JACKPOT DIGITAL INC. Form 51-102F1
JACKPOT DIGITAL INC.
Management's Discussion & Analysis
Condensed Interim Financial Statements for the
Three Months Ended March 31, 2024
The following discussion and analysis of the financial condition and financial position and results of operations of Jackpot Digital Inc. (the "Company" or "Jackpot") for the three months ended March 31, 2024 should be read in conjunction with the unaudited condensed interim financial statements and notes thereto for the three months ended March 31, 2024 and 2023 and the annual audited financial statements and notes thereto for the years ended December 31, 2023 and 2022. The unaudited condensed interim financial statements and notes thereto for the three months ended March 31, 2024 and 2023 have not been reviewed by the Company's Auditor.
The Company's common shares trade on the TSX Venture Exchange ("TSX-V") under the symbol "JJ" and on the OTCQB under the trading symbol "JPOTF". A certain number of the Company's warrants trade on the TSX-V under the symbols "JJ.WT.B" and "JJ.WT.C". The Company's common shares are also listed for trading on the Frankfurt Exchange under the symbol "LVH3".
The following information is prepared as of May 30, 2024.
The Company is a reporting issuer in the Provinces of British Columbia and Alberta and files all public documents on www.sedarplus.ca.
Forward-Looking Statements
Certain statements contained herein are "forward-looking" and are based on the opinions and estimates of management, or on opinions and estimates provided to and accepted by management. Forward-looking statements may include, among others, statements regarding future plans, costs, projections, objectives, economic performance, or the assumptions underlying any of the foregoing. In this MD&A, words such as "may", "would", "could", "will", "likely", "enable", "feel", "seek", "project", "predict", "potential", "should", "might", "hopeful", "objective", "believe", "expect", "propose", "anticipate", "intend", "plan", "estimate", "optimistic" and similar words are used to identify forward-looking statements. Forward-looking statements are subject to a variety of significant risks and uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied. Although management believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, projections and estimations, there can be no assurance that these assumptions, projections or estimations are accurate. Readers, shareholders and investors are therefore cautioned not to place reliance on any forward-looking statements in this MD&A as the plans, assumptions, intentions, estimations, projections, expectations or factors upon which they are based might vary or might not occur. The forward-looking statements contained in this MD&A are made as of the date of this MD&A, and are subject to change after such date. The Company undertakes no obligation to update or revise any forward-looking statements, except in accordance with applicable securities laws.
Overview
The principal business of Jackpot is the developing and marketing of dealerless electronic table games ("ETGs") to casino operators. The Company's flagship dealerless poker product, Jackpot Blitz®, is a digital 'smart table' which brings the social benefits of multiplayer casino games such as poker, blackjack and baccarat, into the digital era.
JACKPOT DIGITAL INC.
Form 51-102F1 - Management's Discussion & Analysis
Three months ended March 31, 2024
Results of Operations
During May 2024, the Company successfully completed the installation of one Jackpot Blitz® casino machine at Gray WolfPeak Casino, located in Missoula, Montana, USA pursuant to the signed licensing agreement.
During May 2024, the Company successfully completed the installation of one Jackpot Blitz® casino machine at Glacier Peaks Casino, located in Browning, Montana, USA pursuant to the signed licensing agreement.
During May 2024, the Company successfully completed the installation of one Jackpot Blitz® casino machine at Lucky Dog Casino, located in Skokomish, Washington, USA pursuant to the signed licensing agreement.
During April 2024, the Company successfully completed the installation of one Jackpot Blitz® casino machine at Chukchansi Gold Resort & Casino, located in Coarsegold, California, USA pursuant to the signed licensing agreement.
During March 2024, the Company successfully completed the installation of four Jackpot Blitz® casino machine at Speaking Rock Entertainment, located in El Paso, Texas, USA pursuant to the signed purchase agreement.
During March 2024, the Company signed a distribution agreement with A&W Enterprises, LLC ("A&W Enterprises") to distribute, install and service the Company's Jackpot Blitz® casino machines throughout tribal casinos in the State of Oklahoma and other regions in the United States.
During March 2024, the Company signed a distribution agreement with Jade Entertainment and Gaming Technologies, Inc. ("Jade Group"), a diversified slots and gaming machine distributor with a presence in key Asian casino markets. The partnership is aimed at accelerating sales and deployment of Jackpot Digital's revolutionary Jackpot Blitz® electronic multiplayer dealerless poker machines in casinos throughout Asia.
During March 2024, the Company successfully completed the deployment of three (3) newly designed land- based Jackpot Blitz® casino machines at Jackson Rancheria Casino Resort ("Jackson Rancheria"), located in Jackson, California pursuant to the signed licensing agreement.
During March 2024, the Company received licensing approval from Little Traverse Bay Bands of Odawa Indians Regulatory Department, the regulator for Odawa Casino located in Petoskey, Michigan. The vendor license was the final step required for the Company to install its casino machines at Odawa Casino. The Company is now scheduling installation of two (2) of its next generation, dealerless Jackpot Blitz® ETGs at Odawa Casino pursuant to the signed licensing agreement.
During February 2024, the Company signed a licensing agreement to install Jackpot Blitz® dealerless multiplayer electronic poker table at the Acropolis Gaming Lounge, located in Kingston, Jamaica, further expanding its growing Jackpot Blitz® casino footprint. The Company has already obtained the required certifications for the jurisdiction and is now scheduling installation at the property.
During February 2024, the Company signed a licensing agreement with the Saskatchewan Indian Gaming Authority ("SIGA") to install the Company's Jackpot Blitz® dealerless poker ETGs. The installations are subject to Jackpot obtaining the customary regulatory and licensing approvals.
During January 2024, the Company received licensing approval from Mille Lacs Band of Ojibwe Garming Regulatory Authority, the regulator for Grand Casino Mille Lacs located in Onamia, Minnesota. The Company is now scheduling installation of two (2) of its next generation, dealerless Jackpot Blitz® ETGs at the property.
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Three Months Ended March 31, 2024 MD&A Form 51-102F1
JACKPOT DIGITAL INC.
Form 51-102F1 - Management's Discussion & Analysis
Three months ended March 31, 2024
As of March 31, 2024, the Company's operations employed 16 people (March 31, 2023: 17 people) consisting of staff and management. As of the date of this MD&A, the Company's operations employ 15 people consisting of staff and management.
At the Company's Annual General Meeting which was held on December 5, 2023 in Vancouver, BC, the shareholders received the Audited Consolidated Financial Statements for the fiscal year ended December 31, 2021 and the Independent Auditor's report thereon; fixed the number of Directors for the ensuing year at four; re-elected Jake H. Kalpakian, Neil Spellman, Gregory T. McFarlane and Alan Artunian as Directors of the Company; re-appointed the Company's Independent Auditor, Smythe LLP, Chartered Professional Accountants, for the ensuing year; authorized the Directors to fix the remuneration to be paid to the Auditor, re-approved the Company's 10% Rolling Stock Option Plan.
Electronic Table Games
The previously announced partnership with a leading global gaming equipment manufacturer enables Jackpot to reduce the production cost of the Jackpot Blitz® ETGs and streamline the manufacturing and delivery process, allowing the Company to ship its product to new clients in a timely manner.
The Company is focused on expansion of the Jackpot Blitz® ETG order book during 2024. During March 2024 the Company made its first-ever deployment of the next-generation version of Jackpot Blitz®, which has been re-designed to meet the specific requirements needed by the land-based casino market with feature functionalities such as Ticket-In-Ticket-Out ("TITO") and Slot Accounting System ("SAS") protocol integration.
The ongoing expansion of the Company's Jackpot Blitz® ETG footprint continues to focus on: (i) the US Tribal land-based casino market; and (ii) the US corporate land-based casino market.
The Company categorizes its ETG customers in three markets: cruise ships, North American casinos and other markets.
Cruise Ships
- the cruise ship industry operates their casinos in international waters.
- during 2021, the Company acquired certain assets of 52 Gaming, LLC ("52 Gaming") thereby fortifying its poker ETG monopoly in the cruise ship industry. 52 Gaming, based in North Carolina, manufactured and licensed its electronic poker tables ("ETGs") to the cruise ship industry. This transaction has solidified Jackpot's position as the leading Electronic Table Game supplier for the cruise ship industry.
- the Company typically leases ETGs on a monthly recurring basis to cruise ship companies and generates revenues according to the gross rakes, fees and side games offered.
- Carnival Corporation ("Carnival") is the largest operator of the Company's ETGs.
- the Company has in place a Software License and Equipment Lease Agreement (the "Agreement") with Royal Caribbean International ("RCI") to be the third cruise ship operator to offer the Jackpot Blitz® ETGs in their casinos. The Company submitted software for RCI's User Acceptance Testing ("UAT") for launch of the Jackpot Blitz® ETG on an RCI ship. The installation date of the ETGs is set to be in Q3 2024.
North American Casinos
- the North American casino industry is regulated at the federal, state, provincial and/or tribal levels as individual jurisdictions. Each jurisdiction approves the gaming equipment used in their casinos, usually in the form of a gaming or vendor licenses. The Company must obtain gaming licenses directly or through a distributor to expand its ETG business in North America.
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Three Months Ended March 31, 2024 MD&A Form 51-102F1
JACKPOT DIGITAL INC.
Form 51-102F1 - Management's Discussion & Analysis
Three months ended March 31, 2024
- The Company and its U.S. subsidiary, Jackpot Digital (NV), Inc. ("SubCo") hold gaming licenses and permits with Berry Creek Tribal Gaming Commission; Blackfeet Tribal Gaming Commission; Chickasaw Nation Office of the Gaming Commissioner; Confederated Salish & Kootenai Tribes Tribal Gaming Commission; Confederated Tribes Gaming Commission; Coyote Valley Gaming Commission; Dept. of Justice and Public Safety Gaming, Liquor and Security Licensing Branch; Jackson Rancheria Tribal Gaming Agency; Lac Vieux Desert Band of Lake Superior Chippewa Indians; Leech Lake Bands of Ojibwe; Little Traverse Bay Bands of Odawa Indians Gaming Regulatory Commission; Mille Lacs Band Gaming Regulatory Authority; Pauma Gaming Commission; Picayune Rancheria of the Chukchansi Indians Tribal Gaming Commission; Pueblo of Isleta Gaming Regulatory Authority; Sac & Fox Nation of Missouri Tribal Gaming Commission; Santa Ynez Tribal Gaming Agency; Skokomish Tribal Gaming Commission; State of California - Bureau of Gambling Control; State of Montana - Gambling Control Division; U.S. Department of Justice - Office of Enforcement Operations Criminal Division; U.S. Virgin Islands Casino Control Commission; and Ysleta del Sure Pueblo Gaming Commission. In addition, the Company and SubCo have several license applications in progress with various gaming regulators across North America.
- the Company typically leases ETGs on a monthly recurring basis to North American casino customers sharing revenue from the rakes generated by the ETGs.
- the Company has signed Agreements and/or Binding Letters of Intent with numerous entities in Canada and the United States which are contingent on the Company receiving license approvals by the relevant regulatory bodies.
Other Markets
- markets outside cruise ships and North American casinos are considered on a case-by-case basis, depending on the revenue potential, practicality of deploying and supporting the Company's ETGs in other countries/continents, and other considerations.
- the Company may opt to lease or sell ETGs in other markets.
- the Company has signed Sales/Service and/or Distribution agreements and/or Binding Letters of Intent with several entities in other markets.
- the Company has installed one Jackpot Blitz® ETG at the Il Palazzo land- based casino in San Lorenzo, Paraguay.
Research and Development
The Company is continuously developing new hardware and software components for the Jackpot Blitz® ETG and other products in the development pipeline. During the three-month period ended March 31, 2024, the Company incurred $87,815 on salaries and benefits in respect to Research and Development ("R&D"). This cost was incurred primarily to develop new software features and improve the hardware with the aim to reduce cost and improve the efficiency of the Jackpot Blitz® ETG. Furthermore, during the three-month period ended March 31, 2024, the Company incurred $2,676 for the design and certification fees of the next generation model of the Jackpot Blitz® ETG and incurred $nil for the purchase of parts which were capitalized as the intellectual property and the prototypes, respectively.
During October 2023, the Company obtained GLI certifications for the Company's next generation Jackpot Blitz® which includes GLI-11 - Gaming Devices in Casinos; GLI-12 - Progressive Gaming Devices in Casinos; GLI-13 - On-Line Monitoring and Control Systems; GLI-21 - Client -Server Systems and GLI-24
- Electronic Table Game Systems.
In May 2023, the Company started work on a new segment, Online Casino Platform for an existing customer. Once ready, the Online Casino Platform will be installed and tested at the customer's User Acceptance Testing ("UAT") lab.
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Three Months Ended March 31, 2024 MD&A Form 51-102F1
JACKPOT DIGITAL INC.
Form 51-102F1 - Management's Discussion & Analysis
Three months ended March 31, 2024
In January 2023, the Company entered into a partnership agreement with a leading global gaming equipment manufacturer to outsource the production and delivery of Jackpot Blitz® ETGs to casinos worldwide. It is expected that this partnership shall enable the Company to meet the growing demand for Jackpot Blitz® ETGs at a reduced cost.
During 2023, the Company's R&D efforts plan to continue the development of new hardware and software components for the Jackpot Blitz® ETGs in order to enhance the marketability of the Company's product.
Consulting, Advisory, Marketing and Other Agreements
In June 2023, the Company entered into a non-exclusive financial advisory and investment banking services agreement for a term of 12 months with Maxim Group LLC of New York, USA (the "Agreement"). The Company will pay to Maxim cash in the amount of US$150,000 over the course of the twelve-month term of the Agreement. In addition, the Company will grant Maxim share purchase warrants equal to US$150,000 over a twelve-month period in which US$37,500 will be paid quarterly in warrants once the services have been performed. As of the date of this MD&A, there has been no payment made nor warrants issued to Maxim.
During September 2023, the Company entered into a special partnership agreement with a third party to provide an iGaming platform for use by the Company, under certain terms and conditions. The agreement provides for a revenue sharing payment stream between the parties.
During March 2024, the Company has engaged a Consultant to provide his services to the Company in the in the marketing and selling of the Company's Jackpot Blitz® electronic table games in the Western US region for a period of twelve (12) months The Consideration payable to the Consultant by the Company shall be as follows: a) The Consultant shall receive payment of US$6,000 per month (US Six Thousand Dollars); b) The Consultant is entitled to a one-time fee of US$200 (US Two Hundred Dollars) for each Jackpot Blitz® ETG placement ("One-Time Fee"). For greater certainty, the One-Time Fee is payable to the Consultant once the Jackpot Blitz® ETG has been installed; and c) The Consultant will be entitled to a 10% commission on Jackpot's share of the revenue stream for five years, generated from the Jackpot Blitz® ETGs that the Consultant has successfully placed through direct efforts.
The investor relations agreement announced in April 2024 with an arm's length party was cancelled along with the stock option grant.
Revenues
For the three months ended March 31, 2024, the Company has recorded Electronic gaming tables revenue of $385,261 (March 31, 2023: $487,027) and table sales revenue of $419,771 (March 31, 2023: $102,615). The increase in revenues is attributable to the increase of table sales.
Cost of Sales
For the three months ended March 31, 2024, the cost of sales was $222,870 as compared to $122,799 during the three months ended March 31, 2023.
Gross Profits
For the three months ended March 31, 2024, the Company has recorded gross profit of $582,162 as compared to $466,843 during the three months ended March 31, 2023. The increase of gross profit is attributable to the increase of revenues.
Expenses
For the three months ended March 31, 2024, operating and other expenses were $1,265,184 as compared to $689,368 during the three months ended March 31, 2023.
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Three Months Ended March 31, 2024 MD&A Form 51-102F1
JACKPOT DIGITAL INC.
Form 51-102F1 - Management's Discussion & Analysis
Three months ended March 31, 2024
Net Loss and Comprehensive Loss
During the three months ended March 31, 2024, the Company had a net loss and comprehensive loss of $683,022 or $0.00 per share (weighted average) as compared to a net loss and comprehensive loss of $222,525 or $0.00 per share (weighted average) during the same period in 2023. During the three months
ended March 31, 2024, the Company's weighted average number of common shares was 133,392,727 as compared to 131,959,302 during the same period in 2023.
Liquidity and Capital Resources
Presently, the Company does not have sufficient funds to continue its operations uninterruptedly. In order for the Company to be efficient, the Company requires new funding so as to be able to meet the Company's expenses, pay its liabilities promptly, and expand its operations to increase its revenues. New funding for the Company may or may not be available to the Company. Should the Company's revenues decline or should the Company lose its major customer, then it will be difficult for the Company to raise additional funds.
The Company intends to seek equity and/or debt financing through private placements and/or public offerings and/or loans. In the past, the Company has been successful in securing equity and debt financings in order to conduct its operations uninterruptedly. While the Company does not give any assurances whatsoever that in the future it will continue being successful in securing equity and/or debt financings in order to conduct its operations uninterruptedly, it is the Company's intention to pursue these methods for future funding of the Company.
As at March 31, 2024, the Company's total assets were $5,657,570 as compared to $3,973,854 for the corresponding period in 2023. The Company's total liabilities were $16,679,647 as compared to $12,284,764 for the corresponding period in 2023. The Company has not paid any dividends and does not plan to pay any dividends in the future.
Financing Activities and Capital Expenditures
During the three months ended March 31, 2024, the Company received $nil of cash from financing activities as compared to $717,980 of cash received from financing activities during the corresponding period of 2023.
As at March 31, 2024, the Company had:
- Cash and cash equivalents of $110,658 as compared to $490,726 at March 31, 2023 (December 31, 2023: $99,948).
- Accounts receivable of $408,738 as compared to $338,223 at March 31, 2023 (December 31, 2023: $355,659).
- Prepaid expenses and deposits of $176,881 as compared to $51,792 at March 31, 2023 (December 31, 2023: $152,901).
- Gaming systems of $3,578,510 as compared to $2,329,052 at March 31, 2023 (December 31, 2023: $3,855,873).
- Equipment of $121,081 as compared to $250,900 March 31, 2023 (December 31, 2023: $134,992).
- Intangible assets of $328,931 as compared to $147,162 at March 31, 2023 (December 31, 2023: $348,038).
- Right of Use Assets of $796,101 as compared to $189,286 at March 31, 2023 (December 31, 2023: $873,266).
Operating Activities
During the three months ended March 31, 2024, the Company used $273,114 of cash in operating activities as compared to $321,465 of cash used in operating activities during the corresponding period of 2023.
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Three Months Ended March 31, 2024 MD&A Form 51-102F1
JACKPOT DIGITAL INC.
Form 51-102F1 - Management's Discussion & Analysis
Three months ended March 31, 2024
Investing Activities
During the three months ended March 31, 2024, the Company received $345,702 of cash from investing activities as compared to $7,240 of cash used in investing activities during the corresponding period of 2023.
Capitalization
In order for the Company to increase its revenues, the Company must reduce or preferably eliminate its outstanding debts as soon as possible, must increase the production of its ETGs, and must dedicate more resources to marketing and promotion of the Company's products and services.
During the year ended December 31, 2023, the Company has incurred a net loss and comprehensive loss of $3,278,196 (December 31, 2022: $5,123,052), has limited revenues, has outstanding liabilities and has no assurances that sufficient funding will be available to continue its operations for an extended period of time.
During the three-month period ended March 31, 2024 and up to the date of this MD&A, the following transaction occurred:
- During May 2024, pursuant to a private placement announced on May 3, 2024, Jackpot closed the first tranche of and issued convertible debentures totaling $ $3,174,235.00 (the "Debentures"). The Debentures bear interest at the rate of 10% per annum and will mature on May 29, 2029. The convertible debentures are convertible at $0.075 per common share in the first year and at $0.10 in subsequent years. In addition, the Company issued an aggregate of 42,323,133 share purchase warrants exercisable at $0.10 per for a period of five years. The finder's fee payable is $5,000 in cash and 66,667 broker warrants exercisable at $0.10 per common share for two years.
- During May 2024, the Company issued 667,000 common shares at $0.075 per share in relation to conversion of convertible debentures in the amount of $50,025.
During the year ended December 31, 2023, the following transactions have occurred:
- During October 2023, the Company issued 1,333,425 common shares at the price of $0.075 per share representing full and final settlement of the Company's debt totaling $100,007 in respect to the convertible debenture (June 2020).
- During July and August 2023, pursuant to a private placement announced on July 10, 2023, Jackpot closed three tranches and issued convertible debentures totaling $3,579,953 (the "Debentures"). The Debentures bear interest at the rate of 10% per annum and will mature on July 28, 2028 (first tranche), August 2, 2028 (second tranche) and August 14, 2028 (third tranche). The convertible debentures are convertible at $0.075 per common share in the first year and at $0.10 in subsequent years. In addition, the Company issued an aggregate of 47,732,700 share purchase warrants exercisable at $0.10 per for a period of five years. The Company paid finder's fee of $6,506 in cash and issued 86,750 broker warrants exercisable at $0.10 per common share for two years.
- During June 2023, the Company issued 100,000 common shares at the price of $0.06 per share upon the exercise of warrants.
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Three Months Ended March 31, 2024 MD&A Form 51-102F1
JACKPOT DIGITAL INC.
Form 51-102F1 - Management's Discussion & Analysis
Three months ended March 31, 2024
- During May and June 2023, pursuant to a private placement announced on March 29, 2023, Jackpot closed three tranches and issued convertible debentures totaling $471,652 (the "Debentures"). The Debentures bear interest at the rate of 10% per annum and will mature on May 17, 2028 (first tranche), May 25, 2028 (second tranche) and June 12, 2028 (third tranche). The convertible debentures are convertible at $0.075 per common share in the first year and at $0.10 in subsequent years. In addition, the Company issued an aggregate of 6,288,690 share purchase warrants exercisable at $0.10 per for a period of five years. The Company paid finder's fee of $375 in cash and issued 5,000 broker warrants exercisable at $0.10 per common share for two years..
- During February 2023, March 2023 and April 2023, the Company closed all four tranches of the private placement of convertible debentures announced on February 13, 2023 for an aggregate gross proceeds of $456,050 (the "Debentures"). The Debentures bear interest at the rate of 10% per annum, and will mature on November 20, 2025. The Debentures are convertible into common shares at a conversion price of $0.07 per common share until November 20, 2025. In addition, the Company issued an aggregate of 6,515,000 share purchase warrants exercisable at $0.10 per share until November 20, 2025. The Company paid to an arm's length party finder's fee of $7,550 in cash and issued 107,857 non-transferable share purchase warrants exercisable at the price of $0.10 per share for a period of two years.
Warrants
As at March 31, 2024, there were 163,752,923 warrants outstanding with a weighted average price of $0.16 per warrant price (March 31, 2023: 111,740,311 warrants outstanding with a weighted average price of $0.19 per warrant. Subsequent to the three months ended March 31, 2024, a total of 40,000 warrants exercisable at the price of $0.10 expired unexercised, a total of 42,323,133 warrants and 66,667 broker warrants at the price of $0.10 were issued. As of the date of this MD&A, a total of 206,102,723 warrants are outstanding.
Should any warrants be exercised by any party, then any funds received by the Company shall be used for general working capital purposes. However, there are no assurances whatsoever that any warrants will be exercised.
Stock Options
As at March 31, 2024, there were 4,984,273 stock options available for granting under the 10% Rolling Stock Option Plan (March 31, 2023: 3,716,569). As at March 31, 2024, there were 8,355,000 stock options outstanding with a weighted average exercise price of $0.10 per share (March 31, 2023: 9,479,161 stock options outstanding with a weighted average exercise price of $0.15 per share). Subsequent to the three months ended March 31, 2024, a total of 1,000,000 stock options granted to consultants exercisable at $0.10 per share expired unexercised and a total of 750,000 stock option grant to a consultant exercisable at the price of $0.10 per share were cancelled. As of the date of this MD&A, a total of 7,355,000 stock options are outstanding.
There were no stock options exercised during the three-months ended March 31, 2024.
Should any outstanding stock options be exercised by any party, then any funds received by the Company shall be used for general working capital purposes. However, there are no assurances whatsoever that any stock options will be exercised.
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Three Months Ended March 31, 2024 MD&A Form 51-102F1
JACKPOT DIGITAL INC.
Form 51-102F1 - Management's Discussion & Analysis
Three months ended March 31, 2024
LOANS PAYABLE AND DEBENTURES*
Loans
March 31, 2024 | March 31, 2023 | ||
Company Received | $nil | $265,000 | |
Company Repaid | $nil | $55,000 | |
Accrued Interest | $nil | $14,906 | |
Non-Convertible Debentures | |||
March 31, 2024 | March 31, 2023 | ||
Company Received | $nil | $nil | |
Company Repaid | $nil | $nil | |
Accrued Interest | $101,783 | $103,360 | |
Convertible Debentures | |||
March 31, 2024 | March 31, 2023 | ||
Company Received | $nil | $249,000 | |
Company Repaid | $nil | $nil | |
Accrued Interest | $148,212 | $46,918 |
- For more detailed information regarding Loans Payable and Debentures, please refer to the Company's Interim Consolidated Financial Statements for the three-months ended March 31, 2024 and March 31, 2023.
On March 23, 2023, the Company entered into a subsequent amendment agreement whereby the maturity date of the Debentures has been extended from July 1, 2023 to July 1, 2025.
In connection with the Non-convertible secured debentures, Convertible debentures (2016) and Convertible debenture (August 2018), the Company entered into the Third and Fourth Amendment Agreements with the lenders in June and August 2023. Under these agreements, the lenders agreed to a new payment schedule, effective from July 31, 2023 and terminating on July 1, 2025, subject to certain terms and conditions. The aggregate new payment schedule is as follows: 1) US$700,000 by August 15, 2023 (paid);
- US$1,300,000 by July 1, 2024; and 3) the remaining outstanding principal plus 20% of all accrued and unpaid interest by July 1, 2025. If the new payment schedule is met, the Debentureholders have agreed to a significant reduction in interest payments, resulting in savings for the Company of approximately Cdn$4,045,091 (US$3,042,108). Upon making the scheduled payments and therefore benefitting from the reduced interest expense, will enable the Company to eliminate a substantial portion of its debt. However, In the event the Company defaults on the new payment schedule, then the remaining principal outstanding shall immediately become due and payable, along with all accrued and unpaid interest to the Debentureholders.
On August 4, 2023, Jackpot made its first payment to the Debentureholders in the aggregate amount of US$700,000.
In respect to the outstanding Convertible debentures (June 2020), the Company entered into a debt settlement agreement with a creditor on October 10, 2023, and issued 1,333,425 common shares in the capital of the Company at the price of $0.075 per share representing full and final settlement of the Company's debt totaling $100,007.
Summary of Quarterly Results
The following are the results for the eight most recent quarterly periods, starting with the three-month quarterly period ended March 31, 2024:
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Three Months Ended March 31, 2024 MD&A Form 51-102F1
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Jackpot Digital Inc. published this content on 03 June 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 June 2024 19:01:01 UTC.
