Smurfit-backed gambling and gaming technology firm Gan has informed investors it has discovered errors in its preliminary financial results, which could force it to revise its losses upwards by over $5m (€4.6m).
n a US Securities Exchange Commission filing, signed by Gan’s chief financial officer Karen Flores, Nasdaq-listed Gan said it had released unaudited results for 2021 in March, which included a net loss of $24.9m.
However, due to some “errors”, it has preliminarily indicated the net loss for the year should be up to $30.6m.
Due to the identified errors, Gan said it would be unable to file its annual report with the Securities and Exchange Commission within the prescribed time without “unreasonable effort or expense”.
Gan said it needed more time to complete its annual report as some unaudited financial statements “should be restated and no longer relied upon”.
Gan, whose chief executive is Dermot Smurfit Jnr, added that management had determined a “material weakness” existed in its internal control over financial reporting as of the end of three quarterly periods in 2021. This related to the “completeness and accuracy of accounting” for software development costs and the timing of revenue recognition where performance obligations were ongoing, resulting in misstatements.
“The company’s preliminary analysis indicates that, after adjusting for these errors, the net loss for the year ended December 31, 2021, will be between approximately $30m and $30.6m,” read the filing.
“No assurances can be given that the additional review and procedures in connection with the issuance of the Company’s Annual Report for the year ended December 31, 2021, will not lead to information that may require further adjustments that would negatively impact the previously announced results of operations.”
In Gan’s preliminary results announcement, the company said revenue for 2021 was $125.4m, up from $35.2m the previous year.
Gan said its growth was driven by its Coolbet acquisition in January 2021.