Smurfit-backed gambling and gaming technology company Gan has informed investors that it has discovered errors in its preliminary financial results that could force it to add over $5 million to its losses to correct.
In a filing with the United States Securities and Exchange Commission (SEC), signed by Gan’s Chief Financial Officer Karen Flores, Nasdaq-listed Gan announced that it had released unaudited 2021 results in March, showing a net loss of $24.9 million included US dollars.
However, due to some “mistakes,” it has tentatively stated that its net loss for the year should be as high as $30.6 million.
Due to the errors found, Gan said it was unable to file its annual report with the Securities and Exchange Commission within the required time without “unreasonable effort or expense.”
Gan said it needed more time to complete its annual report as some unaudited financial statements “should be restated and no longer relied upon.”
Gan, whose chief executive officer is Dermot Smurfit Jr., added that management has identified a “material weakness” in its internal control over financial reporting at the end of three quarters in 2021. This refers to the “completeness and accuracy of the accounting”. for software development costs and the timing of revenue recognition if performance obligations were ongoing, leading to misstatements.
“The Company’s preliminary analysis indicates that after adjusting for these errors, net loss for the year ended December 31, 2021 will be between approximately $30 million and $30.6 million,” the filing reads.
“There can be no assurance that the additional reviews and procedures related to the release of the Company’s annual report for the year ended December 31, 2021 will not result in information that may require further adjustments that adversely affect those previously results announced would impact operations.”
In Gan’s preliminary earnings release, the company said revenue for 2021 was $125.4 million, up from $35.2 million a year earlier.
Gan said its growth was fueled by its January 2021 acquisition of Coolbet.
https://www.independent.ie/business/irish/smurfit-backed-gaming-tech-firm-gan-to-revise-loss-errors-41533578.html Smurfit-backed gaming tech company Gan revises ‘loss bug’