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Note 16 - Segment Reporting
 6 Months Ended
Jun. 30, 2025
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

NOTE 16 — SEGMENT REPORTING

 

For the six months ended June 30, 2025 and 2024, management has determined that the Company functions as a single operating segment, and thus reports as a single reportable segment. This determination is based on rules prescribed by GAAP applied to the manner in which management operates the Company. In particular, management assessed the discrete financial information routinely reviewed by the Company’s chief operating decision maker (“CODM”), its Chief Executive Officer, to monitor the Company’s operating performance and support decisions regarding allocation of resources to its operations. Specifically, performance is continuously monitored at the consolidated level as the Company is engaged in essentially the same business, which focuses on providing an online gaming casino to customers. The CODM evaluates the financial performance of the Company primarily by evaluating revenue (as disclosed on the consolidated statements of operations), adjusted EBITDA (a non-GAAP measure), and cash provided by operating activities (as disclosed on the consolidated statements of cash flows) to assess the Company's results and in the determination of allocating resources. For the three months ended June 30, 2025 and 2024 adjusted EBITDA was $362 thousand and ($931) thousand, respectively. For the six months ended June 30, 2025 and 2024 adjusted EBITDA was ($2,161) thousand and ($1,715) thousand, respectively. The CODM may use disaggregated revenue metrics to evaluate game offerings, active user count, and customer retention, among other things. Adjusted EBITDA and cash provided by operating activities are reviewed to assess allocation of resources. The significant expenses reviewed by the CODM are direct operating expenses, advertising and promotion expenses, and general and administrative expenses as presented on the consolidated statements of operations.

 

Adjusted EBITDA

 

The table below presents the Company's Adjusted EBITDA reconciled to our net loss, which is the most directly comparable financial measure calculated in accordance with U.S. GAAP, for the periods indicated:

 

  

For the Three Months

  

For the Six Months Ended June 30,

 

(in thousands)

 

2025

  

2024

  

2025

  

2024

 
                 

Revenues

 $6,936  $5,803  $13,707  $12,310 

Net loss

  (592)  (1,504)  (3,868)  (3,353)
                 

Add back items:

                

Stock-based compensation expense (1)

  501   148   809   673 

Depreciation and amortization (2)

  84   57   160   107 

Interest expense, net

  53   24   99   50 

Income tax

  37   —   54   — 

Foreign exchange transaction loss

  151   250   329   715 

Other (3)

  128   94   256   93 

Adjusted EBITDA

 $362  $(931) $(2,161) $(1,715)

 

(1) Includes restricted shares, stock options, equity-settled restricted share units, cash-settled restricted share units and equity-settled performance-based restricted share units granted to employees and directors (including related employer payroll taxes).

(2) Includes amortization of intangible assets generated through business acquisitions and depreciation of property and equipment, amortization of contract costs, and amortization of internally developed software and other intangible assets. Excludes amortization of right of use assets.

(3) Includes severance costs and non-recurring compensation payments and gain/loss on disposal of assets.

 

Management further determined that, based on their economic similarities, the Company’s operating subsidiaries, representing components, should be aggregated into one reporting unit for purposes of assessing potential impairment of goodwill in accordance with ASC 350 Intangibles - Goodwill and Other. These legal entities represent acquisitions that occurred over time pursuant to the Company’s strategic growth strategy.

 

There have been no changes in the Company’s segment structure during the six months ended June 30, 2025 and 2024.