10-Q 1 gmgi_10q.htm FORM 10-Q gmgi_10q.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2024 

 

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934

 

For the transition period from ______ to _______

 

Commission File Number: 001-41326

 

gmgi_10qimg2.jpg

 

Golden Matrix Group, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada

 

46-1814729

(State or other jurisdiction

of incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

3651 Lindell Road, Ste D131

Las Vegas, NV

 

 

89103

(Address of principal executive offices)

 

(Zip Code)

 

(702) 318-7548

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.00001 Par Value Per Share

 

GMGI

 

The NASDAQ Stock Market LLC

(The NASDAQ Capital Market)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒     No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒     No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised accounting standard provided pursuant to Section 13(a) of the Exchanger Act ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes      No ☒

 

As of November 12, 2024, there were 128,902,717 shares of the registrant’s $0.00001 par value common stock issued and outstanding.

 

 

 

 

EXPLANATORY NOTE

 

On April 9, 2024 (the “Closing Date”), Golden Matrix Group, Inc. (the “Company”, “we” and “us”), consummated the transactions contemplated by that certain June 30, 2023, Amended and Restated Sale and Purchase Agreement of Share Capital (as amended and restated from time to time, the “Purchase Agreement”), between the Company and Aleksandar Milovanović, Zoran Milošević and Snežana Božović (collectively, the “Sellers”), the owners of Meridian Tech Društvo Sa Ograničenom Odgovornošću Beograd, a private limited company formed and registered in and under the laws of the Republic of Serbia (“Meridian Serbia”); Društvo Sa Ograničenom Odgovornošću “MeridianBet” Društvo Za Proizvodnju, Promet Roba I Usluga, Export Import Podgorica, a private limited company formed and registered in and under the laws of Montenegro; Meridian Gaming Holdings Ltd., a company formed and registered in the Republic of Malta; and Meridian Gaming (Cy) Ltd, a company formed and registered in the republic of Cyprus (collectively, the “MeridianBet Group”). On the Closing Date, the Company acquired 100% of the MeridianBet Group (the “Purchase”), effective for all purposes as of April 1, 2024. References herein to “Golden Matrix” refer to the Company prior to the Purchase.

 

Because the Sellers collectively owned approximately 69.2% of the Company’s outstanding shares of common stock on the Closing Date (with Aleksandar Milovanović (“Milovanović” owning 58.8%), and became the majority stockholders of the Company and received rights to appoint certain persons to the Board of Directors of the Company, the Purchase was accounted for as a reverse merger and recapitalization of the Company under Accounting Standards Codification (“ASC”) Topic 805, “Business Combinations” (“ASC 805”), with the MeridianBet Group as the accounting acquirer and the Company as the accounting acquiree.

 

Therefore, the historical basis of MeridianBet Group’s assets and liabilities has not been remeasured as a result of the acquisition. Instead, as described more fully in “NOTE 1 - BASIS OF PRESENTATION AND ACCOUNTING POLICIES” and in “NOTE 22 – MERIDIANBET GROUP PURCHASE AGREEMENT”, below, the assets and liabilities of Golden Matrix have been recorded at their fair value at the acquisition date and are included in the Company’s consolidated financial statements.  In identifying MeridianBet Group as the acquiring entity, the companies considered the structure of the acquisition, the relative equity ownership and the largest portion of the voting rights, in the combined companies after the closing of the acquisition, along with the composition of the board of directors.

 

On, and effective on, April 5, 2024, the Board of Directors of the Company approved a change in the Company’s fiscal year end from October 31st to December 31st, to align the Company’s fiscal year end with that of MeridianBet Group. As a result of the timing of the Purchase, the Company was not required to file a quarterly report for the quarter ended March 31, 2024. For more information regarding MeridianBet Group’s financial results for the quarter ended March 31, 2024, see the Current Report on Form 8-K/A filed by the Company with the Securities and Exchange Commission on June 4, 2024, which includes financial statements of MeridianBet Group for the quarters ended March 31, 2024 and 2023.

 

As a result, all historical financial information presented in the unaudited consolidated financial statements below represents the accounts of MeridianBet Group as if MeridianBet Group is the predecessor to the Company.

 

 
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GOLDEN MATRIX GROUP, INC.

 

TABLE OF CONTENTS

 

 

Page

Special Note Regarding Forward-Looking Statements

 

4

 

 

 

 

 

PART I. FINANCIAL INFORMATION

 

 

 

 

 

Item 1.

Financial Statements

 

7

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

59

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

79

 

Item 4.

Controls and Procedures

 

79

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

 

80

 

Item 1A.

Risk Factors

 

80

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

102

 

Item 3.

Defaults Upon Senior Securities

 

103

 

Item 4.

Mine Safety Disclosures

 

104

 

Item 5.

Other Information

 

104

 

Item 6.

Exhibits

 

104

 

 

 
3

Table of Contents

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Information included in this Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”) and the Private Securities Litigation Reform Act of 1995. This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Golden Matrix Group, Inc. (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future. You should read the matters described and incorporated by reference in “Risk Factors” and the other cautionary statements made in this Report, and incorporated by reference herein, as being applicable to all related forward-looking statements wherever they appear in this Report. We cannot assure you that the forward-looking statements in this Report will prove to be accurate and therefore prospective investors are encouraged not to place undue reliance on forward-looking statements.

 

Summary Risk Factors

 

Our business is subject to numerous risks and uncertainties, including those included in, and incorporated by reference in, the section entitled “Risk Factors” and elsewhere in this Report. These risks include, but are not limited to, the following: 

 

 

·

our need for significant additional financing to grow and expand our operations, complete acquisitions and pay post-closing amounts due in connection therewith, including in connection with the MeridianBet Group acquisition;

 

 

 

·

dilution caused by the conversion of outstanding preferred stock, convertible notes and warrants, and/or acquisitions;

 

 
4

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·

the Company’s ability to complete acquisitions, and the available funding for such acquisitions, disruptions caused by acquisitions, and other risks associated therewith;

 

 

 

 

·

the reliance on suppliers of third-party gaming content and the cost of such content;

 

 

 

 

·

the ability of the Company to obtain additional gaming licenses and maintain existing gaming licenses;

 

 

 

 

·

the Company’s ability to maintain the listing of its common stock on the Nasdaq Capital Market;

 

 

 

 

·

the ability of the Company to manage growth;

 

 

 

 

·

the Company’s expectations for future growth, revenues, and profitability;

 

 

 

 

·

the Company’s expectations regarding future plans and timing thereof;

 

 

 

 

·

the Company’s reliance on its management;

 

 

 

 

·

the fact that Aleksandar Milovanović has voting control over the Company;

 

 

 

 

·

related party relationships as well as conflicts of interest related thereto;

 

 

 

 

·

the potential effect of economic downturns, recessions, changes in interest rates and inflation, and market conditions, including recessions, decreases in discretionary spending and therefore demand for our products, and increases in the cost of capital, related thereto, among other affects thereof, on the Company’s operations and prospects as a result of increased inflation, increasing interest rates, global conflicts and other events;

 

 

 

 

·

the Company’s ability to protect its proprietary information and intellectual property (IP);

 

 

 

 

·

the ability of the Company to compete in its market;

 

 

 

 

·

the effect of current and future regulation, the Company’s ability to comply with regulations (both current and future) and potential penalties in the event it fails to comply with such regulations and changes in the enforcement and interpretation of existing laws and regulations and the adoption of new laws and regulations that may unfavorably impact our business;

 

 

 

 

·

the risks associated with gaming fraud, user cheating and cyber-attacks;

 

 

 

 

·

risks associated with systems failures and failures of technology and infrastructure on which the Company’s programs rely, as well as cybersecurity and hacking risks;

 

 
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·

risks relating to inventory management;

 

 

 

 

·

foreign exchange and currency risks;

 

 

 

 

·

the outcome of contingencies, including legal proceedings in the normal course of business;

 

 

 

 

·

the ability to compete against existing and new competitors;

 

 

 

 

·

the ability to manage expenses associated with sales and marketing and necessary general and administrative and technology investments; and

 

 

 

 

·

general consumer sentiment and economic conditions that may affect levels of discretionary customer purchases of the Company’s products, including potential recessions and global economic slowdowns.

 

 

 

 

·

the risk of loss if a customer or counterparty to a financial instrument fails to meet its contractual obligations; principally from receivables from customers and transactions with financial institutions with which the Company deposits its surplus funds or mandatory deposits of funds for licensing purposes.

 

 

 

 

·

the risk that the Company will have difficulty meeting its obligations associated with its financial liabilities that are settled by delivering cash or another financial asset.

 

 

 

 

·

the risk that changes in market prices – such as foreign exchange rates and interest rates, will affect the Company’s income or the value of its holdings of financial instruments.

 

 

 

 

·

the risks relating to protection of the players’ deposits; and

 

 

 

 

·

Risks that participants in a sports event intentionally lose or alter the outcome, leading to an unexpected outcome and potentially resulting in a higher payout than expected.

 

 
6

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PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements 

 

Golden Matrix Group, Inc. and Subsidiaries

Consolidated Balance Sheets

 

 

As of

 

 

As of

 

 

 

September 30,

2024

 

 

December 31,

2023

 

 

 

(Unaudited)

 

 

(Audited)

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$38,404,951

 

 

$20,405,296

 

Accounts receivable, net

 

 

8,496,716

 

 

 

2,674,967

 

Accounts receivable – related parties

 

 

663,636

 

 

 

399,580

 

Taxes receivable

 

 

301,349

 

 

 

997,778

 

Inventory

 

 

4,414,399

 

 

 

133,905

 

Prepaid expenses

 

 

1,374,534

 

 

 

328,400

 

Other current assets

 

 

3,013,530

 

 

 

1,989,476

 

Total current assets

 

 

56,669,115

 

 

 

26,929,402

 

 

 

 

 

 

 

 

 

 

Non-current assets:

 

 

 

 

 

 

 

 

Goodwill & intangible assets, net

 

 

117,351,145

 

 

 

15,107,422

 

Property, plant & equipment, net

 

 

29,180,941

 

 

 

27,826,594

 

Investments

 

 

240,152

 

 

 

237,828

 

Deposits

 

 

5,997,157

 

 

 

5,586,495

 

Operating lease right-of-use assets

 

 

4,036,771

 

 

 

4,147,375

 

Other non-current assets

 

 

16,484

 

 

 

17,864

 

Total non-current assets

 

 

156,822,650

 

 

 

52,923,578

 

Total assets

 

$213,491,765

 

 

$79,852,980

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$12,252,903

 

 

$8,751,562

 

Accounts payable - related parties

 

 

21,555

 

 

 

12,605

 

Current portion of operating lease liability

 

 

1,427,983

 

 

 

2,299,317

 

Current portion of long-term loan

 

 

17,491,098

 

 

 

-

 

Taxes payable

 

 

3,310,929

 

 

 

6,137,513

 

Other current liabilities

 

 

1,164,523

 

 

 

581,644

 

Deferred revenues

 

 

1,251,287

 

 

 

-

 

Contingent liability

 

 

2,139,122

 

 

 

-

 

Current portion of consideration payable

 

 

30,331,867

 

 

 

-

 

Total current liabilities

 

 

69,391,267

 

 

 

17,782,641

 

 

 

 

 

 

 

 

 

 

Non-current liabilities:

 

 

 

 

 

 

 

 

Non-current portion of operating lease liability

 

 

2,603,992

 

 

 

1,795,870

 

Non-current portion of long-term loan

 

 

16,167,631

 

 

 

-

 

Other non-current liabilities

 

 

134,176

 

 

 

287,920

 

Non-current portion of consideration payable - Meridian acquisition

 

 

25,000,000

 

 

 

-

 

Convertible note

 

 

1,606,882

 

 

 

-

 

Total non-current liabilities

 

 

45,512,681

 

 

 

2,083,790

 

Total liabilities

 

$114,903,948

 

 

$19,866,431

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock: $0.00001 par value; 20,000,000 shares authorized

 

 

-

 

 

 

-

 

Preferred stock, Series B: $0.00001 par value, 1,000 shares designated, 1,000 and 0 shares issued and outstanding, respectively

 

 

-

 

 

 

-

 

Preferred stock, Series C: $0.00001 par value, 1,000 shares designated, 1,000 and 1,000 shares issued and outstanding, respectively

 

 

-

 

 

 

-

 

Common stock: $0.00001 par value; 300,000,000 shares authorized; 122,708,617 and 83,475,190 shares issued and outstanding, respectively

 

$1,227

 

 

$835

 

Stock payable

 

 

120,000

 

 

 

-

 

Stock payable – related party

 

 

120,664

 

 

 

-

 

Additional paid-in capital

 

 

38,431,527

 

 

 

3,044,894

 

Treasury stock, at cost (September 2024 – 700 shares)

 

 

(1,671)

 

 

-

 

Accumulated other comprehensive income (loss)

 

 

(3,595,263)

 

 

(3,307,578)

Accumulated earnings

 

 

59,177,236

 

 

 

59,296,675

 

Total shareholders’ equity of GMGI

 

 

94,253,720

 

 

 

59,034,826

 

Noncontrolling interests

 

 

4,334,097

 

 

 

951,723

 

Total equity

 

 

98,587,817

 

 

 

59,986,549

 

Total liabilities and equity

 

$213,491,765

 

 

$79,852,980

 

 

See accompanying notes to consolidated financial statements.

 

 
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Table of Contents

 

Golden Matrix Group, Inc and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$40,992,329

 

 

$22,209,657

 

 

$105,258,158

 

 

$67,724,779

 

Cost of goods sold

 

 

(18,589,162)

 

 

(6,116,688)

 

 

(43,477,519)

 

 

(17,943,260)

Gross profit

 

 

22,403,167

 

 

 

16,092,969

 

 

 

61,780,639

 

 

 

49,781,519

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

23,379,550

 

 

 

12,863,262

 

 

 

58,937,789

 

 

 

37,797,023

 

Income (loss) from operations

 

 

(976,383)

 

 

3,229,707

 

 

 

2,842,850

 

 

 

11,984,496

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(790,193)

 

 

(4,049)

 

 

(827,048)

 

 

(31,930)

Interest earned

 

 

58,475

 

 

 

25,807

 

 

 

163,023

 

 

 

35,532

 

Foreign exchange gain (loss)

 

 

(219,060)

 

 

366,183

 

 

 

(337,581)

 

 

320,852

 

Other income

 

 

495,654

 

 

 

219,145

 

 

 

1,498,563

 

 

 

725,372

 

Total other income (expense)

 

 

(455,124)

 

 

607,086

 

 

 

496,957

 

 

 

1,049,826

 

Net income (loss) before tax

 

 

(1,431,507)

 

 

3,836,793

 

 

 

3,339,807

 

 

 

13,034,322

 

Provision for income taxes

 

 

1,864,122

 

 

 

316,733

 

 

 

2,670,788

 

 

 

1,148,270

 

Net income (loss)

 

$(3,295,629)

 

$3,520,060

 

 

$669,019

 

 

$11,886,052

 

Less: Net income attributable to noncontrolling interest

 

 

109,935

 

 

 

41,771

 

 

 

18,924

 

 

 

171,159

 

Net income (loss) attributable to GMGI

 

$(3,405,564)

 

$3,478,289

 

 

$650,095

 

 

$11,714,893

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average ordinary shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

121,510,697

 

 

 

83,475,190

 

 

 

108,570,269

 

 

 

83,475,190

 

Diluted

 

 

121,510,697

 

 

 

83,475,190

 

 

 

115,016,974

 

 

 

83,475,190

 

Net earnings (losses) per ordinary share attributable to GMGI:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$(0.03)

 

$0.04

 

 

$0.01

 

 

$0.14

 

Diluted

 

$(0.03)

 

$0.04

 

 

$0.01

 

 

$0.14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$(3,295,629)

 

$3,520,060

 

 

$669,019

 

 

$11,886,052

 

Foreign currency translation adjustments

 

 

1,818,258

 

 

 

(1,492,622)

 

 

(287,685)

 

 

(1,316,847)

Comprehensive income (loss)

 

 

(1,477,371)

 

 

2,027,438

 

 

 

381,334

 

 

 

10,569,205

 

Less: Net income attributable to noncontrolling interest

 

 

109,935

 

 

 

41,771

 

 

 

18,924

 

 

 

171,159

 

Comprehensive income (loss) attributable to GMGI

 

$(1,587,306)

 

$1,985,667

 

 

$362,410

 

 

$10,398,046

 

 

See accompanying notes to consolidated financial statements.

 

 
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Golden Matrix Group, Inc. and Subsidiaries

Consolidated Statement of Shareholders’ Equity

(Unaudited) 

 

For the Nine Months Ended September 30, 2024

 

 

 

Preferred Stock- Series B

 

 

Preferred Stock – Series C

 

 

Common Stock

 

 

Treasury Stock

 

 

Additional Paid-in

 

 

Stock

 

 

Stock Payable – Related

 

 

Accumulated Other Comprehensive Income

 

 

Accumulated

 

 

Total Equity of

 

 

Non-controlling

 

 

Total Shareholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Payable

 

 

Party

 

 

 (Loss)

 

 

Earnings

 

 

GMGI

 

 

interest

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2023

 

 

-

 

 

$-

 

 

 

1,000

 

 

$-

 

 

 

83,475,190

 

 

$835

 

 

 

-

 

 

$-

 

 

$3,044,894

 

 

$-

 

 

$-

 

 

$(3,307,578)

 

$59,296,675

 

 

$59,034,826

 

 

$951,723

 

 

$59,986,549

 

Fair value of non-controlling interest in subsidiary

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,363,450

 

 

 

3,363,450

 

Other comprehensive income (loss)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(287,685)

 

 

-

 

 

 

(287,685)

 

 

-

 

 

 

(287,685)

Shares issued for vested RSUs

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

560,750

 

 

 

6

 

 

 

-

 

 

 

-

 

 

 

(6)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Shares issued for exercise of options

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

20,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

34,800

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

34,800

 

 

 

-

 

 

 

34,800

 

Shares issued for services

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

100,000

 

 

 

1

 

 

 

-

 

 

 

-

 

 

 

564,399

 

 

 

120,000

 

 

 

120,664

 

 

 

-

 

 

 

-

 

 

 

805,064

 

 

 

-

 

 

 

805,064

 

Shares issued as consideration to acquire subsidiaries

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

810,390

 

 

 

8

 

 

 

-

 

 

 

-

 

 

 

1,689,655

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,689,663

 

 

 

-

 

 

 

1,689,663

 

Shares issued for debt conversion

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,000,000

 

 

 

10

 

 

 

-

 

 

 

-

 

 

 

1,999,990

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,000,000

 

 

 

-

 

 

 

2,000,000

 

FV of warrant granted

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,007,482

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,007,482

 

 

 

-

 

 

 

1,007,482

 

Fair value of stock-based compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,447,739

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,447,739

 

 

 

-

 

 

 

2,447,739

 

Purchase of treasury stock

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(700)

 

 

(1,671)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,671)

 

 

-

 

 

 

(1,671)

Dividends issued to former owners of MeridianBet Group

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(769,534)

 

 

(769,534)

 

 

-

 

 

 

(769,534)

Recapitalization

 

 

1,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

36,742,287

 

 

 

367

 

 

 

-

 

 

 

-

 

 

 

27,642,574

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

27,642,941

 

 

 

-

 

 

 

27,642,941

 

Profit for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

650,095

 

 

 

650,095

 

 

 

18,924

 

 

 

669,019

 

Balance at September 30, 2024

 

 

1,000

 

 

$-

 

 

 

1,000

 

 

$-

 

 

 

122,708,617

 

 

$1,227

 

 

 

(700)

 

$(1,671)

 

$38,431,527

 

 

$120,000

 

 

$120,664

 

 

$(3,595,263)

 

$59,177,236

 

 

$94,253,720

 

 

$4,334,097

 

 

$98,587,817

 

 

See accompanying notes to consolidated financial statements.

 

 
9

Table of Contents

 

For the Three Months Ended September 30, 2024

 

 

 

Preferred Stock- Series B

 

 

Preferred Stock – Series C

 

 

Common Stock

 

 

Treasury Stock

 

 

Additional Paid-in

 

 

Stock

 

 

Stock Payable –

Related

 

 

Accumulated Other Comprehensive Income

 

 

Accumulated

 

 

Total Equity of

 

 

Non-controlling

 

 

Total Shareholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Payable

 

 

Party

 

 

 (Loss)

 

 

Earnings

 

 

GMGI

 

 

interest

 

 

Equity

 

Balance at June 30, 2024

 

 

1,000

 

 

$-

 

 

 

1,000

 

 

$-

 

 

 

120,801,977

 

 

$1,208

 

 

 

-

 

 

$-

 

 

$

32,210,148

 

 

$120,000

 

 

$30,166

 

 

$(5,413,521)

 

$62,582,800

 

 

$

89,530,801

 

 

$860,712

 

 

$

90,391,513

 

Fair value of non-controlling interest in subsidiary

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,363,450

 

 

 

3,363,450

 

Other comprehensive income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,818,258

 

 

 

-

 

 

 

1,818,258

 

 

 

-

 

 

 

1,818,258

 

Shares issued for vested RSUs

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

26,250

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Shares issued for services

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

70,000

 

 

 

1

 

 

 

-

 

 

 

-

 

 

 

384,399

 

 

 

-

 

 

 

90,498

 

 

 

-

 

 

 

-

 

 

 

474,898

 

 

 

-

 

 

 

474,898

 

Shares issued as consideration to acquire subsidiaries

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

810,390

 

 

 

8

 

 

 

-

 

 

 

-

 

 

 

1,689,655

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,689,663

 

 

 

-

 

 

 

1,689,663

 

Shares issued for debt conversion

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,000,000

 

 

 

 10

 

 

 

-

 

 

 

-

 

 

 

1,999,990

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,000,000

 

 

 

-

 

 

 

2,000,000

 

FV of warrant granted

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,007,482

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,007,482

 

 

 

-

 

 

 

1,007,482

 

Fair value of stock-based compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,139,853

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,139,853

 

 

 

-

 

 

 

1,139,853

 

Purchase of treasury stock

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(700)

 

 

(1,671)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,671)

 

 

-

 

 

 

(1,671)

Profit for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(3,405,564)

 

 

(3,405,564)

 

 

109,935

 

 

 

(3,295,629)

Balance at September 30, 2024

 

 

1,000

 

 

$-

 

 

 

1,000

 

 

$-

 

 

 

122,708,617

 

 

$1,227

 

 

 

(700)

 

$(1,671)

 

$38,431,527

 

 

$120,000

 

 

$120,664

 

 

$(3,595,263)

 

$59,177,236

 

 

$94,253,720

 

 

$4,334,097

 

 

$98,587,817

 

 

See accompanying notes to consolidated financial statements.

 

 
10

Table of Contents

 

For the Nine Months Ended September 30, 2023

 

 

 

Preferred Stock- Series B

 

 

Preferred Stock – Series C

 

 

Common Stock

 

 

Additional Paid-in

 

 

Accumulated Other Comprehensive

 

 

Accumulated

 

 

Total Equity of

 

 

Non-controlling

 

 

Total Shareholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Earnings

 

 

GMGI

 

 

interest

 

 

Equity

 

Balance at December 31, 2022

 

 

-

 

 

$-

 

 

 

1,000

 

 

$-

 

 

 

83,475,190

 

 

$835

 

 

$3,044,894

 

 

$(4,133,352)

 

$47,393,096

 

 

$46,305,473

 

 

$759,375

 

 

$47,064,848

 

Other comprehensive income (loss)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,316,847)

 

 

-

 

 

 

(1,316,847)

 

 

-

 

 

 

(1,316,847)

Dividends

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,411,830)

 

 

(1,411,830)

 

 

(2,240)

 

 

(1,414,070)

Profit for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

11,714,893

 

 

 

11,714,893

 

 

 

171,159

 

 

 

11,886,052

 

Balance at September 30, 2023

 

 

-

 

 

$-

 

 

 

1,000

 

 

$-

 

 

 

83,475,190

 

 

$835

 

 

$3,044,894

 

 

$(5,450,199)

 

$57,696,159

 

 

$55,291,689

 

 

$928,294

 

 

$56,219,983

 

 

See accompanying notes to consolidated financial statements.

 

 
11

Table of Contents

  

For the Three Months Ended September 30, 2023

 

 

 

Preferred Stock- Series B

 

 

Preferred Stock – Series C

 

 

Common Stock

 

 

Additional Paid-in

 

 

Accumulated Other Comprehensive

 

 

Accumulated

 

 

Total Equity of

 

 

Non-controlling

 

 

Total Shareholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Earnings

 

 

GMGI

 

 

interest

 

 

Equity

 

Balance at June 30, 2023

 

 

-

 

 

$-

 

 

 

1,000

 

 

$-

 

 

 

83,475,190

 

 

$835

 

 

$3,044,894

 

 

$(3,957,577)

 

$54,692,331

 

 

$53,780,483

 

 

$888,763

 

 

$54,669,246

 

Other comprehensive income (loss)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,492,622)

 

 

-

 

 

 

(1,492,622)

 

 

-

 

 

 

(1,492,622)

Dividends

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(474,461)

 

 

(474,461)

 

 

(2,240)

 

 

(476,701)

Profit for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,478,289

 

 

 

3,478,289

 

 

 

41,771

 

 

 

3,520,060

 

Balance at September 30, 2023

 

 

-

 

 

$-

 

 

 

1,000

 

 

$-

 

 

 

83,475,190

 

 

$835

 

 

$3,044,894

 

 

$(5,450,199)

 

$57,696,159

 

 

$55,291,689

 

 

$928,294

 

 

$56,219,983

 

 

See accompanying notes to consolidated financial statements.

 

 
12

Table of Contents

 

Golden Matrix Group, Inc. and Subsidiaries

Consolidated Statements of Cash Flow

(Unaudited)

 

 

 

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2024

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

669,019

 

 

$

11,886,052

 

Adjustments to reconcile net income to cash provided by operating activities:

 

 

 

 

 

 

 

 

Fair value of stock-based compensation

 

 

3,252,803

 

 

 

-

 

Non-cash interest expense related to debt discount amortization

 

 

729,059

 

 

 

-

 

Amortization of intangible assets

 

 

4,317,523

 

 

 

1,357,453

 

Depreciation of property, plant and equipment

 

 

3,173,473

 

 

 

2,670,258

 

Bad debt expense

 

 

218,800

 

 

 

108,742

 

 

 

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

(Increase) decrease in accounts receivable

 

 

(2,030,489)

 

 

(214,831)

(Increase) decrease in accounts receivable – related party

 

 

62,166

 

 

 

(189,697)

(Increase) decrease in taxes receivable

 

 

696,429

 

 

 

344,042

 

(Increase) decrease in prepaid expenses

 

 

(783,980)

 

 

34,149

 

(Increase) decrease in other current assets

 

 

(494,078)

 

 

(419,984)

(Increase) decrease in inventories

 

 

(1,131,848)

 

 

5,415

 

(Increase) decrease in deposits

 

 

(471,700)

 

 

(354,158)

(Increase) decrease in other non-current assets

 

 

(344,476)

 

 

28,707

 

Increase (decrease) in accounts payable and accrued liabilities

 

 

1,441,319

 

 

(231,972)

Increase (decrease) in accounts payable – related party

 

 

(2,981)

 

 

(3,200)

Increase (decrease) in taxes payable

 

 

(3,903,981)

 

 

22,987

 

Increase (decrease) in deferred revenues

 

 

74,422

 

 

 

-

 

Increase (decrease) in customer deposit

 

 

23,938

 

 

 

-

 

Increase (decrease) in other current liabilities

 

 

299,028

 

 

 

(24,195)

Increase (decrease) in due to shareholders

 

 

-

 

 

 

(137,114)

Increase (decrease) in other liabilities

 

 

-

 

 

 

(976,082)

Increase (decrease) in operating lease liabilities

 

 

1,522,653

 

 

 

1,412,832

 

Net cash provided by operating activities

 

$

7,317,099

 

 

$

15,319,404

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Cash paid for intangible assets

 

 

(9,598,234)

 

 

(4,261,243)

Cash paid for investments

 

 

(2,324)

 

 

3,995

 

Cash paid for property, plant and equipment

 

 

(3,979,633)

 

 

(3,470,626)

Cash paid for purchase of subsidiaries

 

 

(4,452,143)

 

 

-

 

Cash assumed from investment in subsidiaries

 

 

2,265,276

 

 

 

-

 

Cash distribution to former owners of MeridianBet Group in connection with the Purchase

 

 

(23,294,833)

 

 

-

 

Cash assumed from acquisition with Golden Matrix

 

 

17,355,360

 

 

 

-

 

Net cash used in investing activities

 

$

(21,706,531)

 

$

(7,727,874)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Repayment on debt

 

 

(1,174,383)

 

 

-

 

Proceeds from loans and borrowings

 

 

26,870,400

 

 

 

-

 

Proceeds from sale of note and warrant

 

 

9,685,305

 

 

 

-

 

Repayment of lease

 

 

(1,928,562)

 

 

(1,644,714)

Payments of dividends

 

 

(769,534)

 

 

(1,419,205)

Share repurchase

 

 

(1,671)

 

 

-

 

Proceeds from option exercise

 

 

34,800

 

 

 

-

 

Net cash provided by (used in) financing activities

 

$

32,716,355

 

 

$

(3,063,919)

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

 

(327,268)

 

 

(1,297,094)

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

 

17,999,655

 

 

 

3,230,517

 

Cash and cash equivalents at beginning of year

 

 

20,405,296

 

 

 

13,109,447

 

Cash and cash equivalents at end of the quarter

 

 

38,404,951

 

 

 

16,339,964

 

 

 

 

 

 

 

 

 

 

Supplemental cash flows disclosures

 

 

 

 

 

 

 

 

Interest paid

 

89,455

 

 

$

31,930

 

Tax paid

 

$

2,712,786

 

 

$

936,212

 

Non-cash financing activities

 

 

 

 

 

 

 

 

Debt conversion

 

 2,000,000

 

 

$

 -

 

 

See accompanying notes to consolidated financial statements.

 

 
13

Table of Contents

 

Golden Matrix Group, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements

(Unaudited)

 

NOTE 1 - BASIS OF PRESENTATION AND ACCOUNTING POLICIES

 

Organization and Operations

 

Golden Matrix Group, Inc. (together with its consolidated subsidiaries, collectively, “GMGI” “we”, “our”, “us”, or the “Company”) is incorporated and registered in the State of Nevada,  (i) operates online sports betting, online casino, and gaming operations in more than 15 jurisdictions across Europe, Africa and Central and South America, (ii) is an innovative provider of enterprise Software-as-a-Service (“SaaS”) solutions for online casino operators and online sports betting operators, commonly referred to as iGaming operators and, (iii) offers pay-to-enter prize competitions in the United Kingdom (UK) and leads trade promotions in Australia, providing members with free prizes.

 

The Company is a well-established brand and operator in the sports betting and gaming industry, spanning across over 15 markets in Europe, Central and South America, and Africa. The Company employs approximately 1,200 personnel, operating both online (mobile and web) and approximately 700 company-owned or franchised betting shops, with a primary focus (in those shops) on sports betting, online casino games, and virtual games. Of those 700 shops, approximately 250 are owned by the Company’s subsidiaries and approximately 450 shops are owned by franchisees. This is complemented by a variety of slot machines and online casinos, eSports, fixed odds games, and other entertainment options, contingent on the regulatory parameters of the specific jurisdictions. While sports betting is a primary focus, the Company’s online casino revenue has grown significantly over the past years. Following the closing of the Purchase (defined below) and effective April 1, 2024, as discussed below, the Company expanded into the business-to-business (“B2B”) segment where it develops and owns online gaming intellectual property (IP) and builds configurable and scalable, turn-key, and white-label gaming platforms for international customers, located primarily in the Asia Pacific region. As part of the Purchase, the Company acquired a proprietary Internet gaming enterprise software system that provides for unique casino and live game operations on the platforms that include GM-X System (“GM-X”) and GM-Ag System, Turnkey Solution and White Label Solutions. These platforms are provided to Asia Pacific Internet-based and land-based casino operators as a turnkey technology solution for regulated real money Internet gaming (“RMiG”), Internet sports gaming, and virtual simulated gaming (“SIM”). In addition, following the Purchase, the Company broadened its operations in pay-to-enter prize competitions in the UK

 

On April 9, 2024, GMGI completed the acquisition (the “Purchase”) of 100% of Meridian Tech Društvo Sa Ograničenom Odgovornošću Beograd, a private limited company formed and registered in and under the laws of the Republic of Serbia (“Meridian Serbia”); Društvo Sa Ograničenom Odgovornošću “MeridianBet” Društvo Za Proizvodnju, Promet Roba I Usluga, Export Import Podgorica, a private limited company formed and registered in and under the laws of Montenegro (“MeridianBet Montenegro”); Meridian Gaming Holdings Ltd., a company formed and registered in the Republic of Malta; and Meridian Gaming (Cy) Ltd, a company formed and registered in the republic of Cyprus (collectively, “MeridianBet Group”), from Aleksandar Milovanović, Zoran Milošević and Snežana Božović (collectively, the “Sellers”). The Purchase was completed pursuant to the terms of that certain Amended and Restated Sale and Purchase Agreement of Share Capital dated June 27, 2023, entered into between Golden Matrix and the Sellers (as amended from time to time, the “Purchase Agreement”), effective for all purposes as of April 1, 2024. References to “Golden Matrix” refer to the Company prior to the Purchase.

 

In connection with the Purchase, on April 9, 2024, the Company (A) issued 821,418,571,000 restricted shares of the Company’s common stock to the Sellers (the “Closing Shares”) and 1,000 shares of the Company’s Series C Preferred Stock (the “Series C Preferred Stock”); (B) paid the Sellers $12 million in cash; and (C) issued the Sellers $15 million in Promissory Notes (the “Notes”), payable $13,125,000 to Aleksandar Milovanović, $1,250,000 to Zoran Milošević and $625,000 to Snežana Božović.

 

 
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The Purchase Agreement is described in greater detail below under “NOTE 22 – MERIDIANBET GROUP PURCHASE AGREEMENT”.

 

On July 11, 2024, the Company entered into a share purchase agreement related to sale and purchase of one hundred and twenty thousand (120,000) ordinary shares of one euro (€1) each in Media Games Malta (EU) Limited (“Media Games Malta”), bearing company registration number C 44807 incorporated under the laws of Malta (the “SPA”).

 

On August 16, 2024, the Company entered into a Share Exchange Agreement to acquire an 80% ownership interest in Classics Holdings Co. Pty Ltd., an Australian proprietary limited company (“Classics”). Classics, through its wholly-owned subsidiary, Classics For A Cause Pty Ltd (“Classics for a Cause”), is an independent online trade promotions company, located in Australia, which operates a well-established business-to-consumer (B2C) platform that offers paid members access to a wide range of discounts from retailers across Australia. Classics for a Cause rewards its members with free entries into promotional giveaways, which feature luxury and classic motor vehicles, exotic motor vehicles, caravans, jet skis, boats, and exclusive holiday experiences. On August 21, 2024, the Company closed the transactions contemplated by the Share Exchange Agreement, which was effective on August 1, 2024.

 

Change of Control

 

As a result of the closing of the Purchase Agreement, and on April 9, 2024, the Sellers obtained majority voting control over the Company, with each of the Sellers obtaining voting rights as follows:

 

 

·

Aleksandar Milovanović (69,820,578 shares of common stock (58.8% of the Company’s then outstanding common stock) and 850 shares of Series C Preferred Stock, voting in aggregate 76,195,578 voting shares (57.0% of the Company’s outstanding voting shares));

 

·

Zoran Milošević (8,214,186 shares of common stock and 100 shares of Series C Preferred Stock, voting in aggregate 8,964,186 voting shares); and

 

·

Snežana Božović (4,107,093 shares of common stock and 50 shares of Series C Preferred Stock, voting in aggregate 4,482,093 voting shares).

 

The total of the shares referenced above amount to 82,141,857 shares of common stock and 1,000 shares of Series C Preferred Stock voting in aggregate 7,500,000 voting shares, or 89,641,857 voting shares total, which total an aggregate of 69.2% of the Company’s outstanding common stock and 67.0% of the Company’s outstanding voting stock, each as of the Closing date.

 

Prior to the closing of the Purchase Agreement, Mr. Anthony Brian Goodman, the Chief Executive Officer and director of the Company, held voting control over the Company due to his beneficial ownership of 16,124,562 shares of common stock and 1,000 shares of Series B Voting Preferred Stock, which vote 7,500,000 voting shares on all stockholder matters (which prior to the issuance of the shares of common stock and Series C Preferred Stock upon the closing of the Purchase Agreement, provided him a 53.6% voting right over the Company).

 

Amendment to Articles of Incorporation

 

On March 20, 2024, at a special meeting of stockholders of the Company held on March 19, 2024, the stockholders of the Company approved, among other things (collectively, the “Amendments”) the adoption of Certificate of Amendments to amend the Company’s Amended and Restated Articles of Incorporation to (a) remove the provisions thereof providing for a three class, classified Board of Directors of the Company; (b) opt out of Nevada Revised Statutes Sections 78.378 to 78.3793 (the Nevada Control Share Act); (c) amend Article VI thereof to (i) remove the Board of Directors’ exclusive right to make, amend, alter, or repeal the bylaws of the Company; and (ii) provide that nothing in the Amended and Restated Articles of Incorporation shall deny the concurrent power of the stockholders (together with the directors) to adopt, alter, amend, restate, or repeal the Bylaws of the Company; and (d) amend Article III, Section 1, to increase the Company’s authorized number of shares of common stock from two hundred and fifty million (250,000,000) shares to three hundred million (300,000,000) shares.

 

On April 4, 2024, the Company filed a combined Certificate of Amendment to its Articles of Incorporation with the Secretary of State of Nevada, amending such Articles of Incorporation to affect each of the Amendments, which filing became effective on April 4, 2024.

 

 
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As a result of the Amendments, (i) we no longer have a classified Board of Directors, and each member of the Board of Directors will continue to serve in such position until the next annual meeting of stockholders of the Company, and/or until their earlier resignation, removal or death. Any vacancies on the Board which occur during the year may be filled by the Board of Directors until the next annual meeting of stockholders of the Company; (ii) we are no longer subject to the Nevada Control Share Act; (iii) stockholders have the concurrent right, together with the Board of Directors, of amending the Bylaws of the Company; and (iv) we now have 300,000,000 shares of authorized common stock.

 

Series C Preferred Stock

 

Additionally, on April 4, 2024, in contemplation of the closing of the transactions contemplated by the Purchase Agreement, and pursuant to the power provided to the Company by the Articles of Incorporation of the Company, as amended, the Company’s Board of Directors approved the adoption of, and filing of, a Certificate of Designation of Golden Matrix Group, Inc. Establishing the Designation, Preferences, Limitations and Relative Rights of Its Series C Preferred Stock (the “Series C Designation”), which was filed with, and became effective with, the Secretary of State of Nevada on the same date. The Series C Designation designated 1,000 shares of Series C Preferred Stock, which were issued to the Sellers at the closing of the Purchase.

 

Interim Financial Statements

 

These unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the consolidated financial statements do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These consolidated financial statements should be read in conjunction with (i) the financial statements for the fiscal year ended October 31, 2023, and notes thereto, which are included in the Company’s Annual Report on Form 10-K which the Company filed with the Securities and Exchange Commission (the “SEC”) on January 17, 2024; (ii) the audited financial statements, comprising the consolidated balance sheets as of December 31, 2023 and 2022, and the related consolidated statements of owners’ equity, and consolidated statements of operations and comprehensive income, and consolidated statements of cash flows, for MeridianBet Group for the years then ended, and the related notes to the financial statements, which the Company filed with the SEC as an exhibit to a Current Report on Form 8-K/A on June 4, 2024, (iii) Management’s Discussion and Analysis of Financial Condition and Results of Operations of the MeridianBet Group for the three months ended March 31, 2024 and 2023, and the years ended December 31, 2023 and 2022, which the Company filed with the SEC as an exhibit to a Current Report on Form 8-K/A on June 4, 2024, and (iv) the unaudited financial statements, comprising the consolidated balance sheets as of March 31, 2024 and December 31, 2023, and the related consolidated statements of owners’ equity, and consolidated statements of operations and comprehensive income, and consolidated statements of cash flows for MeridianBet Group for the three months ended March 31, 2024 and 2023, and the related notes to the financial statements, which the Company filed with the SEC as an exhibit to a Current Report on Form 8-K/A on June 4, 2024.

 

Principles of Consolidation

 

The consolidated financial statements as of September 30, 2024, include the accounts of the Company and its subsidiaries which include:

 

 

·

Global Technology Group Pty Ltd. (“GTG”), a limited proprietary company formed and registered under the laws of Australia.

 

·

Classics Holdings Co. Pty Ltd (“Classics”), a limited proprietary company formed and registered under the laws of Australia, with direct subsidiaries of:

 

 

o Classics For A Cause Pty Ltd (Australia)

 

·

RKingsCompetitions Ltd., (“RKings”), a limited company formed and registered under the laws of Northern Ireland.

 

·

Golden Matrix MX, S.A. DE C.V., (“GM MX”), a corporation incorporated under the laws of Mexico.

 

·

GMG Assets Limited, (“GMGA”) a limited company formed and registered under the laws of Northern Ireland.

 

 
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·

Golden Matrix (IOM) Limited, (“GMIOM”) a limited company formed and registered under the laws of the Isle of Man.

 

·

Golden Matrix Group Beograd-Novi Beograd (“Golden Matrix Serbia”), a private limited company formed and registered in and under the laws of the Republic of Serbia.

 

·

Meridian Tech Društvo Sa Ograničenom Odgovornošću Beograd (Meridian Tech d.o.o.), a private limited company formed and registered in and under the laws of the Republic of Serbia, with direct subsidiaries of:

 

 

o

Meridian Tech (Bosnia)

 

o

Meridian Bet Brcko (Bosnia)

 

o

Meridian Tech (PYT) LTD (South Africa)

 

o

Meridianbet Brasil Ltda (Brazil)

 

o

Meridian Gaming Brasil SPE Ltda (Brazil)

 

 

·

Društvo Sa Ograničenom Odgovornošću “Meridianbet” Društvo Za Proizvodnju, Promet Roba I Usluga, Export Import Podgorica (MeridianBet), a private limited company formed and registered in and under the laws of Montenegro, with direct subsidiaries of:

 

 

o

Meridian WorldWide (Cyprus)

 

o

Bit Tech Ltd (Tanzania)

 

·

Meridian Gaming Holdings Ltd., a company formed and registered in the Republic of Malta, with direct subsidiaries of:

 

o

Meridian Gaming (Malta)

 

o

My Best Odds (Belgium)

 

o

Meridian Gaming (Peru)

 

o

Global Meridian Gaming (Curacao)

 

o

Fair Champions Meridian Ltd (Cyprus)

 

o

Meridian Global Consulting (Montenegro)

 

o

Expanse Studios (Serbia)

 

o

Media Games Malta Ltd. (Malta)

 

 

·

Meridian Gaming (Cy) Ltd, a company formed and registered in the Republic of Cyprus

 

 
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The descriptions of the ownership and the percentages of ownership are identified below.  All intercompany transactions and balances have been eliminated.

 

Company

Country

Original Date Acquired

Ownership

Companies under Golden Matrix (Legal Acquirer / Accounting Acquiree)

 United States

 

 

Global Technology Group Pty Ltd. (“GTG”)

Australia

January 19, 2021

100%

RKingsCompetitions Ltd.*

United Kingdom

November 1, 2021 &

November 4, 2022*

100%

Golden Matrix MX, S.A. DE C.V.

Mexico

July 11, 2022

99.99%

GMG Assets Limited

United Kingdom

August 1, 2022

100%

Golden Matrix (IOM) Limited 

Isle of Man

November 14, 2023

100%

Golden Matrix Group Beograd-Novi Beograd

Serbia

March 27, 2024

100%

Classics Holdings Co. Pty Ltd

Australia

August 1, 2024

80%

Subsidiary: Classics For A Cause Pty Ltd

Australia

August 1, 2024

80%

Companies under MeridianBet Group (Legal Acquiree / Accounting Acquirer)

 

 

 

Meridian Tech d.o.o. – Accounting Acquirer

Serbia

March 3, 2001**

 

Subsidiary: Meridian Tech