NEW YORK--(BUSINESS WIRE)--$NWGI #casino--Newgioco Group, Inc. (“Newgioco” or the “Company”) (Nasdaq: NWGI), a global sports betting and interactive gaming technology company providing fully integrated, omni-channel sports betting software solutions, announced that it has filed an amendment to its Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (the “10-K/A”), to reflect the restatement of certain of the Company’s previously issued Consolidated Balance Sheets at December 31, 2018 and 2017, Consolidated Statements of Operations and Comprehensive Income (Loss), Consolidated Statements of Changes in Stockholders’ Equity (Deficiency) and Consolidated Statements of Cash Flows for the years ended December 31, 2018 and 2017 and the notes related thereto and certain other related matters. The 10-K/A amends the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, which was originally filed with the Securities and Exchange Commission on March 8, 2019 (the “Original 10-K”).
To assist readers of the Company’s filing, the 10-K/A sets forth the Original 10-K in its entirety. The Company believes that presenting all of the amended and restated information in the 10-K/A allows investors to review all pertinent data in a single presentation. The 10-K/A amends and restates the Financial Statements, and the Notes to Consolidated Financial Statements contained in Item 8 of the 10-K/A to reflect the restated numbers to correct errors from prior periods. In addition, corresponding changes were also made to the outstanding share number on the cover page of the 10-K/A to reflect the retroactive adjustments to the share numbers due to the stock split effected in December 2019 and through the entirety of the 10-K/A were the retroactive adjustment due to the stock split is applicable.
On May 5, 2020, the Company filed a Current Report on Form 8-K under Item 4.02 with the Securities and Exchange Commission stating that it had determined that a restatement relating to its previously issued financial statements was necessary due to the effect of certain errors in its Consolidated Balance Sheets at December 31, 2018 and 2017, Consolidated Statements of Operations and Comprehensive Income (Loss), Consolidated Statements of Changes in Stockholder’ Equity (Deficiency) and Consolidated Statements of Cash Flows for the years ended December 31, 2018 and 2017 and the Notes related thereto. The errors consisted primarily of the following: (i) the understatement of non-cash consolidated depreciation and amortization by $788,666; (ii) the understatement of unrealized foreign exchange losses of $178,976. In addition, the Company identified other miscellaneous immaterial adjustments amounting to $9,506. As a result, net loss for the year ended December 31, 2018 increased by $582,449 and the net income for the year ended December 31, 2017 increased by $85,198 and the cumulative adjustment to periods prior to January 1, 2017 decreased by $460,885.
The Company also analyzed the impact of the aforementioned adjustments and other accumulated misstatements on the financial statements for the interim and annual periods prior to the fiscal year ended December 31, 2018, and concluded that a cumulative opening retained earnings adjustment is appropriate as the correction of the errors in each prior period would not be material individually or in the aggregate to any such prior interim or annual period. However, the Company concluded that correcting the cumulative impact of the errors would be material to its results of operations for the year ended December 31, 2018 and the three subsequent quarters.
Impact of COVID-19 on our ability to timely file our financial reports
The Company's operations and business have experienced disruption due to the unprecedented conditions surrounding the COVID-19 pandemic spreading throughout the United States and the rest of world, and thus the Company's business operations have been disrupted. Substantially all of the Company’s administrative offices that prepare our financial reports from operations are based in Italy, Austria and Malta, which have been significantly impacted by COVID-19 restrictions.
The Company has followed the recommendations of local health authorities to minimize risk of exposure for its employees for the past several weeks, including the temporary closures of its retail locations throughout Italy and its offices, and having employees work from home, which has to an extent adversely affected their ability to work efficiently. As a result, the Company's books and records were not easily accessible, resulting in delays in preparation and completion of its financial statements. Further, the various government mandated closures of businesses in these locations have made it difficult for the Company's personnel, particularly its senior accounting staff, from obtaining access to its subsidiaries' books and records (including those of the Company's wholly-owned subsidiaries, Multigioco Srl, Rifa Srl, Ulisse GmbH, Odissea Betriebsinformatik Beratung GmbH Odissea, Virtual Generation Limited, Elys Technology Group Limited, Newgioco Group Inc. (Canada) and Newgioco Colombia SAS) necessary to prepare the Company's audited annual and unaudited condensed interim financial statements on a timely basis.
These conditions have caused and may continue to cause delays in our ability to file our reports on a timely basis, however, the Company has recently reopened its administrative offices in Italy, Austria and Malta and is taking steps to expedite the process of filing our reports on a timely basis.
About Newgioco Group, Inc.
Newgioco Group, Inc., is a global leisure gaming technology company, with fully licensed online and land-based gaming operations and innovative betting technology platforms that provide bet processing for casinos and other gaming operators. The Company conducts its business under the registered brand Newgioco primarily through its internet-based betting distribution network on its website, www.newgioco.it as well as in retail neighborhood betting shops throughout Italy.
Newgioco offers clients a full suite of leisure gaming products and services, such as sports betting, virtual sports, online casino, poker, bingo, interactive games and slots. Newgioco also owns and operates innovative betting platform software providing both B2B and B2C bet processing for casinos, sports betting and other online and land-based gaming operators. Additional information is available on our corporate website at www.newgiocogroup.com.
Investors may also find us on Facebook® and follow us on Twitter @NWGI_gaming.
This press release contains certain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are identified by the use of the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “may,” “continue,” “predict,” “potential,” “project” and similar expressions that are intended to identify forward-looking statements and includes statements regarding conditions that have caused and may continue to cause delays in the Company’s ability to file its reports on a timely basis and the Company reopening its administrative offices in Italy, Austria and Malta and taking steps to expedite the process of filing its reports on a timely basis. These forward-looking statements are based on management's expectations and assumptions as of the date of this press release and are subject to a number of risks and uncertainties, many of which are difficult to predict that could cause actual results to differ materially from current expectations and assumptions from those set forth or implied by any forward-looking statements. Important factors that could cause actual results to differ materially from current expectations including the Company’s ability to expedite the process of filing its reports on a timely basis, and the risk factors described in the10-K/A and the Company’s filings with the U.S. Securities and Exchange Commission for subsequent reporting periods, including subsequent periodic reports on Forms 10-Q and 8-K. The information in this release is provided only as of the date of this release, and the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events, except as required by law.
Newgioco Group, Inc.
Michele Ciavarella, Chief Executive Officer