Newgioco Group Inc (NASDAQ:NWGI), a global sports betting and interactive gaming technology company, told shareholders on Wednesday that it has completed a $10 million financing, will eliminate its debt and is expanding its footprint in the US.
The Toronto-based company which operates in 12 countries, with licensed online and land-based gaming operations in Italy, said that it successfully closed a $10 million offering on August 17. The company said it used the proceeds to repay a total of $1,495,395 which includes principal and accrued interest. It now has around $484,795 to repay which it expects to clear by September 28. Newgioco said it currently has a “strong balance” with net cash and cash equivalents of $10 million and “no significant debt remaining.”
The company also said it has established a Delaware subsidiary, Elys Gameboard Technologies LLC and has engaged a counsel to start licensing on a state-by-state basis for its US operations. The group said it has completed “the design, coding and testing” for its new Americanized platform for providing sports betting solutions to US gaming operators.
The new Elys US platform differs from its European sportsbook by offering all US sports events, including specialized feeds providing competitive odds on college sports events, as well as in-game betting on all channels including self-serving betting kiosks, and tablets or mobile phones.
For the second quarter ended June 30, 2020, the group saw selling expenses decrease to $4 million, a drop of 36.5%, compared to selling expenses of around $6.3 million for the same period a year earlier.
“The first six months of 2020 presented considerable and surprising challenges since our foundational market in Italy was one of the first nations in the world hit with the coronavirus (COVID-19) crisis,” Newgioco Group CEO Michele Ciavarella said in a statement.
“Despite the suspension of all sports events as well as the temporary closure of all our land-based distribution in Italy for more than two-thirds of the 2Q, 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 basis of about $0.9 million in 2020, compared to about $1.9 million in 2019,” he added.
The Newgioco boss said these deflections were within its cash maintenance range, and the company did not require emergency relief beyond government provided employment benefits.
“The recent offering transaction strengthened our balance sheet and should provide us readily available resources to execute on our near-term go-to-market strategy in the US which we plan to commence in 2020,” he added.
Contact the author Uttara Choudhury at [email protected]
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