In an SEC filing online gaming business GAN announced that it would be “unable to file” its annual report within the proscribed time due to two last minute deals close to the 31 March filing date.
By requesting relief from the SEC, the company hopes to receive a stay on the regulatory requirement, as it will not be able to complete the filings “without unnecessary effort or expense”.
The business said that its audit committee requires the time to complete the review of the document – a result of additional procedures that have been imposed on the company by the two agreements. If the business is successful in seeking relief the company will receive a 15-day extension on its filing date, which GAN said that it “anticipates” would be sufficient to complete the report.
Last minute agreements
On 29 March, GAN said that it amended and restated a content licensing agreement with a third party content provider which meant a reduced content term ending on 31 March 2024, as well as a $15m reduction in fees. Under the new deal, the third-party company has bought 1.25m of the business’s shares.
The second deal – which occurred on 30 March – concerned a master gaming services agreement with Stations Casino LLC to launch a number of products at the operator’s properties through on-premises and state-wide mobile solutions in Nevada and self-service kiosks. The agreement included provisions that would mean that GAN would have to make a payment to Stations if there was a change in control of the company.
“The pendency of these material subsequent events during the preparation of our financial statements and the timing of the transaction so close to the March 31, 2023 filing date, have resulted in additional procedures for the company,” said GAN. “The compressed amount of time to complete those procedures has resulted in our inability to timely finalise the 2022 financial statements.”
At the end of March, the company announced that it would be conducting a strategic review of the business in order to maximise shareholder revenue. GAN said that the process would investigate a “range of strategic alternatives” that may improve the company’s position.
While the business said it would like to complete the assessment in a short time frame, GAN emphasised that there are no assurances that the review will end in business opting to pursue or complete a transaction, and there is no timetable for the completion of the process.
On 3 April, GAN-owned sports betting and igaming brand Coolbet exited the Ontario regulated market after a year of operations. The business acquired the Estonian company in January 2021 for $175.9m in cash and stock.
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