UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File No. 001-39274

GAN Limited

(Exact name of registrant as specified in its charter)

Bermuda

Not Applicable

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

400 Spectrum Center Drive, Suite 1900, Irvine, California		92618
(Address of principal executive offices)		(Zip Code)

(833) 565-0550

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Ordinary shares, par value $0.01		GAN		The Nasdaq Stock Market LLC

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, a 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 financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

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

At August 5, 2024, there were 45,472,877 ordinary shares outstanding.

GAN LIMITED

FORM 10-Q

INDEX

		Page
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023	3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2024 and 2023	4
	Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2024 and 2023	5
	Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three and six months ended June 30, 2024 and 2023	6
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	48
Item 4.	Controls and Procedures	48
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 6.	Exhibits	51
	SIGNATURES	52

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

GAN LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share and per share amounts)

	June 30,			December 31,
	2024			2023
ASSETS
Current assets
Cash	$	36,861		$	38,578
Accounts receivable, net of credit losses of $158 and $244 at June 30, 2024 and December 31, 2023, respectively		8,847			11,417
Prepaid expenses		3,686			3,344
Other current assets		4,461			3,202
Total current assets		53,855			56,541

Capitalized software development costs, net		7,704			8,370
Intangible assets, net		10,653			12,358
Operating lease right-of-use assets		3,822			4,340
Other assets		5,152			5,895
Total assets	$	81,186		$	87,504

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Accounts payable	$	6,255		$	6,971
Accrued compensation and benefits		7,202			7,849
Accrued content license fees		1,928			4,024
Liabilities to users		10,201			10,185
Current operating lease liabilities		811			804
Other current liabilities		8,217			6,891
Total current liabilities		34,614			36,724

Deferred income taxes		3,790			3,793
Long-term debt		44,498			42,189
Non-current operating lease liabilities		3,041			3,577
Other liabilities		5,394			5,825
Total liabilities		91,337			92,108
Commitments and contingencies (Note 15)		-			-
Shareholders’ equity (deficit)
Ordinary shares, $0.01 par value, 100,000,000 shares authorized, 45,393,951 and 45,071,578 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		454			451
Additional paid-in capital		337,987			336,552
Accumulated deficit		(315,196	)		(309,305	)
Accumulated other comprehensive loss		(33,396	)		(32,302	)
Total shareholders’ deficit		(10,151	)		(4,604	)
Total liabilities and shareholders’ equity (deficit)	$	81,186		$	87,504

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

GAN LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except share and per share amounts)

	2024			2023			2024			2023
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023

Revenue	$	35,560		$	33,758		$	66,211		$	68,887

Operating costs and expenses
Cost of revenue ⁽¹⁾		10,244			9,485			19,567			19,646
Sales and marketing		7,056			7,324			13,073			14,508
Product and technology		8,137			11,238			17,753			20,816
General and administrative ⁽¹⁾		7,980			10,029			15,139			20,035
Depreciation and amortization		1,914			4,243			3,753			8,444
Total operating costs and expenses		35,331			42,319			69,285			83,449
Operating income (loss)		229			(8,561	)		(3,074	)		(14,562	)
Interest expense, net		1,157			905			2,289			2,621
Other loss (income), net		27			8,358			1			(934	)
Loss before income taxes		(955	)		(17,824	)		(5,364	)		(16,249	)
Income tax expense		776			585			527			659
Net loss	$	(1,731	)	$	(18,409	)	$	(5,891	)	$	(16,908	)

Loss per share, basic and diluted	$	(0.04	)	$	(0.42	)	$	(0.13	)	$	(0.39	)

Weighted average ordinary shares outstanding, basic and diluted		45,390,559			44,147,701			45,262,413			43,568,197

⁽¹⁾	Excludes depreciation and amortization expense.

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

GAN LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)

(in thousands)

	2024			2023			2024			2023
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023

Net loss	$	(1,731	)	$	(18,409	)	$	(5,891	)	$	(16,908	)
Other comprehensive loss, net of tax
Foreign currency translation adjustments		(327	)		155			(1,094	)		1,121
Comprehensive loss	$	(2,058	)	$	(18,254	)	$	(6,985	)	$	(15,787	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

GAN LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ (DEFICIT) EQUITY (UNAUDITED)

(in thousands, except share amounts)

													Accumulated			Total
							Additional						Other			Shareholders’
	Ordinary Shares						Paid-in			Accumulated			Comprehensive			Equity
	Shares			Amount			Capital			Deficit			Loss			(Deficit)

Balance at January 1, 2024		45,071,578		$	451		$	336,552		$	(309,305	)	$	(32,302	)	$	(4,604	)
Net loss		—			—			—			(4,160	)		—			(4,160	)
Foreign currency translation adjustments		—			—			—			—			(767	)		(767	)
Share-based compensation		—			—			840			—			—			840
Restricted share activity		476,419			4			(5	)		—			—			(1	)
Issuance of ordinary shares upon exercise of stock options		5,778			—			—			—			—			—
Repurchase of restricted shares to pay tax liability (Note 7)		(167,833	)		(2	)		(229	)		—			—			(230	)
Balance at March 31, 2024		45,385,942		$	454		$	337,159		$	(313,465	)	$	(33,069	)	$	(8,922	)
Net loss		—			—			—			(1,731	)		—			(1,731	)
Foreign currency translation adjustments		—			—			—			—			(327	)		(327	)
Share-based compensation		—			—			831			—			—			831
Restricted share activity		8,195			—			—			—			—			—
Issuance of ordinary shares upon exercise of stock options		2,234			—			—			—			—			—
Repurchase of restricted shares to pay tax liability (Note 7)		(2,420	)		—			(3	)		—			—			(3	)
Balance at June 30, 2024		45,393,951		$	454		$	337,987		$	(315,196	)	$	(33,396	)	$	(10,151	)

													Accumulated			Total
							Additional						Other			Shareholders’
	Ordinary Shares						Paid-in			Accumulated			Comprehensive			Equity
	Shares			Amount			Capital			Deficit			Loss			(Deficit)

Balance at January 1, 2023		42,894,211		$	429		$	328,998		$	(274,861	)	$	(33,798	)	$	20,768
Net income		—			—			—			1,501			—			1,501
Foreign currency translation adjustments		—			—			—			—			966			966
Share-based compensation		—			—			1,382			—			—			1,382
Restricted share activity		377,944			4			-			—			—			4
Repurchase of restricted shares to pay tax liability (Note 7)		(49,157	)		(1	)		(78	)		—			—			(79	)
Issuance of ordinary shares upon ESPP purchases		57,960			1			64			—			—			65
Balance at March 31, 2023		43,280,958		$	433		$	330,366		$	(273,360	)	$	(32,832	)	$	24,607
Balance		43,280,958		$	433		$	330,366		$	(273,360	)	$	(32,832	)	$	24,607
Net loss		—

SEC Form 10-Q filed by GAN Limited