Sports Entertainment Gaming Global Media (SEGG) Registration Filing summary

Company overview and business model

• Operates a platform for remote purchase of legally sanctioned lottery games in the U.S. and internationally, with B2C and B2B API channels, data services, and a sports content subsidiary (Sports.com).

• Revenue streams include service fees on lottery ticket sales, B2B technology fees, data subscriptions, and sweepstakes administration.

• Recent focus on relaunching core operations after a 2022 operational cessation due to financial and compliance issues.

• International expansion includes acquisitions in Mexico and the Middle East, and a "buy and build" strategy for Sports.com.

• Plans to relaunch B2C platform in Texas in fall 2024, with phased expansion to other jurisdictions.

Financial performance and metrics

• For the year ended December 31, 2023: revenue was $7.0M (up 3% YoY), cost of revenue $5.7M (up 31%), gross profit $1.3M (down 46%), net loss $25.5M (improved from $60.0M loss in 2022).

• For the six months ended June 30, 2024: revenue $0.52M (down 60% YoY), gross profit $0.39M (down 66%), net loss $11.7M (up 57%).

• Operating expenses for 2023 were $26.5M (down 55% YoY), with significant reductions in personnel costs due to lower headcount and stock compensation.

• As of June 30, 2024, cash and cash equivalents were $28K, with a working capital deficit of $8.9M and accumulated deficit of $247M.

• Substantial doubt exists about ability to continue as a going concern; company relies on external financing.

Use of proceeds and capital allocation

• Up to $150M in gross proceeds from the offering, with net proceeds of ~$138M if fully subscribed.

• Proceeds allocated to operations, acquisitions, product development, general and administrative expenses, and working capital.

• Part of proceeds to be used for D&O, E&O, and cyber risk insurance coverage.

• Acquisitions expected to be weighted toward stock rather than cash.