Exhibit 99.1
BRAGG GAMING GROUP INC.
INTERIM UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
Three and six-month periods ended June 30, 2025 and June 30, 2024
Presented in Euros (Thousands)
TABLE OF CONTENTS
| INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS | 1 |
| INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | 2 |
| INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | 3 |
| INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | 4 |
| NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| 1 | GENERAL INFORMATION | 5 |
| 2 | MATERIAL ACCOUNTING POLICIES | 5 |
| 3 | LOSS BEFORE INCOME TAXES CLASSIFIED BY NATURE | 6 |
| 4 | CONVERTIBLE DEBT | 7 |
| 5 | SHARE CAPITAL | 8 |
| 6 | WARRANTS | 8 |
| 7 | SHARE BASED COMPENSATION | 9 |
| 8 | GOODWILL | 12 |
| 9 | DEFERRED CONSIDERATION | 13 |
| 10 | RIGHT OF USE ASSETS | 14 |
| 11 | INTANGIBLE ASSETS | 15 |
| 12 | TRADE AND OTHER RECEIVABLES | 16 |
| 13 | TRADE PAYABLES AND OTHER LIABILITIES | 16 |
| 14 | LEASE LIABILITIES | 17 |
| 15 | LOANS PAYABLE | 18 |
| 16 | RELATED PARTY TRANSACTIONS | 19 |
| 17 | FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | 20 |
| 18 | SUPPLEMENTARY CASHFLOW INFORMATION | 24 |
| 19 | SEGMENT INFORMATION | 25 |
| 20 | INCOME TAXES | 26 |
| 21 | CONTINGENT LIABILITIES | 27 |
| 22 | SUBSEQUENT EVENTS | 27 |
1
BRAGG GAMING GROUP INC.
INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
| Note | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||
| Revenue | 3, 19 | 26,079 | 24,861 | 51,584 | 48,672 | |||||||||||||||
| Cost of revenue | 3 | (12,336 | ) | (12,457 | ) | (23,557 | ) | (24,391 | ) | |||||||||||
| Gross Profit | 13,743 | 12,404 | 28,027 | 24,281 | ||||||||||||||||
| Selling, general and administrative expenses | 3 | (16,091 | ) | (13,702 | ) | (31,898 | ) | (26,089 | ) | |||||||||||
| Loss on remeasurement of derivative liability | 4 | — | 38 | — | (140 | ) | ||||||||||||||
| Gain on settlement of convertible debt | 4 | — | — | — | 65 | |||||||||||||||
| Gain (Loss) on remeasurement of deferred consideration | 3, 9, 17 | — | 45 | (157 | ) | (600 | ) | |||||||||||||
| Operating Loss | (2,348 | ) | (1,215 | ) | (4,028 | ) | (2,483 | ) | ||||||||||||
| Net interest expense and other financing charges | 3, 18 | (14 | ) | (930 | ) | (360 | ) | (1,522 | ) | |||||||||||
| Loss Before Income Taxes | (2,362 | ) | (2,145 | ) | (4,388 | ) | (4,005 | ) | ||||||||||||
| Income taxes (expense) recovery | 20 | 533 | (255 | ) | (81 | ) | (299 | ) | ||||||||||||
| Net Loss | (1,829 | ) | (2,400 | ) | (4,469 | ) | (4,304 | ) | ||||||||||||
| Items to be reclassified to net loss: | ||||||||||||||||||||
| Cumulative translation adjustment | (2,680 | ) | 387 | (4,103 | ) | 4 | ||||||||||||||
| Net Comprehensive Loss | (4,509 | ) | (2,013 | ) | (8,572 | ) | (4,300 | ) | ||||||||||||
| Basic Loss Per Share | (0.07 | ) | (0.10 | ) | (0.18 | ) | (0.18 | ) | ||||||||||||
| Diluted Loss Per Share | (0.07 | ) | (0.10 | ) | (0.18 | ) | (0.18 | ) | ||||||||||||
| Millions | Millions | Millions | Millions | |||||||||||||||||
| Weighted average number of shares - basic | 25.2 | 24.0 | 25.1 | 23.6 | ||||||||||||||||
| Weighted average number of shares - diluted | 25.2 | 24.0 | 25.1 | 23.6 | ||||||||||||||||
See accompanying notes to the interim unaudited condensed consolidated financial statements.
2
BRAGG GAMING GROUP INC.
INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| As at | As at | |||||||||||
| June 30, | December 31, | |||||||||||
| Note | 2025 | 2024 | ||||||||||
| Cash and cash equivalents | 4,242 | 10,467 | ||||||||||
| Trade and other receivables | 12, 17 | 24,983 | 20,072 | |||||||||
| Prepaid expenses and other assets | 4,141 | 2,624 | ||||||||||
| Total Current Assets | 33,366 | 33,163 | ||||||||||
| Property and equipment | 1,299 | 1,341 | ||||||||||
| Right-of-use assets | 10 | 3,152 | 3,510 | |||||||||
| Intangible assets | 11 | 31,011 | 35,859 | |||||||||
| Goodwill | 8 | 31,235 | 32,722 | |||||||||
| Investments in associates | 500 | — | ||||||||||
| Other assets | 378 | — | ||||||||||
| Total Assets | 100,941 | 106,595 | ||||||||||
| Trade payables and other liabilities | 13, 17 | 26,639 | 19,946 | |||||||||
| Income taxes payable | 20 | 445 | 463 | |||||||||
| Lease obligations on right of use assets | 14 | 867 | 882 | |||||||||
| Deferred consideration | 9 | — | 1,244 | |||||||||
| Share appreciation rights liability | 7 | 525 | — | |||||||||
| Loans payable | 15 | 1,696 | 6,579 | |||||||||
| Total Current Liabilities | 30,172 | 29,114 | ||||||||||
| Deferred income tax liabilities | 20 | 594 | 680 | |||||||||
| Lease obligations on right of use assets | 14 | 2,376 | 2,815 | |||||||||
| Share appreciation rights liability | 7 | 437 | — | |||||||||
| Other non-current liabilities | 487 | 487 | ||||||||||
| Total Liabilities | 34,066 | 33,096 | ||||||||||
| Share capital | 5 | 133,253 | 131,729 | |||||||||
| Contributed surplus | 18,104 | 17,680 | ||||||||||
| Accumulated deficit | (85,679 | ) | (81,210 | ) | ||||||||
| Accumulated other comprehensive income | 1,197 | 5,300 | ||||||||||
| Total Equity | 66,875 | 73,499 | ||||||||||
| Total Liabilities and Equity | 100,941 | 106,595 | ||||||||||
See accompanying notes to the interim unaudited condensed consolidated financial statements.
Approved on behalf of the Board
| Matevž Mazij | Holly Gagnon |
| Chief Executive Officer | Chair of the Board of Directors |
3
BRAGG GAMING GROUP INC.
INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| Accumulated | |||||||||||||||
| other | |||||||||||||||
| Share | Shares to | Contributed | Accumulated | comprehensive | Total | ||||||||||
| Note | capital | be issued | surplus | Deficit | income (loss) | Equity | |||||||||
| Balance as at January 1, 2024 | 120,015 | 3,491 | 19,887 | (76,063 | ) | 2,917 | 70,247 | ||||||||
| Shares issued upon exercise of convertible debt | 4 | 2,704 | — | — | — | — | 2,704 | ||||||||
| Shares issued as deferred consideration | 9 | 5,630 | (3,491 | ) | — | — | — | 2,139 | |||||||
| Exercise of restricted share units | 7 | 1,799 | — | (1,799 | ) | — | — | — | |||||||
| Exercise of deferred share units | 7 | 764 | — | (764 | ) | — | — | — | |||||||
| Exercise of stock options | 7 | 493 | — | (199 | ) | — | — | 294 | |||||||
| Share-based compensation | 7 | — | — | 604 | — | — | 604 | ||||||||
| Net loss for the period | — | — | — | (4,304 | ) | — | (4,304 | ) | |||||||
| Other comprehensive income | — | — | — | — | 4 | 4 | |||||||||
| Balance as at June 30, 2024 | 131,405 | — | 17,729 | (80,367 | ) | 2,921 | 71,688 | ||||||||
| Balance as at January 1, 2025 | 131,729 | — | 17,680 | (81,210 | ) | 5,300 | 73,499 | ||||||||
| Shares issued as deferred consideration | 9 | 1,380 | — | — | — | — | 1,380 | ||||||||
| Exercise of stock options | 7 | 144 | — | (94 | ) | — | — | 50 | |||||||
| Share-based compensation | 7 | — | — | 518 | — | — | 518 | ||||||||
| Net loss for the period | — | — | — | (4,469 | ) | — | (4,469 | ) | |||||||
| Other comprehensive loss | — | — | — | — | (4,103 | ) | (4,103 | ) | |||||||
| Balance as at June 30, 2025 | 133,253 | — | 18,104 | (85,679 | ) | 1,197 | 66,875 |
See accompanying notes to the interim unaudited condensed consolidated financial statements.
4
BRAGG GAMING GROUP INC.
INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| Six Months Ended June 30, | ||||||||||||
| Note | 2025 | 2024 | ||||||||||
| Operating Activities | ||||||||||||
| Net loss | (4,469 | ) | (4,304 | ) | ||||||||
| Add: | ||||||||||||
| Net interest expense and other financing charges | 3, 18 | 360 | 1,522 | |||||||||
| Depreciation and amortization | 3 | 9,689 | 7,871 | |||||||||
| Share based compensation | 7 | 1,585 | 604 | |||||||||
| Loss on remeasurement of derivative liability | 4 | — | 140 | |||||||||
| Gain on settlement of convertible debt | 4 | — | (65 | ) | ||||||||
| Loss on remeasurement of deferred consideration | 3, 9, 17 | 157 | 600 | |||||||||
| Unrealized foreign exchange (gain) loss | (152 | ) | 8 | |||||||||
| Income taxes expense | 20 | 81 | 299 | |||||||||
| 7,251 | 6,675 | |||||||||||
| Change in working capital | 18 | (35 | ) | (3,925 | ) | |||||||
| Income taxes paid | 20 | (142 | ) | (653 | ) | |||||||
| Cash Flows From Operating Activities | 7,074 | 2,097 | ||||||||||
| Investing Activities | ||||||||||||
| Purchases of property and equipment | (219 | ) | (521 | ) | ||||||||
| Additions of intangible assets | 11 | (6,407 | ) | (5,349 | ) | |||||||
| Loan receivables | (375 | ) | — | |||||||||
| Investment in associates | (200 | ) | — | |||||||||
| Cash Flows Used In Investing Activities | (7,201 | ) | (5,870 | ) | ||||||||
| Financing Activities | ||||||||||||
| Proceeds from exercise of stock options | 7 | 50 | 294 | |||||||||
| Repayment of convertible debt | — | (455 | ) | |||||||||
| Repayment of lease liability | 14 | (570 | ) | (350 | ) | |||||||
| Proceeds from (repayment of) loan | 15 | (4,410 | ) | 6,532 | ||||||||
| Interest and financing fees | (248 | ) | (412 | ) | ||||||||
| Cash Flows (Used In) Generated From Financing Activities | (5,178 | ) | 5,609 | |||||||||
| Effect of foreign currency exchange rate changes on cash and cash equivalents | (920 | ) | 218 | |||||||||
| Change In Cash And Cash Equivalents | (6,225 | ) | 2,054 | |||||||||
| Cash and cash equivalents at beginning of period | 10,467 | 8,796 | ||||||||||
| Cash And Cash Equivalents At End Of Period | 4,242 | 10,850 | ||||||||||
See accompanying notes to the interim unaudited condensed consolidated financial statements.
5
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 1 | GENERAL INFORMATION |
Nature of operations
Bragg Gaming Group Inc. and its subsidiaries (collectively, “Bragg” or the “Company”) are, primarily and collectively, a business-to-business (“B2B”) online gaming technology platform and casino content aggregator.
The registered and head office of the Company is located at 130 King Street West, Suite 1955, Toronto, Ontario, Canada M5X 1E3.
| 2 | MATERIAL ACCOUNTING POLICIES |
The interim unaudited condensed consolidated financial statements (“interim financial statements”) were prepared using the same basis of presentation, accounting policies and methods of computation, and using the same significant estimates and judgments in applying the accounting policies as those of the audited consolidated financial statements for the year ended December 31, 2024, which are available at www.sedarplus.ca.
Statement of compliance and basis of presentation
The accompanying interim financial statements have been prepared in accordance with International Accounting Standards (“IAS”) 34 Interim Financial Reporting and do not include all of the information required for annual consolidated financial statements and should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2024.
These interim financial statements are prepared on a historical cost basis except for financial instruments classified at fair value through profit or loss (“FVTPL”) or fair value through other comprehensive income (“FVOCI”) which are measured at fair value. The material accounting policies set out in note 2 of the audited consolidated financial statements for the year ended December 31, 2024 have been applied consistently in the preparation of the interim financial statements for all periods presented.
These interim financial statements were, at the recommendation of the audit committee, approved and authorized for filing by the board of directors of the Company (the “Board”) on August 13, 2025.
6
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 3 | LOSS BEFORE INCOME TAXES CLASSIFIED BY NATURE |
The loss before income taxes is classified as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
| Note | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||
| Revenue | 19 | 26,079 | 24,861 | 51,584 | 48,672 | |||||||||||||||
| Cost of revenue | (12,336 | ) | (12,457 | ) | (23,557 | ) | (24,391 | ) | ||||||||||||
| Gross Profit | 13,743 | 12,404 | 28,027 | 24,281 | ||||||||||||||||
| Salaries and subcontractors | (5,738 | ) | (5,333 | ) | (12,312 | ) | (10,240 | ) | ||||||||||||
| Share based compensation | 7 | (739 | ) | (420 | ) | (1,585 | ) | (604 | ) | |||||||||||
| Total employee costs | (6,477 | ) | (5,753 | ) | (13,897 | ) | (10,844 | ) | ||||||||||||
| Depreciation and amortization | (4,969 | ) | (3,994 | ) | (9,689 | ) | (7,871 | ) | ||||||||||||
| IT and hosting | (1,372 | ) | (1,192 | ) | (2,653 | ) | (2,260 | ) | ||||||||||||
| Professional fees | (1,189 | ) | (1,518 | ) | (2,275 | ) | (2,393 | ) | ||||||||||||
| Corporate costs | (122 | ) | (101 | ) | (254 | ) | (276 | ) | ||||||||||||
| Sales and marketing | (290 | ) | (533 | ) | (587 | ) | (1,092 | ) | ||||||||||||
| Bad debt expense | 12 | (748 | ) | (121 | ) | (879 | ) | (103 | ) | |||||||||||
| Travel and entertainment | (433 | ) | (217 | ) | (764 | ) | (432 | ) | ||||||||||||
| Other operational costs | (491 | ) | (273 | ) | (900 | ) | (818 | ) | ||||||||||||
| Selling, General and Administrative Expenses | (16,091 | ) | (13,702 | ) | (31,898 | ) | (26,089 | ) | ||||||||||||
| Loss on remeasurement of derivative liability | 4 | — | 38 | — | (140 | ) | ||||||||||||||
| Gain on settlement of convertible debt | 4 | — | — | — | 65 | |||||||||||||||
| Gain (Loss) on remeasurement of deferred consideration | 9 | — | 45 | (157 | ) | (600 | ) | |||||||||||||
| Operating Loss | (2,348 | ) | (1,215 | ) | (4,028 | ) | (2,483 | ) | ||||||||||||
| Interest income | 5 | — | 9 | — | ||||||||||||||||
| Accretion on liabilities | 9 | (95 | ) | (579 | ) | (168 | ) | (1,110 | ) | |||||||||||
| Foreign exchange gain | 283 | (88 | ) | 318 | (44 | ) | ||||||||||||||
| Interest and financing fees | (207 | ) | (263 | ) | (519 | ) | (368 | ) | ||||||||||||
| Net Interest Expense and Other Financing Charges | (14 | ) | (930 | ) | (360 | ) | (1,522 | ) | ||||||||||||
| Loss Before Income Taxes | (2,362 | ) | (2,145 | ) | (4,388 | ) | (4,005 | ) | ||||||||||||
7
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 4 | CONVERTIBLE DEBT |
On September 5, 2022, the Company entered into a Funding Agreement for an investment of EUR 8,770 (USD 8,700) with Lind in the form of a Convertible Debt with a face value of EUR 10,081 (USD 10,000), bearing interest at an inherent rate of 7.5% maturing 24 months after issuance. Net proceeds after deducting transaction fees were EUR 8,053. The face value of the Convertible Debt has a 24-month maturity date and can be paid in cash or be converted into common shares of the Company ("Shares") at a conversion price equal to 87.5% of the five-day volume weighted average price ("VWAP") immediately prior to each conversion. Shares issued upon conversion are subject to a 120-day lock-up period following deal close.
| Convertible debt | Derivative liability | Total | |||||||
| Balance as at January 1, 2024 | 2,445 | 471 | 2,916 | ||||||
| Accretion expense | 1,298 | — | 1,298 | ||||||
| Loss on remeasurement of derivative liability | — | 94 | 94 | ||||||
| Gain on settlement of convertible debt | — | (169 | ) | (169 | ) | ||||
| Shares issued upon exercise of convertible debt | (2,314 | ) | (390 | ) | (2,704 | ) | |||
| Repayment of convertible debt | (1,377 | ) | — | (1,377 | ) | ||||
| Effect of movement in exchange rates | (52 | ) | (6 | ) | (58 | ) | |||
| Balance as at December 31, 2024 | — | — | — |
On August 7, 2024, the convertible debt has been settled in full.
For the three and six months ended June 30, 2024, an accretion expense of EUR 409 and EUR 805 was recognised in net interest expense and other financing charges in respect of the Host Debt component. For the three and six months ended June 30, 2024, a gain of EUR 38 and loss of EUR 140 on remeasurement of derivative liability was recognised in the interim unaudited condensed consolidated statements of loss and comprehensive loss.
Immediately prior to any conversion, the embedded derivative liability is remeasured at fair value through profit and loss. Key valuation inputs and assumptions used are closing stock price on dates of conversion of between CAD 6.910 and 8.750, 5-day VWAP of between CAD 6.910 and 8.827, expected life of between 0.06 to 0.56 years, annual risk-free rate of between 5.17% and 5.54%
During the three and six months ended June 30, 2024, 288,067 and 504,215 shares, respectively, were issued upon exercise of convertible debt representing USD 2,500 of the total face value of USD 10,000. The Company also elected to settle USD 500 of the debt in cash upon delivery of a cash in-lieu of shares conversion notice for a total of USD 515.
Derivative and host debt balances representing the fair value of the converted debt are subsequently transferred to the share capital account in the interim unaudited condensed statements of changes in equity. Upon exercise, during the three and six months ended June 30, 2024, EUR 1,393 and EUR 2,314 was transferred from the host debt liability and EUR 243 and EUR 390 from derivative liability, respectively, to share capital in the interim unaudited condensed consolidated statements of changes in equity for a total of EUR 1,636 and EUR 2,704, respectively.
8
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 5 | SHARE CAPITAL |
Authorized - Unlimited Common Shares, fully paid
The following is a continuity of the Company’s share capital:
| Note | Number | Value | |||||||||
| January 1, 2024 | Balance | 23,003,552 | 120,015 | ||||||||
| February 5, 2024 to June 5, 2024 | Shares issued upon exercise of convertible debt | 4 | 504,215 | 2,704 | |||||||
| June 1, 2024 | Shares issued upon settlement of deferred consideration for Spin acquisition | 369,516 | 2,139 | ||||||||
| June 2, 2024 | Shares issued upon settlement of deferred consideration for Wild Streak acquisition | 393,111 | 3,491 | ||||||||
| April 1, 2024 to June 27,2024 | Issuance of share capital upon exercise of FSOs | 7 | 108,682 | 493 | |||||||
| May 1, 2024 to May 29,2024 | Issuance of share capital upon exercise of DSU | 7 | 148,900 | 764 | |||||||
| May 1, 2024 to May 14,2024 | Issuance of share capital upon exercise of RSU | 7 | 418,000 | 1,799 | |||||||
| June 30, 2024 | Balance | 24,945,976 | 131,405 | ||||||||
| January 1, 2025 | Balance | 25,042,982 | 131,729 | ||||||||
| February 6, 2025 | Exercise of FSO | 7 | 25,000 | 124 | |||||||
| June 5, 2025 | Shares issued upon settlement of deferred consideration for Spin acquisition | 371,496 | 1,380 | ||||||||
| June 30, 2025 | Exercise of FSO | 7 | 10,000 | 20 | |||||||
| June 30, 2025 | Balance | 25,449,478 | 133,253 |
The Company’s common shares have no par value.
| 6 | WARRANTS |
The following are continuities of the Company’s warrants:
| Warrants | |||||||
| issued as part of | |||||||
| Number of Warrants | convertible debt | ||||||
| January 1, 2024 | Balance | 979,048 | |||||
| June 30, 2024 | Balance | 979,048 | |||||
| January 1, 2025 | Balance | 979,048 | |||||
| June 30, 2025 | Balance | 979,048 |
Each unit consists of the following characteristics:
| Warrants | ||||
| issued as part of | ||||
| convertible debt | ||||
| Number of shares | 1 | |||
| Number of Warrants | — | |||
| Exercise price of unit (CAD) | 9.28 |
9
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 6 | WARRANTS (CONTINUED) |
Warrants issued upon completion of Financing Arrangement
On September 5, 2022, the Company issued 979,048 warrants, each exercisable at CAD 9.28 for one common share and expiring five years from issuance. The warrants include acceleration clauses based on the Company’s share price performance, which may result in partial or full expiry if not exercised within a specified period.
As the combined fair value of the host debt liability and derivative liability exceeded the transaction price, no value was allocated to the warrants in equity.
| 7 | SHARE BASED COMPENSATION |
The Company maintains an Omnibus Incentive Equity Plan (“OEIP”) for certain employees and consultants. The plan was approved at an annual and special meeting of shareholders on November 27, 2020.
The following table summarizes information about the OEIP.
| DSU | RSU | SAR | FSO | ||||||||||||
| Weighted | |||||||||||||||
| Outstanding | Outstanding | Outstanding | Outstanding | Average | |||||||||||
| DSUs | RSUs | SARs | FSOs | Exercise | |||||||||||
| (Number of | (Number of | (Number of | (Number | Price / Share | |||||||||||
| of shares) | of shares) | of shares) | of shares) | CAD | |||||||||||
| Balance as at January 1, 2024 | 225,154 | 498,000 | — | 1,777,438 | 8.43 | ||||||||||
| Granted | - | - | - | 165,000 | 6.69 | ||||||||||
| Exercised | (148,900 | ) | (418,000 | ) | - | (108,682 | ) | 3.97 | |||||||
| Expired | — | — | — | (50,000 | ) | 5.00 | |||||||||
| Forfeited / Cancelled | (49,588 | ) | — | — | (114,209 | ) | 9.67 | ||||||||
| Balance as at June 30, 2024 | 26,666 | 80,000 | — | 1,669,547 | 8.56 | ||||||||||
| Balance as at January 1, 2025 | 26,666 | 280,000 | 1,329,082 | 1,602,346 | 8.81 | ||||||||||
| Granted | — | — | 144,529 | 15,000 | 2.30 | ||||||||||
| Exercised | — | — | — | (35,000 | ) | 2.30 | |||||||||
| Forfeited / Cancelled | — | — | — | (5,029 | ) | 8.30 | |||||||||
| Balance as at June 30, 2025 | 26,666 | 280,000 | 1,473,611 | 1,577,317 | 8.90 | ||||||||||
10
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 7 | SHARE BASED COMPENSATION (CONTINUED) |
The following table summarizes information about the outstanding share options as at June 30, 2025:
| Outstanding | Exercisable | ||||||||||||||
| Weighted | Weighted | Weighted | |||||||||||||
| Average | Average | Average | |||||||||||||
| FSOs | Remaining | Exercise | FSOs | Exercise | |||||||||||
| Range of exercise | (Number | Contractual | Price / Share | (Number | Price / Share | ||||||||||
| prices (CAD) | of shares) | Life (Years) | CAD | of shares) | CAD | ||||||||||
| 2.30 - 5.00 | 20,000 | 10 | 4.68 | 10,000 | 4.68 | ||||||||||
| 5.01 - 8.62 | 1,128,582 | 2 | 7.72 | 1,026,928 | 7.75 | ||||||||||
| 8.63 - 15.00 | 427,183 | 5 | 12.11 | 427,173 | 12.11 | ||||||||||
| 15.01 - 33.30 | 1,552 | 1 | 33.30 | 1,552 | 33.30 | ||||||||||
| 1,577,317 | 3 | 8.90 | 1,465,653 | 9.02 | |||||||||||
The following table summarizes information about the outstanding share options as at June 30, 2024:
| Outstanding | Exercisable | ||||||||||||||
| Weighted | Weighted | Weighted | |||||||||||||
| Average | Average | Average | |||||||||||||
| FSOs | Remaining | Exercise | FSOs | Exercise | |||||||||||
| Range of exercise | (Number | Contractual | Price / Share | (Number | Price / Share | ||||||||||
| prices (CAD) | of shares) | Life (Years) | CAD | of shares) | CAD | ||||||||||
| 2.30 - 5.00 | 95,825 | 1 | 2.30 | 95,825 | 2.30 | ||||||||||
| 5.01 - 8.62 | 1,139,558 | 4 | 7.72 | 892,277 | 7.82 | ||||||||||
| 8.63 - 15.00 | 432,612 | 6 | 12.09 | 418,321 | 12.21 | ||||||||||
| 15.01 - 33.30 | 1,552 | 2 | 33.30 | 1,552 | 33.30 | ||||||||||
| 1,669,547 | 4 | 8.56 | 1,407,975 | 8.75 | |||||||||||
Fixed Stock Options (“FSOs”)
During the three and six months ended June 30, 2025, a share-based compensation charge of EUR 86 and EUR 184 (three and six months ended June 30, 2024: EUR 51 and EUR 149) has been recognized in the interim unaudited condensed consolidated statements of loss and comprehensive loss.
During the three and six months ended June 30, 2025, 25,000 and 35,000 common shares of the Company were issued upon exercise of FSOs (three and six months ended June 30, 2024: 108,682). Upon exercise of FSOs, for the three and six months ended June 30, 2025, EUR 7 and EUR 94 (three and six months ended June 30, 2024: EUR 199) was transferred from contributed surplus to share capital in the interim unaudited condensed consolidated statements of changes in equity. Cash proceeds upon exercise of FSOs during the three and six months ended June 30, 2025, totaled EUR 13 and EUR 50 (three and six months ended June 30, 2024: EUR 294).
11
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 7 | SHARE BASED COMPENSATION (CONTINUED) |
Deferred Share Units (“DSUs”)
Exercises of grants may only be settled in shares, and only when the employee or consultant has left the Company. Under the OEIP, the Company may grant options of its shares at nil cost that vest immediately.
During the three and six months ended June 30, 2025, a share-based compensation charge of EUR nil (three and six months ended June 30, 2024: EUR 2 and EUR 5) has been recognized in the interim unaudited condensed consolidated statements of loss and comprehensive loss.
During the three and six months ended June 30, 2025, no common shares were issued upon exercise of DSUs (three and six months ended June 30, 2024: 148,900). For the three and six months ended June 30, 2025, upon exercise of DSUs, EUR nil (three and six months ended June 30, 2024: EUR 764) was transferred from contributed surplus to share capital in the interim unaudited condensed consolidated statements of changes in equity.
Restricted Share Units (“RSUs”)
During the three and six months ended June 30, 2025, a share-based compensation charge of EUR 64 and EUR 334 (three and six months ended June 30, 2024: EUR 367 and EUR 450) has been recognized in the interim unaudited condensed consolidated statements of loss and comprehensive loss.
Share Appreciation Rights (“SARs”)
On December 29, 2024, the Company granted a Share Appreciation Rights plan for key members of management, which provided incentive compensation based on the appreciation in the value of the Company’s shares, thereby providing additional incentive for their efforts in promoting the continued growth and success of the business. The amount of the cash payment is determined based on the increase in the share price of the Company between the grant date and the time of the exercise.
The aggregate number of SAR units granted on December 29, 2024 totaled 1,329,082, with an issue price of CAD 5.00 per unit, based on the market price of the Company’s stock on the date of grant. An additional 144,529 units were granted on June 26, 2025, at an issue price of CAD 6.06 per unit, also based on the market price on the date of grant.
These SAR units, which have a term of not exceeding five years, will vest as follows:
| · | 1/3 on the first anniversary of the grant date |
| · | 1/3 on the second anniversary of the grant date |
| · | 1/3 on the third anniversary of the grant date |
12
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 7 | SHARE BASED COMPENSATION (CONTINUED) |
Details of the liabilities arising from the SARs were as follows:
| As at | As at | |||||||
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Total carrying amount of liabilities for SARs | 962 | — | ||||||
The fair value of the SARs has been measured using Black-Scholes formula. Service and non-market performance conditions attached to the arrangements were not taken into account in measuring fair value.
The inputs used in the measurement of the fair values at the measurement date of the SARs were as follows:
| As at | ||||
| June 30, | ||||
| 2025 | ||||
| Expected dividend yield (%) | — | |||
| Expected share price volatility (%) | 70.80 | |||
| Risk-free interest rate (%) | 3.79 | |||
| Expected life of options (years) | 5.0 | |||
| Share price (CAD) | 5.88 | |||
| Forfeiture rate (%) | — | |||
Expected volatility has been based on an evaluation of the historical volatility of the Company’s share price, particularly over the historical period commensurate with the expected term. The expected term of the instruments has been based on historical experience and general option holder behaviour.
During the three and six months ended June 30, 2025, a share-based compensation charge of EUR 589 and EUR 1,067 (three and six months ended June 30, 2024: EUR nil) has been recognized in the interim unaudited condensed consolidated statements of loss and comprehensive loss.
| 8 | GOODWILL |
The following is a continuity of the Company’s goodwill:
| As at January 1, 2024 | 31,921 | |||
| Effect of Movement in exchange rates | 801 | |||
| As at December 31, 2024 | 32,722 | |||
| Effect of movements in exchange rates | (1,487 | ) | ||
| As at June 30, 2025 | 31,235 |
13
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 8 | GOODWILL (CONTINUED) |
The carrying amount of goodwill is attributed to the acquisitions of Oryx, Wild Streak and Spin. The Company completed its annual impairment tests for goodwill as at December 31, 2024 and concluded that there was no impairment.
| 9 | DEFERRED CONSIDERATION |
The following is a continuity of the Company’s deferred consideration:
| Balance as at January 1, 2024 | 2,939 | |||
| Accretion expense | 428 | |||
| Gain on remeasurement of deferred consideration | (132 | ) | ||
| Shares issued as deferred consideration | (2,139 | ) | ||
| Effect of movement in exchange rates | 148 | |||
| Balance as at December 31, 2024 | 1,244 | |||
| Accretion expense | 168 | |||
| Loss on remeasurement of deferred consideration | 157 | |||
| Shares issued as deferred consideration | (1,380 | ) | ||
| Effect of movement in exchange rates | (189 | ) | ||
| Balance as at June 30, 2025 | — |
On June 1, 2022, the Company acquired Spin Games LLC. The Company agreed deferred consideration payments in common shares of the Company over three years from the effective date recorded with a present value of EUR 4,003. The discount for lack of marketability (DLOM) on June 1, 2022, was determined by applying Finnerty’s average-strike put option model (2012) with a volatility of between 71.4% and 80.9%, an annual dividend rate of 0% and time to maturity of 1-3 years.
In the three and six months ended June 30, 2025, an accretion expense of EUR 95 and EUR 168 (three and six months ended June 30, 2024: EUR 170 and EUR 305) was recorded in the interim unaudited condensed consolidated statements of loss and comprehensive loss.
In the three and six months ended June 30, 2025, a loss on remeasurement of deferred consideration of EUR 157 (three months ended June 30, 2024: gain of EUR 45 and loss of EUR 600) was recorded in the interim unaudited condensed consolidated statements of loss and comprehensive loss.
As at June 30, 2025, the Company has EUR nil deferred consideration payable (December 31, 2024: EUR 1,244 in current liabilities), being fully settled on June 5, 2025, with the issuance of 371,496 shares.
The fair value of deferred consideration as at December 31, 2024 is measured by determining the period-end share price and the discount for lack of marketability (DLOM) applying Finnerty’s average-strike put option model (2012). The assumptions include applying an annual dividend rate of 0.0% and volatility of 63.7% resulting in a DLOM of 9.3% for the third anniversary settlement of consideration.
14
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 10 | RIGHT OF USE ASSETS |
| Right of use | ||||
| Properties | ||||
| Cost | ||||
| Balance as at December 31, 2023 | 4,434 | |||
| Additions | 161 | |||
| Modifications | 836 | |||
| Disposal | (633 | ) | ||
| Effect of movement in exchange rates | 78 | |||
| Balance as at December 31, 2024 | 4,877 | |||
| Additions | 130 | |||
| Modification | 4 | |||
| Disposal | (24 | ) | ||
| Effect of movement in exchange rates | (145 | ) | ||
| Balance as at June 30, 2025 | 4,842 | |||
| Accumulated Depreciation | ||||
| Balance as at December 31, 2023 | 1,201 | |||
| Depreciation | 806 | |||
| Disposal | (633 | ) | ||
| Effect of movement in exchange rates | (7 | ) | ||
| Balance as at December 31, 2024 | 1,367 | |||
| Depreciation | 429 | |||
| Disposal | (24 | ) | ||
| Effect of movement in exchange rates | (82 | ) | ||
| Balance as at June 30, 2025 | (1,690 | ) | ||
| Carrying Amount | ||||
| Balance as at December 31, 2024 | 3,510 | |||
| Balance as at June 30, 2025 | 3,152 | |||
In the three and six months ended June 30, 2025, depreciation expense of EUR 215 and EUR 429 was recognized within selling, general and administrative expenses (three and six months ended June 30, 2024: EUR 147 and EUR 373).
15
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 11 | INTANGIBLE ASSETS |
| Deferred | ||||||||||||||||||
| Intellectual | Development | Customer | ||||||||||||||||
| Property | Costs | Relationships | Brands | Other | Total | |||||||||||||
| Cost | ||||||||||||||||||
| Balance as at December 31, 2023 | 18,096 | 21,595 | 24,758 | 2,148 | 299 | 66,896 | ||||||||||||
| Additions | 648 | 11,461 | — | — | — | 12,109 | ||||||||||||
| Effect of movement in exchange rates | 531 | 151 | 1,325 | 53 | (1 | ) | 2,059 | |||||||||||
| Balance as at December 31, 2024 | 19,275 | 33,207 | 26,083 | 2,201 | 298 | 81,064 | ||||||||||||
| Additions | 410 | 5,976 | — | — | 21 | 6,407 | ||||||||||||
| Effect of movement in exchange rates | (980 | ) | (487 | ) | (2,460 | ) | (98 | ) | (32 | ) | (4,057 | ) | ||||||
| Balance as at June 30, 2025 | 18,705 | 38,696 | 23,623 | 2,103 | 287 | 83,414 | ||||||||||||
| Accumulated Amortization | ||||||||||||||||||
| Balance as at December 31, 2023 | 8,445 | 11,270 | 7,452 | 1,430 | 166 | 28,763 | ||||||||||||
| Amortization | 2,755 | 8,962 | 3,246 | 663 | 88 | 15,714 | ||||||||||||
| Effect of movement in exchange rates | 186 | 42 | 451 | 42 | 7 | 728 | ||||||||||||
| Balance as at December 31, 2024 | 11,386 | 20,274 | 11,149 | 2,135 | 261 | 45,205 | ||||||||||||
| Amortization | 1,316 | 5,978 | 1,614 | 76 | 40 | 9,024 | ||||||||||||
| Effect of movement in exchange rates | (268 | ) | (372 | ) | (1,050 | ) | (108 | ) | (28 | ) | (1,826 | ) | ||||||
| Balance as at June 30, 2025 | 12,434 | 25,880 | 11,713 | 2,103 | 273 | 52,403 | ||||||||||||
| Carrying Amount | ||||||||||||||||||
| Balance as at December 31, 2024 | 7,889 | 12,933 | 14,934 | 66 | 37 | 35,859 | ||||||||||||
| Balance as at June 30, 2025 | 6,271 | 12,816 | 11,910 | — | 14 | 31,011 |
In the three and six months ended June 30, 2025, amortization expense of EUR 4,635 and EUR 9,024 was recognized within selling, general and administrative expenses (three and six months ended June 30, 2024: EUR 3,787 and EUR 7,355).
16
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 12 | TRADE AND OTHER RECEIVABLES |
Trade and other receivables comprises:
| As at | As at | |||||||
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Trade receivables | 23,929 | 19,558 | ||||||
| Sales tax | 1,054 | 514 | ||||||
| Trade and other receivables | 24,983 | 20,072 | ||||||
The following is an aging of the Company’s trade receivables:
| As at | As at | |||||||
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Less than one month | 23,090 | 18,984 | ||||||
| Between two and three months | 1,085 | 660 | ||||||
| Greater than three months | 3,130 | 2,411 | ||||||
| 27,305 | 22,055 | |||||||
| Provision for expected credit losses | (3,376 | ) | (2,497 | ) | ||||
| Trade receivables | 23,929 | 19,558 | ||||||
The following is a continuity of the Company’s provision for expected credit losses related to trade receivables:
| Balance as at December 31, 2023 | 2,059 | |||
| Net increase in provision for doubtful debts | 438 | |||
| Balance as at December 31, 2024 | 2,497 | |||
| Net increase in provision for doubtful debts | 879 | |||
| Balance as at June 30, 2025 | 3,376 |
| 13 | TRADE PAYABLES AND OTHER LIABILITIES |
Trade payables and other liabilities comprises:
| As at | As at | |||||||
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Trade payables | 9,916 | 3,236 | ||||||
| Accrued liabilities | 15,974 | 16,666 | ||||||
| Other payables | 749 | 44 | ||||||
| Trade payables and other liabilities | 26,639 | 19,946 | ||||||
17
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 14 | LEASE LIABILITIES |
The Company leases various properties mainly for office buildings. Rental contracts are made for various periods ranging up to six (6) years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes.
In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option. Extension options are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of the Company as a lessee.
Set out below are the carrying amounts of the lease liabilities and the movements for the period:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Balance as at beginning of the period | 3,697 | 3,277 | ||||||
| Additions | 130 | 161 | ||||||
| Modification | 4 | 836 | ||||||
| Accretion of interests | 52 | 123 | ||||||
| Payments | (570 | ) | (790 | ) | ||||
| Effect of movement in exchange rates | (70 | ) | 90 | |||||
| Balance as at end of period | 3,243 | 3,697 | ||||||
The maturity analysis of lease liabilities are disclosed below:
| June 30, 2025 | ||||||||
| Present value | Total | |||||||
| of the minimum | minimum | |||||||
| lease payments | lease payments | |||||||
| Within 1 year | 867 | 909 | ||||||
| After 1 year but within 2 years | 864 | 927 | ||||||
| After 2 years but within 5 years | 1,512 | 1,603 | ||||||
| 3,243 | 3,439 | |||||||
| Less: Total future interest expenses | (196 | ) | ||||||
| 3,243 | ||||||||
18
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 14 | LEASE LIABILITIES (CONTINUED) |
The following are the amounts recognized in the interim unaudited condensed consolidated statement of loss and comprehensive loss:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Amortization expense on right of use assets | 215 | 147 | 429 | 373 | ||||||||||||
| Gain on lease modification | — | — | 101 | — | ||||||||||||
| Interest expense on lease liabilities | 25 | 26 | 52 | 60 | ||||||||||||
| Total amount recognized in the income statement | 240 | 173 | 582 | 433 | ||||||||||||
| 15 | LOANS PAYABLE |
On April 24, 2024, the Company obtained a secured promissory note in the principal amount of USD 7.0m from a member of management. The secured promissory note matured on April 24, 2025, with an extension agreed to September 15, 2025. It bears an interest at an annual rate of 14%, payable quarterly.
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Balance as at beginning of the period | 6,579 | — | ||||||
| Promissory note issued | — | 6,532 | ||||||
| Interest on promissory note | 328 | 617 | ||||||
| Repayment of interest of promissory note | (436 | ) | (454 | ) | ||||
| Repayment of promissory note | (4,410 | ) | — | |||||
| Effect of foreign currency exchange rate | (365 | ) | (116 | ) | ||||
| Balance as at end of period | 1,696 | 6,579 | ||||||
In the three and six months ended June 30, 2025, interest expense of EUR 104 and EUR 328 was recognized within net interest expense and other financing charges (three and six months ended June 30, 2024: 170).
During the three months ended June 30, 2025, the Company repaid a total of USD 5.0m of the outstanding USD 7.0m secured promissory note.
19
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 16 | RELATED PARTY TRANSACTIONS |
The Company’s policy is to conduct all transactions and settle all balances with related parties on market terms and conditions for those in the normal course of business. Transactions between the Company and its consolidated entities have been eliminated on consolidation and are not disclosed in this note.
Key Management Personnel
The Company’s key management personnel are comprised of members of the Board and the executive team.
Transactions with Shareholders, Key Management Personnel and Members of the Board
Transactions recorded in the interim unaudited condensed consolidated statements of loss and comprehensive loss between the Company and its shareholders, key management personnel and members of the Board are set out in aggregate as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Salaries and subcontractors | (745 | ) | (760 | ) | (1,523 | ) | (1,317 | ) | ||||||||
| Share based compensation | (427 | ) | (450 | ) | (1,051 | ) | (586 | ) | ||||||||
| (1,172 | ) | (1,210 | ) | (2,574 | ) | (1,903 | ) | |||||||||
Balances due to/from shareholders, key management personnel and members of the Board are set out in aggregate as follows:
| Interim unaudited condensed consolidated statements of financial position | As at | As at | ||||||
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Accrued liabilities | (626 | ) | (1,321 | ) | ||||
| Net related party payable | (626 | ) | (1,321 | ) | ||||
Transactions recorded in the interim unaudited condensed consolidated statements of changes in equity between the Company and its shareholders, key management personnel and members of the Board are set out in aggregate as follows:
| Interim unaudited condensed consolidated statements of changes in equity | Six Months Ended June 30, | |||||||
| 2025 | 2024 | |||||||
| Exercise of DSUs, RSUs and FSO's | ||||||||
| Contributed surplus | (87 | ) | (195 | ) | ||||
| Share capital | 124 | 465 | ||||||
| Net movement in equity | 37 | 270 | ||||||
20
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 16 | RELATED PARTY TRANSACTIONS (CONTINUED) |
Transactions recorded in the interim unaudited condensed consolidated statements of cash flows between the Company and its shareholders, key management personnel and members of the Board are set out in aggregate as follows:
| Interim unaudited condensed consolidated statements of changes in cash flow | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Proceeds from exercise of options | — | 270 | 37 | 270 | ||||||||||||
| — | 270 | 37 | 270 | |||||||||||||
| 17 | FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT |
The financial instruments measured at amortized cost are summarized below:
Financial Assets
| Financial assets as subsequently | ||||||||
| measured at amortized cost | ||||||||
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Trade receivables | 23,929 | 19,558 | ||||||
Financial Liabilities
| Financial liabilities as subsequently | ||||||||
| measured at amortized cost | ||||||||
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Trade payables | 9,916 | 3,236 | ||||||
| Accrued liabilities | 15,974 | 16,666 | ||||||
| Other liabilities | 749 | 44 | ||||||
| Loans payable | 1,696 | 6,579 | ||||||
| 28,335 | 26,525 | |||||||
The carrying values of the financial instruments approximate their fair values.
21
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 17 | FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED) |
Fair Value Hierarchy
The following table presents the fair values and fair value hierarchy of the Company’s financial instruments.
| June 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
| Financial assets | ||||||||||||||||||||||||||||||||
| Fair value through profit and loss: | ||||||||||||||||||||||||||||||||
| Cash and cash equivalents | 4,242 | — | — | 4,242 | 10,467 | — | — | 10,467 | ||||||||||||||||||||||||
| Financial liabilities | ||||||||||||||||||||||||||||||||
| Fair value through profit and loss: | ||||||||||||||||||||||||||||||||
| Deferred consideration | — | - | — | - | — | 1,244 | — | 1,244 | ||||||||||||||||||||||||
| Share appreciation rights liability | — | 962 | — | 962 | — | — | — | — | ||||||||||||||||||||||||
There were no transfers between the levels of the fair value hierarchy during the periods.
During the three and six months ended June 30, 2025, a loss of EUR 157 (three and six months ended June 30, 2024: gain of EUR 45 and loss of EUR 600), was recognized in the interim unaudited condensed consolidated statements of loss and comprehensive loss on remeasurement of deferred consideration (Note 9) for financial instruments designated as FVTPL.
During the three and six months ended June 30, 2025, a share-based compensation charge of EUR 589 and EUR 1,067 (three and six months ended June 30, 2024: EUR nil) relating to share appreciation rights liability has been recognized in the interim unaudited condensed consolidated statements of loss and comprehensive loss.
As a result of holding and issuing financial instruments, the Company is exposed to certain risks. The following is a description of those risks and how the exposures are managed.
Liquidity risk
Liquidity risk is the risk that the Company is unable to generate or obtain sufficient cash and cash equivalents in a cost-effective manner to fund its obligations as they come due. The Company will experience liquidity risks if it fails to maintain appropriate levels of cash and cash equivalents, is unable to access sources of funding or fails to appropriately diversify sources of funding. If any of these events were to occur, they could adversely affect the financial performance of the Company.
The Company has a planning and budgeting process in place by which it anticipates and determines the funds required to support its normal operating requirements. The Company coordinates this planning and budgeting process with its financing activities through its capital management process. The Company holds sufficient cash and cash equivalents and working capital, maintained through stringent cash flow management, to ensure sufficient liquidity is maintained. The Company is not subject to any externally imposed capital requirements.
22
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 17 | FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED) |
The following are the undiscounted contractual maturities of significant financial liabilities and the total contractual obligations of the Company as at June 30, 2025:
| 2025 | 2026 | 2027 | 2028 | Thereafter | Total | |||||||||||||||||||
| Trade payables and other liabilities | 26,639 | — | — | — | — | 26,639 | ||||||||||||||||||
| Lease obligations on right of use assets | 909 | 927 | 864 | 477 | 262 | 3,439 | ||||||||||||||||||
| Loans payable | 1,849 | — | — | — | — | 1,849 | ||||||||||||||||||
| Share appreciation rights liability | 1,382 | 1,382 | 1,382 | — | — | 4,146 | ||||||||||||||||||
| Other non-current liabilities | 4 | 3 | 19 | 23 | 438 | 487 | ||||||||||||||||||
| 30,783 | 2,312 | 2,265 | 500 | 700 | 36,560 | |||||||||||||||||||
During the three months ended June 30, 2025, the Company repaid a total of USD 5.0m of the outstanding USD 7.0m secured promissory note.
FOREIGN CURRENCY EXCHANGE RISK
The Company is exposed to foreign currency risk, which includes risks related to its revenue and operating expenses denominated in currencies other than EUR, which is both the reporting currency and primary contracting currency of the Company’s customers. Accordingly, changes in exchange rates may in the future reduce the purchasing power of the Company’s customers thereby potentially negatively affecting the Company’s revenue and other operating results.
The Company has experienced and will continue to experience fluctuations in its net loss as a result of translation gains or losses related to revaluing certain current asset and current liability balances that are denominated in currencies other than the functional currency of the entities in which they are recorded.
Credit risk
The Company is exposed to credit risk resulting from the possibility that counterparties could default on their financial obligations to the Company including cash and cash equivalents, other assets and accounts receivable. Failure to manage credit risk could adversely affect the financial performance of the Company.
The Company mitigates the risk of credit loss relating to accounts receivable by evaluating the creditworthiness of new customers and establishes a provision for expected credit losses. The Company applies the simplified approach to provide for expected credit losses as prescribed by IFRS 9, Financial Instruments, which permits the use of the lifetime expected loss provision for all accounts receivable. The expected credit loss provision is based on the Company’s historical collections and loss experience and incorporates forward-looking factors, where appropriate.
23
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 17 | FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED) |
The provision matrix below shows the expected credit loss rate for each aging category of accounts receivable as at June 30, 2025:
| Aging (months) | ||||||||||||||||||||
| Note | <1 | 1 - 3 | >3 | Total | ||||||||||||||||
| Gross trade receivable | 12 | 23,090 | 1,085 | 3,130 | 27,305 | |||||||||||||||
| Expected credit loss rate | 4.08% | 19.79% | 70.88% | 12.36% | ||||||||||||||||
| Expected credit loss provision | 12 | 942 | 215 | 2,219 | 3,376 | |||||||||||||||
The provision matrix below shows the expected credit loss rate for each aging category of accounts receivable as at December 31, 2024:
| Aging (months) | ||||||||||||||||||||
| Note | <1 | 1 - 3 | >3 | Total | ||||||||||||||||
| Gross trade receivable | 12 | 18,984 | 660 | 2,411 | 22,055 | |||||||||||||||
| Expected credit loss rate | 2.88% | 5.75% | 79.32% | 11.32% | ||||||||||||||||
| Expected credit loss provision | 12 | 547 | 38 | 1,913 | 2,497 | |||||||||||||||
Gross accounts receivable includes the balance of accrued income within the aging category of less than one month.
Concentration risk
For the three and six months ended June 30, 2025, one customer (three and six months ended June 30, 2024: one customer) contributed more than 10% each to the Company’s revenues. Aggregate revenues from this customer totaled EUR 4,436 and EUR 8,675, respectively, for the three and six months ended June 30, 2025 (three and six months ended June 30, 2024: EUR 5,461 and EUR 11,870).
As at June 30, 2025, one customer (December 31, 2024: one customer) constituted more than 10% to the Company’s accounts receivable. The balance owed by this customer totaled EUR 2,823 (December 31, 2024: EUR 4,247).
24
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 18 | SUPPLEMENTARY CASHFLOW INFORMATION |
Cash flows arising from changes in non-cash working capital are summarized below:
| Six Months Ended June 30, | ||||||||
| Cash flows arising from movement in: | 2025 | 2024 | ||||||
| Trade and other receivables | (4,911 | ) | (638 | ) | ||||
| Prepaid expenses and other assets | (1,517 | ) | (1,096 | ) | ||||
| Trade payables and other liabilities | 6,393 | (2,191 | ) | |||||
| Changes in working capital | (35 | ) | (3,925 | ) | ||||
Significant non-cash transactions from investing and financing activities are as follows:
| Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Investing Activity | ||||||||
| Settlement of deferred consideration for Spin through share issuance | (1,380 | ) | (2,139 | ) | ||||
| Financing Activity | ||||||||
| Settlement of convertible debt through share issuance | — | (2,704 | ) | |||||
During the six months ended June 30, 2025 and 2024, the Company incurred both cash and non-cash interest expense and other financing charges. The following table shows the split as included in the interim unaudited condensed consolidated statement of loss and comprehensive loss:
| Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |||||||||||||||||||||||
| Cash | Non-cash | Total | Cash | Non-cash | Total | |||||||||||||||||||
| Interest and financing fees | (248 | ) | (210 | ) | (458 | ) | (308 | ) | — | (308 | ) | |||||||||||||
| Foreign exchange gain (loss) | — | 318 | 318 | (44 | ) | — | (44 | ) | ||||||||||||||||
| Lease interest expense | — | (52 | ) | (52 | ) | (60 | ) | — | (60 | ) | ||||||||||||||
| Accretion expense on deferred consideration | — | (168 | ) | (168 | ) | — | (305 | ) | (305 | ) | ||||||||||||||
| Accretion expense on convertible debt | — | — | — | — | (805 | ) | (805 | ) | ||||||||||||||||
| (248 | ) | (112 | ) | (360 | ) | (412 | ) | (1,110 | ) | (1,522 | ) | |||||||||||||
25
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 19 | SEGMENT INFORMATION |
Operating
The Company has one reportable operating segment, B2B online gaming.
Geography – Revenue
Revenue from continuing operations was generated from contracted customers in the following jurisdictions:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Malta | 6,037 | 6,054 | 10,588 | 10,647 | ||||||||||||
| Netherlands | 3,935 | 6,774 | 10,285 | 14,570 | ||||||||||||
| United States | 1,793 | 1,094 | 4,836 | 2,279 | ||||||||||||
| Brazil | 2,612 | — | 4,714 | — | ||||||||||||
| Curaçao | 1,819 | 5,372 | 4,406 | 10,615 | ||||||||||||
| Marshall Islands | 2,200 | — | 3,750 | — | ||||||||||||
| Belgium | 1,259 | 1,160 | 2,492 | 2,310 | ||||||||||||
| Croatia | 1,053 | 1,026 | 2,146 | 2,130 | ||||||||||||
| Czech Republic | 926 | 303 | 1,801 | 679 | ||||||||||||
| Isle of Man | 1,202 | 492 | 1,373 | 565 | ||||||||||||
| Other | 3,243 | 2,586 | 5,193 | 4,877 | ||||||||||||
| Revenue | 26,079 | 24,861 | 51,584 | 48,672 | ||||||||||||
This segmentation is not correlated to the geographical location of the Company’s worldwide end-user base.
Geography – Non-Current Assets
Non-current assets are held in the following jurisdictions:
| As at | As at | |||||||
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| United States | 62,679 | 69,201 | ||||||
| Other | 4,896 | 4,231 | ||||||
| Non-current assets | 67,575 | 73,432 | ||||||
26
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 20 | INCOME TAXES |
The components of income taxes recognized in the interim unaudited condensed consolidated statements of financial position are as follows:
| As at | As at | |||||||
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Income taxes payable | (445 | ) | (463 | ) | ||||
| Deferred income tax liabilities | (594 | ) | (680 | ) | ||||
The components of income taxes recognized in the interim unaudited condensed consolidated statements of loss and comprehensive loss are as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Current income taxes expense (recovery) | (490 | ) | 120 | 167 | 453 | |||||||||||
| Deferred income taxes expense (recovery) | (43 | ) | 135 | (86 | ) | (154 | ) | |||||||||
| Total income taxes expense (recovery) | (533 | ) | 255 | 81 | 299 | |||||||||||
There is no income taxes expense recognized in other comprehensive loss.
| As at | As at | |||||||
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Deferred tax assets | ||||||||
| Lease obligations on right of use assets | 717 | 777 | ||||||
| Non-capital losses carried forward | 13 | 39 | ||||||
| Deferred tax liabilities | ||||||||
| Goodwill and intangible assets | (595 | ) | (681 | ) | ||||
| Right-of-use assets | (697 | ) | (776 | ) | ||||
| Property and equipment | (32 | ) | (39 | ) | ||||
| Deferred income tax liabilities | (594 | ) | (680 | ) | ||||
27
BRAGG GAMING GROUP INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024
PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 20 | INCOME TAXES (CONTINUED) |
The effective income tax rates in the interim unaudited condensed consolidated statements of loss and comprehensive loss were reported at rates different than the combined Canadian federal and provincial statutory income tax rates for the following reasons:
| Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Consolidated loss before income taxes | (4,388 | ) | (4,005 | ) | ||||
| Effective tax rate | 26.5 | % | 26.5 | % | ||||
| Effective income taxes recovery | (1,163 | ) | (1,061 | ) | ||||
| Effect of tax rate in foreign jurisdictions | 610 | 8 | ||||||
| Non-deductible and non-taxable items | 441 | 400 | ||||||
| Change in tax benefits not recognized | 451 | 952 | ||||||
| Adjustment of prior year tax payable | (258 | ) | — | |||||
| Total income taxes expense | 81 | 299 | ||||||
| 21 | CONTINGENT LIABILITIES |
In the ordinary course of business, the Company is involved in and potentially subject to, legal actions and proceedings. In addition, the Company is subject to tax audits from various tax authorities on an ongoing basis. As a result, from time to time, tax authorities may disagree with the positions and conclusions taken by the Company in its tax filings or legislation could be amended or interpretations of current legislation could change, any of which events could lead to reassessments.