High Roller Technologies, Inc. 10-K

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA FINANCIAL STATEMENTS OF HIGH ROLLER TECHNOLOGIES, INC. CONTENTS Report of Independent Registered Public Accounting Firm (PCAOB No. 100 ) F-2 Financial Statements Consolidated Balance Sheets as of December 31, 2024 and 2023 F-3 Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2024 and 2023 F-4 Consolidated Statements of Stockholders’ (Deficit) Equity for the years ended December 31, 2024 and 2023 F-5 Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023 F-6 Notes to the Consolidated Financial Statements F-7 F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of High Roller Technologies, Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of High Roller Technologies, Inc. and Subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity (deficit), and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ WithumSmith+Brown, PC We have served as the Company’s auditor since 2022. Whippany, New Jersey March 20, 2025 PCAOB ID Number 100 F-2 Table of Contents HIGH ROLLER TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of As of December 31, December 31, (in thousands, except share and per share data) 2024 2023 Assets Current assets Cash and cash equivalents $ 6,869 $ 2,087 Restricted cash 1,085 1,958 Prepaid expenses and other current assets 825 836 Total current assets 8,779 4,881 Due from affiliates 1,624 702 Deferred offering costs — 580 Property and equipment, net 372 250 Operating lease right-of-use asset, net 910 — Intangible assets, net 4,899 5,117 Other assets 41 255 Total assets $ 16,625 $ 11,785 Liabilities and stockholders’ equity Current liabilities Accounts payable $ 1,560 $ 686 Accrued expenses 4,307 4,300 Player liabilities 662 499 Due to affiliates 3,406 3,972 Short-term unsecured notes payable to stockholders 90 — Operating lease obligation, current 143 — Total current liabilities 10,168 9,457 Other liabilities 7 23 Operating lease obligation, noncurrent 729 — Total liabilities 10,904 9,480 Stockholders’ equity Preferred stock, $ 0.001 par value; 10,000,000 shares authorized; none issued and outstanding as of December 31, 2024 and December 31, 2023 — — Common stock, $ 0.001 par value; 60,000,000 shares authorized; 8,350,882 shares and 6,967,278 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively 8 7 Additional paid-in capital 31,557 22,052 Accumulated deficit ( 27,143 ) ( 21,220 ) Accumulated other comprehensive income 1,299 1,466 Total stockholders’ equity 5,721 2,305 Total liabilities and stockholders’ equity $ 16,625 $ 11,785 See accompanying notes to the consolidated financial statements. F-3 Table of Contents HIGH ROLLER TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS For the Year Ended December 31, (in thousands, except share and per share data) 2024 2023 Revenues, net $ 27,882 $ 29,675 Operating expenses Direct operating costs: Related party 2,646 4,289 Other 10,296 9,359 General and administrative: Related party 174 493 Other 9,189 10,037 Advertising and promotions: Related party 956 1,649 Other 9,387 5,955 Product and software development: Related party 208 242 Other 818 342 Total operating expenses 33,674 32,366 Loss from operations ( 5,792 ) ( 2,691 ) Other expenses Interest expense, net ( 125 ) ( 114 ) Other income 1 — Total other expenses ( 124 ) ( 114 ) Loss before income taxes ( 5,916 ) ( 2,805 ) Income tax expense 7 13 Net loss $ ( 5,923 ) $ ( 2,818 ) Other comprehensive (loss) income Foreign currency translation adjustment ( 167 ) 54 Comprehensive loss $ ( 6,090 ) $ ( 2,764 ) Net loss per common share: Net loss per common share – basic and diluted $ ( 0.82 ) $ ( 0.42 ) Weighted average common shares outstanding – basic and diluted 7,248,892 6,641,774 See accompanying notes to the consolidated financial statements. F-4 Table of Contents HIGH ROLLER TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’ (DEFICIT) EQUITY Common Stock Accumulated Total Additional Other Stockholder’s Paid-In Accumulated Comprehensive Equity (in thousands, except shares) Shares Amount Capital Deficit Income (Deficit) December 31, 2022 6,318,094 $ 6 $ 16,834 $ ( 18,402 ) $ 1,412 $ ( 150 ) Issuance of common shares in settlement of short-term debt to affiliated party 631,809 1 4999 — — 5,000 Share-based compensation — — 219 — — 219 Shares issued for vesting of restricted stock units 17,375 — — — — — Net loss — — — ( 2,818 ) — ( 2,818 ) Foreign currency translation — — — — 54 54 December 31, 2023 6,967,278 7 22,052 ( 21,220 ) 1,466 2,305 Shares issued for vesting of restricted stock units 48,989 — — — — — Shares issued for services rendered 12,500 — — — — — Settlement of an affiliated payable through contribution to capital 72,115 — 375 — — 375 Issuance of common shares in initial public offering, net of offering costs 1,250,000 1 8,077 — — 8,078 Share-based compensation — — 1,053 — — 1,053 Net loss — — — ( 5,923 ) — ( 5,923 ) Foreign currency translation — — — — ( 167 ) ( 167 ) December 31, 2024 8,350,882 $ 8 $ 31,557 $ ( 27,143 ) $ 1,299 $ 5,721 See accompanying notes to the consolidated financial statements. F-5 Table of Contents HIGH ROLLER TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Year Ended December 31, (in thousands) 2024 2023 Cash flows from operating activities Net loss $ ( 5,923 ) $ ( 2,818 ) Adjustments to reconcile net loss to net cash used in operating activities: Amortization and depreciation 243 60 Foreign exchange loss (gain) 34 ( 1 ) Noncash interest expense 129 114 Noncash lease expense 189 22 Change in deferred taxes — 13 Share-based compensation 1,053 219 Changes in operating assets and liabilities: Due from affiliates ( 1,010 ) 2,363 Prepaid expenses and other current assets ( 47 ) 471 Other assets 207 14 Deferred offering costs 544 — Accounts payable 927 ( 692 ) Accrued expenses 259 2,068 Player liabilities 202 30 Due to affiliates ( 461 ) ( 986 ) Other liabilities ( 22 ) ( 90 ) Operating lease liabilities ( 230 ) ( 25 ) Net cash (used in) provided by operating activities ( 3,906 ) 762 Cash flows from investing activities Investment in capitalized software ( 284 ) ( 380 ) Purchases of property and equipment ( 187 ) ( 249 ) Net cash used in investing activities ( 471 ) ( 629 ) Cash flows from financing activities Payment of offering costs ( 863 ) ( 336 ) Proceeds from issuance of debt 500 — Cash settlement of affiliated debt ( 35 ) — Proceeds from issuance of common stock in initial public offering, net of offering costs 8,078 — Net cash provided by (used in) financing activities 7,680 ( 336 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 606 98 Net change in cash, cash equivalents, and restricted cash 3,909 ( 105 ) Cash, cash equivalents, and restricted cash – beginning of period 4,045 4,150 Cash, cash equivalents, and restricted cash – end of period $ 7,954 $ 4,045 Supplemental disclosure of cash flow: Cash paid for taxes $ — $ 25 Non-cash investing and financing activities: Conversion of related party debt to common stock $ 375 $ 5,000 Offering costs accrued but not paid $ — $ 208 Acquisition of right-of-use asset in exchange for lease obligations $ 1,141 $ — See accompanying notes to the consolidated financial statements. F-6 Table of Contents HIGH ROLLER TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 — NATURE OF OPERATIONS High Roller Technologies, Inc. (the “Company” or “High Roller”) was incorporated in Delaware on December 21, 2021, with the intent to seek an initial public offering on a United States securities exchange. High Roller is the direct parent company of Ellmount Entertainment Ltd (“Entertainment”). Entertainment, which is based in Malta, has been in operation for over a decade and operated an online gaming business offering casino games to customers worldwide under the domain name ‘casinoroom.com’ under licenses issued by the Malta Gaming Authority and Swedish Gaming Authority. SUBSIDIARIES OF ENTERTAINMENT Wowly NV (“Wowly”) is a wholly owned subsidiary of Entertainment. Wowly, which is organized in Curacao, manages certain internet related advertising services on behalf of Entertainment. Ellmount Support SA (“Support”), which was based in Costa Rica, provided services to Entertainment that are currently being provided by Lunar Ventures Limited (“Ventures”), as described below, prior to its wind down in first quarter of 2024. Deep Dive Holdings LTD, which is organized in Malta in September 2024, acts as a holding company for our consolidated Maltese operating and service entities and has no operations. Subsidiaries of Highroller In March 2022, the Company acquired HR Entertainment Ltc (“HR Entertainment”), an entity organized under the laws of British Virgin Islands, which holds a worldwide license to operate the HighRoller.com domain, and HR Entertainment became a wholly-owned subsidiary of the Company. On May 30, 2023, Ventures was incorporated in Malta. The services provided by Ventures principally include customer support, activation, and retention, risk management, payments, and fraud management, Facebook maintenance and telemarketing, and monthly reporting on support transactions. On February 15, 2024, Interstellar Entertainment N.V. was incorporated in Curacao for the primary purpose of extending our current Curacao sublicense previously held by our wholly-owned subsidiary HR Entertainment, and to apply for a gaming license directly with the Curacao Gaming Control Board. The Curacao Gaming Control Board has mandated that all applying entities seeking to receive a gaming license must be domiciled in Curacao. In March 2024, Interstellar Entertainment N.V., a wholly owned subsidiary of the Company incorporated in Curacao, applied to obtain a license from the Curacao Gaming Control Board and in July 2024 was issued license no. OGL/2024/1042/0564 to operate the highroller.com and fruta.com domains. Reverse stock split On January 16, 2024, the Company’s Board of Directors and shareholders approved a 1 -for- 3.95689 reverse stock split of the Company’s outstanding common stock, which became effective on January 16, 2024. Fractional shares, if any, were rounded up or down to the nearest whole share, as appropriate. As a result of this reverse split, all share and per share amounts have been retroactively adjusted for the impact of the reverse stock split for all periods presented. The reverse stock split did not impact the number of authorized shares of common stock, which remained at 60,000,000 shares, or the authorized shares of preferred stock, which remained at 10,000,000 shares, nor the $ 0.001 par value of such shares. F- 7 Table of Contents NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of High Roller Technologies, Inc. and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated upon consolidation. Risk and Uncertainties The Company’s business and operations are sensitive to general business and economic conditions worldwide. These conditions include short-term and long-term interest rates, inflation, fluctuations in debt and equity capital markets, cash transfer rules and restrictions, and the general condition of the world economy. A host of factors beyond the Company’s control could cause fluctuations in these conditions. Adverse developments in these general business and economic conditions could have a material adverse effect on the Company’s financial condition and the results of its operations. The Company’s business and operations are also sensitive to continually evolving online gaming regulatory and licensing requirements. In addition, the Company competes with many companies that currently have extensive and well-funded businesses, marketing and sales operations. The Company may be unable to compete successfully against these companies. The Company’s industry is characterized by rapid changes in technology and market demands. As a result, the Company’s products, services, or expertise may become obsolete or unmarketable. The Company’s future success will depend on its ability to adapt to technological advances, anticipate customer and market demands, and enhance its current technology under development. F- 8 Table of Contents Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenue and expenses. Some of those judgments can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Significant estimates include those related to assumptions used in accruals for potential legal and other liabilities, realization of intangible assets, share-based compensation, accrued jackpots, the realization of deferred tax assets, and going concern assessment. Cash and Cash Equivalents, and Restricted Cash Cash and cash equivalents consist of liquid checking and instant access internet banking accounts with original maturities of 90 days or less that are subject to an insignificant risk of change in value. The Company has not experienced any losses to date resulting from this policy. For the year ended December 31, 2024, the company recorded an allowance of $ 171 thousand for balances with certain payment service providers that is considered uncollectible. Cash and cash equivalents that are legally restricted as to withdrawal or usage are classified as restricted cash in the consolidated balance sheets. Entertainment and HR Entertainment maintain separate accounts with various intermediary parties to segregate cash that resides in customers’ interactive gaming accounts from cash used in operating activities. Player funds denoted as such by Entertainment at the end of each period are classified as restricted cash. Player funds include cash amounts that reside in players’ interactive gaming withdrawals that were initiated by players but that are still pending at the end of each period, and the value of any bets that are unsettled at the end of each period. Due from Affiliates Due from affiliates consists of amounts expected to be collected from certain affiliated companies under common control. Amounts due reflect the revenues recorded by the Company under intra-group services arrangements for maintenance and operations of the iCasino platform on behalf of Interactive. As of December 31, 2024 and 2023 , due from affiliates reflected amounts due from Spike Up and Happy Hour Solutions (see Note 13 ). On a periodic basis, the Company evaluates the collectability of amounts due from affiliates and establishes an allowance for amounts not expected to be collected. No allowance was recorded for the periods presented in the consolidated financial statements. Deferred Offering Costs Deferred offering costs consist of payments with respect to pending equity financing transactions, including legal fees. Such costs were deferred and were charged to additional paid-in capital during the year ended December 31, 2024 in conjunction with the completion of the Company’s initial public offering in October 2024. Property and Equipment, net Property and equipment are carried at cost, net of accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful life of the asset. Amortization of leasehold improvements is computed over the shorter of the lease term or estimated useful life of the asset. Additions and improvements are capitalized, while repairs and maintenance are expensed as incurred. Useful lives of each asset class are as follows: Asset Useful Life (in years) Machinery and equipment 5 Computer and IT equipment 3 Furniture and fixtures 7 F- 9 Table of Contents An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in general and administrative expenses. Intangible Assets, Net Intangible assets with finite useful lives that are acquired are carried at cost less accumulated amortization and accumulated impairment losses. Amortization expense is recognized on a straight-line basis over the estimated useful lives of the intangible assets. The estimated useful lives and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimates being accounted for on a prospective basis. Impairment of Long-Lived Assets The Company’s long-lived assets consist of property and equipment, operating lease-right of use assets and indefinite lived assets (i.e. trademarks and domain name). The Company evaluates long-lived assets for indicators of impairment at least annually or when events or changes in circumstances indicate that their carrying amounts may not be recoverable. The factors that would be considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the long-lived asset is used and the effects of obsolescence, demand, competition and other economic factors. If indicators of impairment are identified, the Company performs an undiscounted cash flow analysis of the long-lived assets. Asset groups are written down only to the extent that their carrying value is lower than their respective fair value. Fair values of the asset group are determined by discounting the cash flows at a rate that approximates the cost of capital of a market participant. Indefinite-lived intangible assets consist of trademarks and domain name. Indefinite-lived intangible assets are not amortized; rather they are tested for impairment at least annually, or more frequently if adverse events or changes in circumstances indicate that the carrying value may not be recoverable. In addition, management evaluates whether events and circumstances continue to support an indefinite useful life. Impairment tests are performed, at a minimum, in the fourth quarter of each year. To test indefinite-lived intangible assets for impairment, the Company first assesses the qualitative factors to determine whether it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative impairment test. If the Company determines that it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, then the quantitative impairment test is performed. The qualitative assessment requires the consideration of factors such as recent market transactions, macroeconomic conditions, and changes in projected future cash flows. The quantitative assessment compares the fair value of an indefinite-lived intangible asset to its carrying amount. If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized for the excess. Fair values of indefinite-lived intangible assets are determined based on discounted cash flows. The Company conducted an impairment analysis with respect to the casino room trademarks and HighRoller domain names at December 31, 2024 which concluded that the fair value, determined using a discounted cash flow analysis, substantially exceed their carrying value, and thus they were not impaired. Projected cash flows included an estimated commission fee for referring a player who opens an account with a deposit to an online gaming site, as well as future revenue sharing agreements for those customers based upon net gaming revenue over an estimated gaming period ranging from approximately 5 months to 12 months. The Company did not have any impairment of indefinite-lived intangible assets during the year ended December 31, 2024. The Company did not record any impairment for indefinite-lived intangible assets for the year ended December 31, 2023. F- 10 Table of Contents Player Liabilities The Company records liabilities for customer account balances, which consist of customer deposits, plus customer winning bets, less customer losing bets and customer withdrawals. The Company includes accrued jackpots within player liabilities on the accompanying consolidated balance sheets. The Company’s restricted cash balance equals or exceeds the cash portion of the Company’s player liabilities account. Due to Affiliates Due to affiliates consists of amounts owed by the Company to certain of its related parties and affiliates. Amounts due to affiliates may include payment for services provided to the Company by employees of the related party or affiliate, or reimbursement of amounts paid by the related party or affiliate on the Company’s behalf. Revenue Recognition: Gaming Revenue The Company records revenue in accordance with the provisions of Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606” ). Revenue is recognized when a game is completed, a winner is definitive, and the player has lost their wager. These wagers were passed on to the Company and revenue is recognized at that point in time. The Company recognizes revenue based on the following conditions: Existence of a Contract with the Customer The Company has concluded that an implied contract between the player and the Company is enforceable when the player places a wager. At that point in time, the Company has agreed to fulfill its obligations to the player, and it is probable that the Company will collect substantially all of the consideration to which it is entitled. Performance Obligation The performance obligation arises when a player decides to place a wager. A wager is defined as any form of real money wager, which in turn grants that player a chance to earn higher returns. Determining the Transaction Price The transaction price is the amount to which a player expects to be entitled in exchange for its share of the performance obligations. In this case, the transaction price would be the wager placed by the player. Allocating the Transaction Price to the Performance Obligations There is only one performance obligation. Therefore, the transaction price is allocated 100% to the single performance obligation. Recognize the Revenue Revenue is recognized at the time a placed wager is lost as the performance obligation is met. Contract liabilities represent the differences in the timing of revenue recognition from the receipt of cash from the Company’s customers and billings to those customers. Gaming revenue typically include the full suite of games available online, such as blackjack, roulette and slot machines. For these offerings, the Company generates revenue through hold, or gross winnings, as customers play against the house. Revenue is generated based on total customer bets less amounts paid to customers for winning bets, less other incentives awarded to customers, plus or minus the change in the progressive jackpot reserve, thus on a net basis. Revenue attributable to gaming transactions in which the Company assumes an open position against the player are reported net after deductions for player winnings. Gaming taxes are determined on a jurisdiction-by-jurisdiction basis. The Company incurs payment processing costs on customer deposits and occasionally chargebacks (i.e., when a payment processor contractually disallows customer deposits in the normal course of business). Intra-Group Service Arrangement The Company also performed certain intra-group services related to management services for Interactive. The Company did not control the contractual services and therefore recorded the services as net revenue over time during the period of performance as the customer simultaneously receives and consumes the benefits from the services provided. F- 11 Table of Contents Fair Value Measurements The Company applies ASC 820, Fair Value Measurement (“ASC 820” ), which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances. The valuation hierarchy is composed of three levels. The classification within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The levels within the valuation hierarchy are described below: Level 1 - Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 - Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. Fair Value of Financial Instruments Financial instruments consist of cash and cash equivalents, restricted cash, accounts payable, accrued expenses and player liabilities. The Company determines the estimated fair value of such financial instruments presented in these consolidated financial statements using available market information and appropriate methodologies. These financial instruments are stated at their respective historical carrying amounts, which approximate fair value due to their short-term nature. Leases The Company accounts for leases in accordance with ASC 842 , Leases , under which arrangements meeting the definition of a lease are classified as operating or finance leases and are recorded on the consolidated balance sheets as both a right-of-use asset and a lease liability. The Company elected to apply the practical expedient that allows for the combination of lease and non-lease components for all asset classes. The lease classification evaluation begins at the lease commencement date. The lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain. F- 12 Table of Contents For leases with an initial term greater than 12 months, a related lease liability is recorded on the balance sheet at the present value of future payments discounted at the estimated fully collateralized incremental borrowing rate (discount rate) corresponding with the lease term. In addition, a right-of-use asset is recorded as the initial amount of the lease liability, plus any lease payments made to the lessor before or at the lease commencement date and any initial direct costs incurred, less any tenant improvement allowance incentives received. Tenant incentives are amortized through the right-of-use asset as a reduction of rent expense over the lease term. The difference between the minimum rents paid and the straight-line rent is reflected within the associated right-of-use asset. Certain leases contain provisions that require variable payments consisting of common area maintenance costs (variable lease cost). Variable lease costs are expensed as incurred. As the interest rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate corresponding with the lease term. As the Company does not have any outstanding debt, this rate is determined based on prevailing market conditions and comparable company and credit analysis. The incremental borrowing rate is reassessed if there is a change to the lease term or if a modification occurs and it is not accounted for as a separate contract. Direct Operating Costs Direct costs primarily consist of revenue share and market access fees, platform fees, gaming taxes and payment processing fees and charge backs. Revenue share and market access fees consist primarily of amounts paid to local partners. Advertising and Promotions Costs Advertising and promotion costs consist primarily of costs incurred with respect to the marketing of the Company’s products and services via different channels, promotional activities and the related costs incurred to acquire new customers. These costs also include salaries, bonuses, benefits and share-based compensation for dedicated personnel and are expensed as incurred. General and Administrative Costs General and administrative expenses consist primarily of administrative personnel costs, including salaries, bonuses and benefits, share-based compensation expenses, professional services related to legal, securities and tax compliance, accounting, auditing and consulting services, rent and other premises costs, and insurance. Foreign currency (gains) and losses arising from transactions denominated in currencies other than the functional currency are also included within general and administrative expenses. Capitalized Internal-Use Software Costs Costs related to software acquired, developed, or modified solely to meet the Company’s internal requirements, including tools that enable the Company’s employees to interact with members and their providers, with no substantive plans to market such software at the time of development, are capitalized. Costs incurred during the preliminary planning and evaluation stage of the project and during the post-implementation operational stage are expensed as incurred. Costs related to minor upgrades, minor enhancements, and maintenance activities are expensed as incurred. Costs incurred during the application development stage of the project and costs related to major upgrades or enhancements are capitalized. Internal-use software is included in intangible assets and is amortized on a straight-line basis over 3 years. F- 13 Table of Contents Share-Based Compensation The Company records share-based compensation in accordance with ASC 718, Compensation-Stock Compensation (“ASC 718” ), and recognizes share-based compensation expense in the period in which a grantee is required to provide service, which is generally over the vesting period of the individual share-based payment award. Compensation expense for awards with performance conditions is not recognized until it is probable that the performance target will be achieved. Compensation expense for awards is recognized over the requisite service period on a straight-line basis. The Company accounts for forfeitures as they occur. The Company classifies unit awards as either an equity award or a liability award depending on whether the award contains certain repurchase provisions. Equity-classified awards are valued as of the grant date based upon the price of the underlying unit or share and a number of assumptions, including volatility, performance period, risk-free interest rate and expected dividends. Liability-classified awards are valued at fair value at each reporting date. Income Taxes The Company complies with the accounting and reporting requirements of ASC 740, Income Taxes (“ASC 740” ), which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances in respect of deferred tax assets are provided for, if necessary, to reduce deferred tax assets to amounts more likely than not to be realized. As of December 31, 2024 and 2023 , the Company had recorded a full valuation allowance on its deferred tax assets. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than- not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. Any interest and penalties related to uncertain tax positions will be recognized as a component of income tax expense. Net Loss Per Share The Company computes net loss per share in accordance with ASC 260, Earnings per Share (“ASC 260” ). ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the consolidated statement of operations. Basic EPS is computed by dividing net loss available to common stockholders by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of December 31, 2024 and 2023 , the Company had 1,295,840 and 221,449 potentially dilutive common shares outstanding, respectively. The additional securities are excluded from the dilutive earnings per share calculation as of December 31, 2024 and 2023 , because the effect would have been anti-dilutive. The additional securities excluded from the dilutive earnings per share calculation because their effect would have been anti-dilutive are as follows: As of and for the Years Ended December 31, 2024 2023 Warrants 101,672 39,172 Stock options 938,453 88,454 Restricted stock units 255,715 93,823 1,295,840 221,449 F- 14 Table of Contents Foreign Currency and Foreign Exchange Risk The consolidated financial statements are presented in United States Dollars ($), which is the Company’s reporting currency. Foreign currency exchange risk is the risk that the Company’s results of operations and/or financial condition could be impacted by unfavorable changes in exchange rates. The Company has transactions denominated in currencies other than the U.S. Dollar, principally the Euro but also other foreign currencies including Norwegian Krone, New Zealand Dollar and Canadian Dollar, that expose the Company’s operations to risk from the effects of exchange rate movements. Such movements may impact future revenues, expenses, and cash flows. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining other comprehensive income. Changes in the value of the Company’s cash balance due to fluctuations in foreign exchange rate are presented on the consolidated statements of cash flows as effect of foreign exchange rate changes on cash and cash equivalents, and restricted cash. As of December 31, 2024 and 2023 , 33 % and 97 %, respectively, of the Company’s cash and cash equivalents, and restricted cash reside in bank accounts located outside of the United States. The Company’s primary foreign currency exchange risk occurs between the time when other foreign currencies are exchanged for wagering on the Platform, and when those funds are settled to the Company in Euro. In addition, gains and losses related to translating certain cash balances from the Euro to the U.S. Dollar, as well as payable balances also impact net income. As the Company’s foreign operations expand, results may be impacted further by fluctuations in the exchange rates of the currencies in which the Company does business. The Company has not used any derivative financial instruments to manage its foreign currency exchange risk exposure. In most of the Company’s operations, the Company transacts primarily in the Euro, including wagered amounts, net revenue, revenue share, and employee-related compensation costs. Operating arrangements with payment service providers who convert player funds to the Euro from other currencies, for example the Canadian Dollar, could further negatively impact foreign currency exchange risk if the exchange spot rates used are unfavorable as compared to European Central Bank exchange rates. Foreign currency gains and losses arising from transactions denominated in currencies other than the functional currency are included in net loss and are included within general and administrative expenses. For the years ended December 31, 2024 and 2023 , the Company incurred foreign currency transaction losses of $ 1.1 million and $ 2.0 million, respectively. While we expect these losses to persist into 2025, we continue to manage and negotiate contracts with payment providers. The effects of foreign currency translation adjustments are included in stockholders’ equity (deficit) as a component of accumulated other comprehensive income in the accompanying consolidated balance sheets. Foreign currency fluctuations between the functional and reporting currency can significantly impact the currency translation adjustment component of accumulated other comprehensive income. Going Concern The accompanying Consolidated Financial Statements are prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. In accordance with Accounting Standards Codification ("ASC") 205 - 40, Going Concern, the Company’s management has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the Consolidated Financial Statements are issued. When substantial doubt exists under this methodology, the Company's management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about our ability to continue as a going concern. The mitigating effect of its plans, however, is only considered if both ( 1 ) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and ( 2 ) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the Consolidated Financial Statements are issued. The Company's history of operating losses and negative operating cash flows initially raised substantial doubt regarding its ability to continue as a going concern. However, based on management's current operating plan, the Company believes its cash on hand and the projected cash generated from operations are sufficient to fund the Company's operations for a period of a least 12 months subsequent to the issuance of the accompanying Consolidated Financial Statements and alleviates the conditions that initially raised substantial doubt regarding the Company's ability to continue as a going concern. Credit Risk The Company’s credit risk arises from cash and cash equivalents, and restricted cash and deposits with banks and other financial institutions. The Company maintains balances in banks in the United States and outside of the United States, primarily within the European Union. For funds held within the United States, the Federal Deposit Insurance Corporation insures $250 thousand per depositor per FDIC insured bank. For funds held within the European Union, the European Deposit Insurance Scheme insures €100 thousand per depositor per bank. The Company has funds in Finland, Cyprus, Lithuania, and Malta that are protected under this scheme. The Company mitigates potential cash risk by diversifying bank accounts with insured banking institutions within the United States and European Union. Furthermore, the Company maintains cash in payment service provider accounts and other such financial institutions that may or may not be protected under the previously mentioned insurance schemes. The inability to receive funds from certain payment service provider accounts may result in a negative impact to operations. The Company mitigates this potential risk by drawing down funds and transferring them to insured bank accounts on a regular basis. Segment Information In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023 - 07, Segment Reporting (Topic 280 ), Improvements to Reportable Segment Disclosures (“ASU 2023 - 07” ), which is effective for the consolidated financial statements for the reporting period and all interim periods thereafter. The Company adopted ASU 2023 - 07 on January 1, 2024. In accordance with ASC 280, “Segment Reporting”, the Company has one operating segment, which focuses on providing an online gaming casino to customers. The Company’s chief operating decision maker (“CODM”) identified as the Company’s Chief Executive Officer, utilizes the consolidated results of operations as a whole when making decisions about allocating resources and assessing the performance of the Company. As a result of the assessment made by the CODM, the Company has only one operating segment. See Note 17, Segment Reporting . F- 15 Table of Contents Common Stock The Company accounts for common stock subject to possible conversion in accordance with the guidance in ASC Topic 480 - “Distinguishing Liabilities from Equity” . Common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified within stockholders’ equity. The Company’s common stock may feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, shares of common stock subject to possible redemption are presented as temporary equity, adjusted to reflect redemption value (if material), outside of the stockholders’ equity section of the Company’s consolidated balance sheet. The Company did not have any potentially redeemable preferred stock as of December 31, 2024 or 2023. Recent Accounting Pronouncements In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ), Improvements to Income Tax Disclosures (“ASU 2023 - 09” ). The amendments in ASU 2023 - 09 are intended to increase transparency through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. ASU 2023 - 09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the disclosure impact that ASU 2023 - 09 may have on its financial statement presentation and disclosures. Management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures. NOTE 3 – INITIAL PUBLIC OFFERING On October 24, 2024, the Company consummated its Initial Public Offering ("IPO") of 1,250,000 shares of common stock on the NYSE American Exchange, at a price of $ 8.00 per share, for aggregate gross proceeds of $ 10.0 million, before deducting underwriting discount and offering expenses of approximately $ 1.9 million. In addition, the Company has granted the underwriters a 45 -day option to purchase up to an additional 187,500 shares of common stock to cover over-allotments at the initial public offering price, less the underwriting discount. Concurrently with the closing of IPO, the Company also issued warrants to purchase up to 62,500 shares of common stock to the representative of the several underwriters and its designees, at an exercise price of $ 10.00 per share, exercisable beginning on April 20, 2025 and expire on October 22, 2029. F- 16 Table of Contents NOTE 4 – REVENUE Disaggregated revenue for the years ended December 31, 2024 and 2023 is summarized as follows: For the Year Ended December 31, (in thousands) 2024 2023 Net gaming revenue $ 24,324 $ 28,577 Net revenue generated through intra-group services arrangements 3,558 1,098 Total Revenue $ 27,882 $ 29,675 The Company’s revenue by country for those countries with significant revenue for the years ended December 31, 2024 and 2023 is summarized as follows: Year Ended December 31, (in thousands) 2024 2023 Finland $ 12,950 46 % $ 8,208 28 % New Zealand 6,524 23 % 7,725 26 % Norway 3,653 13 % 6,076 20 % Canada 3,780 14 % 4,607 16 % Rest of world 975 3 % 3,059 10 % Total Revenue $ 27,882 100 % $ 29,675 100 % As of December 31, 2024 and 2023 , the Company had not recorded any contract assets or liabilities. NOTE 5 — CASH AND CASH EQUIVALENTS AND RESTRICTED CASH The following table reconciles cash and cash equivalents, and restricted cash in the consolidated balance sheets to the totals shown on the consolidated statements of cash flows as of December 31, 2024 and 2023 : December 31, December 31, (in thousands) 2024 2023 Cash and cash equivalents $ 6,869 $ 2,087 Restricted cash 1,085 1,958 Total cash and cash equivalents, and restricted cash $ 7,954 $ 4,045 F- 17 Table of Contents The following table presents cash and cash equivalents, and restricted cash held in accounts in each country (translated into USD) as of December 31, 2024 and 2023 : December 31, December 31, (in thousands) 2024 2023 Cash and cash equivalents: Malta $ 607 $ 392 Finland 431 387 United States 5,307 123 United Kingdom 57 163 Cyprus 14 83 Lithuania 313 671 Switzerland 81 — Other 59 268 Restricted cash Malta 566 1,074 Denmark 160 544 United Kingdom 164 183 Singapore — 105 Cyprus 188 — Other 7 52 Total cash and cash equivalents, and restricted cash $ 7,954 $ 4,045 NOTE 6 — PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets at December 31, 2024 and 2023 are summarized as follows: December 31, December 31, (in thousands) 2024 2023 VAT recoverable $ 77 $ 523 Payment provider receivables 92 113 Prepaid income tax — 32 Prepaid insurance 428 — Other prepaids 228 168 Total prepaid and other current assets $ 825 $ 836 F- 18 Table of Contents NOTE 7 — INTANGIBLE ASSETS, NET Intangible assets, net at December 31, 2024 and 2023 are summarized as follows: December 31, 2024 Weighted Average Amortization Gross Accumulated Net Period Carrying Accumulated Impairment Carrying (years) Amount Amortization Amount Amount Trademarks Indefinite $ 1,237 $ (950 ) $ — $ 287 Domain name Indefinite 4,129 — — 4,129 Capitalized software 3 817 ( 334 ) — 483 $ 6,183 $ ( 1,284 ) $ — $ 4,899 December 31, 2023 Weighted Average Amortization Gross Accumulated Net Period Carrying Accumulated Impairment Carrying (years) Amount Amortization Amount Amount Trademarks Indefinite $ 1,242 $ — $ ( 935 ) $ 307 Domain name Indefinite 4,396 — — 4,396 Capitalized software 3 568 ( 154 ) — 414 $ 6,206 $ ( 154 ) $ ( 935 ) $ 5,117 Trademarks and domain names have no amortization as the Company recognizes these identified intangibles assets as having an indefinite useful life. The Company considered various economic and competitive factors, including but not limited to, the life of trademarks that have been in existence with trademarks generally in the casino industry. The Company expects to generate cash flows from these intangible assets for an indefinite period of time. The Company’s trademarks and domain names are located in Europe. During the year ended December 31, 2024 , no indicators of impairment have been noted since the analysis performed at year end. During the year ended December 31, 2023 , the Company acquired the Fruta.com domain for $ 40 thousand. There was no impairment during the years ended December 31, 2024 and 2023 . For the year ended December 31, 2024, the Company capitalized $ 284 thousand of costs incurred with respect to internal-use software, related to development of enhancements to the functionality of the software placed into service during the fourth quarter of 2023. The customer database was fully amortized in 2014, but was still in use through December 31, 2024. The Company recorded $ 199 thousand in amortization expense on internal-use software for the year ended December 31, 2024 , which is included in general and administrative expenses in the consolidated statements of operations. The Company’s internal use software is in use in Europe. The Company recorded $ 35 thousand in amortization expense on internal-use software for the year ended December 31, 2023 . As of December 31, 2024 , the estimated future amortization expense associated with the Company’s finite-lived intangible assets for each of the five succeeding fiscal years is as follows: Amortization Year Ended December 31, Expense 2025 $ 227 2026 195 2027 61 2028 — 2029 — Total $ 483 F- 19 Table of Contents NOTE 8 — PROPERTY AND EQUIPMENT Property and equipment at December 31, 2024 and 2023 are summarized as follows: December 31, December 31, (in thousands) 2024 2023 Machinery, furniture, and equipment $ 225 $ 182 Leasehold improvements 195 121 420 303 Less: accumulated depreciation and amortization ( 48 ) ( 53 ) Total property and equipment, net $ 372 $ 250 The Company recorded depreciation expense on property a nd equipment of $ 44 thousand and $ 25 thousand for the yea rs ended December 31, 2024 and 2023 , respectively, which is included in general and administrative expenses in the consolidated statements of operations. NOTE 9 — ACCRUED EXPENSES Accrued expenses at December 31, 2024 and 2023 are summarized as follows: December 31, December 31, (in thousands) 2024 2023 VAT and other non income tax liabilities $ 1,503 $ 778 Accrued expenses 847 1,466 Accrued deferred offering costs — 208 Accrued licensing fee 335 399 Accrued marketing 1,553 1,192 Accrued payroll 23 133 Other accrued expenses 46 124 Total accrued expenses $ 4,307 $ 4,300 NOTE 10 — STOCKHOLDERS ’ EQUITY The Company is authorized to issue 60,000,000 shares of common stock and 10,000,000 shares of undesignated preferred stock. The common stock and undesignated preferred stock have a par value of $ 0.001 per share. The holders of common stock are entitled to one vote per share on any matter submitted to a vote at a meeting of stockholders. On October 22, 2024, the Company signed a firm commitment underwriting agreement (“Underwriting Agreement”) with ThinkEquity LLC to sell at the initial closing on October 24, 2024, an aggregate of 1,250,000 shares of common stock, for gross proceeds of $ 10 million and net proceeds after underwriting commissions and other offering expenses of approximately $ 8.1 million. In addition, the Company issued 62,500 warrants (“Warrants”) to the underwriter and its assignees to purchase up to 62,500 shares of common stock. The Warrants are exercisable beginning April 20, 2025 at an exercise price of $ 10.00 per share and expire on October 22, 2029. The Company accounted for these warrants as an equity warrant and expensed $ 250 thousand in the year ended December 31, 2024 in general and administrative expense. The holders of the Warrants have been provided with certain demand and piggy-back registration rights. The Warrants have typical representations, warranties and anti-dilution rights. F- 20 Table of Contents NOTE 11 — NET LOSS PER SHARE The computation of net loss per common share and the weighted average common shares outstanding for the years ended December 31, 2024 and 2023 are summarized as follows: For the Year Ended December 31, (in thousands, except share and per share data) 2024 2023 Basic Net loss $ ( 5,923 ) $ ( 2,818 ) Weighted average number of shares used in computing net loss per share – basic 7,248,892 6,641,774 Net loss per share - basic $ ( 0.82 ) $ ( 0.42 ) Diluted Net loss $ ( 5,923 ) $ ( 2,818 ) Weighted average number of shares used in computing net loss per share – diluted 7,248,892 6,641,774 Net loss per share - diluted $ ( 0.82 ) $ ( 0.42 ) As of December 31, 2024 and 2023 , the Company excluded the outstanding securities summarized below, which entitle the holders thereof to acquire shares of common stock, from its calculation of dilutive net loss per share for the years ended December 31, 2024 and 2023 , as their effect would have been anti-dilutive. These additional securities were excluded from the calculation of dilutive net loss per share as follows: As of and for the Years Ended December 31, 2024 2023 Warrants 101,672 39,172 Stock options 938,453 88,454 Restricted stock units 255,715 93,823 1,295,840 221,449 NOTE 12 — SHARE-BASED COMPENSATION The Company adopted its 2024 Equity Incentive Plan in January 2024 to provide equity-based compensation incentives in the form of options, restricted stock unit awards, performance awards, restricted stock awards, stock appreciation rights, and other forms of awards to employees, directors and consultants, including employees and consultants or affiliates, to purchase the Company’s common stock in order to motivate, reward and retain personnel. Upon adoption, an aggregate of 1,700,000 shares of common stock was reserved for grant and issuance pursuant to the equity incentive plan. F- 21 Table of Contents Options A summary of option activity for the years ended December 31, 2024 and 2023 is presented below: Weighted- Average Weighted- Remaining Average Contractual Number of Exercise Term Options Price (In Years) Outstanding - January 1, 2023 199,651 $ 7.63 5.79 Granted — $ — — Exercised — $ — — Modified/Cancelled ( 111,198 ) $ 11.87 6.51 Expired/Forfeited — $ — — Outstanding - December 31, 2023 88,453 $ 2.29 3.67 Granted 940,000 $ 5.42 9.80 Exercised — $ — — Modified/Cancelled — $ — — Expired/Forfeited ( 90,000 ) $ 6.33 — Outstanding - December 31, 2024 938,453 $ 5.08 9.20 Exercisable - December 31, 2024 148,454 $ 3.92 5.25 Options granted during the year ended December 31, 2024 were valued using the Black-Scholes option-pricing model with the following assumptions. There were no options granted during the year ended December 31, 2023 . For the Year Ended December 31, 2024 Weighted average grant date fair value $ 3.37 Expected term (years) 5.14 - 5.52 Risk-free interest rate 4.0 - 4.1 % Expected volatility 68.0 % Expected dividends yield 0 % Exercise price 5.20 0 - 6.33 33 The Company estimates its expected volatility by using a combination of historical share price volatilities of similar companies within our industry. The risk-free interest rate assumption is based on observed interest rates for the appropriate term of the Company’s options on a grant date. The expected option term assumption is estimated using the simplified method and is based on the mid-point between vest date and the remaining contractual term of the option, since the Company does not have sufficient exercise history to estimate expected term of its historical option awards. F- 22 Table of Contents Share-based compensation related to options is included in the consolidated statements of operations as follows: Year Ended December 31, (in thousands) 2024 2023 General and administrative $ 425 $ 1 Advertising and promotions 79 — Product software and development 65 — Total $ 569 $ 1 Compensation cost related to non-vested option awards not yet recognized as of December 31 , 2024 was $ 2.4 million and will be rec ognized over the next 2.75 years. Restricted Stock Units (“RSUs”) On March 8, 2023, the Company amended a stock option agreement originally issued on September 1, 2022 to purchase 111,198 shares of common stock at the initial public offering price. The amendment issued 111,198 RSUs in lieu of the 111,198 stock options. One- half of the RSUs vest over three years and half of the RSUs vest upon the completion of certain performance milestones. On September 1, 2023, 13,900 RSUs vested into shares of common stock, and approximately 1,158 shares will continue to vest on the first day of each month until the end of the vesting period in 2026. The Company accounted for the amendment as a modification. The Company determined the modification of the time-based awards to be a Type I: Probable-to-probable modification, under ASC 718 - 20. The Company performed a fair value calculation of the awards immediately before and after the modification, resulting in $ 54 thousand of incremental cost to be recorded, which will be recognized on a straight-line basis over the remaining requisite service period. The Company determined the modification of the performance-based awards to be a Type IV: Improbable-to-improbable modification, under ASC 718 - 20. The compensation cost related to the performance-based awards after the modification is based on the fair value on the modification date. The fair value of the Milestone Vesting RSUs was determined to be $ 242 thousand. As of December 31, 2024 there has been no compensation cost recognized in relation to the Milestone Vesting RSUs. No share-based compensation expense has been recorded related to the performance-based awards as the Company determined it is currently not probable of being achieved. A summary of RSU activity for the years ended December 31, 2024 and 2023 is presented below: Weighted Average Number of Grant Date Units FV RSUs outstanding at January 1, 2023 — $ — Granted 111,198 $ 8.92 Vested ( 17,375 ) $ 13.53 Forfeited — $ — RSUs outstanding at December 31, 2023 93,823 $ 8.07 Granted 306,623 $ 5.64 Vested ( 48,989 ) $ 7.18 Forfeited ( 95,741 ) $ 7.60 RSUs outstanding at December 31, 2024 255,716 $ 4.13 F- 23 Table of Contents The total fair value of RSUs vested during the years ended December 31, 2024 and 2023 was $ 352 thousand and $ 235 thousand, respectively. Stock-based compensation related to RSUs is included in the consolidated statements of operations as follows: Year Ended December 31, (in thousands) 2024 2023 General and administrative $ 449 $ 218 Advertising and promotions 19 — Product software and development 16 — Total $ 484 $ 218 Of the 306,623 RSUs granted during the year ended December 31, 2024, 60,812 were determined to be performance RSUs, of which 30,406 vest upon the Company generating specified net gaming revenue targets for the year ending December 31, 2024 and 30,406 vest upon generating specified net gaming revenue targets for the year ending December 31, 2025. As of December 31, 2024, the Company determined it was not probable of these performance conditions being met and therefore no expense has been recognized. Total compensation cost related to non-vested time-based RSUs not yet recognized as of December 31, 2024 was approximately $ 924 thousand which will be recognized on a straight-line basis through the end of the vesting period in 2026. There was no total compensation cost related to non-vested performance-based RSUs not yet recognized as of December 31, 2024. Warrants As of December 31, 2024 , the Company had the following warrants outstanding: Weighted- Average Weighted- Remaining Average Contractual Number of Exercise Term Shares Price (In Years) Warrants outstanding - January 1, 2023 39,172 $ 2.37 4.50 Issued — $ — — Exercised — $ — — Expired — $ — — Warrants outstanding - December 31, 2023 39,172 $ 2.37 3.50 Issued 62,500 $ 10 4.81 Exercised — $ — — Expired — $ — — Warrants outstanding - December 31, 2024 101,672 $ 7.06 4.40 Warrants exercisable - December 31, 2024 101,672 $ 7.06 4.40 The $ 250 thousand expense related to the issuance of the 62,500 warrants was included in general and administrative expense during the years ended December 31, 2024 . There was no expense related to the issuance of warrants during the year ended December 31, 2023 . F- 24 Table of Contents NOTE 13 — RELATED PARTY TRANSACTIONS Services Agreement The Company had previously entered into an Intra-Group Services Agreement with Interactive, pursuant to which, among other things, the Company and its subsidiaries provided certain specified services to Interactive. In addition, Interactive provides certain services to the Company. Beginning in 2022, the Company no longer provided specified services to Interactive, but Interactive continued to provide specified services to the Company. There also exists an agreement with another affiliate, Spike Up, wherein Spike Up provides marketing and promotion and other operating support for the Company. For the years ended December 31, 2024 and 2023 , the Company generated revenues of $ 3.6 million and $ 1.1 million respectively, related to the services performed for Spike Up for the Company, which was included in net revenues in the consolidated statements of operations. For the years ended December 31, 2024 and 2023 , the Company recognized $ 737 thousand and $ 1.6 million, respectively, for marketing and other operating costs performed by Spike Up on behalf of the Company, which was included in advertising and promotion in the consolidated statements of operations. For the year ended December 31, 2024 and 2023, the Company also incurred other costs from Spike Up that were included in the consolidated statement of operations, consisting of $ 621 thousand and $ 459 thousand included in general and administrative expenses, $ 2.6 million and $ 4.2 million included in direct operating costs, and respectively. For the years ended December 31, 2024 and 2023 , the Company recognized an immaterial amount in both periods for services performed by Interactive for the Company which was included in general and administrative expenses in the consolidated statements of operations. Happy Hour Solutions Ltd., a company registered in Cyprus and a subsidiary of Happy Hour Entertainment Holdings Ltd., one of our principal shareholders, is the holder of an Estonian gaming license, and as of October 21, 2021 entered into a Services Agreement with HR Entertainment Ltd., a company registered in the British Virgin Islands, whereby Happy Hour Solutions would provide gaming and technical and solutions, as well as hosting and cloud services, customer services, management information systems and other operational services for HR Entertainment. Pending receipt of an Estonian gaming license, for which we intend to apply following close of our public offering, we entered into several agreements with Happy Hour Solutions Ltd., including: ● a Domain License Agreement, dated January 1, 2022 ( which we refer to as the “Effective Date”), that gives Happy Hour Solutions the right to use our domain; ● a Nominee Agreement, dated as of the Effective Date, which allows Happy Hour Solutions to, among other business solutions, process payments made on the aforementioned domain and allows us to host, manage, administer, operate and support, and enter into contracts in the ordinary course of business in the name of Happy Hour Solutions; and ● in March 2024 Online Gaming Operations Agreement, by which as further described therein we continue to supply Happy Hour Solutions, with services that commenced as of the Effective Date, related to the operation of an online casino primarily through our existing personnel, technical solutions, and commercial relationships while utilizing the Happy Hour Solutions Estonian gaming license and to recognize the revenues generated thereof as agreed upon by the parties. The Happy Hour Solutions Agreements collectively allow HR Entertainment access to additional online gaming revenues. In consideration of these agreements, HR Entertainment pays Happy Hour Solutions consideration of 500 euros per month. Beginning in the fourth quarter of 2023, the Company also recognized certain administrative costs performed by certain subsidiaries of Happy Hour Entertainment Holdings. For the years ended December 31, 2024 and 2023 , the Company recognized $ 34 thousand and $ 22 thousand, respectively, for services performed for the Company by Happy Hour Entertainment Holdings and its wholly owned subsidiaries which was included in general and administrative expenses in the consolidated statements of operations. As of March 1, 2022, the Company entered into an agreement with Funnz (formerly known as WKND) to perform various services in connection with the conduct of the Company’s business. For the year ended December 31, 2024 , services totaled $ 208 thousand, which was included in product and software development expenses in the consolidated statement of operations. For the year ended December 31, 2023, services totaled $ 290 thousand, with $ 47 thousand included in direct operating, and $ 54 thousand included in product and software development expenses in the consolidated statement of operations. F- 25 Table of Contents Due From/Due to Affiliates The components of related party balances included in due from affiliates and due to affiliates on the consolidated balance sheets as of December 31, 2024 and 2023 are summarized as follows: December 31, December 31, (in thousands) 2024 2023 Due from affiliates Spike Up $ 1,120 $ 53 Happy Hours Entertainment Holdings 498 644 Other 6 5 Total due from affiliates $ 1,624 $ 702 Due to affiliates Interactive $ — $ 4 Spike Up 3,357 3,718 Happy Hour Solutions 48 121 Funnz (formerly known as WKND) — 68 Other 1 61 Total due to affiliates $ 3,406 $ 3,972 As of December 31, 2024 and 2023 , the total amount due to Spike Up includes $ 1.9 million and $ 2.7 million, respectively, related to the HighRoller.com domain name purchase (see Note 7 ). NOTE 14 — INCOME TAXES The Company’s loss before income taxes for the years ended December 31, 2024 and 2023 from domestic and foreign operations are as follows: Year Ended December 31, (in thousands) 2024 2023 Domestic $ ( 3,360 ) $ ( 1,630 ) Foreign ( 2,556 ) ( 1,175 ) Loss before income taxes $ ( 5,916 ) $ ( 2,805 ) F- 26 Table of Contents The components of income tax expense for the years ended December 31, 2024 and 2023 are summarized as follows: Year Ended December 31, 2024 2023 (in thousands) Current income taxes: Federal $ — $ — State and local — — Foreign — — — — Deferred income taxes: Federal — — State and local — — Foreign 7 13 7 13 Income tax expense $ 7 $ 13 Reconciliations of income tax expense computed at the U.S. federal statutory income tax rate of 21 % to the recognized income tax expense is summarized as follows: Year Ended December 31, Year Ended December 31, 2024 2023 ($ in thousands) Amount Percent Amount Percent U.S. federal statutory income tax rate $ ( 1,242 ) 21.00 % $ ( 589 ) 21.00 % Change in valuation allowance 985 ( 16.66 )% 896 ( 31.93 )% Other permanent items 50 - 0.84 % ( 14 ) 0.52 % Provision to return differences ( 21 ) 0.36 % ( 153 ) 5.44 % Statutory to US GAAP Adjustments ( 28 ) 0.48 % — 0.00 % Foreign rate differential 263 ( 4.47 )% ( 127 ) 4.51 % Income tax expense (benefit) $ 7 ( 0.13 )% $ 13 ( 0.46 )% Deferred Tax Assets and Liabilities The components of deferred income tax assets and liabilities as of December 31, 2024 and 2023 are summarized as follows: December 31, (in thousands) 2024 2023 Deferred tax assets - noncurrent: Net operating loss carryforward $ 5,526 $ 5,129 Unrealized gain or loss 434 291 Intangible assets 197 354 Share-based compensation 247 26 Other 6 12 Statutory to US GAAP — 4 Less: valuation allowance ( 6,410 ) ( 5,816 ) Total deferred tax assets — — Net deferred tax assets (liabilities) $ — $ — F- 27 Table of Contents The Company regularly reviews its deferred tax assets, including net operating loss carryovers, for recoverability, and a valuation allowance is provided when it is more-likely-than- not that some portion or all of a deferred tax asset may not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences are deductible. In assessing the need for a valuation allowance, the Company makes estimates and assumptions regarding projected future taxable income, its ability to carry back operating losses to prior periods, the reversal of deferred tax liabilities and the implementation of tax planning strategies. Based on the Company’s cumulative earnings history and unpredictable nature of the gaming industry, among other things, the Company has determined it is not more-likely-than- not to realize existing deferred tax assets and thus has recorded a valuation allowance for High Roller Technologies, Inc, Ellmount Entertainment Ltd, Wowly N.V. Ltd, High Roller Solutions Limited, HR Entertainment Solutions Limited, InterStellar Entertainment N.V, and Deepdive Holdings Ltd. As the Company reassesses these assumptions in the future, changes in forecasted taxable income may alter this expectation and may result in changes to the valuation allowance and the effective tax rate. The Company has determined that undistributed earnings of its non-U.S. subsidiaries will be reinvested for an indefinite period of time. The Company has both the intent and ability to indefinitely reinvest these earnings. Given its intent to reinvest these earnings for an indefinite period of time, the Company has not accrued a tax liability on these earnings. A determination of an unrecognized tax liability related to these earnings is not practical at this time. As of December 31, 2024 and 2023, the Company has U.S. federal net operating loss carryforwards of $ 4.6 million and $ 2.5 million, respectively, which are available to offset future taxable income and do not expire. U.S. federal net operating loss carryforwards are limited to offsetting 80% of taxable income in any given tax year. As of December 31, 2024 and 2023, the Company has foreign net operating loss carryforwards of $ 15.7 million and $ 14.0 million, respectively, which are available to offset future foreign taxable income. As of December 31, 2024, and 2023, the Company’s foreign net operating loss carryforwards of $ 5.8 million and $ 2.4 million, respectively, expire at various times from 2024 to 2034, while the remainder of the Company’s foreign net operating loss carryforwards do not expire. The federal and foreign net operating loss as of December 31, 2024 and 2023 are summarized as follows: Year Ended December 31, (in thousands) 2024 Expiration 2023 Expiration US net operating loss carryforwards $ 4,639 Indefinite $ 2,549 Indefinite Foreign net operating loss carryforwards (Malta) 9,867 Indefinite 11,588 Indefinite Foreign net operating loss carryforwards (Curacao) 5,797 2024 - 2034 2,261 2024 - 2029 Foreign net operating loss carryforwards (Cyprus) 42 2027 - 2029 — N/A Foreign net operating loss carryforwards (Costa Rica) — N/A 140 2024 $ 20,345 $ 16,538 The Tax Cuts and Jobs Act of 2017 (TCJA) amended Internal Revenue Code (IRC) Section 174, requiring taxpayers to capitalize and amortize specified research or experimental (SRE) expenditures from tax years beginning after December 31, 2021. However, these capitalization requirements only apply to qualified SRE activities as defined under IRC Section 174. The company's 2024 activities do not currently qualify as SRE under IRC Section 174. As a result, the company has not recorded any capitalized SRE costs subject to amortization for the tax year 2024. The Inflation Reduction Act created the Corporate Alternative Minimum Tax (CAMT), which imposes a 15% minimum tax on the adjusted financial statement income of large corporations for taxable years beginning after December 31, 2023. The CAMT generally applies to large corporations with average annual financial statement income exceeding $1 billion. Accordingly, CAMT does not apply to High Roller Technologies Inc and foreign subsidiaries for the tax year 2024. Uncertain Tax Positions The Company evaluates its tax positions and recognizes tax benefits that, more-likely-than- not, will be sustained upon examination based on the technical merits of the position. The Company did not have any unrecognized tax benefits as of December 31, 2024 or 2023 . NOTE 15 — COMMITMENT AND CONTINGENCIES Legal Claims The Company operates in an emerging online gaming industry. For internet based online gaming operations, there is uncertainty as to which country’s law ought to be applied, as the internet operations can be linked to several jurisdictions. Legislation concerning online gaming is under investigation in many jurisdictions. The Company monitors the legal situation within the United States, European Union (the “EU”), and any of its key markets to ensure the Company will be in a position to continue operating in those jurisdictions. In the normal course of business, the Company may be subject to claims and litigation. The Company reviews its legal proceedings and claims, regulatory reviews and inspections, and other legal matters on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions are required. If necessary, the Company establishes accruals for those contingencies when the incurrence of a loss is probable and can be reasonably estimated, and the Company discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued if such disclosure is necessary for the Company’s consolidated financial statements to not be misleading. The Company does not record an accrual when the likelihood of loss being incurred is probable, but the amount cannot be reasonably estimated, or when the loss is believed to be only reasonably possible or remote, although disclosures are made for material matters as required by ASC 450 - 20, Contingencies . F- 28 Table of Contents For the years ended December 31, 2024 and 2023 , the Company had certain pending or threatened legal claims or actions in which there was a probable outcome. Ellmount Entertainment Ltd, a wholly-owned subsidiary of the Company, has litigation pending in Austria and Germany regarding player claims and related legal fees. The Company has provided an appropriate provision for these claims and related fees, which are included in accrued expenses in the consolidated balance sheets at December 31, 2024 and 2023 . The Company currently is not targeting these markets and does not anticipate further claims of a similar nature in these markets. The Company is also currently subject to administrative claims initiated by the Czech Ministry of Finance regarding the operation of gambling activities in 2018 without a license and has been ordered to pay a fine of approximately $ 216 thousand, which is under appeal. The Company has provided a full provision for these administrative claims in accrued expenses in the consolidated balance sheets at December 31, 2024 and 2023 . Principal Commitments The Company’s principal commitments primarily consist of operating lease obligations for office space and finance leases obligations, services agreements, and other contractual commitments. The principal commitments and contingencies are described below. NOTE 16 — LEASES The Company previously had an operating lease for administrative offices in Malta and Costa Rica, but these leases were terminated in January 2023 and October 2023, respectively. In January 2024, the Company entered into a lease for office space and car parking bays in Malta. The term of the lease is for six years, although the Company may terminate the lease at any time after three years. The monthly rent payment for the office is approximately $ 15 thousand for the first year, with a 3 % annual increase. Right-of-use assets for these administrative office leases as of December 31, 2024 , and December 31, 2023 , are summarized as follows: December 31, December 31, (in thousands) 2024 2023 Malta Office 910 — Operating lease, right-of-use asset, net $ 910 $ — The Company has no other material operating or financing leases with terms greater than 12 months. Lease expense for operating leases recorded in the balance sheet is included in operating costs and expenses and is based on the future minimum lease payments recognized on a straight- line basis over the term of the lease plus any variable lease costs. Operating lease expenses, inclusive of short-term and variable lease expenses, included in the Company’s consolidated statements of operations for the years ended December 31, 2024 and 2023 , w ere $ 232 thousand and $ 18 thousand, respectively. We have a month to month lease in Las Vegas. Annual maturities analysis under the Malta lease agreement at December 31, 2024 is as follows: Year ending December 31, 2025 $ 189 2026 194 2027 199 2028 205 2029 206 Total 993 Less: Present value discount ( 121 ) Lease obligations, net $ 872 Operating lease obligations are based on the net present value of t he remaining lease paym ents over the remaining lease term. In determining the present value of lease payments, the Company used its incremental borrowing rate on the date of adoption of ASU 2016 - 02, Leases. As of December 31, 2024 , the weighted average remaining lease term is 5 years and the weighted average discount rate used to determine the operation lease liability was 4.5 % . F- 29 Table of Contents NOTE 17 — SEGMENT REPORTING Management has determined that the Company functions as a single operating segment, and thus reports as a single reportable segment. This determination is based on rules prescribed by GAAP applied to the manner in which management operates the Company. In particular, management assessed the discrete financial information routinely reviewed by the Company’s chief operating decision maker (“CODM”), its Chief Executive Officer, to monitor the Company’s operating performance and support decisions regarding allocation of resources to its operations. Specifically, performance is continuously monitored at the consolidated level as the Company is engaged in essentially the same business, which focuses on providing an online gaming casino to customers. The CODM evaluates the financial performance of the Company primarily by evaluating revenue (as disclosed on the consolidated statements of operations), adjusted EBITDA (a non-GAAP measure), and cash provided by operating activities (as disclosed on the consolidated statements of cash flows) to assess the Company's results and in the determination of allocating resources. The CODM may use disaggregated revenue metrics to evaluate game offerings, active user count, and customer retention, among other things. Adjusted EBITDA and cash provided by operating activities are reviewed to assess allocation of resources. The significant expenses reviewed by the CODM are direct operating expenses, advertising and promotion expenses, and general and administrative expenses as presented on the consolidated statements of operations. Management further determined that, based on their economic similarities, the Company’s operating subsidiaries, representing components, should be aggregated into one reporting unit for purposes of assessing potential impairment of goodwill in accordance with ASC 350 Intangibles - Goodwill and Other . These legal entities represent acquisitions that occurred over time pursuant to the Company’s strategic growth strategy. NOTE 18 — SUBSEQUENT EVENTS The Company evaluated subsequent events that occurred after the balance sheet date through March 20 , 2025, the date that these consolidated financial statements were available to be issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment to or disclosure in the condensed consolidated financial statements. F- 30 Table of Contents Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There have been no disagreements on accounting and financial disclosure matters.