Newgioco Group, Inc. (“Newgioco” or the “Company”) (Nasdaq:
NWGI), a global sports betting and interactive gaming technology
company providing a cutting-edge fully integrated, omni-channel
sports betting technology, is pleased to provide a corporate update
to shareholders and investors.
Completion of $10 Million Follow-on Offering
During the first 6 months of fiscal 2020, the Company filed its
Registration Statement (333-233768) on Form S-1, that was declared
effective by the Securities and Exchange Commission on August 12,
2020. As previously announced, the Company successfully closed on
the $10 million offering on August 17, 2020.
Use of Proceeds and Future
Plans
Elimination of Debt
On August 20 and 21, 2020, the Company re-paid a total of
$1,495,395 and CDN$1,388,088, which includes principal and accrued
interest paid in full to the payment date. The Company has
approximately $484,795 and CDN$394,479 that includes principal and
accrued interest remaining, and which it expects to pay out by
September 28, 2020. The Company currently has a strong balance with
net cash and cash equivalents of approximately $10 million and no
significant debt remaining.
U.S. Expansion Plans
As previously announced, the Company established a Delaware
subsidiary named Elys Gameboard Technologies, LLC and has engaged
U.S. gaming counsel to commence licensing on a state by state basis
for U.S. operations. The Company intends to use remaining proceeds
to continue to develop and execute on our U.S. market
expansion.
The Company has also completed the design, coding and testing of
its all new “Americanized” platform for providing sports betting
solutions to gaming operators throughout the U.S.A. The Company’s
new Elys U.S. platform differs functionally from its European
sports book by offering seamless integration of all U.S. sports
events including the ability to integrate specialized feeds
providing highly competitive odds on college sports events as well
as in-game betting on all channels including land-based POS,
self-serving betting kiosks and mobile or tablet. The Company’s
reconfigured Elys U.S. offers a simplified, easy to use customer
interface to facilitate rapid betting while maintaining the
integrity of Elys’ innovative bet risk management system and
modular architecture.
The Company previously reported that it has commenced the Gaming
Laboratories International (“GLI”) certification of its Elys
Gameboard sports betting technology on July 15, 2020. The Company
plans to certify all components of Elys, including GLI-33 for
point-of-sale (POS) betting within the coming days, followed by
GLI-20 for the kiosk and the mobile/tablet component shortly
thereafter. The full GLI certification on all components should
allow Newgioco to operate Elys in virtual every corner of the
United States.
Summary of Quarter report for the period ended June 30,
2020
During Q2, Newgioco reported year over year decrease in turnover
(betting handle) by about 5.3% to approximately $94.1 million from
approximately $99.3 million for the three months ended June 30,
2020 and 2019 respectively and by about 11.1% to approximately
$210.0 million from approximately $236.2 million for the six months
ended June 30, 2020 and 2019 respectively. The result of lower
turnover was a decrease in revenue of about 47.3% to approximately
$4.8 million from approximately $9.1 million for the three months
ended June 30, 2020 and 2019, respectively, and by about 18.5% to
approximately $15.0 million from approximately $18.4 million for
the six months ended June 30, 2020 and 2019, respectively. Turnover
and revenue was directly impacted by the temporary shutdown of
physical locations and suspension of sporting events due to the
global COVID-19 crisis.
Commensurate with the decrease in turnover and revenue, the
Company’s selling expenses decreased by about 36.5% to
approximately $4.0 million from approximately $6.3 million for the
three months ended June 30, 2020 and 2019, respectively, and by
about 25.6% to approximately $10.2 million from approximately $13.7
million for the six months ended June 30, 2020 and 2019,
respectively. The reduction in selling expenses had a normalizing
effect on trading results. The Company also saw a reduction in
overall expenses to approximately $6.8 million from approximately
$9.6 million for the three months ended June 30, 2020 and 2019,
respectively, and to approximately $15.9 million from approximately
$20.2 million for the six months ended June 30, 2020 and 2019,
respectively. Net Loss increased by about 42% to approximately $2.5
million from approximately $1.8 million for the three months ended
June 30, 2020 and 2019, respectively which was primarily due to a
one-time non-cash expense on the issuance of warrants to debenture
holders that extended the maturity date of their debentures and the
expenses associated with preparation of the Company’s public
offering that was closed on August 17, 2020, while the net loss for
the six months ended June 30, 2020 and 2019, respectively was
reduced by 51.6% to approximately $2.4 million from approximately
$4.9 million due to disciplined cost containment measures employed
by management.
“The first six months of 2020 presented considerable and
surprising challenges being that our foundational market in Italy
was one of the first nations in the world hit with the COVID-19
crisis,” stated Michele (Mike) Ciavarella, CEO Newgioco Group.
“Despite the severe economic impact caused by the COVID-19 to our
customers, the suspension of all sports events as well as the
temporary closure of all of our land-based distribution in Italy
for more than two-thirds of the second quarter, Newgioco performed
exceptionally well compared to our industry peer group. We
experienced an overall short-term and sustainable operating loss of
about $2 million compared to about $0.5 million last year on a
three-month year over year basis, however, we also managed an
overall year over year improvement in operating loss on a six month
bases of about $0.9 million in 2020 compared to about $1.9 million
in 2019. These deflections were well within our cash maintenance
range and the Company did not require emergency relief beyond
government provided employment benefits. The recent offering
transaction immediately strengthened our balance sheet and should
provide us readily available resources to execute on our near-term
go-to-market strategy in the U.S. which we plan to commence in
2020.
“Elys’ modular architecture, that was design-built in the
challenging regulated Italian market, is the ideal solution for
U.S. casino and franchise operators such as restaurant and c-store
chains that own multiple locations and that wish to offer sports
betting throughout their network while controlling the bet risk
from a centralized dashboard,” continued Mr. Ciavarella.
The Company’s full financial report can be found on EDGAR
through the following link: Nasdaq:NWGI SEC Filings.
About Newgioco Group, Inc.
Newgioco Group, Inc., is a global leisure gaming technology
company operating in 12 countries worldwide, with fully licensed
online and land-based gaming operations in Italy. The Company’s
innovative alternative wagering system services online operators,
resort concept casinos, retail neighborhood betting establishments
and franchise distribution networks.
Newgioco offers its clients a full suite of leisure gaming
products and services, such as sports betting, esports, virtual
sports, online casino, poker, bingo, interactive games and slots.
Additional information is available on our corporate website at
www.newgiocogroup.com.
Investors may also find us on Facebook® and follow us on Twitter
@NWGI_gaming.
Forward-Looking Statements
This press release contains certain forward-looking statements
within the meaning of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These statements are
identified by the use of the words “could,” “believe,”
“anticipate,” “intend,” “estimate,” “expect,” “may,” “continue,”
“predict,” “potential,” “project” and similar expressions that are
intended to identify forward-looking statements and includes, among
other aspects, statements regarding the intended use of remaining
proceeds to continue to develop and execute on our U.S. market
expansion, the recent offering transaction providing us readily
available resources to execute on our near-term go-to-market
strategy in the U.S. which we plan to commence in 2020 and plans to
certify all components of Elys, including GLI-33 for point-of-sale
(POS) betting within the coming days, followed by GLI-20 for the
kiosk and the mobile/tablet component shortly thereafter. These
forward-looking statements are based on management's expectations
and assumptions as of the date of this press release and are
subject to a number of risks and uncertainties, many of which are
difficult to predict that could cause actual results to differ
materially from current expectations and assumptions from those set
forth or implied by any forward-looking statements. Important
factors that could cause actual results to differ materially from
current expectations include, among others, the Company’s ability
to continue to develop and execute on our U.S. market expansion,
the ability to execute on the Company’s near-term go-to-market
strategy in the U.S. and to commence the strategy in 2020, the
ability to certify all components of Elys, including GLI-33 for
point-of-sale (POS) betting within the coming days, followed by
GLI-20 for the kiosk and the mobile/tablet component shortly
thereafter, the duration and scope of the COVID-19 outbreak
worldwide, including the impact to the state and local economies,
and the risk factors described in the Company’s Annual Report on
Form 10-K for the year ended December 31, 2019 and its subsequent
filings with the U.S. Securities and Exchange Commission, including
subsequent periodic reports on Form 10-Q and current reports on
Form 8-K. The information in this release is provided only as of
the date of this release, and the Company undertakes no obligation
to update or revise publicly any forward-looking statements,
whether as a result of new information, future events or otherwise,
after the date on which the statements are made or to reflect the
occurrence of unanticipated events, except as required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200826005136/en/
Newgioco Group, Inc. Michele Ciavarella, Chief Executive Officer
investor@newgiocogroup.com
Newgioco (NASDAQ:NWGI)
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