What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-12 compared with 2021-08-12 · 527 added, 944 removed, 404 unchanged (78% of the section changed)

10 unchanged sentences

For definitions of the term Forward-Looking Statements, see the definitions provided in the Cautionary Note Regarding Forward-Looking

Statements at the start of the Quarterly Report on Form 10-Q for the period ended June 30, 2021.

Governments in all of the major jurisdictions

in which our land-based customers operate have now reopened land-based venues.

As of April 12, 2021, in the United Kingdom, licensed

betting offices in England and Wales have reopened with certain restrictions including operating two of four gaming machines per

venue, limited dwell time of 15 minutes, as well as a maximum of two visits per day per patron and an 8:00pm curfew.

These restrictions

remained in place until May 17, 2021.

Gaming machines

in pubs, holiday parks, motorway services, Scottish betting offices and adult gaming centers across the United Kingdom reopened on

May 17, 2021 with social distancing restrictions in place.

Statements at the start of the Annual Report on Form 10-K for the year ended December 31, 2020.

in all of the major jurisdictions in which our land-based customers operate have now reopened land-based venues.

As of April 12, 2021,

in the United Kingdom, licensed betting offices in England and Wales have reopened with certain restrictions including operating two

of four gaming machines per venue, limited dwell time of 15 minutes, as well as a maximum of two visits per day per patron and an 8:00pm

These restrictions remained in place until May 17, 2021.

Gaming machines in pubs, holiday parks, motorway services, Scottish

betting offices and adult gaming centers across the United Kingdom reopened on May 17, 2021, with social distancing restrictions in place.

All social distancing restrictions were removed in England as of July 19, 2021.

As of August 9, 2021 no restrictions remain in the United Kingdom.

remains an element of social distancing in venues in Greece and in Italy, there are restrictions in place that state only fully vaccinated

people can enter our venues.

It remains uncertain as to whether and when further restrictions or closures could happen in each jurisdiction

and how long they may last.

As of August 9, 2021, no restrictions remain in the United

There remains an element of social distancing in venues in Greece and in Italy, there are restrictions in place that state only

fully vaccinated people can enter our venues which came into place in Italy on August 20, 2021, and in Greece on September 13, 2021.

It remains uncertain as to whether and when further restrictions or closures could happen in each jurisdiction and how long they may

Reporting Recharacterizations

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of our revenue is derived from, and non-current assets attributable to, Greece, Canada, Italy and the rest of the world.

the three months ended June 30, 2021, we earned approximately 72% of our revenue in the UK, 9% in Greece, 2% in Italy and the remaining

17% across the rest of the world.

During the three months ended June 30, 2020, we earned approximately 59%, 17%, 9% and 15% of our revenue

in those regions, respectively.

the six months ended June 30, 2021, we earned approximately 64% of our revenue in the UK, 10% in Greece, 3% in Italy and the remaining

23% across the rest of the world.

During the three months ended June 30, 2020, we earned approximately 70%, 11%, 5% and 14% of our revenue

in those regions, respectively.

of June 30, 2021, our non-current assets (excluding goodwill) attribution approximately 79% in the UK, 11% in Greece, 2% in Italy, and

the three months ended September 30, 2021, we earned approximately 76% of our revenue in the UK, 8% in Greece and the remaining 16% across

the rest of the world.

During the three months ended September 30, 2020, we earned approximately 78%, 10% and 12% of our revenue in those

regions, respectively.

the nine months ended September 30, 2021, we earned approximately 70% of our revenue in the UK, 9% in Greece and the remaining 21% across

the rest of the world.

During the nine months ended September 30, 2020, we earned approximately 73%, 10% and 17% of our revenue in those

regions, respectively.

of September 30, 2021, our non-current assets (excluding goodwill) attribution approximately 80% in the UK, 11% in Greece and

9% across the rest of the world.

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functional currency into our functional currency, is reported separately in Accumulated Other Comprehensive Income.

the three months ended June 30, 2021, we derived approximately 28% of our revenue from sales to customers outside the UK, compared to

41% during the three months ended June 30, 2020.

the six months ended June 30, 2021, we derived approximately 36% of our revenue from sales to customers outside the UK, compared to 30%

during the six months ended June 30, 2020.

the three months ended September 30, 2021, we derived approximately 24% of our revenue from sales to customers outside the UK, compared

to 22% during the three months ended September 30, 2020.

the nine months ended September 30, 2021, we derived approximately 30% of our revenue from sales to customers outside the UK, compared

to 27% during the nine months ended September 30, 2020.

the section “Results of Operations” below, currency impacts shown have been calculated as the current-period average GBP:USD

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currency (USD).

During the three-month periods ended June 30, 2021 and June 30, 2020, the average GBP:USD rates were 1.40 and 1.24, respectively.

During the six-month periods ended June 30, 2021 and June 30, 2020, the average GBP:USD rates were 1.39 and 1.27, respectively.

During the three-month periods ended September 30, 2021 and September 30, 2020, the average GBP:USD rates were 1.38 and

1.29, respectively.

During the nine-month periods ended September 30, 2021 and September 30, 2020, the average GBP:USD rates were 1.38

and 1.28, respectively.

following discussion and analysis of our results of operations has been organized in the following manner:

discussion and analysis of the Company’s results of operations for the three-month period and six-month period ended June 30,

discussion and analysis of the Company’s results of operations for the three-month period and nine-month periods ended September

30, 2021, compared to the same periods in 2020;

a discussion and analysis of the results of operations of our Gaming business segment for the three-month period and six-month period ended June 30, 2021, compared to the same periods in 2020, including KPI analysis;

discussion and analysis of the results of operations of our Virtual Sports business segment for the three-month period and six-month

period ended June 30, 2021, compared to the same periods in 2020, including KPI analysis;

discussion and analysis of the results of operations of our Interactive business segment for the three-month period and six-month

period ended June 30, 2021, compared to the same periods in 2020, including KPI analysis;

discussion and analysis of the results of operations of our Leisure business segment for the three-month period and six-month period

ended June 30, 2021, compared to the same periods in 2020, including KPI analysis.

discussion and analysis of the results of operations for each of the Company’s segments (Gaming, Virtual Sports, Interactive

and Leisure) for the three-month period and nine-month periods ended September 30, 2021, compared to the same periods in 2020, including

KPI analysis.

the discussion and analysis below, certain data may vary from the amounts presented in our consolidated financial statements due to rounding.

Months ended June 30, 2021, compared to Three Months ended June 30, 2020

the Three-Month

Unaudited June 30,

Total Variance

all reported variances, refer to the overall company and segment tables shown below.

All variances discussed in the overall company and

segment results are on a functional currency (at constant rate) basis, which excludes the impact of any changes in foreign currency exchange

Company Results

and Nine Months ended September 30, 2021, compared to Three and Nine Months ended September 30, 2020

the Three-Month Period ended

the Nine-Month Period ended

Unaudited September 30,

(In millions)

Attributable to Currency Movement

on a Functional currency basis

Functional Currency Variance %

Reported Variance %

Attributable to Currency Movement

on a Functional currency basis

Functional Currency Variance %

Reported Variance %

Total revenue

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Other finance income (expense)

Total other income (expense), net

Net Income (loss) from continuing operations before income

Loss from equity method investee

income (expense), net

Net Income (loss) from continuing

operations before income taxes

Income tax expense

Net Income (Loss)

Exchange Rate - $ to £

reported revenue for the three months ended June 30, 2021, increased by $25.9 million, or 166%, to $41.5 million on a reported basis.

This included an increase from Gaming of $12.0 million, Leisure of $10.9 million, Interactive of $2.4 million and Virtual Sports of $0.6

Favorable currency movements accounted for a $4.7 million impact.

On a functional currency (at constant rate) basis, revenue

increased by $21.2 million, or 136%, as detailed below:

revenue increased by $10.2 million, comprised of an increase in Service revenue of $7.3 million and an increase in Product sales

of $2.9 million.

The increase in Service revenue was primarily due to reopening of retail venues.

Sports revenue decreased by $0.4 million, or 4.6%.

This decrease included a $1.0 million decrease in Online Virtuals, $0.7 million

of which was due to a one-time sales in the prior period, which itself was driven by the lack of live sports.

was partially offset by growth in Retail Virtuals of $0.6 million as retail venues reopened during the period.

revenue increased by $1.7 million, or 50.0%.

This growth was driven by the addition of new customers and territories and the consistent

launches of new high-quality content.

revenue increased by $9.7 million, comprised of an increase in Service revenue of $9.3 million and an increase in Product sales of

$0.4 million.

The increase in revenue was due to the reopening of venues during the period.

“Segments Results” below for a more detailed explanation of the significant changes in our components of revenue within the

individual segment results of operations.

Reported Revenue by Segment

the three and nine months ended September 30, 2021, revenue on a functional currency (at constant rate) basis increased by $12.4 million

and $3.2 million, or 20.6% and 2.5%, respectively.

The three-month increase included an increase from Leisure of $13.8 million, Interactive

of $2.2 million and Virtual Sports of $1.6 million, partly offset by a decrease in Gaming of $5.1 million, driven by $9.4 million VAT-related

revenue in the prior period.

The nine-month increase included an increase from Leisure of $6.9 million and Interactive of $6.5 million,

offset by decreases from Gaming of $9.5 million and Virtual Sports of $0.7 million.

of Sales, excluding depreciation and amortization

of Sales, excluding depreciation and amortization, increased by $7.9 million, or 280%, on a reported basis, to $10.7 million, including

the impact of $1.2 million from unfavorable currency movements.

Of this increase, $5.5 million was attributable to cost of Service and

of Sales, excluding depreciation and amortization for the three and nine months ended September 30, 2021, increased by $3.2 million and

$0.3 million, or 22.7% and 31.0% respectively.

Of the three-month increase, $2.1 million was attributable to cost of Service and

$1.1 million was attributable to cost of Product sales.

On a functional currency (at constant rate) basis, cost of sales increased by

$6.7 million, or 238%, as detailed below:

cost of sales increased by $4.1 million, comprised of an increase in Service costs of $2.2 million and a $1.9 million increase in

Product costs.

This increase was driven primarily by the reopening of retail venues.

Sports cost of sales decreased by $0.4 million, or 45.0%, driven by a one-off sale in the prior period comparable.

cost of sales increased by $0.4 million, or 112%.

This increase was driven by the revenue growth in Interactive.

cost of sales increased by $2.5 million, comprised of an increase in Service costs of $2.4 million and an increase in Product costs

of $0.2 million, which was driven primarily by the reopening of retail venues.

Of the nine-month increase, $0.4 million was attributable to cost of Service.

general and administrative expenses

Selling, general and administrative (“SG&A”)

expenses increased by $14.0 million, or 125%, on a reported basis, to $25.1 million.

This included $2.9 million of unfavorable currency

On a functional currency (at constant rate basis), SG&A increased by $11.1 million, or 100%.

This increase was driven

by staff returning from furlough as retail venues began to reopen ($6.6 million), additional fleet costs as staff returned to work ($0.7

million), additional distribution costs as markets started to reopen ($0.6 million), plus an increase in costs of $1.2 million

for the provision following settlement with the Italian Tax Authorities in respect of an audit of the Italian Branch of Inspired Gaming

(International) Limited for the period 2015-2017 in respect of the historic VAT treatment of supplies.

The settlement includes an amount

of $1.5 million in relation to VAT (of which $0.9 million had previously been provided for) plus interest of $0.3 million and penalties

in the amount of $0.3 million which were levied at the lowest rate applicable under the relevant regime.

As well as refinancing costs

of $0.6 million.

the three months ended June 30, 2021, the Company recorded an expense of $3.4 million with respect to outstanding awards.

Of this expense,

$1.9 million related to awards made under the 2021 Plan (including $1.4 million of upfront recognition) and $1.5 million related

to awards made under the 2018 Plan.

During the three months ended June 30, 2020, the charge for stock-based compensation was $1.0 million.

Of this expense, $0.9 million was related to awards made under the 2018 Plan and $0.1 million was related to costs from awards made under

a 2016 long term incentive plan.

general and administrative (“SG&A”) expenses for the three and nine months ended September 30, 2021 increased by $5.8

million and $2.1 million, or 27.2% and 3.5% respectively.

The three-month increase was driven by all staff returning from furlough for

the whole period ($3.6 million), additional other employee costs ($0.4 million), additional IT costs due to returning staff ($0.3 million)

and lower labor capitalization ($0.3 million).

The nine-month increase was driven by staff returning from furlough and additional distribution

costs as markets and retail venues reopened.

$1.2 million of the additional cost in the nine-month period was for the provision following

a settlement with the Italian Tax Authorities in respect of an audit of the Italian Branch of Inspired Gaming (International) Limited

for the period 2015-2017 in respect of the historic VAT treatment of supplies.

the three months and nine months ended September 30, 2021, the Company recorded an expense of $3.8 million and $8.6 million respectively,

with respect to outstanding awards.

The expense for the three-month and nine-month periods included $1.2 million and $4.1 million respectively,

related to awards made under the 2018 Plan, $2.4 million and $4.2 million (including $1.4 million of upfront recognition) respectively

related to awards made under the 2021 Plan and $0.2 million related to the vesting of awards from the 2018 Plan.

The charge for stock-based

compensation for the three months and nine months ended September 30, 2020, was $1.1 million and $3.1 million, respectively.

for the three-month and nine-month periods included $1.1 million and $2.9 million, respectively, that

were related to awards made under the 2018 Plan The nine-month period ended September 30, 2020, also included $0.2 million, related

to costs from awards made under a 2016 long term incentive plan.

and integration related transaction expenses

and integration related transaction expenses decreased by $1.1 million to $0.1 million, on a reported basis.

Both the 2021 and 2020 expenses

were primarily integration costs in relation to the NTG acquisition.

and integration related transaction expenses decreased for both the three-month and nine-month periods by $1.2 million to zero and by

$4.4 million to $1.5 million, respectively.

Both the 2021 and 2020 expenses were primarily integration costs in relation to the NTG acquisition.

and amortization

and amortization decreased by $1.4 million, or 10.7%, to $11.9 million on a reported basis.

This included the impact of unfavorable currency

movements of $1.3 million.

On a functional currency (at constant rate) basis, depreciation and amortization decreased by $2.7 million,

or 20.7%, driven primarily by a decrease of $1.9 million in Gaming and $0.8 million in Leisure.

operating loss

the period, net operating loss was $9.7 million compared to a net operating loss of $13.9 million in the prior period.

The net operating

loss improvement of $4.2 million was attributable to the increase in revenue due to the reopening of retail venues across the business

as well as growth in Interactive.

This net operating loss variance also included a $1.1 million unfavorable impact from foreign currency

interest expense increased by $14.1 million in the three months ended June 30, 2021, to $22.2 million, on a reported basis

due to a $14.4 million write-off of previously capitalized debt fees following the refinancing in May 2021, a $0.7 million increase

in debt interest and a $0.3 million exchange rate impact.

These were offset by a $1.0m write-off of debt fees in the three months

ended June 30, 2020 and a $0.4 million reduction in revolver interest.

and amortization decreased for both the three-month and nine-month periods by $3.5 million and $6.7 million respectively, driven primarily

by a decrease in Gaming and Leisure due to certain assets being fully written down.

operating income/(loss)

the three-month period, net operating income was $14.9 million, an increase of $5.7 million.

This was attributable to the increase in

revenue, despite the $9.2 million of VAT-related income recorded in the prior period.

The increase was due to retail venues across the

majority of the business being open for the entire period, with social distancing restrictions being removed, growth in Leisure driven

by Leisure parks, as well as growth in Interactive and Online Virtuals.

During the nine-month period, net operating loss was $7.0 million

which improved by $7.1 million.

This was attributable to the increase in our Interactive and Online Virtuals segments as well as our

Leisure segment, as well as the decrease in acquisition and integration related transaction expenses and depreciation and amortization.

interest expense decreased by $1.5 million in the three-month period, this decrease was due to a $0.6 million reduction in

the level of debt fee amortization after the refinance in May 2021, a $0.2million lower revolver interest charge and a

$0.5 million impact from currency movement.

In the nine-month period net interest expense increased by $12.7 million.

This was driven by a $14.4 million increase due to the write-off of previously capitalized debt fees following the refinancing in

May 2021 and a $2.0m higher debt interest charge, offset by a $3.2 million currency movement.

in fair value of warrant liability

in fair value of warrant liability for the three months ended June 30, 2021, resulted in a $10.5 million charge.

The charge was related

to changes in liability accounting pursuant to the statement made by the Office of Chief Accountant of the SEC, released on April 12,

2021, informing market participants that warrants issued by special purpose acquisition companies may require classification as a liability

of the entity measured at fair value, with changes in fair value each period reported in earnings.

The $10.5 million charge reflects

the increase in the value of the warrants, driven by increases in the Company’s share price from $9.29 on March 31 st ,

2021 to $12.75 on June 30 th , 2021.For the three months ended June 30, 2020, the change in fair value resulted in a $1.7 million

in fair value of warrant liability for the three and nine months ended September 30, 2021, resulted in a $17.3 million and $3.8 million

credit respectively.

The credit for both periods was related to changes in liability accounting pursuant to the statement made by the

Office of Chief Accountant of the SEC, released on April 12, 2021, informing market participants that warrants issued by special purpose

acquisition companies may require classification as a liability of the entity measured at fair value, with changes in fair value each

period reported in earnings.

The credits for the three-month and nine-month periods reflect the decrease in the value of the warrants,

driven by a decrease in the Company’s share price and a decrease in the time to warrant expiry, respectively.

During the three-month

period, the Company’s share price decreased from $12.75 on June 30, 2021, to $11.70 on September 30, 2021.

Although the Company’s

share price increased during the nine-month period, the time to expiry for the warrants decreased from approximately one year to three

months which drove the decrease in the value of the warrants.

finance income

finance income for the three months ended June 30, 2021, resulted in a $1.2 million charge compared to a $2.5 million charge in

the three months ended June 30, 2020.

This variance was driven by movements in the retranslation with respect to the principal balance

of our senior debt facilities.

effective tax rate for the period ended June 30, 2021, was 0.8% and our effective tax rate for the period ended June 30, 2020, was 0.2%.

the period, net loss was $43.8 million compared to a net loss of $26.2 million in the prior period.

On a functional currency (at constant

rate) basis, net loss increased by $12.6 million, primarily due to the increase in interest expense ($11.5 million) and

increase in change in fair value of warrant liability ($7.6 million), partly offset by the decrease in net operating loss

($5.3 million).

Months ended June 30, 2021, compared to Three Months ended June 30, 2020 – Gaming Segment

finance income for the three and nine months ended September 30, 2021, resulted in a $0.3 million credit and a $5.5 million credit, respectively.

The three-month credit was in line with the prior year but the nine month credit was $11.4 million better than the corresponding period

in the prior year due to movements in the retranslation with respect to the principal balance of our senior debt facilities in place

at that time.

effective tax rate for the three and nine months ended September 30, 2021, was (1.1%) and (0.3%), respectively.

Our effective

tax rate for the three and nine months ended September 30, 2020, was (6.9%) and 0.9%, respectively.

Income/ (loss)

the three-month period, net income was $25.0 million, an increase of $22.8 million, primarily due to the increase in net

operating income ($5.7 million), the increase in credit of the change in fair value of warrant liability ($16.0 million) and a decrease

in net interest expense ($1.5 million).

During the nine-month period, net loss was $35.5 million, an improvement of $4.1

million, primarily due to the increase in net operating income ($7.1 million) and the increase in other finance income ($11.2 million),

partly offset by the increase in net interest expense ($12.7 million).

Results ( for the three and nine months ended September 30, 2021, compared to the three and nine months ended September 30, 2020)

generate revenue from our Gaming segment through the selling and rental of our gaming machines.

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the net win performance of the machines and the net win percentage that we receive pursuant to our contracts with our customers.

Segment, Key Performance Indicators

For the Three-Month Period ended

Key Performance Indicators

the Three-Month Period ended

the Nine-Month Period ended

End of period installed base (# of terminals)

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Service Only - Average installed base (# of terminals)

Customer Gross Win per unit per day (1) (2)

Customer Net Win per unit per day (1) (2)

Customer Gross Win per unit

per day (1) (2)

Customer Net Win per unit per

Inspired Blended Participation Rate

4 unchanged sentences

Average selling price per terminal

all Gaming terminals in which the company takes a participation revenue share across all territories

all days of the period, including the days during which the Gaming terminals were not operating due to COVID-19, as many of our customers’

venues were closed during a portion of the period (the “COVID-19 closures”).

all SBG terminals in which the company takes a participation revenue share across all territories

refer to our Annual Report on Form 10-K for the year ended December 31, 2020, for definitions of terms used in the above table.

Segment, Recurring Revenue

Recurring Revenue

forth below is a breakdown of our Gaming recurring revenue.

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and fixed rental revenue.

For the Three-Month Period ended

the Three-Month Period ended

the Nine-Month Period ended

(In £ millions)

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Gaming Recurring Revenue as a % of Total Gaming Revenue †

There was no VAT-related income in the period

Total Gaming excluding VAT related-revenue

Gaming Recurring Revenue as a % of Total Gaming Revenue (excluding VAT

related-revenue)

not reflect VAT-related revenue for the three-month period or nine-month period, there was no VAT-related income in the three-month

period for 2021

Gaming Revenue for the nine-month period ended September 30, 2021, includes the £2.3 million for VAT-related revenue, which

is not reflected in Gaming Recurring Revenue for that period.

Excluding VAT-related revenue, Gaming Recurring Revenue was 66.4% of

Total Gaming Revenue for such period.

refer to our Annual Report on Form 10-K for the year ended December 31, 2020, for definitions of terms used in the above table.

Segment, Service Revenue by Region

Service Revenue by Region

forth below is a breakdown of our Gaming service revenue by geographic region.

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See “Gaming Segment Revenue” below for a discussion of gaming service revenue between the periods under review.

Service Revenue by Region

For the Three-Month Period ended

the Three-Month Period ended

the Nine-Month Period ended

(In millions)

Unaudited June 30,

Variance 2021 vs 2020

Total Functional Currency %

Total Variance %

Functional Currency %

Service Revenue:

UK VAT - Related Income

Rest of the World

3 unchanged sentences

be slightly different from the average rate during the period depending on timing of transactions.

Segment, key events that affected results for the Three Months ended June 30, 2021

Gaming Customer Gross Win per unit per day (in our functional currency, GBP) increased by £35.08, or 288% which was due to the

impact of COVID-19.

In the UK, retail venues were closed for the majority of the quarter ended June 30, 2020, as compared to the current

period when retail venues reopened in April and May 2021 (for further detail see segment revenue discussion below).

In Greece, retail

venues reopened in late May 2021 while in Italy retail venues began reopening in June 2021.

The participation rate decreased from 6.6%

to 6.0% primarily due to a higher proportion of UK venues operating in 2021 when compared to the same quarter in 2020 as UK share terms

are lower (due to the fact we have higher gross win levels in the UK) than the total blended Gaming average.

the period, Inspired sold 71 “Valor™” terminals to a number of customers in Illinois, increasing the total number of

North American unit sales since launch in December 2019 to 540.

the UK market, momentum was gained with our new “Community King” three-player product.

addition, we have been upgrading our UK Gaming estate with the installation of 134 “Flex” and 57 “Prismatic”

terminals on three-year lease agreements.

Months ended June 30, 2021, compared to Three Months ended June 30, 2020 – Gaming Segment

For the Three-Month Period ended

the three and nine months ended September 30, 2021

Gaming Customer Gross Win per unit per day (in our functional currency, GBP) for the three-month period increased by £6.08, or

8.6%, but decreased by £7.54, or 15.4%, for the nine-month period.

The year-to-date decrease was due to the impact of COVID-19

as there was a longer period of retail venue closures compared to the prior period.

the three-month period, retail venues in the UK LBO estate showed significant year over year growth which contributed to the majority

of the overall Gross Win per unit per day increase.

Revenues returned to prior year levels in the Greek and Italy markets.

nine-month period in 2021, retail venues across the business were in operation for approximately 53% of the period, compared to approximately

67% of the prior year period in 2020.

participation rate for the three-month period decreased from 6.7% to 6.5% year over year.

This was primarily due to the COVID-19 restriction

in place in the prior period in UK venues compared to the 2021 as UK share terms are lower than the total blended Gaming

average (due to the fact we have higher gross win levels in the UK).

The participation rate for the nine-month decreased from 6.6% to

6.3% due to the same factors.

the three-month period ended September 30, 2020, Inspired received VAT-related revenue of $9.4 million in July 2020 from a major UK customer.

During the nine-month period ended September 30, 2021, Inspired received VAT-related revenue of $2.9 million in January 2021 from a major

Both receipts in 2020 and 2021 were recorded as revenue in our results.

the three-month period in the UK market, we sold 363 VLT’s to a major customer resulting in revenue of $2.4 million.

addition, during the nine-month period we upgraded our UK Gaming estate with the installation of 245 “Flex” and 375 “Prismatic”

terminals through a combination of outright sales and lease agreements.

furthered its relationship with a major customer in the Dutch market with the sale and delivery of an additional 222 “Analogue”

terminals during the nine-month period.

the UK LBO market, during the three-month period Inspired continued its strong relationship with a major customer by securing a new three-year

contract extension for the service of self-service betting terminals “SSBTs” which are charged on a rental basis.

same period Inspired recognized hardware sales for an additional 150 SSBTs generating revenue of $0.6 million.

the three-month period, Inspired recognized a 944 VLT hardware sale to a major Italian customer, generating revenue of $1.1 million.

This completed a 1,624 VLT hardware sale.

the three-month period, Inspired sold a further 60 “Valor™” terminals to a number of customers in Illinois, bringing

the total terminals sold for the nine-month period to 171 and increasing the total number of North American unit sales since launch in

December 2019 to 600.

Retail venues in Illinois were shut down during January 2021, which negatively impacted sales during this period.

As of February 2021, all eleven regions in Illinois had reopened.

the nine-month period, Inspired delivered its first sales to Western Canada Lottery Corporation (“WCLC”), our second jurisdiction

in North America.

Inspired recorded the sale of 100 “Valor™” terminals to WCLC during March 2021, generating revenue

of $1.5 million.

Results of Operations

the Three-Month Period ended

the Nine-Month Period ended

(In millions)

Unaudited June 30,

Total Functional Currency %

Total Variance %

Attributable to Currency Movement

on a Functional currency basis

Functional Currency Variance %

Reported Variance %

Attributable to Currency Movement

on a Functional currency basis

Functional Currency Variance %

Reported Variance %

Total revenue

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different from the average rate during the period depending on timing of transactions.

Segment Revenue

the period, Gaming revenue increased by $12.0 million, or 284%, to $16.2 million on a reported basis.

This increase included a favorable

currency impact of $1.8 million.

On a functional currency (at constant rate) basis, Gaming revenue increased by $10.2 million, or 242%

as Gaming retail venues reopened during the period (see market information below for more detail) albeit with some restrictions for some

of the period.

revenue increased by $8.7 million to $12.8 million on a reported basis.

This increased included favorable currency movements of $1.4

On a functional currency (at constant rate) basis, Gaming Service revenue increased by $7.3 million, or 179%.

This was driven

by an increase in UK sales (including Licensed Betting Offices (“LBO”) and UK other) of $6.9 million primarily driven by

the reopening of retail venues.

UK LBO had additional two months trading verses quarter two 2020, albeit with one of these months at

fifty percent capacity and UK other venues had an additional one month trading verses quarter two 2020.

Greece revenue increased by $0.4

million, driven by the reopening of retail venues, Greece trading for an additional two weeks verses last period.

Italy service revenue

was unchanged as COVID-19 restrictions mostly remained in place during the period.

revenue increased by $3.2 million to $3.4 million on a reported basis.

On a functional currency (at constant rate) basis, revenue increased

by $2.9 million.

This was driven by Product sales of $1.7 million in the UK markets, $1.1 million of Valor terminal sales in North America

and $0.6 million of spare part sales.

Segment Operating Income

of sales (excluding depreciation and amortization) increased by $4.8 million to $6.0 million on a reported basis, which included adverse

currency movements of $0.7 million.

On a functional currency (at constant rate) basis, Gaming cost of sales increased by $4.1 million,

Cost of Service increased by $2.2 million driven by the reopening of retail venues.

Cost of Product increased by $1.9 million

driven by the increase in Product revenue.

expense increased by $3.6 million on a reported basis.

This increase included the impact of unfavorable currency movements of $0.7 million.

On a functional currency (at constant rate) basis, Gaming SG&A increased by $2.9 million, or 95.6%.

This was driven by staff returning

from furlough as retail venues and markets reopened.

and amortization declined by $1.2 million on a reported basis, or 17.1%.

This included the impact of unfavorable currency movements of

$0.7 million.

On a functional currency (at constant rate basis), Gaming depreciation and amortization decreased by $1.9 million, or 27.1%.

This was driven by a decrease in depreciation in the UK LBO and Greece markets.

Loss improved by $4.4 million on a reported basis, from a loss of $7.1 million to a loss of $2.7 million.

This was primarily due to the

increase in revenue as retail venues reopened, partly offset by increased costs as staff returned from furlough as well as unfavorable

currency movements of $0.5 million.

Months ended June 30, 2021, compared to Three Months ended June 30, 2020 – Virtual Sports Segment

variances discussed in the Gaming results below are on a functional currency (at constant rate) basis, which excludes the impact of any

changes in foreign currency exchange rates.

the three-month period, all COVID-19 closures and restrictions were removed for the key markets for the majority of both the current

and prior periods.

During the nine-month, Gaming revenue was impacted by COVID-19 closures and restrictions for a portion of both the

current and prior periods (for more details please see the Gaming Revenue section in the Quarterly Report on Form 10-Q for the period

ended June 30, 2021).

the three-month and nine-month period, Gaming revenue decreased by $5.1 million and $9.5 million, or 16.7% and 15.9%, respectively.

was driven by the decrease in VAT-related revenue of $9.4 million in the three-month period and $6.5 million in the nine-month period

compared to the prior period.

Excluding the VAT-related revenue, Gaming revenue during the three-month period increased by $4.3 million

and decreased by $3.0 million during the nine-month period.

the three-month period, Gaming Service revenue (excluding VAT-related revenue) increased by $0.6 million.

This was primarily driven by

an increase in UK sales (including Licensed Betting Offices (“LBOs”) and UK other) of $0.8 million due to the increase in

UK LBO Net Win (a record high average for the period since the implementation of the Triennial regulation changes).

the nine-month period, Gaming Service revenue (excluding VAT-related revenue) decreased by $6.2 million.

This was driven by a decline

in UK sales (including LBOs and UK other) of $3.0 million primarily driven by the COVID-19 closures, with both markets experiencing additional

lockdowns and UK LBO capacity restrictions compared to the prior period.

Greece and Italy experienced revenue declines of $2.1 million

and $0.8 million, respectively, driven by the COVID-19 closures as both markets experienced additional lockdowns compared to the prior

revenue increased in the three-month and nine-month period by $3.7 million and $3.2 million, respectively.

The increase for both periods

was primarily driven by Product sales of $2.0 million in the UK markets, $1.1 million sales to Italy and $0.8 million of Valor terminal

sales in North America, all of which occurred during the three-month period.

Operating Income

Income decreased during both the three-month and nine-month periods by $4.9 million and $2.3 million, respectively.

decrease in Operating Income in the three-month period was primarily due to the decrease in VAT-related income compared to the prior

period ($9.2 million) and an increase in SG&A ($1.9 million) as all staff returned from furlough for the whole period.

This was partially

offset by the increase in product revenue (detailed above), a $1.6 million decrease in depreciation and amortization driven by a decrease

in depreciation in the UK LBO and Greece markets, and a decrease in Cost of Sales of $0.8 million.

Excluding the VAT-related Income,

Operating Income would have increased by $4.2 million in the three-month period.

decrease in Operating Income in the nine-month period was primarily due to the decrease in VAT-related income compared to the prior periods

($6.3 million) and the decrease in Gaming Service revenue (detailed above).

This was partially offset by the increase in product revenue

(detailed above), a decrease in cost of sales ($2.9 million), as well as a reduction in depreciation and amortization ($4.8 million)

particularly in UK LBO as certain assets have been fully written down.

Excluding the VAT-related Income, Operating Income would have

increased by $4.0 million in the nine-month period.

generate revenue from our Virtual Sports segment through the licensing of our products.

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and the net win percentage that we receive pursuant to our contracts with our customers.

Sports Segment, Key Performance Indicators

For the Three-Month Period ended

Sports, Key Performance Indicators

For the Three-Month

For the Nine-Month

of Live Customers at the end of the period

4 unchanged sentences

refer to our Annual Report on Form 10-K for the year ended December 31, 2020, for definitions of terms used in the above table.

Sports Segment, Recurring Revenue

Sports, Recurring Revenue

forth below is a breakdown of our Virtual Sports recurring revenue, which consists of Retail Virtuals and Online Virtuals recurring revenue

2 unchanged sentences

Service revenue between the periods under review.

For the Three-Month Period ended

the Three-Month

the Nine-Month

(In £ millions)

5 unchanged sentences

Total Virtual Sports Recurring Revenue

Virtual Sports Recurring Revenue as a Percentage of Total Virtual Sports Revenue

Virtual Sports Recurring Revenue as a Percentage of Total Virtual Sports

refer to our Annual Report on Form 10-K for the year ended December 31, 2020, for definitions of terms used in the above table.

Sports Segment, key events that affected results for the Three Months ended June 30, 2021

the three months ended June 30, 2021, our key retail territories in the UK, Ireland, Italy and Greece reopened at different stages in

In the prior year period, only Greece and Italy had reopened during June of 2020.

As a result, retail recurring revenues

increased by $0.9 million.

the three months ended June 30, 2021, we launched three channels of our V-Play Soccer 3.0 product with Stoiximan, the largest online

operator in Greece, using our cloud streaming solution.

Turkey we launched our new Euro Soccer Marbles product alongside a new Parlay Boost feature with Misli via our proprietary Virtual Plug

& Play TM (“VPP”) platform.

suite of new products including Marbles, Matchday Soccer Ultra and the new Penalty shootout soccer product were launched in Italy on

both retail and online channels.

signed an extension to our existing agreement with Entain enabling betMGM, Borgata and PartyCasino to launch VPP into multiple U.S.

to V-Play Soccer 3.0 and V-Play Matchday Soccer were launched in OPAP venues in Greece along with a new Euro Tournament product enabling

bets to be placed on a Virtual Soccer tournament which was launched alongside the European soccer tournament in June.

contract extension was signed with Boylesports covering the continued provision of Virtual Sports across retail betting shops in the

UK and Ireland.

Months ended June 30, 2021, compared to Three Months ended June 30, 2020 – Virtual Sports Segment

For the Three-Month Period ended

Sports, key events

the three months ended September 30, 2021, we launched our Virtual Sports suite of products with BetMGM in New Jersey via our new proprietary

VPP (Virtuals Plug and Play) platform.

largest online customer bet365 launched four channels of our brand-new V-Play Soccer 3 product.

Furthermore, we signed new contracts

with Mozzarbet (Serbia), Betplay (Colombia), Novibet (Greece), Betshop (Greece), iBet and Fonbet to deliver Virtuals via the VPP platform.

August 2021, the Italian government introduced a proof of vaccination requirement to enter betting shops which has slowed recovery.

Sports have not resumed in Belgium betting shops in 2021 due to evolution in regulations.

Greece, US Basketball was deployed in September 2021 into the OPAP retail estate of approximately 3,500 venues.

Pennsylvania, Inspired revenue share increased by approximately 70% during the nine-month period ended September 30, 2021, driven

by our “Derby Cash” horse racing product.

Italian clients (including Snaitech) launched in July 2021 with new products Penalty Shootout, Matchday Ultra and Marbles.

Sports, Results of Operations

the Three-Month Period ended

the Nine-Month Period ended

(In millions)

Unaudited June 30,

Total Functional Currency %

Total Variance %

Attributable to Currency Movement

on a Functional currency basis

Functional Currency Variance %

Reported Variance %

Attributable to Currency Movement

on a Functional currency basis

Functional Currency Variance %

Reported Variance %

Service Revenue

7 unchanged sentences

different from the average rate during the period depending on timing of transactions.

Sports Segment revenue

the period, revenue increased by $0.6 million, or 7.5%, on a reported basis.

This increase included the impact of favorable currency

movements of $0.9 million.

On a functional currency (at constant rate) basis, revenue decreased by $0.4 million, or 4.6%.

This decrease

was driven by a $1.0 million decline in Online Virtuals of which $0.7 million stemmed from one-time sales of Virtual Sports events in

the prior year period and a $0.4 million decline in Online recurring revenue resulting from the high activity on Online Virtuals in the

prior year period, both of which were due to the limited live sports betting available during COVID-19 lockdowns.

the decline in the quarter, Online revenues remain significantly higher than pre-COVID-19 levels.

This was partially offset by growth

in recurring Retail Virtuals of $0.9 million as retail venues reopened during the period.

Sports Segment operating income

of Service decreased by $0.3 million to $0.5 million on a reported basis.

This decrease included the impact of $0.1 million from adverse

currency movements.

On a functional currency (at constant rate) basis, cost of Service decreased by $0.4 million, or 45.0%, driven by

the decrease in Online Virtuals revenue.

expenses increased by $1.9 million on a reported basis.

On a functional currency (at constant rate) basis, SG&A expenses increased

by $1.6 million, or 223%.

This was driven by a $1.2 million increase for the provision following settlement with the Italian Tax Authorities

in respect of an audit of the Italian Branch of Inspired Gaming (International) Limited for the period 2015-2017 in respect of the historic

VAT treatment of supplies, as well as increase in costs as staff returning from furlough as retail venues.

and amortization decreased by $0.2 million on a reported and functional currency (at constant rate) basis.

profit decreased by $0.9 million on a reported basis which included the impact of favorable currency movements of $0.6

On a functional currency (at constant rate) basis, operating profit decreased by $1.4 million.

This was primarily due

to the $1.6 million increase in SG&A following the settlement with the Italian Tax Authorities.

Months ended June 30, 2021, compared to Three Months ended June 30, 2020 – Interactive Segment

variances discussed in the Virtual Sports results below are on a functional currency (at constant rate) basis, which excludes the impact

of any changes in foreign currency exchange rates.

Sports revenue

the three-month period, revenue increased by $1.6 million, or 19.3%.

This increase was driven by a $2.1 million increase in Online Virtuals,

driven by the performance of one of our major online customers, which was partially offset by a decline in recurring Retail

Virtuals of $0.7 million, driven by slower recovery since reopening in all major markets compared to the prior year, as well as regulator

changes in Belgium resulting in no revenues for 2021.

the nine-month period, revenue decreased by $0.7 million, or 2.9%.

This decrease was driven by a $3.0 million decrease in retail revenue

due to the COVID-19 closures and a decline of $0.5 million from historical license fee amortization contracts reaching their expiration.

This decline was partially offset by growth in recurring Online Virtuals of $3.4 million.

Online revenues remain significantly higher

than pre-Covid-19 levels.

Sports operating income

Income increased in the three-month period by $1.3 million but declined in the nine-month period by $1.6 million.

increase in the three-month period was primarily due to the increase in revenue of $1.6 million, the decrease in Depreciation and Amortization

of $0.3 million and the decrease in Cost of Sales of $0.2 million.

This was partly offset by the increase in SG&A expenses of $0.7

million, driven by the increase in costs as all staff returned to full pay for the period and an increase in technology costs driven

by the growth of Online Virtuals.

decline in the nine-month period was primarily due to the decrease in revenue of $0.7 million and the increase in SG&A expenses of

$2.1 million driven by the $1.2 million increase from the settlement with the Italian Tax Authorities as well as staff returning from

This was partly offset by a decrease in Cost of Sales of $1.0 million.

generate revenue from our Interactive segment through the licensing of our products.

7 unchanged sentences

of the games and the net win percentage that we receive pursuant to our contracts with our customers.

Segment, Key Performance Indicators

For the Three-Month Period ended

Key Performance Indicators

For the Three-Month

For the Nine-Month

of Live Customers at the end of the period

4 unchanged sentences

refer to our Annual Report on Form 10-K for the year ended December 31, 2020, for definitions of terms used in the above table.

Segment, Recurring Revenue

Recurring Revenue

forth below is a breakdown of our Interactive recurring revenue which consists principally of Interactive participation revenue.

“Interactive Segment Revenue” below for a discussion of Interactive service revenue between the periods under review.

For the Three-Month Period ended

the Three-Month

the Nine-Month

(In £ millions)

3 unchanged sentences

Interactive Recurring Revenue as a Percentage of Total Interactive Revenue

Segment, key events that affected results for the Three Months ended June 30, 2021

the period, the North American market has grown 265% or $0.4 million in the quarter.

There were seven new brand launches including BetMGM

and Golden Nugget in Michigan.

deployed seven new games in the quarter across the estate including “Big Spin Bonus” and “Cops and Robbers Megaways”.

Big Spin Bonus is the biggest launch in Inspired’s history and is the first game to generate 20 million plays in a week.

is expected to launch in all markets.

Months ended June 30, 2021, compared to Three Months ended June 30, 2020 – Interactive Segment

For the Three-Month

the three-month period, we were shortlisted for the SBC Awards for Casino / Slots Developer of the year.

were twelve new brand launches during the quarter ended September 2021 including Draftkings in Michigan, four brands with The Stars Group,

Pokerstars, Betstars, Full Tilt and Stars Casino and Leo Vegas in Spain.

were twenty-eight new brand launches across the nine-month period including BetMGM in New Jersey and Michigan, Golden Nugget in Michigan,

Gamesys, Draftkings in Michigan and four brands under The Stars Group.

We also launched with our first operators in Spain, Luckia, 888

and Leo Vegas.

deployed twenty-three new games in the nine-month period across the estate and eight new games in the three-month period including “William

Hill Cash Spins”, “Big Piggy Bonus”, “Dice Spinner Megaways” and “Reel Spooky King Megaways”.

Results of Operations

the Three-Month Period ended

the Nine-Month Period ended

(In millions)

Unaudited June 30,

Total Functional Currency %

Total Variance

Attributable to Currency Movement

on a Functional currency basis

Functional Currency Variance %

Reported Variance %

Attributable to Currency Movement

on a Functional currency basis

Functional Currency Variance %

Reported Variance %

Service Revenue

Cost of Service

Selling, general and administrative

Selling, general and administrative expenses

Stock-based compensation

4 unchanged sentences

different from the average rate during the period depending on timing of transactions.

Segment revenue

the period, revenue increased by $2.4 million, or 69.0%, on a reported basis.

On a functional currency (at constant rate) basis, revenue

increased by $1.7 million, or 50.0%.

This was driven by recurring revenue growth due to the consistent launch of new content across the

estate, growth in the customer base in new, emerging and core markets and increased promotional activity through exclusive deals with

tier-one customers.

Segment operating income

of Service increased by $0.5 million to $0.9 million on a reported basis.

On a functional currency (at constant rate) basis, cost of

Service increased by $0.4 million due to increased third party platform provider costs, in line with the revenue increase for the period.

expenses increased by $0.7 million on a reported basis.

This increase included the impact of unfavorable currency movements of $0.1 million.

On a functional currency (at constant rate) basis, SG&A increased by $0.6 million driven by the investment in the segment to help

drive the increasing revenues.

and amortization increased by $0.3 million on a reported basis.

On a functional currency (at constant rate) basis, depreciation and amortization

increased by $0.2 million.

profit increased by $0.8 million on a reported basis.

On a functional currency (at constant rate) basis operating profit increased by

$0.4 million.

This was primarily due to the increase in revenue, partly offset by the increase in cost of sales and SG&A.

Months ended June 30, 2021, compared to Three Months ended June 30, 2020 – Leisure Segment

variances discussed in the Interactive results below are on a functional currency (at constant rate) basis, which excludes the impact

of any changes in foreign currency exchange rates.

the three-month and nine-month periods, revenue increased by $2.2 million and $6.7 million, respectively.

These increases were

driven by recurring revenue growth due to the consistent launch of new content across the estate, growth in the customer base in new,

emerging and core markets and increased promotional activity through exclusive deals with tier-one customers.

operating income

Income increased in the three-month and nine-month periods by $0.7 million and $3.3 million, respectively.

increase in both periods was primarily due to the increase in revenue (detailed above), partly offset by an increase in cost of sales

($0.5 million and $1.4 million for the three-month and nine-month periods, respectively) driven by an increase in third party platform

provider costs (in line with the revenue increase for the periods) as well as an increase in SG&A expenses ($0.7 million and $1.1

million for the three-month and nine-month periods, respectively) driven by the investment in the segment to help drive the increasing

generate revenue from our Leisure segment through the rental of our gaming and amusement machines.

9 unchanged sentences

the net win performance of the machines and the net win percentage that we receive pursuant to our contracts with our customers.

segment, Key Performance Indicators

For the Three-Month Period ended

Key Performance Indicators

For the Three-Month

For the Nine-Month

End of period installed base Gaming machines (# of terminals)

13 unchanged sentences

refer to our Annual Report on Form 10-K for the year ended December 31, 2020, for definitions of terms used in the above table.

Segment, Recurring Revenue

Recurring Revenue

forth below is a breakdown of our Leisure recurring revenue which consists principally of Leisure participation revenue and Leisure other

2 unchanged sentences

forth below is a breakdown of our Leisure recurring revenue.

For the Three-Month Period ended

the Three-Month Period ended

the Nine-Month Period ended

(In £ millions)

3 unchanged sentences

Leisure Recurring Revenue as a Percentage of Total Leisure Revenue

Segment, key events that affected results for the Three Months ended June 30, 2021

the three months ended June 30, 2021, all major sectors of the Leisure segment (Pubs, Holiday Parks, Motorway Service Areas and Bingo

Halls) remained closed due to the COVID-19 closures in the UK until May 17 th .

May 17, 2021, venues reopened with social distancing and other restrictions imposed due to COVID-19.

These restrictions remained in place

for the rest of the period.

Months ended June 30, 2021, compared to Three Months ended June 30, 2020 – Leisure Segment

For the Three-Month Period ended

(In millions)

Unaudited June 30,

Total Functional Currency %

Total Variance %

Total revenue

Cost of Sales, excluding depreciation and amortization:

Cost of Service

Cost of Product

Total cost of sales

Selling, general and administrative expenses

Stock-based compensation

Depreciation and amortization

Net operating Income (Loss)

Exchange Rate - $ to £

Exchange rate in the table is calculated by dividing the USD total revenue by the GBP total revenue, therefore this could be slightly

different from the average rate during the period depending on timing of transactions.

Segment Revenue

the period, revenue increased by $10.9 million to $11.3 million on a reported basis, including a $1.3 million impact from favorable currency

On a functional currency (at constant rate) basis revenue increased by $9.7 million.

revenue increased by $10.5 million on a reported basis and $9.3 million on a functional currency (at constant rate) basis to $10.7 million.

This was driven by the reopening of venues in May although with some COVID-19 restriction remaining for the rest of the period.

revenue increased by $0.4 million to $0.6 million on a reported and functional currency (at constant rate) basis.

This increase was driven

by the reopening of venues.

Segment Operating Income

loss improved by $2.7 million on a reported basis from a loss of $7.0 million to a loss of $4.4 million, which included the impact of

unfavorable currency movements of $0.5 million.

On a functional currency (at constant rate) basis operating loss improved by $3.2 million.

This was primarily due to the increase in revenue as venues reopened.

Months ended June 30, 2021, compared to Six Months ended June 30, 2020

the Six-Month

Unaudited June 30,

Functional Currency

Total Variance

(In millions)

Total revenue

Cost of Sales, excluding depreciation and amortization:

Cost of Service

Cost of Product

Selling, general and administrative expenses

Stock-based compensation

Acquisition and integration related transaction expenses

Depreciation and amortization

Net operating Income (Loss)

Other income (expense)

Interest income

Interest expense

Change in fair value of warrant liability

Other finance income (expense)

Loss from equity method investee

Total other income (expense), net

Net Income (loss) from continuing operations before income

Income tax expense

Net Income (Loss)

Exchange Rate - $ to £

reported revenue for the six months ended June 30, 2021, decreased by $3.6 million, or 5.3%, to $64.3 million on a reported basis.

included an increase from Interactive of $5.5 million, offset by declines in Gaming of $2.2 million, Virtual Sports of $0.9 million,

and Leisure of $6.0 million.

Favorable currency movements accounted for a $5.5 million impact.

On a functional currency (at constant

rate) basis, revenue decreased by $9.1 million, or 13.3%, as detailed below:

revenue decreased by $4.3 million, comprised of a decrease in Service revenue of $3.8 million and a decrease in Product sales of

$0.6 million.

The decrease in Service revenue includes VAT-related revenue of $2.9 million generated in the current period (using

prior year exchange rate).

Excluding the VAT-related revenue, Service revenue would have declined by $6.7 million.

This was primarily

due to the COVID-19 closures, which effected a longer closure during the period than during the comparable prior period.

Sports revenue decreased by $2.2 million, or 14.5%.

This decrease included a $2.9 million decrease in retail revenue primarily as

a result of the COVID-19 closures, particularly in the first quarter of 2021.

This was partially offset by growth in Online Virtuals

of $0.6 million.

revenue increased by $4.3 million, or 78.2%.

This growth was driven by the addition of new customers and territories and the consistent

launch of new high-quality content

revenue decreased by $7.0 million, comprised of a decrease in Service revenue of $6.7 million and a decrease in Product sales of

$0.3 million.

The decline in revenue was due to the impact of the COVID-19 closures, as venues were closed during a longer portion

of the period than in the prior comparable period.

of sales, excluding depreciation and amortization

of sales, excluding depreciation and amortization, decreased by $1.5 million, or 8.4%, on a reported basis, to $16.0 million, including

the impact of $1.4 million from unfavorable currency movements.

Of this decrease, $0.8 million was attributable to cost of Service and

$0.6 million was attributable to cost of Product sales.

On a functional currency (at constant rate) basis, cost of sales decreased by

$2.8 million, or 16.2%, reflecting the revenue reductions resulting from the COVID-19 closures.

general and administrative expenses

general and administrative (“SG&A”) expenses remained unchanged from the prior year on a reported basis at $38.9 million.

This included $3.4 million of unfavorable currency movements.

On a functional currency (at constant rate basis), SG&A decreased by

$3.7 million, or 9.3%.

This decrease was driven primarily by permanent synergy and other savings.

the six months ended June 30, 2021, the Company recorded an expense of $4.8 million with respect to outstanding awards.

Of this expense,

$1.9 million related to awards made under the 2021 Plan (including $1.4 million of upfront recognition) and $2.9 million related

to awards made under the 2018 Plan.

During the six months ended June 30, 2020, the charge for stock-based compensation was $2.0 million.

Of this expense, $1.8 million related to awards made under the 2018 Plan and $0.2 million related to costs from awards made under a 2016

long term incentive plan.

and integration related transaction expenses

and integration related transaction expenses decreased by $2.9 million to $1.5 million on a reported basis.

Both the 2021 and 2020 expenses

were primarily integration costs in relation to the NTG acquisition.

and amortization

and amortization decreased by $0.9 million, or 3.5%, to $25.0 million on a reported basis.

This included the impact of unfavorable currency

movements of $2.3 million.

On a functional currency (at constant rate) basis, depreciation and amortization decreased by $3.2 million,

or 12.4%, driven primarily by a decrease of $3.2 million in Gaming due to certain assets being fully written down.

operating loss

the period, net operating loss was $21.9 million compared to a net operating loss of $21.1 million in the prior period.

of $0.8 million in operating loss on a reported basis was attributable to a $2.2 million unfavorable impact from foreign currency

On a functional currency (at constant rate) basis, net operating loss improved by $1.5 million, or 6.8%.

This was attributable

to the cost savings across our Gaming, Virtual Sports and Leisure segments as well as the decrease in acquisition and integration related

transaction expenses.

This was partly offset by the decrease of revenue driven by the COVID-19 closures.

interest expense increased by $16.6 million in the six months ended June 30, 2021, to $30.8 million, on a reported basis,

due to a $14.4 million write-off of capitalized debt fees on refinancing, a $2.1 million increase in debt interest due

to capitalization of debt interest in 2020 increasing debt levels and debt margin and $0.9 million exchange rate impact.

in fair value of warrant liability

in fair value of warrant liability for the six months ended June 30, 2021, resulted in a $13.5 million charge.

This charge reflects the

increase in the value of the warrants, driven by increases in the Company’s share price from $6.58 on December 31 st ,

2020 to $12.75 on June 30 th , 2021.For the six months ended June 30, 2020, the change in fair value resulted in a $5.9 million

finance income

finance income for the six months ended June 30, 2021, resulted in a $5.2 million credit compared to a $6.2 million charge in

the six months ended June 30, 2020.

This variance was driven by movements in the retranslation with respect to the principal balance

of the senior debt facilities.

effective tax rate for the period ended June 30, 2021, was (0.6%) and our effective tax rate for the period ended June 30, 2020, was

the period, net loss was $60.5 million compared to a net loss of $36.0 million in the prior period.

On a functional currency (at constant

rate) basis, net loss increased by $18.6 million, primarily due to the decline in revenue, increase in interest expense and the

increase in change in fair value of warrant liability.

Months ended June 30, 2021, compared to Six Months ended June 30, 2020 – Gaming Segment

Segment, Key Performance Indicators

For the Six-Month Period ended

End of period installed base (# of terminals)

Total Gaming - Average installed base (# of terminals)

Participation - Average installed base (# of terminals)

Fixed Rental - Average installed base (# of terminals)

Service Only - Average installed base (# of terminals)

Customer Gross Win per unit per day (1) (2)

Customer Net Win per unit per day (1) (2)

Inspired Blended Participation Rate

Inspired Fixed Rental Revenue per Gaming Machine per week

Inspired Service Rental Revenue per Gaming Machine per week

Gaming Long term license amortization (£’m)

Number of Machine sales

Average selling price per terminal

(1) Includes all SBG terminals in which the company takes a participation revenue share across all territories

all Gaming terminals in which the company takes a participation revenue share across all territories

all days of the period, including the days during which the Gaming terminals were not operating due to COVID-19 closures.

refer to our Annual Report on Form 10-K for the year ended December 31, 2020, for definitions of terms used in the above table.

Segment, Recurring Revenue

forth below is a breakdown of our Gaming recurring revenue.

Gaming recurring revenue consists principally of Gaming participation revenue

and fixed rental revenue.

For the Six-Month Period ended

(In £ millions)

Gaming Recurring Revenue

Total Gaming Revenue

Gaming Participation Revenue

Gaming Other Fixed Fee Recurring Revenue

Gaming Long-term license amortization

Total Gaming Recurring Revenue *

Gaming Recurring Revenue as a % of Total Gaming Revenue †

Total Gaming excluding VAT

Gaming Recurring Revenue as a % of Total Gaming Revenue (excluding VAT)

not reflect VAT-related revenue

Gaming Revenue for the six-month period ended June 30, 2021, includes the £2.3 million for VAT-related revenue, which is not

reflected in Gaming Recurring Revenue for that period.

Excluding VAT-related revenue, Gaming Recurring Revenue was 61.5% of Total

Gaming Revenue for such period.

refer to our Annual Report on Form 10-K for the year ended December 31, 2020, for definitions of terms used in the above table.

Segment, Service Revenue by Region

forth below is a breakdown of our Gaming service revenue by geographic region.

Gaming service revenue consists principally of Gaming

participation revenue, Gaming other fixed fee revenue, Gaming long term license amortization and Gaming other non-recurring revenue.

See “Gaming Segment Revenue” below for a discussion of gaming service revenue between the periods under review.

Service Revenue by Region

For the Six-Month Period ended

(In millions)

Unaudited June 30,

Total Functional Currency %

Total Variance %

Service Revenue:

UK VAT - Related Income

Rest of the World

Total Service revenue

Exchange Rate - $ to £

Exchange rate in the table is calculated by dividing the USD total service revenue by the GBP total service revenue, therefore this could

be slightly different from the average rate during the period depending on timing of transactions.

Segment, key events that affected results for the Six Months ended June 30, 2021

Gaming Customer Gross Win per unit per day (in our functional currency, GBP) decreased by £14.39, or 37.6%, which was due to the

impact of COVID-19.

During the six month period ended June 30, retail venues were in operation for approximately 35% in 2021, compared

to approximately 50% in 2020.

The participation rate decreased from 6.6% to 6.0% primarily due to a higher proportion of UK venues operating

in 2021 when compared to the same quarter in 2020 as UK share terms are lower than the total blended Gaming average.

received VAT-related revenue of $3.1 million in January 2021 from a major UK customer.

This payment has been recorded as revenue in our

the period, Inspired sold 111 “Valor™” terminals to a number of customers in Illinois, increasing the total number

of North American unit sales since launch in December 2019 to 540.

Retail venues in Illinois were shut down during January 2021, which

negatively impacted sales during this period.

As of February 2021, all eleven regions in Illinois had reopened.

the period, Inspired delivered our first sales to Western Canada Lottery Corporation (“WCLC”), our second jurisdiction in

North America.

Inspired recorded the sale of 100 “Valor™” terminals to WCLC during March 2021, generating revenue of

$1.6 million.

furthered its relationship with a major customer in the Dutch market with the sale and delivery of an additional 222 “Analogue”

terminals during the period.

the UK market, Inspired continued to upgrade the UK Gaming estate with the installation of over 220 “Flex” and 140 “Prismatic”

terminals through a combination of outright sales and lease agreements.

These sales also include content agreements which deliver recurring

revenues for the next four to five years.

Months ended June 30, 2021, compared to Six Months ended June 30, 2020 – Gaming Segment

For the Six-Month Period ended

the nine-month period ending September 30, 2021, all major sectors of the Leisure segment (Pubs, Holiday Parks, Motorway Service Areas

and Bingo Halls) remained closed due to the COVID-19 closures in the UK until May 17 th , 2021.

Venues subsequently reopened

with social distancing and other restrictions imposed due to COVID-19.

All significant COVID-19 restrictions were lifted on July 19,

the three-month period, COVID-19 restrictions resulted in frequent amendments to overseas travel policies in the UK.

The additional costs

and uncertainty of overseas travel during the quarter resulted in a strong summer season for our Leisure Parks business despite initial

restrictions in Wales and Scotland.

the three-month period, new investments in cashless operations proved popular at an increased number of sites The MSA sector continued

to trade strongly due to increased travel within the UK and increasing volume of road transport.

Results of Operations

the Three-Month Period ended

the Nine-Month Period ended

(In millions)

Unaudited June 30,

Total Functional Currency %

Total Variance %

Attributable to Currency Movement

on a Functional currency basis

Functional Currency Variance %

Reported Variance %

Attributable to Currency Movement

on a Functional currency basis

Functional Currency Variance %

Reported Variance %

Total revenue

10 unchanged sentences

different from the average rate during the period depending on timing of transactions.

Segment Revenue

the period, Gaming revenue decreased by $2.2 million, or 7.4%, to $27.0 million on a reported basis.

On a functional currency (at constant

rate) basis, Gaming revenue decreased by $4.3 million, or 14.9%.

This was partially offset by favorable currency movements of $2.2 million.

revenue decreased by $2.3 million on a reported basis.

On a functional currency (at constant rate) basis, Gaming Service revenue decreased

by $3.8 million, or 18.3%, to $18.4 million.

This was driven by a decline in UK sales (including LBO and UK other) of $3.8 million primarily

driven by the COVID-19 closures, with UK LBO having an additional three weeks of lockdown and a further four weeks at 50% capacity versus

the prior period and UK other being closed for an additional two months in the current period.

Greece and Italy experienced revenue declines

of $2.1 million and $0.7 million, respectively, driven by the COVID-19 closures as both markets experienced additional three months of

additional lockdowns compared to the prior period.

This was partially offset by $2.9 million of VAT-related revenue and favorable currency

movements of $1.5 million.

revenue increased by $0.1 million to $8.6 million on a reported basis.

On a functional currency (at constant rate) basis, revenue decreased

by $0.6 million, or 6.6%.

Segment Operating Income

loss improved by $1.9 million on a reported basis, from a loss of $8.3 million to a loss of $6.3 million, including unfavorable currency

movements of $0.9 million On a functional currency (at constant rate) basis, Gaming operating loss improved by $2.9 million.

primarily due to the decrease in revenue, cost of sales, SG&A expenses driven by the COVID-19 closures, as well as a reduction in

depreciation particularly in UK LBO as certain assets have been fully written down.

Months ended June 30, 2021, compared to Six Months ended June 30, 2020 – Virtual Sports Segment

Sports Segment, Key Performance Indicators

For the Six-Month Period ended

of Live Customers at the end of the period

of Live Customers

Total Revenue (£’m)

Total Revenue £’m - Retail

Total Revenue £’m - Online Virtuals

refer to our Annual Report on Form 10-K for the year ended December 31, 2020, for definitions of terms used in the above table.

Sports Segment, Recurring Revenue

forth below is a breakdown of our Virtual Sports recurring revenue.

For the Six-Month Period ended

(In £ millions)

Virtual Sports Recurring Revenue

Total Virtual Sports Revenue

Recurring Revenue - Retail Virtuals

Recurring Revenue - Online Virtuals

Total Virtual Sports Long-term license amortization

Total Virtual Sports Recurring Revenue

Virtual Sports Recurring Revenue as a Percentage of Total Virtual Sports Revenue

refer to our Annual Report on Form 10-K for the year ended December 31, 2020, for definitions of terms used in the above table.

Sports Segment, key events that affected results for the Six Months ended June 30, 2021

the six months ended June 30, 2021, our key retail territories in the United Kingdom, Ireland, Italy, Greece, and Belgium were in full

lockdown due to the COVID-19 closures for the first quarter, with Greece reopening mid-April, the UK and Ireland opening mid-May and

a staged reopening in Italy throughout June.

In the same period in the prior year only half of March 2020 was impacted by land-based

closures in the first quarter with Greece and Italy reopening in June 2020.

All periods were affected by closures during the six months

ended June 30, 2021 whereas only three and a half months were affected during the six months ended June 30, 2020.

the six months ended June 30, 2021 was in recovery from the previous lockdown period.

As a result, retail recurring revenues declined

by $2.4 million.

Months ended June 30, 2021, compared to Six Months ended June 30, 2020 – Virtual Sports Segment

For the Six-Month Period ended

(In millions)

Unaudited June 30,

Total Functional Currency %

Total Variance %

Service Revenue

Cost of Service

Selling, general and administrative expenses

Stock-based compensation

Depreciation and amortization

Net operating Income (Loss)

Exchange Rate - $ to £

Exchange rate in the table is calculated by dividing the USD service revenue by the GBP service revenue, therefore this could be slightly

different from the average rate during the period depending on timing of transactions.

Sports Segment revenue.

the period, revenue decreased by $0.9 million, or 5.7%, on a reported basis.

This decrease included the impact of favorable currency

movements of $1.4 million.

On a functional currency (at constant rate) basis, revenue decreased by $2.2 million, or 14.5%.

This decrease

was driven by a $2.9 million decrease in retail revenue due to the COVID-19 closures and a decline of $0.5 million from historical license

fee amortization contracts reaching their expiration.

This decline was partially offset by growth in recurring Online Virtuals of $1.4

Online revenues continue to be significantly higher than pre Covid levels.

Sports Segment operating income

profit decreased by $2.2 million on a reported basis which included the impact of favorable currency movements of $0.8 million.

On a functional currency (at constant rate) basis operating profit decreased by $3.0 million.

This was primarily due to the decrease

in revenues and cost of sales resulting from COVID-19 closures and the increase in SG&A from the settlement with the Italian Tax

Authorities .

Months ended June 30, 2021, compared to Six Months ended June 30, 2020 – Interactive Segment

Segment, Key Performance Indicators

For the Six-Month Period ended

of Live Customers at the end of the period

of Live Customers

of Live Games at the end of the period

of Live Games

Total Revenue (£’m)

refer to our Annual Report on Form 10-K for the year ended December 31, 2020, for definitions of terms used in the above table.

Segment, Recurring Revenue

forth below is a breakdown of our Interactive recurring revenue which consists principally of Interactive participation revenue.

“Interactive Segment Revenue” below for a discussion of Interactive service revenue between the periods under review.

For the Six-Month Period ended

(In £ millions)

Interactive Recurring Revenue

Total Interactive Revenue

Total Recurring Revenue - Interactive

Interactive Recurring Revenue as a Percentage of Total Interactive Revenue

Segment, key events that affected results for the Six Months ended June 30, 2021

were sixteen new brand launches including BetMGM in New Jersey and Michigan, Golden Nugget in Michigan, Gamesys and Interwetten.

launched with our first new operators in Spain, Luckia and 888.

deployed twenty-nine new games in the period across the estate including Vegas Cash Spins, Fruity Bonanza Scatterdrops (both of

which were developed with brand new game mechanics), Big Spin Bonus and Cops and Robbers Megaways.

Months ended June 30, 2021, compared to Six Months ended June 30, 2020 – Interactive Segment

For the Six-Month Period ended

(In millions)

Unaudited June 30,

Total Functional Currency %

Total Variance %

Service Revenue

Cost of Service

Selling, general and administrative expenses

Stock-based compensation

Depreciation and amortization

Net operating Income (Loss)

Exchange Rate - $ to £

Exchange rate in the table is calculated by dividing the USD service revenue by the GBP service revenue, therefore this could be slightly

different from the average rate during the period depending on timing of transactions.

Segment revenue

the period, revenue increased by $5.5 million, or 98.5%, on a reported basis.

On a functional currency (at constant rate) basis, revenue

variances discussed in the Leisure results below are on a functional currency (at constant rate) basis, which excludes the impact of

any changes in foreign currency exchange rates.

three-month period was the first quarter in 2021 when revenue was not impacted by COVID-19 closures and restrictions.

For the three-month

period, revenue increased by $13.8 million or 79.3%, as all social distancing restrictions were removed.

For the nine-month period revenue

increased by $6.9 million, or 19.4%.

This was driven by recurring revenue growth due to the increase in online demand attributable to

the addition of new customers and territories and the consistent launch of quality content.

Segment operating income

profit increased by $3.4 million on a reported basis.

On a functional currency (at constant rate) basis operating profit increased by

$2.7 million.

This was primarily due to the increase in revenue, partly offset by the increase in cost of sales from third party royalty

costs and increase in SG&A expenses from driven by the investment in Interactive to help increase revenues.

Months ended June 30, 2021, compared to Six Months ended June 30, 2020 – Leisure Segment

segment, Key Performance Indicators

For the Six-Month Period ended

End of period installed base Gaming machines (# of terminals)

Average installed base Gaming machines (# of terminals)

End of period installed base Other (# of terminals)

Average installed base Other (# of terminals)

Pub Digital Gaming Machines - Average installed base (# of terminals)

Pub Analogue Gaming Machines - Average installed base (# of terminals)

MSA and Bingo Gaming Machines - Average installed base (# of terminals) (1)

Inspired Leisure Revenue per Gaming Machine per week

Inspired Pub Digital Revenue per Gaming Machine per week

Inspired Pub Analogue Revenue per Gaming Machine per week

Inspired MSA and Bingo Revenue per Gaming Machine per week

Inspired Other Revenue per Machine per week

Total Leisure Parks Revenue (Gaming and Non Gaming) (£’m)

Service Area machines

refer to our Annual Report on Form 10-K for the year ended December 31, 2020, for definitions of terms used in the above table.

Segment, Recurring Revenue

forth below is a breakdown of our Leisure recurring revenue which consists principally of Leisure participation revenue and Leisure other

fixed fee revenue.

See “Leisure Segment Revenue” below for a discussion of leisure service revenue between the periods under

forth below is a breakdown of our Leisure recurring revenue.

For the Six-Month Period ended

(In £ millions)

Leisure Recurring Revenue

Total Leisure Revenue

Total Leisure Recurring Revenue

Leisure Recurring Revenue as a Percentage of Total Leisure Revenue

Segment, key events that affected results for the Six Months ended June 30, 2021

Jan 1, 2021, to May 17, 2021, all major sectors of the Leisure segment (Pubs, Holiday Parks, Motorway Service Areas and Bingo Halls)

remained closed due to the COVID-19 closures in the UK.

May 17, 2021, venues reopened with social distancing and certain other restrictions imposed.

These restrictions remained in place for

the remainder of the period.

Months ended June 30, 2021, compared to Six Months ended June 30, 2020 – Leisure Segment

For the Six-Month Period ended

(In millions)

Unaudited June 30,

Total Functional Currency %

Total Variance %

Total revenue

Cost of Sales, excluding depreciation and amortization:

Cost of Service

Cost of Product

Total cost of sales

Selling, general and administrative expenses

Stock-based compensation

Depreciation and amortization

Net operating Income (Loss)

Exchange Rate - $ to £

Exchange rate in the table is calculated by dividing the USD total revenue by the GBP total revenue, therefore this could be slightly

different from the average rate during the period depending on timing of transactions.

Segment Revenue

the period, revenue decreased by $6.0 million, or 33.7%, to $11.8 million on a reported basis.

On a functional currency (at constant

rate) basis, revenue decreased by $7.0 million, or 39.0%.

revenue decreased by $5.7 million on a reported basis to $10.7 million.

This included an adverse currency impact of $0.9 million.

a functional currency (at constant rate) basis service revenue decreased by $6.7 million.

This was driven by the COVID-19 closures, with

all of the major sectors of the Leisure segment experiencing closures for a portion of the period as well as social distancing restrictions

once they had reopened.

Segment Operating Income

loss increased by $4.1 million on a reported basis from a loss of $8.0 million to a loss of $12.1 million, which included

the impact of unfavorable currency movements of $1.4 million.

On a functional currency (at constant rate) basis operating loss

increased by $2.6 million.

This was primarily due to the decrease in revenue, offset by cost of sales and SG&A savings all

driven by COVID-19 closures.

the three-month period, Service revenue increased by $13.7 million to $32.4 million.

This was driven by strong incomes in leisure parks

with the removal of all COVID-19 restrictions for the majority of the period.

Product revenue increased by $0.1 million.

the nine-month period, Service revenue increased by $7.1 million to $43.1 million.

This was driven by the leisure park reopenings and

the removal of COVID-19 restrictions which began in the third quarter.

Product revenue decreased by $0.2 million to $2.1 million.

Operating Income

Income for the three-month period improved by $10.3 million to income of $9.0 million.

This was primarily due to the increase in revenue

as venues reopened and COVID-19 restrictions were removed.

Loss for the nine-month period improved by $7.6 million to a loss of $3.1 million.

This was primarily due to the increase in revenue

as venues reopened as well as cost of sales and SG&A savings driven by COVID-19 closures earlier in the period.

Financial Measures

13 unchanged sentences

define our non-GAAP financial measures as follows:

is defined as net loss excluding depreciation and amortization, interest expense, interest income and income tax expense.

EBITDA is defined as net loss excluding depreciation and amortization, interest expense, interest income and income tax expense,

and other additional exclusions and adjustments .

Such additional excluded amounts include stock-based compensation U.S.

where the associated liability is expected to be settled in stock, and changes in the value of earnout liabilities and income and expenditure

in relation to legacy portions of the business (being those portions where trading no longer occurs) including closed defined benefit

pension schemes.

Additional adjustments are made for items considered outside the normal course of business, including (1) restructuring

costs, which include charges attributable to employee severance, management changes, restructuring, dual running costs, costs related

to facility closures and integration costs, (2) merger and acquisition costs and (3) gains or losses not in the ordinary course of business.

is defined as net income (loss) excluding depreciation and amortization, interest expense, interest income and income

EBITDA is defined as net income (loss) excluding depreciation and amortization, interest expense, interest income and

income tax expense, and other additional exclusions and adjustments .

Such additional excluded amounts include stock-based compensation

GAAP charges where the associated liability is expected to be settled in stock, and changes in the value of earnout liabilities

and income and expenditure in relation to legacy portions of the business (being those portions where trading no longer occurs) including

closed defined benefit pension schemes.

Additional adjustments are made for items considered outside the normal course of business, including

(1) restructuring costs, which include charges attributable to employee severance, management changes, restructuring, dual running costs,

costs related to facility closures and integration costs, (2) merger and acquisition costs and (3) gains or losses not in the ordinary

course of business.

This does not include any adjustments related to COVID-19.

26 unchanged sentences

Reconciliation

to Adjusted EBITDA by segment for the Three Months ended June 30, 2021

to Adjusted EBITDA by segment for the Three and Nine Months ended September 30, 2021

the Three-Month Period ended

the Nine-Month Period ended

(In millions)

Net Income/ (loss)

Items Relating to Legacy Activities:

Items Relating to Legacy

Pension charges

Items outside the normal course of business:

Costs of group restructure

Acquisition and integration related transaction expenses

Refinancing of Company Debt (4)

Italian tax related costs relating to prior years (5)

Items outside the normal

course of business:

and integration related transaction expenses (3)

of Company Debt (4)

related costs relating to prior years (5)

Stock-based compensation expense

2 unchanged sentences

Interest Expense

Change in fair value of warrant liability

Change in fair value of warrant

Other finance expenses / (income)

5 unchanged sentences

Reconciliation

to Adjusted EBITDA by segment for the Three Months ended June 30, 2020

to Adjusted EBITDA by segment for the Three and Nine Months ended September 30, 2020

the Three-Month Period ended

June 30, 2020

Net Income/ (loss)

Items Relating to Legacy Activities:

Pension charges (1)

Items outside the normal course of business:

Costs of group restructure

Acquisition and integration related transaction

Stock-based compensation expense

Depreciation and amortization

Interest Income

Interest Expense

Change in fair value of warrant liability

Other finance expenses / (income)

Adjusted EBITDA

Exchange Rate - $ to £ (5)

Reconciliation

to Adjusted EBITDA by segment for the Six Months ended June 30, 2021

For the Six-Month Period ended

the Nine-Month Period ended

(In millions)

June 30, 2021

Virtual Sports

Net Income/ (loss)

4 unchanged sentences

Acquisition and integration related transaction expenses

Refinancing of Company Debt (4)

Italian tax related costs relating to prior years (5)

Impairment on interest in equity method investee(6)

10 unchanged sentences

costs are not allocable and to do so would not be practical, these are shown in the Corporate category.

Reconciliation

to Adjusted EBITDA by segment for the Six Months ended June 30, 2020

For the Six-Month Period ended

(In millions)

June 30, 2020

Net Income/ (loss)

Items Relating to Legacy Activities:

Pension charges (1)

Items outside the normal course of business:

Costs of group restructure (2)

Acquisition and integration related transaction expenses (3)

Impairment on interest in equity method investee(6)

Stock-based compensation expense

Depreciation and amortization

Interest Income

Interest Expense

Change in fair value of warrant liability

Other finance expenses / (income)

Adjusted EBITDA

Exchange Rate - $ to £ (5)

to Adjusted EBITDA reconciliation tables above:

5 unchanged sentences

These costs are included within Corporate Functions.

of group restructure” include redundancy costs, Payments In Lieu of Notice costs, any associated employer taxes and costs associated

with onerous property leases.

To qualify as being an adjusting item, costs must be part of a large restructuring project, which will

net save ongoing future costs.

“Costs of group restructure” include redundancy costs, Payments In Lieu of Notice costs, any associated employer taxes and costs associated with onerous property leases.

To qualify as being an adjusting item, costs must be part of a large restructuring project, which will net save ongoing future costs.

These costs were primarily incurred in connection with the property consolidation.

and integration related transaction expenses, Stock-based compensation expense, Depreciation and amortization, Total other expense,

net and Income tax are as described above in the Results of Operations line item discussions.

Total expense, net includes interest

income, interest expense, change in fair value of earnout liability, change in fair value of derivative liability and other finance

May 2021, the Company refinanced its debt.

Acquisition and integration related transaction expenses, Stock-based compensation expense, Depreciation and amortization, Total other expense, net and Income tax are as described above in the Results of Operations line item discussions.

Total expense, net includes interest income, interest expense, change in fair value of earnout liability, change in fair value of derivative liability and other finance income.

In May 2021, the Company refinanced its debt.

These are the one-off fees as a result of the refinance.

tax related costs relating to prior years invoicing” relate to a settlement with the Italian Tax Authorities in respect

of an audit of the Italian Branch of Inspired Gaming (International) Limited for the period 2015-2017 in respect of the historic

VAT treatment of supplies.

April 2020, the Company disposed of its 40% non-controlling equity interest in Innov8 Gaming Limited which resulted in the investment

of $0.7 million being written off.

rate in the table is calculated by dividing the USD Adjusted EBITDA by the GBP Adjusted EBITDA, therefore this could be slightly

different from the average rate during the period depending on timing of transactions.

“Italian tax related costs relating to prior years invoicing” relate to a settlement with the Italian Tax Authorities in respect of an audit of the Italian Branch of Inspired Gaming (International) Limited for the period 2015-2017 in respect of the historic VAT treatment of supplies.

In April 2020, the Company disposed of its 40% non-controlling equity interest in Innov8 Gaming Limited which resulted in the investment of $0.7 million being written off.

Exchange rate in the table is calculated by dividing the USD Adjusted EBITDA by the GBP Adjusted EBITDA, therefore this could be slightly different from the average rate during the period depending on timing of transactions.

and Capital Resources

Months ended June 30, 2021 compared to Six Months ended June 30, 2020

6 Months ended

(in millions)

Amortization of debt fees

Change in fair value of derivative and warrant liabilities and stock-based compensation expense

Impairment expense

Foreign currency translation on senior bank debt and cross currency swaps

Depreciation and amortization (incl RoU assets)

Other net cash (utilized)/generated by operating activities

Net cash (used)/provided by operating activities

Net cash used in investing activities

Net cash generated/(used) by financing activities

Effect of exchange rates on cash

Net (decrease)/increase in cash and cash equivalents

cash (used)/provided by operating activities

the six months ended June 30, 2021, net cash outflow used by operating activities was $12.8 million, compared to a $10.2 million

inflow for the six months ended June 30, 2020, representing a $23.0 million decrease in cash generation driven by COVID-19 related

closures and interest expense timing differences resulting in payments of $17.5 million compared to $0.4 million in the prior period.

In addition, a larger VAT payment made in the three months ended March 31, 2021 resulted in an $7.7 million higher outflow compared to

the prior period.

of debt fees increased by $15.1 million to $16.3 million due to the write-off in May 2021 of capitalized debt fees totaling $14.4

million following the Company refinancing.

The remainder of the current year’s non-cash interest expense related to amortization

of debt fees incurred in relation to the business refinancing in October 2019 up to the refinancing.

Post refinancing the amortization

of debt fees related to those incurred and capitalized as part of the May 2021 refinancing.

The prior year’s non-cash interest

expense related to amortization of debt fees incurred in relation to the business refinancing in October 2019.

in fair value of derivative and warrant liabilities and stock-based compensation expense increased by $22.7 million, from an outflow

of $3.4 million to an inflow of $19.3 million.

Months ended September 30, 2021, compared to Nine Months ended September 30, 2020

in fair value of derivative and warrant liabilities and stock-based compensation expense

currency translation on senior bank debt and cross currency swaps

and amortization (incl RoU assets)

net cash (utilized)/generated by operating activities

cash provided by operating activities

cash used in investing activities

cash generated by financing activities

of exchange rates on cash

(decrease)/increase in cash and cash equivalents

cash provided by operating activities

For the nine months ended September 30, 2021,

net cash inflow provided by operating activities was $7.0 million, compared to a $31.5 million inflow for the nine months ended September

30, 2020, representing a $24.5 million decrease in cash generation.

This decrease was driven by interest timing differences resulting

in interest payments of $17.6 million compared to $0.6 million in the prior period.

The prior period also included a receipt in relation

to VAT related income.

of debt fees increased by $14.5 million to $16.7 million due to the write-off in May 2021 of capitalized debt fees totaling $14.4 million

following the Company refinancing.

The remainder of the current year’s non-cash interest expense related to amortization of debt

fees incurred in relation to the business refinancing in October 2019 up to the refinancing.

Post refinancing the amortization of debt

fees related to those incurred and capitalized as part of the May 2021 refinancing.

The prior year’s non-cash interest expense

related to amortization of debt fees incurred in relation to the business refinancing in October 2019.

in fair value of derivative and warrant liabilities and stock-based compensation expense increased by $8.4 million, from an outflow of

$2.3 million to an inflow of $6.1 million.

Movements in the fair valuation of warrant liabilities increased the inflow by $2.3 million,

$5.5 million related to stock-based compensation expense and $0.6 million related to the movement in cross-currency swaps.

currency translation on senior bank debt and cross currency swaps resulted in a loss in the six months ended June 30, 2021 of $4.6

million as a result of the movement in exchange rates during the period, compared to a $6.6 million gain in the six months ended

June 30, 2020.

and amortization decreased by $1.7 million to $26.2 million with reductions of a $1.5 million in amortization of intangible assets, $0.5

million in machine depreciation and $0.7 million relating to the amortization of Right of Use assets under ASC 842 offset through an

increase of $1.0 million in development costs and licenses amortization.

net cash utilized by operating activities decreased by $22.7 million, to a $9.5 million outflow following the significant impact of the

COVID-19 closures.

Movements in other creditor levels resulted in a $13.2 million higher outflow in the six months ended June

30, 2021 which was largely due to the different timing of interest payments becoming payable following the refinancing in May 2021.

high tax accrual level at the start of 2021 resulted in a net $6.8 million adverse movement in the six months ended June 30, 2021.

adverse movements were also seen on deferred revenue creditors ($3.2 million) and accounts receivable ($4.8 million), caused by the variability

of trading levels caused by COVID-19, partly offset by improved inventory ($4.8 million).

Many of the operating activity movements were

impacted by the COVID-19 closures, however, throughout the period, management have actively managed cash levels to seek to optimize our

liquidity position.

currency translation on senior bank debt and cross currency swaps resulted in a loss in the nine months ended September 30, 2021, of

$4.6 million as a result of the movement in exchange rates during the period, compared to a $6.6 million gain in the nine months ended

September 30, 2020.

and amortization decreased by $3.9 million to $38.7 million with reductions of a $2.9 million in machine depreciation and $1.5 million

in amortization of intangible assets offset through an increase of $0.6 million in development costs and licenses amortization.

net cash utilized by operating activities decreased by $31.6 million, to a $14.4 million outflow following the significant

impact of the COVID-19 closures.

Movements due to different timing of interest payments following the May 2021 refinancing have resulted

in a $15.6 million higher outflow in the nine months ended September 30, 2021.

In addition a higher VAT accrual level at

the start of 2021 resulted in a net $10.6 million adverse movement in the nine months ended September 30, 2021.

Further adverse

movements were also seen on deferred revenue creditors ($3.3 million) long term liabilities ($1.8 million) and accounts receivable

($7.7 million), caused by the variability of trading levels caused by COVID-19 lockdowns and the unwind period needed when

lockdown restrictions were eased are partly offset by favorable movements in accounts payable and accruals ($6.6 million).

cash used in investing activities

cash used in investing activities decreased by $3.3 million to $12.2 million in the six months ended June 30, 2021, with lower spend

on gaming machines as a result of the COVID-19 closures.

cash used in investing activities decreased by $3.8 million to $18.2 million in the nine months ended September 30, 2021.

cash generated by financing activities

the six months ended June 30, 2021, net cash generated by financing activities was an inflow of $1.0 million, compared to a $18.6

million inflow in the six months ended June 30, 2020.

The inflow in the six months ended June 30, 2021 related to the net movement from

the May 2021 refinancing.

During the six months ended June 30, 2020, an increase in the amount drawn on the revolver provided a $22.3

million inflow which was partly offset by $3.1 million of debt fees incurred.

the nine months ended September 30, 2021, net cash generated by financing activities was an inflow of $0.9 million, compared to a $5.4

million inflow in the nine months ended September 30, 2020.

The inflow in the nine months ended September 30, 2021, related to the net

movement from the May 2021 refinancing and finance lease spend of $0.4 million.

During the nine months ended September 30, 2020, an increase

in the amount drawn on the revolver provided a $9.2 million inflow which was partly offset by $3.1 million of debt fees incurred and

$0.7 million of finance lease spend.

Needs and Sources

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debt or the refinancing of existing debt.

As of June 30, 2021, we had liquidity of $24.5 million in cash and cash equivalents

and a further $27.6 million of an undrawn revolver facility.

This compares to $39.9 million of cash and cash equivalents as of

June 30, 2020 but $24.7 million drawn on the revolver facility.

We had a working capital outflow of $9.5 million for the six months

ended June 30, 2021, compared to an $13.2 million inflow for the six months ended June 30, 2020.

The level of our working capital surplus

or deficit varies with the level of machine production we are undertaking and our capitalization as well as the seasonality evident in

some of the businesses purchased as part of the NTG Acquisition.

In periods with minimal machine volumes and capital spend, our working

capital is more stable.

In periods where significant numbers of machines are being produced, the levels of inventory and creditors are

higher than typical and there is a natural timing difference between converting the stock into sellable or capitalized plant and settling

payments to suppliers.

These factors, along with movements in trading activity levels which have been seen during 2020 and 2021 following

the COVID-19 closures, can result in significant working capital volatility.

In periods of low activity, our working capital volatility

Working capital is reviewed and managed with the aim of ensuring that current liabilities are covered by the level of cash

held and the expected level of short-term receipts.

As of September 30, 2021, we had liquidity of $37.1 million in cash and cash equivalents and

a further $27.0 million of an undrawn revolver facility.

This compares to $43.9 million of cash and cash equivalents as of September

30, 2020, but $12.9 million drawn on the revolver facility with a further $12.9 million of revolver facilities undrawn.

We had a working

capital outflow of $14.4 million for the nine months ended September 30, 2021, compared to an $17.3 million inflow for the nine

months ended September 30, 2020.

The level of our working capital surplus or deficit varies with the level of machine production we are

undertaking and our capitalization as well as the seasonality evident in some of the businesses purchased as part of the NTG Acquisition.

In periods with minimal machine volumes and capital spend, our working capital is more stable.

In periods where significant numbers of

machines are being produced, the levels of inventory and creditors are higher than typical and there is a natural timing difference between

converting the stock into sellable or capitalized plant and settling payments to suppliers.

These factors, along with movements in trading

activity levels which have been seen during 2020 and 2021 following the COVID-19 closures, can result in significant working capital

In periods of low activity, our working capital volatility is reduced.

Working capital is reviewed and managed with the aim

of ensuring that current liabilities are covered by the level of cash held and the expected level of short-term receipts.

of our business operations require cash to be held within the machines.

As of June 30, 2021, $4.6 million of our $24.5 million

of cash and cash equivalents were held as operational floats within the machines.

currently believes that despite the reduced trading levels caused by the COVID-19 closures, the Company’s cash balances on hand,

cash flows expected to be generated from operations, and the ability to control and defer capital projects will be sufficient to fund

the Company’s net cash requirements through August 2022.

As of September 30, 2021, $5.0 million of our $37.1 million of

cash and cash equivalents were held as operational floats within the machines.

Subsequent to the balance sheet date, holders

of the Company’s public warrants exercised 109,346 warrants for a total exercise price of $0.6 million, resulting in the issue

of 54,673 common shares.

As of November 9, 2021, there were 23,433,386 shares of the Company’s common stock outstanding.

may from time to time to purchase all or a portion of the Company’s outstanding debt, or a portion of the Company’s

outstanding equity securities.

Such purchases may be effected in the open market, through redemptions, or through privately

negotiated transactions.

currently believes that the Company’s cash balances on hand, cash flows expected to be generated from operations, and the ability

to control and defer capital projects will be sufficient to fund the Company’s net cash requirements through November 2022.

Term and Other Debt

Note 4 Long Term and Other Debt of the Financial Statements for detail of the debts held during 2020 and 2021.

our debt facilities in place as of June 30, 2021 we are not subject to covenant testing on the Senior Secured Notes.

our debt facilities in place as of September 30, 2021, we are not subject to covenant testing on the Senior Secured Notes.

We are, however,

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As the RCF has never been drawn at

any point since being in place, no covenant testing was required at June 30, 2021.

our debt facilities in place as of June 30, 2020 we are subject to covenant testing on the Senior Secured Notes.

The covenant testing

is set at the level of Inspired Entertainment Inc., the ultimate holding company, and consists of a test on Leverage (Consolidated Total

Net Debt/Consolidated Pro Forma EBITDA) and a test on the level of capital expenditure.

any point since being in place, no covenant testing was required at September 30, 2021.

our debt facilities in place as of September 30, 2020, we were subject to covenant testing on the Senior Secured Notes.

testing is set at the level of Inspired Entertainment Inc., the ultimate holding company, and consists of a test on Leverage (Consolidated

Total Net Debt/Consolidated Pro Forma EBITDA) and a test on the level of capital expenditure.

These are measured under U.S.

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revised covenants was achieved on June 25, 2020.

were no breaches of the debt covenants in the periods ended June 30, 2021 and June 30, 2020.

were no breaches of the debt covenants in the periods ended September 30, 2021, and September 30, 2020.

and Encumbrances

of June 30, 2021, our senior bank debt was secured by the imposition of a fixed and floating charge in favor of the lender over all the

assets of the Company and certain of the Company’s subsidiaries.

of June 30, 2021, our contractual obligations were as follows:

Contractual Obligations (in millions)

Operating activities

Interest on long term debt

Financing activities

Senior bank debt - principal repayment

Finance lease payments

Operating lease payments

Interest on non-utilization fees

of September 30, 2021, our senior bank debt was secured by the imposition of a fixed and floating charge in favor of the lender over

all the assets of the Company and certain of the Company’s subsidiaries.

of September 30, 2021, our contractual obligations were as follows:

Obligations (in millions)

on long term debt

bank debt - principal repayment

lease payments

on non-utilisation fees

Sheet Arrangements

of June 30, 2021, there were no off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K, promulgated by the

of September 30, 2021, there were no off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K, promulgated

Securities and Exchange Commission.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis