Agreement contains customary representations, warranties and
covenants of us and the Sellers. Subject to certain customary limitations, the
Sellers have agreed to indemnify us and ours officers and directors against
certain losses related to, among other things, breaches of the Sellers'
representations and warranties, certain specified liabilities and the failure to
perform covenants or obligations under the Purchase Agreement.



The commencement of betting transactions in the United States are subject to
obtaining the required certification, licensing and approvals from the
respective state gambling control agency, in addition to any other state or
federal regulatory approval required by law, On September 1, 2021, we issued a
press release announcing the approval of our first license in Washington DC, a
Class B Managed Service Provider and Class B Operator licenses to operate a
sportsbook within the Grand Central Bar and Grill located in the Adams Morgan
area of Washington, D.C. which commenced sports betting in October 2021, and in
October 2021 we entered into an agreement with Ocean Resort Casino in Atlantic
City to commence operations in the state of New Jersey in March 2022.



Inflation


We do not believe that general price inflation will have a significant effect on our business in the near future.


Foreign Exchange



We operate in several foreign countries, including Austria, Italy, Malta and
Canada and we incur operating expenses and have foreign currency denominated
assets and liabilities associated with these operations. Transactions involving
our corporate expenditures are generally denominated in U.S. dollars and
Canadian dollars while the functional currency of our subsidiaries is in Euro.
Changes and fluctuations in the foreign exchange rate between the US Dollar and
the Euro, Canadian dollar and Colombian Peso will have an effect on our results
of operations.


Critical accounting conventions and estimates

Preparation of our unaudited condensed consolidated financial statements in
accordance with U.S. generally accepted accounting principles requires us to
make estimates and assumptions that affect the reported amounts of certain
assets, liabilities, revenues and expenses, as well as related disclosure of
contingent assets and liabilities. Significant accounting policies are
fundamental to understanding our financial condition and results as they require
the use of estimates and assumptions which affect the financial statements
and
accompanying Notes.


Recently published accounting position papers

See note 2 – Summary of significant accounting policies in the notes to the condensed consolidated financial statements included in this quarterly report on Form 10-Q for information on recently issued accounting standards.




                                       38








Results of Operations


Operating results for the three months ended September 30, 2021 and the three months have ended September 30, 2020


Revenues



The following table represents disaggregated revenues from our gaming operations
for the three months ended September 30, 2021 and 2020. Net Gaming Revenues
represents Turnover (also referred to as "Handle"), the total bets processed for
the period, less customer winnings paid out, and taxes due to government
authorities, Service Revenues is revenue invoiced for our Elys software service
and royalties invoiced for the sale of virtual products.



                                                   Three Months Ended
                                                                                          Increase
                                       September 30, 2021      September 30, 2020        (decrease)        Percentage change
Turnover
Turnover web-based                    $       162,471,799     $       117,879,687     $   44,592,112                37.8 %
Turnover land-based                             1,193,779              25,823,099        (24,629,320 )             (95.4 )%
Total Turnover                                163,665,578             143,702,786         19,962,792                13.9 %

Winnings/Payouts
Winnings web-based                            152,328,199             110,841,093         41,487,106                37.4 %
Winnings land-based                             1,031,217              21,495,660        (20,464,443 )             (95.2 )%
Total Winnings/payouts                        153,359,416             132,336,753         21,022,663                15.9 %

Gross Gaming Revenues                          10,306,162              11,366,033         (1,059,871 )              (9.3 )%

Less: ADM Gaming Taxes                          2,515,570               1,698,192            817,378                48.1 %
Net Gaming Revenues                             7,790,592               9,667,841         (1,877,249 )             (19.4 )%

Add: Service Revenues                             239,490                 
33,955            205,535               605.3 %
Total Revenues                        $         8,030,082     $         9,701,796     $   (1,671,714 )             (17.2 )%




The Company generated total revenues of $8,030,082 and $9,701,796 for the three
months ended September 30, 2021 and 2020, respectively, a decrease of $1,671,714
or 17.2%.


The change in turnover (handle) is mainly due to the following elements:

Web-based turnover increased by $44,592,112 or 37.8%. The increase was due to
the significant number of new online players while the physical betting shops
were closed for a significant portion of the prior year and up until June 14,
2021 due to the pandemic. The reopening of physical land-based locations during
June 2021 resulted in a lower percentage growth in our web-based turnover for
the current quarter, however it still remains significant and reinforces our
belief that web based turnover will continue its growth trajectory. In addition,
due to the closure of our Ulisse operations in Italy, we generated no revenue
from this entity. We expect the business mix to continue to trend towards online
channels, and we still expect quarterly growth for the foreseeable future as we
gain market share. The percentage of payouts on web-based turnover improved to
93.8% from 94.0% for the three months ended September 30, 2021 and 2020,
respectively.



Land-based turnover decreased by $24,629,320 or 95.4%. The decrease over the
prior period was impacted by the closure of the Ulisse Italian operations during
June 2021, with no revenue generated from this entity during the current period.
The impact of the closure of our Ulisse operations was offset by increased
online gaming in Multigioco. We expect the business mix to continue trending
towards online channels. The percentage of payouts on land-based turnover
increased to 86.4% from 83.2% for the three months ended September 30, 2021
and
2020, respectively.





                                       39








The turnover mix impacts our Gross Gaming Revenue. In the prior year three-month
period ended September 30, 2020 sports betting represented 31.4% of turnover and
casino style games represented 67.8% and other was 0.8%, in the current year
three-month period ended September 30, 2021 sports betting represented 19.2% of
turnover and casino style games represented 80.1% of turnover and other was
0.7%. Although the shift towards sports betting had a positive impact on our
gross gaming revenue, the closure of all Ulisse Italian based locations in the
second quarter, had a negative impact on the overall sports betting turnover
resulting in our blended Hold (sports betting combined with i-gaming and online
poker) decreasing to 6.3% compared to 7.9% for the three months ended September
30, 2021 and 2020, respectively. Casino style games generally have a lower Hold
compared to our sports betting business.



Disaggregated sportsbook hold, before gaming taxes, decreased to 14.8% from
17.0% of handle for the three months ended September 30, 2021 and 2020,
respectively, a decrease of 2.2 percentage points in sportsbook hold. The
closure of the Ulisse operations had a negative impact on overall sports betting
during the current three month period compared to the same prior year period and
the lower sports betting hold had a negative impact on our overall gross gaming
revenue, or our blended hold (sports betting combined with i-gaming and online
poker). Although the Casino style games hold improved to 4.2% from 3.6% for the
three months ended September 30, 2021 and 2020, respectively, the shift of
overall revenue towards on-line casino style games with a lower hold and lower
margin poker rake, resulted in an overall blended conversion of turnover to
revenue hold of 6.3% compared to 7.9% for the three months ended September 30,
2021 and 2020, respectively, a year-over-year decrease of 1.6 percentage points
in blended hold.



Gaming taxes increased by $817,378 or 48.1% over the prior period. The relative
rate of our gaming taxes, which is based on Gross Gaming Revenues was 24.4% and
14.9% for the three months ended September 30, 2021 and 2020, respectively. The
increase is attributable to all of our Italian based gaming business shifting to
Multigioco. In the prior period Ulisse had a significantly lower tax rate due to
its incorporation being situated outside of Italy.



The majority of Ulisse CTD locations were not expected to re-open after the
COVID-19 related lockdowns in Italy, management simplified its Italian footprint
by focusing our investment towards the Multigioco operations and discontinued
Ulisse presence in Italy at the end of the second quarter of 2021, re-focusing
our Ulisse online operations in Austria and other potential European regions.



Service revenues increased by $205,535 or 605.3%. This is primarily due to; (i)
revenues generated by our Colombian operations of $99,524, which started trading
in the last quarter of the prior year and revenues generated of $121,552 from
our recent acquisition of USB. This revenue remains insignificant to total
revenues during the periods presented.



Selling expenses



We incurred selling expenses of $6,054,757 and $7,154,623 for the three months
ended September 30, 2021 and 2020, respectively, a decrease of $1,099,866 or
15.4%. Selling expenses are commissions that are paid to our sales agents as a
percentage of turnover (handle) and are not affected by the winnings that are
paid out. Therefore, increases in turnover (handle), will typically result in
increases in selling expenses but may not result in increases in overall revenue
if winnings/payouts, that are subject to the unknown outcome of sports events
that we have no control over, are very high. The percentage of selling expenses
to turnover improved to 3.7% compared to 5.0% for the three months ended
September 30, 2021 and 2020, respectively. The improvement is due to the wind
down of Ulisse during the second quarter, which had a commission percentage
of
9.8% in the prior year.


General and administrative expenses

General and administrative expenses were $5,075,300 and $3,156,505 for the three
months ended September 30, 2021 and 2020, respectively, an increase of
$1,918,795 or 60.8%. The increase over the prior year is attributable to the
following: (i) an increase in personnel costs of $1,074,838 in our European
operations as well as in our US operations as we gear up for our expansion into
the US markets, this includes both administrative personnel and engineering
personnel to develop the platform for the US market; (ii) an increase in stock
based compensation expense of $626,376 primarily due to the periodic
amortization expense of options granted to senior management during the second
half of the prior year and the third quarter of the current year; (iii) an
increase in platform and IT related services to support the services offered by
the group of $54,322, and (iv) an increase in depreciation and amortization
expense of $185,557 offset by (v) a foreign exchange gain realized predominantly
in our corporate operations of $423,452 due to the improvement in the US Dollar
exchange rate against the Euro. The balance of the increase of $401,154 consists
of numerous individually insignificant expenses that have increased due to the
increased activity as we gear up for our expansion into the US market.



Loss from Operations



The loss from operations was $3,099,975 and $609,332 for the three months ended
September 30, 2021 and 2020, respectively, an increase of $2,490,643 or 408.8%.
The increase in operating loss is directly attributable to the decrease in
revenues of $1,671,714 and the increase in general and administrative expenses
of $1,918,795, offset by a reduction in selling expenses of $1,099,866, as
discussed above.

                                       40








 Other income



Other income was $74,327 and $37,237 for the three months ended September 30,
2021 and 2020, respectively, an increase of $37,090 or 99.6%. Other income
includes a gain realized on reconciling our accounting records to the platform
records.



Other expense



Other expense was $384 and $109,623 for the three months ended September 30,
2021 and 2020, respectively, a decrease of $109,239 or 99.6%. The prior year
expense consists primarily of a contribution made to an Italian sporting
Association to relaunch sporting operations post the COVID-19 shut down.



Interest expense, net of interest income



Interest expense was $4,705 and $56,093 for the three months ended September 30,
2021 and 2020, respectively, a decrease of $51,388 or 91.6%. The decrease is
primarily related to the repayment and the conversion into equity of convertible
debentures during the prior year resulting in lower interest-bearing debt. The
last convertible debenture was repaid during the first quarter of 2021.



Change in the fair value of the contingent purchase consideration

The change in the fair value of the contingent purchase consideration was $ 569,076 and $ 0
for the three months ended September 30, 2021 and 2020, respectively, an increase of $ 569,076. The change in the fair value of the conditional purchase consideration corresponds to the increase charge associated with the present value of the conditional purchase consideration due to the acquisition of USB.

Amortization of the present value discount



Amortization of present value discount was $0 and $43,604 for the three months
ended September 30, 2021 and 2020, respectively, an increase of $514,892. The
amortization of present value discount in the prior period, related to deferred
purchase consideration on the acquisition of Virtual Generation which was fully
amortized in the first quarter of the current period.



(Loss) gain on Negotiable securities



The loss on marketable securities was $200,000 and $250,000 for the three months
ended September 30, 2021 and 2020, respectively, a decrease of $50,000 or 20.0%.
The losses and gains on marketable securities is directly related to the stock
price of our investment in Zoompass which is marked-to-market each quarter. The
shares in Zoompass were acquired by the Company as settlement of a litigation
matter, we have no influence over the performance of Zoompass.



Loss Before Income Taxes


Loss before income taxes was $3,799,813 and $1,031,379 for the three months
ended September 30, 2021 and 2020, respectively, an increase of $2,768,434 or
268.4%. The increase is primarily attributable to the increase in loss from
operations and the change in fair value of contingent purchase consideration, as
discussed above.



Income Tax Provision



The income tax provision was a credit of $284,636 and a charge of $(181,902) for
the three months ended September 30, 2021 and 2020, respectively, a decrease of
$466,538 or 256.5%. The current period credit is due to the reversal of a tax
provision raised in the previous quarter due to the current period reduction in
profitability in our Multigioco and Odissea operations and an adjustment to a
prior period income tax charge in Ulisse related to incentive bonuses reversed
during the current period of $119,660.



Net Loss


Net loss was $3,515,177 and $1,213,281 for the three months ended September 30,
2021 and 2020, respectively, an increase of $2,301,896 or 189.7% due to the
increase in loss before income taxes and the reduction in income tax provision,
discussed above.



Comprehensive Loss


Our reporting currency is the U.S. dollar while the functional currency of our
Italian, Maltese and Austrian subsidiaries is the Euro, the functional currency
of our Canadian subsidiary is the Canadian Dollar and the functional currency of
our Colombian operation is the Colombian Peso. The financial statements of our
subsidiaries are translated into United States dollars in accordance with ASC
830, using year-end rates of exchange for assets and liabilities, and average
rates of exchange for the period for revenues, costs, and expenses and
historical rates for equity. Translation adjustments resulting from the process
of translating the local currency financial statements into U.S. dollars are
included in determining other comprehensive income.



We recorded a foreign currency translation loss of $(154,572) and a foreign
currency translation gain of $218,193 for the three months ended September 30,
2021 and 2020, respectively, primarily due to the strengthening of the US Dollar
against the Euro during the current period and the weakening against the Euro in
the prior period.



                                       41









Operating results for the nine months ended September 30, 2021 and the nine months have ended September 30, 2020


Revenues



The following table represents disaggregated revenues from our gaming operations
for the nine months ended September 30, 2021 and 2020. Net Gaming Revenues
represents Turnover (also referred to as "Handle"), the total bets processed for
the period, less customer winnings paid out, and taxes due to government
authorities, while Service Revenues represents revenue invoiced for our Elys
software service and royalties invoiced for the sale of virtual products.

                                                 Nine Months Ended
                                                                                       Increase
                                    September 30, 2021      September 30, 2020        (decrease)        Percentage change
Turnover
Turnover web-based                 $       613,678,568     $       300,111,151     $  313,567,417               104.5 %
Turnover land-based                         13,237,738              53,635,357        (40,397,619 )             (75.3 )%
Total Turnover                             626,916,306             353,746,508        273,169,798                77.2 %

Winnings/Payouts
Winnings web-based                         572,975,466             281,541,363        291,434,103               103.5 %
Winnings land-based                         11,362,524              43,286,978        (31,924,454 )             (73.8 )%
Total Winnings/payouts                     584,337,990             324,828,341        259,509,649                79.9 %

Gross Gaming Revenues                       42,578,316              28,918,167         13,660,149                47.2 %

Less: ADM Gaming Taxes                       9,129,881               4,294,680          4,835,201               112.6 %
Net Gaming Revenues                         33,448,435              24,623,487          8,824,948                35.8 %

Add: Service Revenues                          428,924                  58,752            370,172               630.1 %
Total Revenues                     $        33,877,359     $        24,682,239     $    9,195,120                37.3 %



The Company generated total revenues of $ 33,877,359 and $ 24,682,239 for the nine months ended September 30, 2021 and 2020, respectively, an increase of
$ 9,195,120 or 37.3%.

The change in turnover (handle) is mainly due to the following elements:



Web-based turnover increased by $313,567,417 or 104.5%. The increase was due to
the significant number of new online players while the physical betting shops
were closed for a significant portion of the prior year and up until June 14,
2021 due to the pandemic. The reopening of physical land-based locations during
June 2021 resulted in a lower percentage growth in our web-based turnover for
the current quarter, however it still remains significant and reinforces our
belief that web based turnover will continue its growth trajectory. In addition,
due to the closure of our Ulisse operations in Italy during the second quarter,
we generated no revenue from this entity. The percentage of payouts on web-based
turnover improved to 93.4% from 93.8% for the nine months ended September 30,
2021 and 2020, respectively.



Land-based turnover decreased by $40,397,619 or 75.3%. The decrease over the
prior period was impacted by the closure of the Ulisse Italian operations during
June 2021, with no revenue generated from this entity during the third quarter.
The impact of the closure of our Ulisse land-based operations which were
severely impacted by Covid-19, was offset by increased online gaming in
Multigioco. We, however, expect the business mix to continue trending towards
online channels. The percentage of payouts on land-based turnover increased to
85.8% from 80.7% for the nine months ended September 30, 2021 and 2020,
respectively.



The turnover mix impacts our Gross Gaming Revenue. In the prior year nine-month
period ended September 30, 2020 sports betting represented 28.3% of turnover and
casino style games represented 71.1% and other was 0.6%, in the current year
nine-month period ended September 30, 2021 sports betting represented 22.7% of
turnover and casino style games represented 76.4% of turnover and other was
0.9%. The payout percentage varies based on the skill and luck of our customers
and the outcome of sporting events which are inherently unpredictable and can
fluctuate significantly from period to period.



                                       42








Disaggregated sportsbook hold decreased to 14.2% from 19.3% of handle for the
nine months ended September 30, 2021 and 2020, respectively, a decrease of 5.1
percentage points in sportsbook hold. The decrease in sports betting during the
current nine month period compared to the same prior year period has a negative
impact on our overall gross gaming revenue, or our blended Hold (sports betting
combined with i-gaming and online poker). Casino style games generally have a
lower Hold compared to our sportsbook hold. The shift towards growing our online
channel, with higher pay-out casino games and lower margin poker rake, resulted
in an overall blended conversion of turnover to revenue hold to 6.8% from 8.2%
for the nine months ended September 30, 2021 and 2020, respectively, a
year-over-year decrease of 1.4 percentage points in blended hold.



Gaming taxes increased by $4,835,201 or 112.6% over the prior period. The
relative rate of our gaming taxes, which is based on Gross Gaming Revenues was
21.4% and 14.9% for the nine months ended September 30, 2021 and 2020,
respectively. The increase is attributable to the shift of our gaming business
to Multigioco which has an average gaming tax of approximately 24.5% compared to
Ulisse with a significantly lower tax rate due to its incorporation being
situated outside of Italy.



Since the majority of Ulisse CTD locations were not re-opened after the COVID-19
related lockdowns in Italy were lifted as management had decided to simplify our
Italian footprint by focusing our investment towards our Multigioco operations
and discontinued our Ulisse distribution in Italy at the end of the second
quarter of 2021, re-focusing our Ulisse online operations in Austria and other
potential European regions.



Service revenues increased by $370,172 or 630.1%. This is predominantly due to
revenues generated by our Colombian operations and our newly acquired USB
operations. Our Colombian operations only started trading in the current year.
Our Platform services customer base is currently limited primarily to services
provided to external US and international retail customers and internal group
operations of Multigioco, Ulisse and VG. This revenue remains insignificant to
total revenues during the periods presented.



Selling expenses



We incurred selling expenses of $26,333,156 and $17,327,150 for the nine months
ended September 30, 2021 and 2020, respectively, an increase of $9,006,006 or
52.0%. Selling expenses are commissions that are paid to our sales agents as a
percentage of turnover (handle) and are not affected by the winnings that are
paid out. Therefore, increases in turnover (handle), will typically result in
increases in selling expenses but may not result in increases in overall revenue
if winnings/payouts, that are subject to the unknown outcome of sports events
that we have no control over, are very high. The percentage of selling expenses
to turnover decreased to 4.2% from 4.9% for the nine months ended September 30,
2021 and 2020, respectively.



General and administrative expenses

General and administrative expenses were $13,975,455 and $8,860,893 for the nine
months ended September 30, 2021 and 2020, respectively, an increase of
$5,114,562 or 57.7%. The increase over the prior year is attributable to the
following: (i) an increase in personnel costs of $1,791,192 in our European
operations as well as in our US operations as the Company gears up for its
expansion into the US markets and includes both administrative personnel and
engineering personnel to develop the platform for the US market; (ii) stock
based compensation increased by $1,158,967 primarily due to the periodic
amortization expense of options granted to senior management during the second
half of the prior year and the current quarter; (iii) an increase in
professional fees of $382,611, primarily legal fees incurred on licensing,
acquisitions and corporate restructuring; (iv) investor relations expenses of
$315,825 primarily related to programs undertaken to promote the company to its
US investors; (v) an increase in depreciation and amortization expense of
$184,443, primarily due to the amortization of intangibles on the acquisition of
USB; and(vi) an increase in platform and IT related services to support the
services offered by the group of $552,780, including third party provider
revenue shares. The balance of the increase of $728,744 consists of numerous
individually insignificant expenses that have increased due to the increased
activity as we gear up for our expansion into the US market.



Loss from Operations


The loss from operations was $6,431,252 and $1,505,804 for the nine months ended
September 30, 2021 and 2020, respectively, an increase of $4,925,448 or 327.1%.
The increase in loss from operations is primarily due to the following: (i) the
increase in selling expenses of $9,006,006; (ii) the increase in general and
administrative expenses of $5,114,562; partially offset by (iii) the increase in
revenue of $9,195,120, as discussed above.



Other income



Other income was $444,689 and $62,933 for the nine months ended September 30,
2021 and 2020, respectively, an increase of $381,756 or 606.6%. Other income
includes a COVID tax credit of $85,874 received from the Agenzia delle Dogane e
dei Monopoli ("ADM") for taxes previously charged; $204,888 of COVID relief
funds received by Ulisse during the current period, a gain of $35,507 realized
on reconciling our accounting records to the platform records, and other
immaterial non-operating amounts received.

                                       43








 Other expense


Other expense was $28,522 and $109,623 the nine months ended September 30, 2021
and 2020, respectively, an increase of $81,101 or 74.0%. Other expense includes
an administrative penalty of $26,930, related to ADM taxes provided for by
Multigioco. The prior year expense consists primarily of a contribution made to
an Italian sporting Association to relaunch sporting operations post the
COVID-19 shut down.



Interest expense, net of interest income



Interest expense was $14,748 and $229,166 for the nine months ended September
30, 2021 and 2020, respectively, a decrease of $214,418 or 93.6%. The decrease
is primarily related to the repayment and the conversion into equity of
convertible debentures during the prior year resulting in lower interest-bearing
debt. The last convertible debenture was repaid during the first quarter of
2021.



Change in the fair value of the contingent purchase consideration

Change in fair value of contingent purchase consideration was $569,076 and $0
for the nine months ended September 30, 2021 and 2020, respectively, an increase
of $569,076. The change in fair value of contingent purchase consideration is
the accretion expense associated with the present value of contingent purchase
consideration due on the acquisition of USB.



Amortization of the present value discount



Amortization of present value discount was $12,833 and $780,678 for the nine
months ended September 30, 2021 and 2020, respectively, a decrease of $767,845.
The prior year charge relates to the amortization of present value discounts on
the convertible debentures which matured during the second quarter of 2020 and
deferred purchase consideration on the acquisition of Virtual Generation which
was fully amortized in the first quarter of the current period.



Loss on extinction of convertible debt

The loss on extinguishment of convertible debt was $0 and $719,390 for the nine
months ended September 30, 2021 and 2020, respectively, a decrease of $719,390
or 100%. In the prior period, we issued additional warrants to certain debenture
holders who agreed to extend the maturity date of their debentures by between 90
and 120 days to allow us to complete a fund raising exercise. These warrants
were valued using a Black-Scholes valuation model.



(Loss) gain on Negotiable securities

The loss on marketable securities was $(292,500) and the gain on marketable
securities was $472,500 for the nine months ended September 30, 2021 and 2020,
respectively, a decrease of $765,000 or 161.9%. The losses and gains on
marketable securities is directly related to the stock price of our investment
in Zoompass which is marked-to-market each quarter. The shares in Zoompass were
acquired by the Company as settlement of a litigation matter, we have no
influence over the performance of Zoompass.



Loss Before Income Taxes


Loss before income taxes was $6,904,242 and $2,809,228 for the nine months ended
September 30, 2021 and 2020, respectively, an increase of $4,095,014 or 145.8%.
The increase is attributable to the increase in loss from operations, the loss
on extinguishment of convertible debt in the prior period and the increase in
loss on marketable securities, offset by the increase in other income, as
discussed above.



Income Tax Provision



The income tax provision was a credit of $8,136 for the nine months ended
September 30, 2021 and a charge of $771,999 for the nine months ended September
30, 2020, a decrease of $780,135 or 101.1%. The prior period tax charge included
a withholding tax charge on dividends declared by one of our subsidiaries to our
holding company of €150,000 (Approximately $162,000). The current year charge
decreased due to losses incurred at our Ulisse operation during the current
period and lower profitability at our Multigioco operation during the current
period.



Net Loss


Net loss was $6,896,106 and $3,581,227 for the nine months ended September 30,
2021 and 2020, respectively, an increase of $3,314,879 or 92.6% due to the
increase in loss before income taxes, the increase in the change in fair value
of contingent purchase consideration offset by the reduction in income tax
provision, discussed above.



Comprehensive Loss


Our reporting currency is the U.S. dollar while the functional currency of our
Italian, Maltese and Austrian subsidiaries is the Euro, the functional currency
of our Canadian subsidiary is the Canadian Dollar and the functional currency of
our Colombian operation is the Colombian Peso. The financial statements of our
subsidiaries are translated into United States dollars in accordance with ASC
830, using year-end rates of exchange for assets and liabilities, and average
rates of exchange for the period for revenues, costs, and expenses and
historical rates for equity. Translation adjustments resulting from the process
of translating the local currency financial statements into U.S. dollars are
included in determining other comprehensive income.

                                       44





We recorded a foreign currency translation loss of $(413,917) and a foreign
currency translation gain of $124,679 for the nine months ended September 30,
2021 and 2020, respectively, primarily due to the strengthening of the US Dollar
against the Euro during the current period and the weakening against the Euro in
the prior period.


Liquidity and capital resources

Our principal cash requirements have included the funding of acquisitions,
repayments of convertible debt and deferred purchase consideration, the purchase
of plant and equipment, and working capital needs. Working capital needs
generally result from expenses incurred in developing our gaming platform for
the various markets we operate in and new markets we are developing as well as
our intention to aggressively expand into the US market.



We finance our business primarily though debt and equity placements and cash
generated from operations. Our ability to generate sufficient cash flow from
operations is dependent on the continued demand for our gaming services we offer
to our customers through our land based and web based locations as well as the
gaming platforms we license to third parties.



We finance our business to provide adequate funding for at least 12 months,
based on forecasted profitability and working capital needs, and in the future,
we anticipate that we would need to raise additional cash through equity or
debt
funding.


We believe that our cash and cash equivalents and our ability to access public equity markets provide us with sufficient liquidity to meet our current and foreseeable cash needs.

At July 15, 2021, we closed the acquisition of US Bookmakers for a cash consideration of $ 6,000,000.

The ongoing Covid-19 pandemic has impacted on our Italian based operations, we
have seen a significant increase in Turnover (Handle) from our web-based
operations and a significant decline in turnover from our land-based operations
with the permanent closure of our Ulisse betting shop locations. The percentage
Hold or Gross Gaming Revenue generated from our turnover is typically lower on
web-based business which generally favors more casino type gaming at lower
margins, as discussed above. The selling expenses, which primarily consists of
commissions, paid to our agents is based on turnover and not Gross Gaming
Revenues, therefore the significant increase in web-based turnover at lower hold
margins, resulted in a significant increase in selling expenses, offsetting the
benefit we realized on the increased web-based turnover, whilst increasing the
complexity of our business with significantly higher transaction volumes.



Assets



At September 30, 2021, we had total assets of $63,732,313 compared to
$35,857,979 at December 31, 2020, an increase of $27,874,334. The increase is
primarily related to the increase in goodwill of $27,024,036 and intangible
assets of $10,066,732 recognized on the acquisition of USB, offset by a decrease
in cash of $9,537,782 primarily due to the net cash payment to the USB sellers
of $5,973,839 and the absorption of negative operating cash flows of $5,258,606,
offset by net from financing activities of $2,891,186



Liabilities


At September 30, 2021, we had $38,310,489 in total liabilities compared to total
liabilities of $15,701,626 at December 31, 2020, an increase of $22,608,863. The
increase is primarily attributable to the contingent purchase consideration on
the acquisition of USB of $25,286,033, the increase in the deferred tax
liability of $2,149,004, offset by a decrease in accounts payable and accrued
liabilities of $3,735,582, the repayment of the bank line of credit of $500,000,
the repayment of deferred purchase consideration of $394,627 and the redemption
of convertible debt of $34,547.



Working Capital



We had $9,408,035 in cash and cash equivalents at September 30, 2021 compared to
$18,945,817 on December 31, 2020. On July 15, 2021, we closed on the acquisition
of US Bookmakers which required a net cash payment of $5,973,839.



We had a working capital surplus of $3,485,411 at September 30, 2021, compared
to a working capital surplus of $7,879,631 at December 31, 2020. The working
capital position was affected by the payment of a net $5,973,839 upon the
acquisition of USB, the absorption of negative operating cash flows of
$5,258,607, offset by net from financing activities of $2,891,186.



Accumulated Deficit


From September 30, 2021, we had accumulated a deficit of $ 40,074,623 compared to the accumulated deficit of $ 33,178,517 To December 31, 2020.

                                       45





Cash flow from operating activities



Net cash used in operating activities was $5,258,609 and $412,867 for the nine
months ended September 30, 2021 and 2020, respectively, an increase of
$4,845,742, primarily related to; (i) the increase in net loss of $(2,745,803),
discussed under operating results; and (ii) the movements in working capital of
$(2,247,489), primarily due to the movement in accounts payable of $1,243,866,
prepaid expenses and other current assets of $621,447, taxes payable of
$542,126, the movement in long term liabilities of $287,243 offset by the
increase in gaming accounts liabilities of $513,332.



Cash flow from investing activities



Net cash used in investing activities was $6,109,674 and $172,674 for the nine
months ended September 30, 2021 and 2020, an increase of $5,937,000, primarily
due to the initial net cash payment on the acquisition of USB of $5,973,839.



Cash flow from financing activities

Net cash provided by financing activities was $2,891,186 and $4,697,328 for the
nine months ended September 30, 2021 and 2020, respectively, a decrease of
$1,806,142. The decrease is primarily due to; (i) a decrease in proceeds from
subscriptions, net of fees of $8,966,121; (ii) a decrease in proceeds from
related party promissory notes of $301,071; offset by (iii) an increase in
proceeds from warrants exercised of $3,962,482; (iv) a reduction in the
repayment of convertible debentures of $2,983,092 and (v) a reduction in the
repayment of bank credit lines of $500,000.



Contractual Obligations


Current accounting standards require disclosure of significant obligations and commitments to make future payments under contracts, such as debts, leases and purchase obligations.



The amount of future minimum lease payments under finance leases are as follows:



                                                   Amount

Remainder of 2021                                $  2,272
2022                                                8,957
2023                                                7,177
2024                                                  833

Total undiscounted future minimum lease payments $ 19,239




The amount of future minimum lease payments under operating leases are as
follows:



                                                   Amount

Remainder of 2021                                $  76,162
2022                                               269,988
2023                                               209,319
2024                                                29,637

Total undiscounted future minimum lease payments $ 585,106

Off-balance sheet provisions



We have no off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenue or expenses, results of operations, liquidity, capital
expenditures or capital resources that we expect to be material to investors. We
do not have any non-consolidated, special-purpose entities.





                                       46








Related Party Transactions



The following includes a summary of transactions during our fiscal year ended
December 31, 2020 and our current period ended September 30, 2021 to which we
have been a party, in which the amount involved in the transaction exceeds the
lesser of $120,000 or 1% of the average of our total assets at year-end for the
last two completed fiscal years, and in which any of our directors, executive
officers or, to our knowledge, beneficial owners of more than 5% of our capital
stock or any member of the immediate family of any of the foregoing persons had
or will have a direct or indirect material interest, other than equity and other
compensation, termination, change in control and other arrangements.



Debts and receivables between related parties represent receivables (debts) that do not bear interest and are due on demand.

The outstanding balances are as follows:

                             September 30,      December 31,
                                  2021              2020
Related Party payables
Luca Pasquini               $         (543 )   $       (565 )
Victor Salerno                     (50,854 )             -
                                   (51,397 )           (565 )
Related Party Receivables
Luca Pasquini               $        1,438     $      1,519



Amounts due to Luca Pasquini correspond to advances granted to various subsidiaries for working capital purposes.



Prior to the acquisition of USB, Mr. Salerno had advanced USB $100,000 of which
$50,000 was forgiven and the remaining $50,000 is still owing to Mr. Salerno,
which amount earns interest at 8% per annum, compounded monthly and repayable on
December 31, 2023.


Capital of the street of gold 100% owned by Gilda Ciavarella, the spouse of Mr. Ciavarella. Amounts due to Gold Street Capital Corp., the main shareholder of Elys, are for the reimbursement of expenses.

On September 4, 2019, we issued to Gold Street 15,196 shares of our common stock
as payment in settlement of $48,508 of the reimbursable expenses owing to Gold
Street. There was no balance owing to Gold Street as of September 30, 2021 and
December 31, 2020, respectively.



Gold Street Capital acquired certain convertible notes that had matured on May
31, 2020, amounting to CDN $35,000 from third parties, the maturity date of
these convertible notes was extended to September 28, 2020. The convertible
notes together with interest thereon, amounting to CDN $44,062 (approximately
$34,547) was outstanding at December 31, 2020. This amount was repaid during the
current period end.



As an incentive for extending the maturity date of the convertible debentures,
all debenture holders, including Gold Street Capital, were granted two-year
warrants exercisable at an exercise price of $3.75 per share, and three-year
warrants exercisable at an exercise price of $5.00 per share. Gold Street
Capital was granted two year-warrants exercisable for 9,533 shares of common
stock at $3.75 per share and three-year warrants exercisable for 2,383 shares of
common stock at $5.00 per share.



In February 2018 we provided a loan of €39,048 (approximately $45,000) to Engage
IT Services Srl to finance hardware purchased by third-party betting shops. In
June 2018, we increased the loan by €45,675 (approximately $53,000). The loan
bears interest at 4.47% and is due in February 2019. This loan has been repaid
in full. During the year ended December 31, 2020, we contracted with Engage IT
to provide us software development services of approximately €706,300
(approximately $806,029) of which approximately €20,000 (approximately $24,456)
was outstanding at December 31, 2020. Luca Pasquini, one of our officers and
directors, holds a 34% stake in Engage IT Services Srl.



As of September 30, 2021, we had settled the balance outstanding to the former
shareholders of VG under the VG Share Purchase Agreement by making cash payments
equal to €2,500,000 (approximately $2,946,978), and we issued 562,605 shares
amounting to €1,500,000 (approximately $1,673,959) of common stock pursuant to
the promissory note. Mr. Pasquini has been paid cash of €500,000 (approximately
$604,380) and issued 112,521 shares of common stock valued at €300,000
(approximately $399,061). Mr. Peroni has been paid cash of €500,000
(approximately $604,380) and issued 112,521 shares of common stock valued at
€300,000 (approximately $334,792).

                                       47







In addition, pursuant to the terms of the VG purchase agreement, we agreed to
pay the sellers as an earnout payment in shares of our common stock within one
month from the end of the 2019 fiscal year such number of shares as shall equal
to an aggregate amount of €500,000 (approximately $561,000), if the amounts of
bets made by the users through the VGS platform related to our 2019 fiscal year
are at least 5% higher than the amounts of bets made by the users through the
VGS platform related to our 2018 fiscal year. Based on 18,449,380 tickets sold
in 2019 the VG sellers qualified for the earnout payment of 132,736 shares of
common stock equal at a price of $4.23 per share.



We issued promissory notes in the principal amounts of $300,000 during the year
ended December 31, 2020 to Forte Fixtures and Millwork, Inc., a Company
controlled by the brother of our Executive Chairman. The aggregate principal
amount of $300,000 together with interest thereon of $22,521 was repaid in
full
during the year.



Forte Fixtures and Millwork acquired certain convertible notes from third
parties that had matured on May 31, 2020. The convertible notes had an aggregate
principal amount of $150,000 and only the accrued interest of $70,000 on a note
with an aggregate principal amount of $350,000 and notes with an aggregate
principal amount of CDN $207,000, the maturity date of these convertible notes
was extended to September 28, 2020. The convertible notes together with interest
thereon, amounting to $445,020 were repaid between August 23, 2020 and October
21, 2020.



As an incentive for extending the maturity date of the convertible debentures,
Forte Fixtures was granted two year warrants exercisable for 134,508 shares of
common stock at an exercise price of $3.75 per share and three year warrants
exercisable for 33,627 shares of common stock at an exercise price of $5.00 per
share. These warrants were exercised on December 30, 2020, for gross proceeds of
$630,506.



                                       48









The movement on deferred purchase consideration consists of the following:

                                           September 30,      December 31,
Description                                     2021              2020

Main unpaid promissory notes owed to related parties $ 382,128 $ 1,279,340
Settled by the issuance of ordinary shares

               -         (482,978 )
Repayment in cash                               (385,121 )       (471,554 )
Foreign exchange movements                         2,993           57,230
                                                       -          382,128
Present value discount on future payments
Present value discount                            (5,174 )        (80,069 )
Amortization                                       5,133           76,222
Foreign exchange movements                            41           (1,327 )
                                                       -           (5,174 )
Deferred purchase consideration, net      $            -     $    376,954




At January 22, 2021, we issued Mr. Pasquini 44,968 ordinary shares valued at $ 257,217, in settlement of the accumulated indemnities which are due to him.

Mr. Ciavarella agreed to receive $ 140,000 of his compensation for the 2021 financial year in the form of an allocation of free shares, the January 22, 2021, we issued Mr. Ciavarella 24,976 ordinary shares valued at $ 140,000 on the date of issue.

At January 22, 2021, we issued Mr. Ciavarella 175,396 ordinary shares valued at $ 1,003,265, in settlement of the accumulated indemnities which are due to him.

At January 22, 2021, we issued Mr. Peroni 74,294 ordinary shares valued at $ 424,962, in settlement of the accumulated indemnities which are due to him.

At January 22, 2021, we issued Mr. Marcelli 34,002 ordinary shares valued at $ 194,491, in settlement of the accumulated indemnities which are due to him.

At January 22, 2021, we issued Mr. Salvagni 70,807 ordinary shares valued at $ 405,016, in settlement of the accumulated indemnities which are due to him.

At January 22, 2021, we issued to Mr. Gianfelici 63,278 ordinary shares valued at $ 361,950, in settlement of the accumulated indemnities which are due to him.



On January 22, 2021, we issued to Mr. Shallcross, a director of the Company,
5,245 shares of common stock valued at $30,000, in settlement of directors'
fees
due to him.


At June 29, 2021, the Board of Directors of the Company appointed Mr. Mandel-Mantello as a member of the Board. The appointment is effective immediately and Mr. Mandel-Mantello will serve on the audit committee.



On July 1, 2021, Philippe Blanc resigned as a director of the Company,
simultaneously with Mr. Blanc's resignation as a director of the Company, the
Company entered into a consulting agreement with Mr. Blanc to provide for his
future services in a consulting capacity over two years. Mr. Blanc will receive
€105,000 per annum as compensation.



                                       49









On July 5, 2021, the Company entered into an employment agreement dated July 1,
2021 with Mark Korb, the Company's Chief Financial Officer, (the "Korb
Employment Agreement"), to employ Mr. Korb, on a full-time basis commencing
September 1, 2021, as Chief Financial Officer for a term of four (4) years, at
an annual base salary of $360,000 and such additional performance bonus payments
as may be determined by the Company's board of directors with a target bonus of
40% of his base salary. Mr. Korb will also be entitled to pension, medical,
retirement and other benefits available to other Company senior officers and
directors and he will receive an allowance of up to $2,000 per month towards
medical and welfare benefits. In connection with the Korb Employment Agreement,
On July 1, 2021, the Compensation Committee of the Board granted Mr. Korb, an
option to purchase 400,000 shares of the Company's common stock. The shares of
common stock underlying the option award vest pro rata on a monthly basis over a
thirty-six month period. The options are exercisable for a period of ten years
from the date of grant and have an exercise price of $4.03 per share.



On July 11, 202.1, we entered into an agreement with Engage IT Services
Srl.("Engage"), to provide gaming software and maintenance and support of the
system, the total contract price was €390,000 (approximately $459,572). Mr.
Pasquini owns 34% of Engage



On July 15, 2021, Michele Ciavarella, Executive Chairman of the Company, was
appointed as the interim Chief Executive Officer and President of the Company,
effective July 15, 2021. Mr. Ciavarella will serve as the Company's Executive
Chairman and interim Chief Executive Officer until the earlier of his
resignation or removal from office.



On September 13, 2021, the board of directors of the Company appointed Mr.
Salerno, the President and founder of the Company's newly acquired subsidiary,
Bookmakers Company US LLC ("US Bookmaking"), to serve as a member of the Board.
On July 15, 2021 the Company consummated the acquisition of USB and in terms of
the Purchase Agreement the Company acquired 100% of USB, from its members (the
"Sellers"). Mr. Salerno was a 68% owner of USB and received $4,080,000 of the
$6,000,000 paid in cash upon closing and 860,760 of the 1,265,823 shares of
common stock issued on closing. Together with the consummation of the
acquisition of USB, the Company entered into a 4 year employment agreement with
Mr. Salerno terminating on July 14, 2025, automatically renewable for a period
of one year unless notified by either party of non-renewal. The employee will
earn an initial base salary of $0 and thereafter $150,000 per annum commencing
in January 1, 2022. Mr. Salerno is entitled to bonuses, equity incentives and
benefits consistent with those of other senior employees.



At September 13, 2021, Mr. Pasquini, the company’s vice president of technology, has resigned as a director of the company.

At September 13, 2021, the Company granted Mr. Sallwasser ten-year options exercisable on 21,300 ordinary shares at an exercise price of $ 5.10, also acquired over a period of twelve months beginning on September 13, 2021.

At September 13, 2021, the Company granted Mr. Shallcross ten-year options exercisable on 13,600 ordinary shares at an exercise price of $ 5.10, also acquired over a period of twelve months beginning on September 13, 2021.



On September 13, 2021, the Company granted Mr. Mandel-Montello ten year options
exercisable for 13,600 shares of common stock at an exercise price of $5.10,
vesting equally over a twelve month period commencing on September 13, 2021.





                                       50

© Edgar online, source Previews


Source link

Share.

About Author

Comments are closed.