As filed with the Securities and Exchange Commission on February 23, 2022

Registration No. ______

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM F-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

Codere Online Luxembourg, S.A.

(Exact Name of Registrant as Specified in Its Charter)

Grand Duchy of Luxembourg	7990	Not applicable
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

7 rue Robert Stümper

L-2557 Luxembourg,
Grand Duchy of Luxembourg

R.C.S. Luxembourg: B255798
+34 91354 28 19

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

CT Corporation System

28 Liberty Street

New York, NY 10005

(212) 894-8940

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies of all correspondence to:

Michael J. Willisch, Esq.
Davis Polk & Wardwell LLP
Paseo de la Castellana, 41
Madrid, Spain 28046
Tel: +34 91 768 9610
Fax: +34 91 768 9710

Approximate date of commencement of proposed sale to the public: From time to time after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ☒

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933. Emerging growth company ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. The selling securityholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Subject to completion, dated February 23, 2022

PRELIMINARY PROSPECTUS

Codere Online Luxembourg, S.A.
8,034,500 Ordinary Shares

37,000 Holdco Warrants

This prospectus relates to the offer and sale from time to time by the selling securityholders named in this prospectus, or their permitted transferees (collectively, the “Selling Securityholders”), of up to (i) 7,997,500 of our Ordinary Shares (as defined herein), which includes (a) 1,212,500 Ordinary Shares issued to holders of Class B Common Stock of DD3, other than the Sponsor, on the Closing Date, (each as defined herein), (b) 5,000,000 Ordinary Shares issued to the Forward Purchasers (as defined herein) on the Closing Date, (c) 1,711,000 Ordinary Shares issued to the Subscribers (as defined herein) on the Closing Date and (d) 74,000 Ordinary Shares issued to the Private Shareholders (as defined herein), other than the Sponsor, on the Closing Date; and (ii) 37,000 Holdco Warrants, which are Holdco Private Warrants (each as defined herein).

The Selling Securityholders may offer, sell or distribute all or a portion of the securities hereby registered publicly or through private transactions at prevailing market prices or at negotiated prices. We will not receive any of the proceeds from such sales of the Ordinary Shares or Holdco Private Warrants, except with respect to amounts received by us upon the exercise of the Holdco Private Warrants. We will bear all costs, expenses and fees in connection with the registration of these securities, including with regard to compliance with state securities or “blue sky” laws. The Selling Securityholders will bear all commissions and discounts, if any, attributable to their sale of Ordinary Shares or Holdco Private Warrants. See “Plan of Distribution.”

In addition, this prospectus relates to the issuance by us of up to 37,000 Ordinary Shares that are issuable by us upon the exercise of the Holdco Private Warrants.

The Ordinary Shares and Holdco Warrants are listed on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “CDRO” and “CDROW,” respectively. On February 22, 2022, the last reported sales price of the Ordinary Shares was $4.94 per Ordinary Share and the last reported sales price of the Holdco Warrants was $0.46 per Holdco Warrant.

Codere Newco, our majority shareholder, owns approximately 66.49% of the issued and outstanding Ordinary Shares and has the right to propose for appointment a majority of the Holdco Board (as defined herein) until, among other things, it owns less than 30% of the issued and outstanding Ordinary Shares. Accordingly, we are a “controlled company” under Nasdaq corporate governance rules and are eligible for certain exemptions from these rules. We are a “foreign private issuer” under applicable U.S. Securities and Exchange Commission (“SEC”) rules and an “emerging growth company” as that term is defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and are eligible for reduced public company disclosure requirements.

Investing in our securities involves a high degree of risk. You should review carefully the risks and uncertainties described under the heading “Risk Factors” beginning on page 13 of this prospectus, and under similar headings in any amendment or supplements to this prospectus.

NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this prospectus is          2022

table of contents

	Page
Selected Definitions	ii
Cautionary Note Regarding Forward-Looking Statements	ix
Summary of the Prospectus	1
The Offering	12
Risk Factors	13
Use of Proceeds	53
Market Price of our Securities	54
Unaudited Pro Forma Combined Financial Information	55
Management’s Discussion and Analysis of Financial Condition and Results of Operations	66
Business	96
Management	113
Regulation Applicable to Codere Online’s Business	122
Description of Securities	132
Beneficial Ownership of Securities	136
Ordinary Shares Eligible for Future Sale	137
Selling Securityholders	139
Certain Relationships and Related Party Transactions	145
Certain Agreements Related to the Business Combination	154
Material U.S. Federal Income Tax Considerations	159
Material Luxembourg Income Tax Considerations	164
Plan of Distribution	166
Legal Matters	168
Experts	168
Where You Can Find More Information	168
Index to Financial Information	F-1

No one has been authorized to provide you with information that is different from that contained in this prospectus. This prospectus is dated as of the date set forth on the cover hereof. You should not assume that the information contained in this prospectus is accurate as of any date other than that date. Certain amounts that appear in this prospectus may not sum due to rounding.

For investors outside the United States: We have not done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.

i

Selected Definitions

In this document, unless the context otherwise requires:

“1915 Law” means the Luxembourg Law of August 10, 1915 on commercial companies, as amended from time to time (loi du 10 août 1915 sur les sociétés commerciales, telle que modifiée).

“3Q Combined Carve-out Financial Information” means the unaudited carve-out financial information of the Codere Online Business for the three months and nine months ended September 30, 2021 and 2020 included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Trading and Certain Other Recent Developments.”

“AenP Agreement” means the Contrato de Asociación en Participación, dated June 21, 2021, by and between SEJO and Libros Foráneos, S.A. de C.V., which became effective on the Merger Effective Time. See “Certain Relationships and Related Party Transactions—Material Agreements—AenP Agreement.”

“ALTA” means Alta Cordillera, S.A., a corporation (sociedad anónima) registered and incorporated under the laws of Panama.

“ALTA License” means the standalone online gaming license granted to ALTA in Panama, under which ALTA is authorized to conduct online gaming operations in Panama for a twenty (20) year term from December 1, 2021.

“Ancillary Agreements” means the Contribution and Exchange Agreement, the Registration Rights and Lock-Up Agreement, the Nomination Agreement, the Indemnification Letter, the Warrant Amendment Agreement, and all other agreements, certificates and instruments executed and delivered by DD3, Codere Newco, Holdco, Merger Sub or SEJO in connection with the Transactions and specifically contemplated by the Business Combination Agreement.

“Annual Combined Carve-out Financial Statements” means the audited combined carve-out financial statements of the Codere Online Business as of December 31, 2020 and 2019 and January 1, 2019 and for the years ended December 31, 2020 and 2019, prepared in accordance with IFRS, as adopted by the International Accounting Standards Board, and the accompanying notes.

“Argentina Restructuring Agreement” refers to the agreement entered into between Iberargen, S.A. a subsidiary within the Codere Group, and SEJO on November 15, 2021, as amended on November 30, 2021. See “Certain Relationships and Related Party Transactions—Material Agreements—Argentina Restructuring Agreement.”

“Baron” means Baron Global Advantage Fund, Baron Emerging Markets Fund and Destinations International Equity Fund.

“Baron Forward Purchase Agreement” means that certain Forward Purchase Agreement, dated as of November 17, 2020, by and between DD3 and Baron, as amended by the Baron FPA Amendment.

“Baron FPA Amendment” means Amendment No. 1 to the original Baron Forward Purchase Agreement, dated as of June 21, 2021, by and between DD3 and Baron.

“Baron IPO Shares” refers to the 996,069 Public Shares acquired by Baron in the IPO that Baron agreed not to redeem pursuant to the Baron Support Agreement.

“Baron Support Agreement” means the Investor Support Agreement, dated as of June 21, 2021, by and between DD3 and Baron.

“Buenos Aires License” means the permit granted to Iberargen S.A. by LOTBA under code DI-2021-238-GCABA-LOTBA on March 12, 2021 for a period of five (5) years.

“Business Combination” means the transactions contemplated by the Business Combination Agreement, including the Restructuring, the Exchange, the Class B Conversion, the Merger and the Holdco Capital Increase.

“Business Combination Agreement” means the Business Combination Agreement, dated as of June 21, 2021, as may be amended, supplemented, or otherwise modified from time to time, by and among DD3, Codere Newco, SEJO, Holdco and Merger Sub.

ii

“Colombia License” means license C1470, which allows for the operation of online gaming, granted by the Colombian gaming regulator, Coljuegos, to Codere Colombia, S.A. for a term of five (5) years and which expires on November 15, 2022.

“CDON” means Codere Online, S.A.U., a corporation (sociedad anónima unipersonal) registered and incorporated under the laws of Spain.

“CDON Licenses” means the following online licenses granted by the DGOJ to CDON: (A) three (3) general licenses for a ten (10) year term which were recently extended for ten (10) additional years (until May 31, 2032): (i) Other Games License, (ii) Betting License and (iii) Contests License; and (B) six (6) singular licenses for: (i) slots (granted until July 30, 2025), (ii) roulette (recently extended until June 22, 2025), (iii) black jack (recently extended until June 22, 2025), (iv) sports betting (granted until April 28, 2025), (v) horse betting (granted until April 28, 2024), and (vi) other bets (granted until April 28, 2025).

“Class B Conversion” means the automatic conversion and exchange immediately that occurred prior to the Merger Effective Time pursuant to the Business Combination Agreement of each share of DD3 Class B Common Stock for one validly issued, fully paid and non-assessable share of DD3 Class A Common Stock.

“Closing” means the consummation of the Business Combination.

“Closing Date” means November 30, 2021.

“Code” means the Internal Revenue Code of 1986, as amended.

“Codere Group” means until November 18, 2021, Codere, S.A. and its subsidiaries and, from November 19, 2021, Codere New Topco S.A. and its subsidiaries.

“Codere Newco” means Codere Newco, S.A.U., a corporation (sociedad anónima unipersonal) registered and incorporated under the laws of Spain.

“Codere Online,” the “Company,” “we,” “our” and “us” refer to Holdco, including the Codere Online Business contributed to Holdco, or in respect of which Restructuring Agreements have been entered into, in connection with the consummation of the Business Combination, unless the context otherwise requires.

“Codere Online Business” means the entities and/or businesses of the Codere Group focused on online gambling and other online services in Spain, Mexico, Colombia, Panama, Italy, Gibraltar, Israel and Malta, which were either transferred to Holdco at the time of the Exchange or in respect of which Restructuring Agreements have been entered into.

“Colombia Restructuring Agreements” refers to the sale and transfer agreement, the joint accounts agreement (contrato de cuentas en participacion) and the license assignment agreement entered into among Codere Colombia S.A., a subsidiary within the Codere Group, and Codere Online Colombia S.A.S., a subsidiary of Holdco, on November 15, 2021, in each case as amended on November 30, 2021. See “Certain Relationships and Related Party Transactions—Material Agreements—Colombia Restructuring Agreements.”

“Combined Company” means Holdco and its consolidated subsidiaries after giving effect to the Business Combination.

“Continental” means Continental Stock Transfer & Trust Company, Holdco’s transfer agent, registrar and warrant agent.

“Contribution and Exchange Agreement” means that certain Contribution and Exchange Agreement, dated as of June 21, 2021, by and between Holdco, SEJO and Codere Newco.

“DD3” means (i) prior to the Merger Effective Time, DD3 Acquisition Corp. II, a Delaware corporation and (ii) following the Merger Effective Time, Codere Online U.S. Corp., a Delaware corporation.

“DD3 Capital” means DD3 Capital Partners S.A. de C.V.

iii

“DD3 Capital Subscription Agreement” means the Subscription Agreement, dated as of June 21, 2021, by and among DD3, DD3 Capital and Holdco, pursuant to which, among other things, DD3 Capital agreed to subscribe for, and DD3 agreed to sell, upon the terms and subject to the conditions of the DD3 Capital Subscription Agreement, 500,000 shares of DD3 Class A Common Stock for an aggregate purchase price of $5,000,000, at a price of $10.00 per each share of DD3 Class A Common Stock, immediately prior to the Closing Date.

“DD3 Class A Common Stock” means the Class A common stock of DD3, par value $0.0001 per share.

“DD3 Class B Common Stock” means the Class B common stock of DD3, par value $0.0001 per share.

“DD3 Common Stock” means the DD3 Class A Common Stock and the DD3 Class B Common Stock, collectively.

“DD3 Units” means the Public Units and the Private Placement Units, collectively.

“DD3 Warrants” means the Public Warrants and the Private Warrants, collectively.

“DGCL” means the General Corporation Law of the State of Delaware.

“DGOJ” means the Spanish Directorate General for the Regulation of Gambling (Dirección General de Ordenación del Juego), the Spanish gaming regulator.

“Exchange” means the contribution and exchange, effective on the Exchange Effective Time, by Codere Newco of its SEJO Ordinary Shares to Holdco in exchange for additional Ordinary Shares, which were subscribed for by Codere Newco, as contemplated by and pursuant to the Contribution and Exchange Agreement.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exchange Effective Time” means 10:00 a.m. New York time on November 29, 2021.

“Exchange Issuance” has the meaning ascribed to it in the Business Combination Agreement.

“Expenses Reimbursement Letter” means that certain letter agreement entered into immediately prior to the Closing by and among the Sponsor, DD3, Codere Newco and Holdco.

“Forward Purchase Agreements” means, collectively, (i) the Baron Forward Purchase Agreement and (ii) the MG Forward Purchase Agreement, in each case as may be amended from time to time.

“Forward Purchase Amendments” means, collectively, (i) the Baron FPA Amendment and (ii) the MG FPA Amendment.

“Forward Purchasers” means Baron and MG, and their permitted transferees under the Forward Purchase Agreements, collectively.

“Forward Purchase Shares” means an aggregate of 5,000,000 shares of DD3 Class A Common Stock issued to the Forward Purchasers in a private placement immediately prior to the Closing pursuant to the Forward Purchase Agreements, which shares were exchanged for Ordinary Shares upon consummation of the Business Combination.

“Gross Proceeds” means the sum of (i) the cash held by DD3 outside of the Trust Account, including the aggregate amount of proceeds from the Investment (as defined in the Business Combination Agreement) pursuant to the Forward Purchase Agreements and Subscription Agreements consummated prior to, or as of, the Closing, and (ii) the cash held in the Trust Account (including the amount of proceeds held in the Trust Account as a result of Baron not exercising any of its Redemption Rights pursuant to the Baron Support Agreement), after deducting all payments made or required to be made pursuant to exercises of Redemption Rights.

iv

“HIPA” means Hípica de Panamá, S.A., a corporation (sociedad anónima) registered and incorporated under the laws of Panama.

“HIPA License” means Resolution No. 921 of September 21, 2017 which authorizes to operate online sports betting by virtue of Contract No. 1 of April 16, 2018 (under which HIPA was awarded 5 licenses for a five (5) year term, renewable for another five (5) years) and Contract No. 193 of 4 October 4, 2005 (under which HIPA was awarded 51 licenses for a twenty (20) year term).

“Holdco” means Codere Online Luxembourg, S.A., a limited liability company (société anonyme) governed by the laws of the Grand Duchy of Luxembourg having its registered office at 7 rue Robert Stümper, L-2557 Luxembourg, Grand Duchy of Luxembourg, registered with the Luxembourg Trade and Companies Register (Registre de Commerce et des Sociétés, Luxembourg) under number B255798.

“Holdco Board” means the board of directors of Holdco.

“Holdco Capital Increase” means the share capital increase of Holdco by way of the Ordinary Shares Merger Issuance.

“Holdco Financial Statements” means the audited balance sheet of Holdco as of June 30, 2021, prepared in accordance with IFRS, as adopted by the International Accounting Standards Board, and the accompanying notes.

“Holdco Shareholders” means holders of Ordinary Shares.

“Holdco Private Warrants” means the 185,000 Private Warrants that converted into Holdco Warrants on the Closing Date.

“Holdco Public Warrants” means the 6,250,000 Public Warrants that converted into Holdco Warrants on the Closing Date.

“Holdco Warrants” means the DD3 Warrants as converted into warrants of Holdco representing the right to purchase Ordinary Shares, pursuant to the Warrant Amendment Agreement in connection with the Merger and on substantially the same terms as were in effect immediately prior to the Merger Effective Time under the terms of the Original Warrant Agreement.

“IFRS” means the International Financial Reporting Standards, as issued by the IFRS Foundation and the International Accounting Standards Board, as in effect from time to time.

“Indemnification Letter” means the indemnification entered into by Codere Newco, Holdco and SEJO at Closing.

“Interim Combined Carve-out Condensed Financial Statements” means the unaudited combined carve-out financial statements of the Codere Online Business as of June 30, 2021 and for the six months ended June 30, 2021 and 2020, prepared in accordance with IFRS, as adopted by the International Accounting Standards Board, and the accompanying notes.

“IPO” means DD3’s initial public offering of Public Units, consummated on December 10, 2020.

“Italy License” means Remote Gaming License no. 15411 granted to Codere Scommese S.r.l. on October 7, 2019, which expires on December 31, 2022.

“JOBS Act” means the Jumpstart Our Business Startups Act of 2012, as amended.

“Larrain” means Larrain Investment Inc.

“Larrain Subscription Agreement” means the Subscription Agreement, dated as of June 21, 2021, by and among DD3, Larrain and Holdco, pursuant to which, among other things, Larrain subscribed for, and DD3 sold, upon the terms and subject to the conditions of the Larrain Subscription Agreement, 1,211,000 shares of DD3 Class A Common Stock for an aggregate purchase price of $12,110,000, at a price of $10.00 per each share of DD3 Class A Common Stock, immediately prior to the Closing Date.

“LIFO” means Libros Foráneos, S.A. de C.V.

“LIFO License” means license 2768 granted to LIFO in May 1990, which was renewed for a period of 12 years under Official Letter DGJS/1018/2015, expiring on May 10, 2027, which allows for the operation of 18 retail locations in Mexico and online gaming. By virtue of Official Letter No. DGJS/234/2019, dated March 14, 2019 the Ministry of Interior authorizes Codere Online to operate online gaming through the website “codere.mx”.

v

“Merger” means the merger of Merger Sub with and into DD3, with DD3 surviving the Merger as a wholly-owned subsidiary of Holdco. In connection therewith, DD3’s corporate name changed to “Codere Online U.S. Corp.”

“Merger Consideration” has the meaning ascribed to it in the Business Combination Agreement.

“Merger Effective Time” means 12:01 a.m. New York time on November 30, 2021.

“Merger Sub” means Codere Online U.S. Corp., a Delaware corporation, which merged with and into DD3 at the Merger Effective Time, with DD3 surviving the Merger.

“MG” means MG Partners Multi-Strategy Fund LP, an Ontario limited partnership.

“MG Forward Purchase Agreement” means that certain Forward Purchase Agreement, dated as of November 19, 2020, by and between DD3 and MG, as amended by the MG FPA Amendment.

“MG FPA Amendment” means Amendment No. 1 to the original MG Forward Purchase Agreement, dated as of June 21, 2021, by and between DD3 and MG.

“Nasdaq” means The Nasdaq Stock Market LLC.

“net gaming revenue” means all gross amounts wagered of Codere Online less: (i) player wins, (ii) player bonuses and (iii) promotional bets.

“Nomination Agreement” means that certain nomination agreement entered into by Codere Newco, Holdco and the Sponsor at Closing.

“ONOL” means Codere Online Operator Limited, a private limited company incorporated in Malta.

“OMSE” means Codere Online Management Services Limited, a private limited company incorporated in Malta.

“Ordinary Shares” means the ordinary shares of Holdco, with a nominal value of €1.00 per share.

“Ordinary Shares Merger Issuance” means the issuance of one Ordinary Share in consideration of each share of DD3 Class A Common Stock issued and outstanding immediately prior to the Merger Effective Time (which for the avoidance of doubt did not include shares of DD3 Class A Common Stock as to which Redemption Rights were exercised).

“Original Warrant Agreement” means the warrant agreement, dated as of December 7, 2020, by and between DD3 and Continental, as warrant agent, governing the DD3 Warrants.

“Panama Restructuring Agreements” refers collectively to the agreement entered into among Codere Online Panama and HIPA on November 15, 2021, as amended on November 30, 2021, and the agreement entered into by Codere Online Panama and ALTA on December 1, 2021. See “Certain Relationships and Related Party Transactions—Material Agreements—Panama Restructuring Agreements.”

“PCAOB” means the Public Company Accounting Oversight Board.

“PIPE” means the private placement pursuant to which the Subscribers purchased the PIPE Shares immediately prior to the Closing.

“PIPE Shares” means the shares of DD3 Class A Common Stock issued to the Subscribers in the PIPE, which shares were exchanged for Ordinary Shares upon consummation of the Business Combination. An aggregate of 1,711,000 shares of DD3 Class A Common Stock were issued to the Subscribers in the PIPE.

vi

“Platform and Technology Services Agreement” means the Platform and Technology Services Agreement, effective January 1, 2021, by and among Codere Newco, OMSE and Codere Apuestas España, S.L.U., for the provision of platform and technology services by Codere Newco and Codere Apuestas España, S.L.U. to OMSE’s online casino and sports betting business. See “Certain Relationships and Related Party Transactions—Material Agreements—Platform and Technology Services Agreement.”

“Private Placement Units” means the aggregate 370,000 units purchased by the Sponsor and the Forward Purchasers in a private placement in connection with the IPO, each of which consisted of one Private Share and one-half of one Private Warrant.

“Private Shareholders” means the holders of Private Shares, and their permitted transferees, collectively.

“Private Shares” means the shares of DD3 Class A Common Stock issued as part of the Private Placement Units.

“Private Warrants” means the warrants included in the Private Placement Units, each of which was exercisable for one share of DD3 Class A Common Stock, in accordance with its terms.

“Proxy Statement” means the definitive proxy statement filed by DD3 with the SEC on October 27, 2021.

“Public Shares” means the shares of DD3 Class A Common Stock issued as part of the Public Units.

“Public Stockholders” means the holders of Public Shares.

“Public Units” means the 12,500,000 units issued in the IPO, each of which consisted of one Public Share and one-half of one Public Warrant.

“Public Warrants” means the warrants included in the Public Units, each of which was exercisable for one share of DD3 Class A Common Stock, in accordance with its terms.

“Redemption Rights” means the redemption rights provided for in Article IX of the DD3 Certificate of Incorporation.

“Relationship and License Agreement” means the Relationship and License Agreement, dated June 21, 2021, by and between Codere Newco and SEJO, which became effective as of the Merger Effective Time. See “Certain Relationships and Related Party Transactions—Material Agreements—Relationship and License Agreement.”

“Registration Rights and Lock-Up Agreement” means that certain registration rights and lock-up agreement entered into by DD3, Codere Newco, Holdco, the Sponsor, the Forward Purchasers and the other parties thereto, at Closing.

“Restructuring” means the corporate restructuring pursuant to which all of the Codere Group’s online gaming, gambling, casino, slots, poker, bingo, sports betting, betting exchanges, lottery operations, racing, and pari-mutuel activities became operated or owned, as applicable, by SEJO and its subsidiaries by holding or receiving assets, rights and/or entities from the Codere Group, as set forth in the Business Combination Agreement; except that, in Colombia, Panama and the City of Buenos Aires (Argentina), in lieu of causing the consummation of the restructuring step plan agreed with DD3 in respect of each of such jurisdictions, the Codere Online group entered into a Restructuring Agreement with the relevant subsidiaries of Codere Group in the affected jurisdiction.

“Restructuring Agreements” refers, collectively, to the Colombia Restructuring Agreements, the Panama Restructuring Agreements and the Argentina Restructuring Agreement and “Restructuring Agreement” refers to one or any of such agreements, as the context may require.

“RM Sponsorship Agreement” means the sponsorship agreement (“Contrato de Patrocinio”), dated October 11, 2016, between Codere Newco and Real Madrid Club de Fútbol, as amended on April 10, 2019, November 24, 2020 and October 7, 2021 and as further amended from time to time, pursuant to which, Codere Online is, and is expected to continue to be, the licensee of certain rights, marks, names, images, designations, anthems, photographs and brands set forth under the RM Sponsorship Agreement.

vii

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“SEJO” means Servicios de Juego Online S.A.U., a corporation (sociedad anónima unipersonal) registered and incorporated under the laws of Spain.

“SEJO Ordinary Shares” means the ordinary shares of SEJO, all with a nominal value of €1.00 per share.

“Selling Securityholders” means the selling securityholders named in this prospectus under “Selling Securityholders”, or their permitted transferees.

“Spanish Gaming Law” means Spanish Law 13/2011, of May 27, on gaming regulation.

“Sponsor” means DD3 Sponsor Group, LLC, a Delaware limited liability company.

“Sponsorship and Services Agreement” means the Sponsorship and Services Agreement, dated June 21, 2021, by and between Codere Newco and SEJO, which became effective as of the Merger Effective Time. See “Certain Relationships and Related Party Transactions—Material Agreements—Sponsorship and Services Agreement.”

“Subscribers” means DD3 Capital, Larrain and their permitted transferees under the Subscription Agreements, collectively.

“Subscription Agreements” means the DD3 Capital Subscription Agreement and the Larrain Subscription Agreement.

“Supporting Entities” means OMSE, Codere Israel Marketing Support Services LTD and Codere (Gibraltar) Marketing Services LTD.

“Surviving Corporation” means DD3 as surviving corporation of the Merger. Upon the Merger, DD3 became a wholly-owned subsidiary of Holdco and its corporate name changed to “Codere Online U.S. Corp.”

“Surviving Corporation Exchange” means the exchange in which each share of Merger Sub was converted into one share of the Surviving Corporation.

“TAM” means total addressable market.

“Transaction Documents” means the Business Combination Agreement, including all schedules and exhibits thereto and related disclosure schedules, the Ancillary Agreements and all other agreements, certificates and instruments executed and delivered by DD3, Codere Newco, Holdco, Merger Sub or SEJO in connection with the Transactions and specifically contemplated by the Business Combination Agreement.

“Transactions” means the transactions contemplated by the Transaction Documents, including the Restructuring, the Exchange and the Merger.

“Trust Account” means the trust account that holds a portion of the proceeds of the IPO and the concurrent sale of the Private Placement Units.

“U.S. GAAP” means generally accepted accounting principles as in effect in the United States from time to time.

“Warrant Agreement” means the Original Warrant Agreement, as amended by the Warrant Amendment Agreement.

“Warrant Amendment Agreement” means that certain agreement to amend the Original Warrant Agreement entered into by DD3, Holdco and Continental, as warrant agent, at Closing.

viii

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this prospectus may constitute “forward-looking statements” for purposes of the federal securities laws. Forward-looking statements include, but are not limited to, statements regarding Codere Online’s or its management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this prospectus may include, for example, statements about:

● Codere Online’s financial performance and, in particular, the potential evolution and distribution of its net gaming revenue following the consummation of the Business Combination;

● prospective and illustrative financial information included in this prospectus;

● changes in Codere Online’s strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans;

● Codere Online’s strategic advantages and the impact those advantages will have on future financial and operational results;

● expansion plans and opportunities, including TAM estimates;

● Codere Online’s expectations with respect to obtaining and maintaining online gaming licenses;

● Codere Online’s ability to grow its business in a cost-effective manner;

● the implementation, market acceptance and success of Codere Online’s business model;

● developments and projections relating to Codere Online’s competitors and industry;

● Codere Online’s approach and goals with respect to technology;

● Codere Online’s expectations regarding its ability to obtain and maintain intellectual property protection and not infringe on the rights of others;

● the impact of the COVID-19 pandemic on Codere Online’s business;

● changes in foreign currency exchange rates, which can affect revenue and foreign currency prices;

● changes in applicable laws or regulations, including online gaming rules and regulations; and

● the outcome of any known and unknown litigation and regulatory proceedings.

These forward-looking statements are based on information available as of the date of this prospectus, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing Codere Online’s or its management team’s views as of any subsequent date, and Codere Online does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

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As a result of a number of known and unknown risks and uncertainties, Codere Online’s actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:

● Codere Online’s ability to continue as a going concern;

● changes in applicable laws or regulations, including online gaming, privacy, data use and data protection rules and regulations as well as consumers’ heightened expectations regarding proper safeguarding of their personal information;

● the effects of the COVID-19 pandemic on Codere Online’s business;

● the ability to implement business plans, forecasts, and other expectations and identify and realize additional opportunities;

● the risk of downturns and the possibility of rapid change in the highly competitive industry in which Codere Online operates;

● the risk that Codere Online and its current and future collaborators are unable to successfully develop and commercialize Codere Online’s services, or experience significant delays in doing so;

● the risk that Codere Online may never achieve or sustain profitability;

● the risk that Codere Online will need to raise additional capital to execute its business plan, which may not be available on acceptable terms or at all;

● the risk that Codere Online experiences difficulties in managing its growth and expanding operations;

● the risk that third-party providers are not able to fully and timely meet their obligations;

● the risk that the online gaming operations will not provide the expected benefits due to, among other things, the inability to obtain or maintain online gaming licenses in the anticipated time frame or at all;

● the risk that Codere Online is unable to secure or protect its intellectual property;

● the possibility that Codere Online may be adversely affected by other economic, business, and/or competitive factors; and

● other risks and uncertainties described in this prospectus, including those under the section entitled “Risk Factors.”

x

Summary of the Prospectus

This summary highlights selected information from this prospectus and does not contain all of the information that is important to you in making an investment decision. This summary is qualified in its entirety by the more detailed information included in this prospectus. Before making your investment decision with respect to our securities, you should carefully read this entire prospectus, including the information under “Risk Factors,” “Business,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the financial statements included elsewhere in this prospectus.

Overview

Codere Online is an international online casino gaming and sports betting company focused on providing its customers with a safe and enjoyable online gaming experience. Codere Online currently operates primarily in Spain, Italy, Mexico, Colombia, Panama and, since December 2021, the City of Buenos Aires (Argentina), where it offers its users the ability to play online casino games and bet on sports events. Codere Online seeks to innovate and expand its product offering on its established and flexible technology platform as it pursues its vision to be the leading online casino gaming and sports betting operator in Latin America. Codere Online maintains a wide and updated catalogue of online casino games with over 1,300 titles from more than 30 third-party content providers.

As part of the Codere Group, Codere Online expects to leverage the “Codere” brand, a well-recognized brand in the gaming industry across Spain and Latin America, by providing customers with an online gaming experience consistent with the Codere Group’s retail footprint. The Codere Group is a leading international gaming operator founded in 1980 with a presence across Spain, Italy and Latin America, including in all of the markets where Codere Online operates. The Codere Group had nearly 57,000 slots in over 10,000 controlled and third-party retail venues throughout Latin America, Spain and Italy as of December 31, 2019 (approximately 34,000 slots and 9,700 retail venues as of June 30, 2021 and 23,000 slots and 6,600 retail venues as of December 31, 2020, as a result of COVID-19 temporary closings).

In 2014, the Codere Group entered into the online gaming business in Spain to pursue new avenues of growth and diversification of its revenue streams, first through Desarrollo Online de Juegos Regulados, S.A. and CDON, and Codere Apuestas, S.A.U. in Madrid, Spain, and afterwards independently through Codere Online, which was created to lead the Codere Group’s expansion into the online casino gaming and sports betting markets beyond Spain. To enhance its business, in 2018, the Codere Group recruited an experienced online management team led by industry veteran Moshe Edree with top tier online casino gaming and sports betting expertise. As of the date of this prospectus, Codere Online has approximately 165 employees, including directors, intermediate managers, technicians and administrative personnel based in Spain, Mexico, Colombia, Panama, Argentina, Israel, Malta and Gibraltar. Codere Online operates under the “Codere” brand across all of its markets.

Codere Online believes it is well-positioned for continued growth with the support of the “Codere” brand, its dedicated and highly-experienced management team and an established and flexible technology platform, and due to other macroeconomic and industry tailwinds. Codere Online believes that this privileged combination of expertise, brand recognition and infrastructure across multiple jurisdictions will not only support its continued success in the markets in which it operates, but also allow Codere Online to capture market share in existing markets and in other expansion markets in the future. In particular, Codere Online seeks to expand into other markets in Latin America (many of which are expected to be regulated in the near future), including Brazil, Chile, Peru, Puerto Rico and Uruguay, as well as Argentina (beyond the City of Buenos Aires, where it started operating in December 2021), subject to obtaining the required regulatory approvals once such markets become regulated. Additionally, Codere Online intends to pursue options to access the large Hispanic market in the United States (an estimated 60 million people as of 2019, according to the U.S. Census Bureau) in the future.

Codere Online’s product offering and platform are designed to create exciting online casino gaming and sports betting experiences for its customers. Codere Online’s established and flexible technology platform has an extensive track record of successfully serving its customers and provides the business with a solid foundation for future growth.

Codere Online has established itself as a leading operator across a number of markets since it began operations. According to Codere Online’s estimates, Codere Online’s market share in the online gaming markets of Mexico, Colombia, Panama and Spain ranged between approximately 3% and 11% in each of such markets in terms of net gaming revenue. Codere Online estimates that it had the second largest market share in both Mexico and Panama online gaming markets in terms of net gaming revenue. Codere Online’s management believes that current market shares have been adversely affected by the financial constraints faced by the Codere Group and are not fully reflective of Codere Online’s potential. In the future, Codere Online expects to use a substantial part of the proceeds of the Business Combination, which was consummated in November 2021, to fund customer acquisition costs. Such proceeds, paired with the fact that Codere Online’s marketing spend is currently estimated to be below market leaders in Spain and Mexico and the other competitive advantages detailed herein, are expected to serve as a foundation for its plan to seek a rapid acquisition of customers and market share growth in Spain, Mexico and our other markets.

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In the City of Buenos Aires, where Codere Online started operating in December 2021, Codere Online, through Iberargen S.A., was the first operator to receive approval for its platform implementation program in October 2020 by the City of Buenos Aires’ regulator, LOTBA (Lotería de Buenos Aires). In addition, Codere Online expects to benefit from the Codere Group’s leading retail presence in the Province of Buenos Aires, where it operates 13 bingo halls and has approximately a 42% market share (based on gross gaming revenue according to Codere Online’s estimates as of February 2020).

For the six months ended June 30, 2021, Codere Online’s revenues grew to €39.9 million compared to €30.0 million for the six months ended June 30, 2020, mainly due to strong revenue trends in Spain, despite regulatory headwinds, and substantial growth achieved across Latin America on the back of a significant increase in average monthly active players, partially due to the impact from the COVID-19 pandemic on sporting events (i.e. cancellation of events) during the six months ended June 30, 2020. Codere Online’s revenues grew to €70.5 million for the year ended December 31, 2020 from €61.6 million for the year ended December 31, 2019 driven mainly by substantial growth of online casino wagering in Spain and Mexico, partially offset by a decrease in sports betting activity, which was negatively impacted by the cancellation or postponement of sporting events as a result of the COVID-19 pandemic.

The address of Holdco’s registered office is 7 rue Robert Stümper, L-2557 Luxembourg, Grand Duchy of Luxembourg and its telephone number is +34 91354 28 19.

The Business Combination

The Business Combination Agreement

On June 21, 2021, DD3, Codere Newco, SEJO, Holdco and Merger Sub entered into the Business Combination Agreement, which contains customary representations and warranties, covenants, closing conditions, expenses provisions and other terms relating to the Merger and the other transactions contemplated thereby, as summarized below. Capitalized terms used in this section but not otherwise defined herein have the meanings given to them in the Business Combination Agreement.

Pursuant to the Business Combination Agreement, following the effectiveness of the transactions contemplated by the Exchange at the Exchange Effective Time and the Merger on the Merger Effective Time, the parties consummated the Business Combination and SEJO and DD3 became direct wholly-owned subsidiaries of Holdco. Pursuant to the Business Combination Agreement, each of the following transactions occurred in the following order:

● pursuant to the Contribution and Exchange Agreement, Codere Newco, effective on the Exchange Effective Time, contributed its SEJO Ordinary Shares constituting all the issued and outstanding share capital of SEJO to Holdco in exchange for additional Ordinary Shares, which were subscribed for by Codere Newco. As a result of the Exchange, SEJO became a wholly-owned subsidiary of Holdco and Holdco continued to be a wholly-owned subsidiary of Codere Newco at the Exchange Effective Time;

● after the Exchange and immediately prior to the Merger Effective Time, each share of DD3 Class B Common Stock automatically converted into and exchanged for one share of DD3 Class A Common Stock pursuant to the Class B Conversion;

● on the Closing Date, pursuant to the Merger, Merger Sub merged with and into DD3, with DD3 surviving such merger and becoming a direct wholly-owned subsidiary of Holdco and, in connection therewith, DD3’s corporate name changed to “Codere Online U.S. Corp.”;

● in connection with the Merger, all shares of DD3 Class A Common Stock issued and outstanding immediately prior to the Merger Effective Time, but after the Class B Conversion, were contributed to Holdco in exchange for the Merger Consideration in the form of one Ordinary Share for each share of DD3 Class A Common Stock pursuant to the Holdco Capital Increase, as set forth in the Business Combination Agreement; and

● as of the Merger Effective Time, each DD3 Warrant that was outstanding immediately prior to the Merger Effective Time no longer represented a right to acquire one share of DD3 Class A Common Stock and instead represented the right to acquire one Ordinary Share on substantially the same terms.

2

Consideration Received in the Business Combination

Codere Newco received the Exchange consideration in the form of Ordinary Shares on the Exchange Effective Time. The Ordinary Shares making up the Exchange consideration, minus any Ordinary Shares owned by Codere Newco immediately prior to the Exchange Effective Time, were issued to Codere Newco. After such issuance and as of the date of this prospectus, Codere Newco held 30,000,000 Ordinary Shares.

At the Merger Effective Time, each share of DD3 Class A Common Stock issued and outstanding immediately prior to the Merger Effective Time was exchanged for one validly issued and fully paid Ordinary Share.

The Business Combination Agreement is included as an exhibit to the registration statement of which this prospectus forms part.

Organizational Structure

The following diagram shows the ownership percentages (excluding the impact of the shares underlying the Holdco Warrants) and structure of Holdco based on 45,121,956 Ordinary Shares issued and outstanding immediately following the consummation of the Business Combination.

Note: Percentages may not add to 100% due to rounding.

(1)	Consists of 3,915,956 Ordinary Shares held by Public Stockholders (excludes Ordinary Shares issued in exchange for shares of DD3 Class A Common Stock held by Baron per footnote 3 below).
(2)	Consists of 3,421,000 Ordinary Shares issued to the Sponsor and its permitted transferees in exchange for 3,125,000 shares of DD3 Class B Common Stock and 296,000 Private Shares.
(3)	Consists of 6,074,000 Ordinary Shares issued to (i) Baron in exchange for 2,500,000 Forward Purchase Shares, 37,000 Private Shares, 996,069 Baron IPO Shares and 3,931 additional Public Shares acquired by Baron in the IPO and (ii) MG and its permitted transferees in exchange for 2,500,000 Forward Purchase Shares and 37,000 Private Shares. Does not include Ordinary Shares issued in exchange for the shares of DD3 Class B Common Stock acquired from the Sponsor prior to the Closing Date.
(4)	Consists of 1,711,000 Ordinary Shares issued to the Subscribers and their permitted transferees in exchange for 1,711,000 PIPE Shares.
(5)	Consists of 30,000 Ordinary Shares issued to Codere Newco in connection with Holdco’s incorporation and 29,970,000 Ordinary Shares issued to Codere Newco in connection with the Exchange.

3

Risk Factors

Investing in our securities involves risks. You should carefully consider the risks described in “Risk Factors” before making a decision to invest in the Ordinary Shares or Holdco Warrants. If any of these risks actually occurs, our business, financial condition and results of operations would likely be materially adversely affected. In such case, the trading price of our securities would likely decline, and you may lose all or part of your investment. Set forth below is a summary of some of the principal risks we face:

Risks Related to Codere Online

● Codere Online is an early stage company which has not yet demonstrated its ability to obtain profits and expects to incur significant expenses and continuing losses for the foreseeable future.

● Codere Online’s future performance may be significantly different from any prospective financial information, or illustrative financial information, that Holdco may have published in the past.

● Codere Online has never operated as an independent company and there has been expressed substantial doubt about Codere Online’s ability to continue as a going concern.

● Holdco’s management has no experience in operating a publicly traded company in the United States and will incur increased costs as a result of operating as a public company.

● The online gaming industry is subject to extensive regulation, including applicable direct and indirect taxation and anti-corruption, anti-money laundering, economic sanctions and data protection and consumer data regulation, and the failure to comply with such regulation could have a material adverse impact on Codere Online’s business, results of operations and financial condition.

● Codere Online relies on licenses to conduct its operations, and the failure to renew existing licenses or obtain new licenses or the termination of such licenses could have a material adverse effect on its business.

● Codere Online has international business operations, including in emerging countries in Latin America, which subjects Codere Online to additional costs and risks.

● Codere Online may require additional capital to support its growth plans, and such capital may not be available on terms acceptable to Codere Online, or at all.

● Codere Online’s success is dependent on maintaining and enhancing the “Codere” brand. Codere Online may be affected by actions undertaken, or failed to be undertaken, by Codere Newco and other members of the Codere Group.

● The Codere Group has undergone a significant financial restructuring of its liabilities which has recently affected its shareholding structure and may impact its strategy and operations, which could potentially adversely affect Codere Online.

● Codere Online is dependent on Codere Newco and certain of its subsidiaries to provide Codere Online with certain services, which may not be sufficient to meet Codere Online’s needs.

● Codere Online’s network, information technology systems and accounting systems are subject to error, damage and interruption and may be vulnerable to hacker intrusion, cyberattacks and system breaches.

● Codere Online relies on third-party providers to validate the identity and location of its users, and if such providers fail to accurately confirm user information, Codere Online’s business, results of operations and financial condition could be adversely affected.

● Negative perceptions and negative publicity surrounding the gaming industry could damage Codere Online’s reputation or lead to increased regulation or taxation.

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● Codere Online may fail to detect money laundering or fraudulent activities by its customers or third parties and may be vulnerable to player fraud.

● Codere Online depends on the skill and experience of its management and key personnel. The loss of managers or key and highly qualified personnel, or an inability to attract such personnel, could adversely impact Codere Online’s business.

Risks Related to the Financial Information and this Prospectus

● The Holdco Financial Statements, the Interim Combined Carve-out Condensed Financial Statements, the Annual Combined Carve-out Financial Statements and the 3Q Combined Carve-out Financial Information are not necessarily indicative of the results of operations and financial position of Codere Online. Further, the unaudited pro forma combined financial information included in this prospectus is not necessarily indicative of the results of operations and financial position that would have been achieved had the Business Combination been consummated on the date indicated therein, or of the future consolidated results of operations or financial position of the Combined Company.

● To the extent a Selling Securityholder elects to sell his or her Ordinary Shares and/or Holdco Warrants without involving an underwriter, no underwriter will have conducted due diligence of Codere Online’s business, operations or financial condition or reviewed the disclosure in this prospectus in connection with such sale.

Risks Related to the Recently Completed Business Combination

● The Holdco Warrants are accounted for as liabilities under IFRS and the changes in value of the Holdco Warrants could have a material effect on Holdco’s financial results.

● Material weaknesses were identified in DD3’s internal control over financial reporting with respect to DD3’s previously issued financial statements. These material weaknesses could adversely affect Holdco’s ability to report its results of operations and financial condition accurately and in a timely manner.

● Holdco may face litigation and other risks as a result of the Business Combination, past actions or omissions of DD3 and material weakness in DD3’s internal control over financial reporting and its accounting of the Private Warrants and DD3 Class A Common Stock.

● Certain former shareholders of DD3 may pursue rescission rights and related claims.

● Holdco may be required to take write-downs or write-offs, restructuring and impairment or other charges as a result of the Business Combination and may face litigation as a result thereof.

Other Risk Factors

● Holdco is controlled by Codere Newco and Codere Newco’s interests may not be aligned with Holdco’s interests or the interests of other shareholders.

● A market for the Ordinary Shares and the Holdco Warrants may not develop and the market price of such securities may be volatile.

● There can be no assurance that the Holdco Warrants will be in the money at the time they become exercisable or thereafter, and they may expire worthless.

● The sale of Ordinary Shares and/or Holdco Warrants by the Selling Securityholders may adversely affect the market price of Holdco’s securities.

● As long as Holdco is a foreign private issuer, Holdco is exempt from a number of U.S. securities laws and rules promulgated thereunder and is permitted to publicly disclose less information than U.S. public companies. This may limit the information available to holders of Holdco’s securities.

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Selected Historical Financial Data of DD3

The following tables summarize selected historical financial data for DD3’s business. DD3’s balance sheet data as of September 30, 2021 and statement of operations data for the period from September 30, 2020 (inception) through September 30, 2021 are derived from DD3’s audited financial statements included elsewhere in this prospectus.

As described under “Risk Factors—Risks Related to the Recently Completed Business Combination—Material weaknesses were identified in DD3’s internal control over financial reporting with respect to DD3’s previously issued financial statements. These material weaknesses could adversely affect Holdco’s ability to report its results of operations and financial condition accurately and in a timely manner”, Holdco and DD3 determined that the Public Shares included certain provisions that required classification of all of the Public Shares as temporary equity regardless of the net tangible assets redemption limitation that was contained in the amended and restated certificate of incorporation of DD3, resulting in the filing of amendments to DD3’s quarterly reports on Form 10-Q/A for each of the Affected Periods (as defined below) with the SEC on January 27, 2022. Additionally, DD3’s previously issued financial statements as of December 31, 2020 and for the period from September 30, 2020 (inception) through December 31, 2020 were restated to classify Private Warrants as derivative liabilities measured at fair value on DD3’s balance sheet. As a result, financial statements issued with respect to the Affected Periods prior to date of the amendments to DD3’s quarterly reports on Form 10-Q/A should not be relied upon. Holdco will present this restatement in a prospective manner in all future filings. Under this approach, the previously issued financial statements of DD3 included in the Proxy Statement and in Holdco’s registration statement on Form F-4 (File No. 333-258759) initially filed by Holdco with the SEC on August 12, 2021, as amended, will not be amended to reflect DD3’s restated financial statements for the Affected Periods, but historical amounts presented in the current and future filings will reflect DD3’s restated financial statements, as applicable.

Additionally, in connection with the preparation of DD3’s audited financial statements for the period from September 30, 2020 (inception) through September 30, 2021, DD3 identified an accrual that was not initially recorded in the financial statements for such period. The accrual was recorded in the audited financial statements for the period from September 30, 2020 (inception) through September 30, 2021 and appropriately reflected in the financial statements contained in the Form 10-K filed by DD3 with the SEC on February 16, 2022. As part of such processes, DD3 identified a material weakness in its internal control over financial reporting related to the process of recording accounts payable and accrued expenses.

The historical results presented below are not necessarily indicative of the results to be expected for any future period. You should read the following selected financial information in conjunction with DD3’s audited financial statements and related notes contained elsewhere in this prospectus.

(in thousands of U.S. dollars, except share and per share data)	For the twelve months ended September 30, 2021
Statement of Operations Data:
Revenue
Loss from operations	$	(1,521,995	)
Interest income (expense) on marketable securities	$	50,181
Provision for income taxes	$	—
Net loss	$	(1,580,128	)
Basic and diluted net loss per share, Class A common stock subject to redemption	$	(0.12	)
Weighted average shares outstanding—basic and diluted, Class A common stock subject to redemption		10,102,740
Basic and diluted net loss per share, non-redeemable common stock	$	(0.12	)
Weighted average shares outstanding—basic and diluted, non-redeemable common stock		3,261,712

	September 30, 2021
Balance Sheet Data:
Working capital deficit	$	(583,674	)
Trust account	$	125,056,567
Total assets	$	125,446,377
Total liabilities	$	1,376,767
Value of Class A Common Stock subject to redemption	$	125,000,000
Stockholders’ deficit	$	(930,390	)

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Selected Combined Carve-Out Financial Data of Codere Online

For purposes of this section, references to financial data of Codere Online refer to financial data of the Codere Online Business.

The information as of June 30, 2021 and for the six months ended June 30, 2021 and 2020, and as of December 31, 2020 and 2019 and January 1, 2019 and for the years ended December 31, 2020 and 2019, presented below is derived from the Interim Combined Carve-out Condensed Financial Statements and the Annual Combined Carve-out Financial Statements, respectively, included elsewhere in this prospectus.

Holdco was incorporated on June 4, 2021 and its incorporation is accounted for in the Interim Combined Carve-out Condensed Financial Statements. However, as Holdco did not exist during the periods covered by the Annual Combined Carve-out Financial Statements, it is not accounted for in the Annual Combined Carve-out Financial Statements.

As explained in greater detail in Notes 1 and 2 to the Annual Combined Carve-out Financial Statements, the combined carve-out financial information reflects the combination of the results of all of the entities and/or businesses that form the Codere Online Business. However, as of the date of this Prospectus, Holdco does not own all of the Codere Online Business. Except as indicated below with respect to Colombia, Panama and the City of Buenos Aires (Argentina), according to the Business Combination Agreement, the Codere Online Business was transferred to Holdco in two steps: first, the transfer to SEJO of all the relevant entities and/or businesses that form the Codere Online Business that were not direct or indirect subsidiaries or businesses of SEJO as of the date of the Business Combination Agreement (as part of the Restructuring) and, secondly, the transfer of SEJO to Holdco (as part of the Exchange).

In Spain and Italy, CDON and Codere Scommese S.r.l., respectively, were transferred to, and became wholly-owned subsidiaries of, SEJO, which became in turn a subsidiary of Holdco upon consummation of the Exchange. In accordance with the Business Combination Agreement, as the planned corporate restructuring could not be consummated by October 1, 2021 with respect to Colombia, Panama and the City of Buenos Aires (Argentina), respectively, Restructuring Agreements were entered into on November 15, 2021 (except for the agreement that Codere Online Panama and ALTA entered into on December 1, 2021) between the relevant Codere Group entity holding the online license and a Codere Online entity. Such Restructuring Agreements generally govern the terms and conditions of, among other things, the assignment by the relevant Codere Group entity of assets, contracts, employees and permits, as applicable, necessary for the operation of the online gaming business by the Codere Online entity in Colombia, Panama and the City of Buenos Aires (Argentina), respectively, subject to the required authorizations. See “Certain Relationships and Related Party Transactions—Material Agreements—Restructuring Agreements.” In addition, in Mexico, Codere Online operates under an “Asociación en Participación” or “AenP” (an unincorporated joint venture) with LIFO (the entity which holds the LIFO License) as asociante, and SEJO as asociado, pursuant to which SEJO has the right to receive 99.99% of any distributed profits (see “Certain Relationships and Related Party Transactions—Material Agreement—AenP Agreement”).

The information presented below should be read alongside the Interim Combined Carve-out Condensed Financial Statements and the Annual Combined Carve-out Financial Statements included elsewhere in this prospectus. In addition, you should read this information together with the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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The following table highlights key measures of Codere Online’s financial condition and results of operations (in thousands of Euros) for the periods and as of the dates indicated:

	For the six months ended June 30,						For the year ended December 31,
(in thousands of Euros)	2021			2020			2020			2019
	(unaudited)
Statement of Income Data:
Revenue		39,944			29,975			70,497			61,583
Personnel expenses		(2,985	)		(2,611	)		(5,157	)		(5,102	)
Depreciation and amortization		(377	)		(543	)		(932	)		(1,193	)
Other operating expenses		(49,695	)		(32,610	)		(78,657	)		(71,165	)
Operating expenses		(53,057	)		(35,764	)		(84,746	)		(77,460	)
OPERATING INCOME/(LOSS)		(13,113	)		(5,789	)		(14,249	)		(15,877	)
Finance income/(costs)		68			(245	)		(520	)		(269	)
Net financial results		68			(245	)		(520	)		(269	)
NET INCOME/(LOSS) BEFORE TAX		(13,045	)		(6,034	)		(14,769	)		(16,146	)
Income tax benefit/(expense)		(222	)		(743	)		(1,510	)		53
NET INCOME/(LOSS) FOR THE YEAR		(13,267	)		(6,777	)		(16,279	)		(16,093	)
Attributable to equity holders of the parent		(13,300	)		(6,773	)		(16,274	)		(16,191	)
Attributable to non-controlling interests		33			(4	)		(5	)		98
Statement of Cash Flows Data:
Net cash provided by (used in) operating activities		(4,524	)		(1,005	)		3,856			(1,242	)
Net cash used in investing activities		(31	)		(381	)		(72	)		(275	)
Net cash provided by (used in) financing activities		221			100			(175	)		6,814
Effect of exchange rate on cash and cash equivalents		17			207			(726	)		91

	As of
(in thousands of Euros)	June 30, 2021			December 31, 2020			December 31, 2019			January 1, 2019
	(unaudited)
Balance Sheet Data:
Total cash		6,584			10,901			8,018			2,630
Total assets		11,985			18,548			44,227			36,074
Total liabilities		19,940			58,473			75,560			55,424
Total stockholders’ deficit		(7,955	)		(39,925	)		(31,333	)		(19,350	)

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Trading and Certain Other Recent Developments” for unaudited carve-out financial information of the Codere Online Business for the three months and nine months ended September 30, 2021 and 2020.

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Selected Historical Financial Data of Holdco

The following table summarizes selected historical financial data of Holdco. Holdco did not have any significant operations prior to the Closing of the Business Combination, so only balance sheet data is presented. Holdco was incorporated on June 4, 2021 and its incorporation is also accounted for in the Interim Combined Carve-out Condensed Financial Statements.

The information presented below should be read alongside the Holdco Financial Statements and the Interim Combined Carve-out Condensed Financial Statements included elsewhere in this prospectus. In addition, you should read this information together with the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The following table highlights key measures of Holdco’s financial condition (in thousands of Euros) as of June 30, 2021:

(in thousands of Euros)	As of June 30, 2021
Balance Sheet Data:
Total cash		30
Total assets		30
Total liabilities		-
Total stockholders’ equity		30

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Selected Unaudited Pro Forma Combined Financial Information

The following selected unaudited pro forma combined financial information is being provided to aid you in your analysis of the financial aspects of the Business Combination.

This information should be read together with the Annual Combined Carve-out Financial Statements, the Interim Combined Carve-out Condensed Financial Statements, DD3’s audited financial statements as of September 30, 2021 and for the period from September 30, 2020 (inception) through September 30, 2021 and related notes included in this prospectus and elsewhere in the registration statement of which this prospectus forms part, DD3’s unaudited restated interim financial statements as of June 30, 2021 and for the period from September 30, 2020 (inception) through June 30, 2021, as included in DD3’s 10-Q/A for the third quarter, filed by DD3 with the SEC on January 27, 2022 (the “Restated Q3 10-Q”) and DD3’s unaudited restated interim financial statements as of December 31, 2020 and for the period from September 30, 2020 (inception) through December 31, 2020, as included in DD3’s 10-Q/A for the first quarter, filed by DD3 with the SEC on January 27, 2022 (the “Restated Q1 10-Q”), “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Selected Combined Carve-Out Financial Data of Codere Online”, “Selected Historical Financial Data of DD3,” “Unaudited Pro Forma Combined Financial Information” and other financial information included elsewhere in this prospectus.

The following selected unaudited pro forma combined statement of financial position as of June 30, 2021 has been prepared using Codere Online Business’s unaudited interim combined carve-out condensed statement of financial position as of June 30, 2021 and DD3’s unaudited restated condensed balance sheet as of June 30, 2021, as included in the Restated Q3 10-Q, giving pro forma effect to the Business Combination as if it had been consummated on June 30, 2021.

The following selected unaudited pro forma combined income statement for the six months ended June 30, 2021 has been prepared using Codere Online Business’s unaudited interim combined carve-out condensed income statement for the six months ended June 30, 2021 and DD3’s restated condensed statement of operations derived from the unaudited restated condensed statement of operations of DD3 for the period from September 30, 2020 (inception) through June 30, 2021, as included in the Restated Q3 10-Q after deducting the unaudited restated condensed statement of operations of DD3 for the period from September 30, 2020 (inception) through December 31, 2020, as included in the Restated Q1 10-Q, giving pro forma effect to the Business Combination as if it had been consummated on January 1, 2020.

The following selected unaudited pro forma combined income statement for the year ended December 31, 2020 has been prepared using Codere Online Business’s combined carve-out income statement for the year ended December 31, 2020 and DD3’s unaudited restated condensed statement of operations for the period from September 30, 2020 (inception) through December 31, 2020, as included in the Restated Q1 10-Q, giving pro forma effect to the Business Combination as if it had been consummated on January 1, 2020.

The selected unaudited pro forma combined financial information is presented for illustrative purposes only, is based on certain assumptions, addresses a hypothetical situation and reflects limited historical financial data. In particular, the selected pro forma combined financial information was prepared based on actual figures for DD3 redemptions and transaction costs related to the Business Combination applied retrospectively to the historical financial information of DD3 and Codere Online as of the dates and for the periods described above. The selected unaudited pro forma combined financial information was prepared on the basis of the redemption of 7,584,044 shares of DD3 Class A Common Stock into cash by Public Stockholders upon the consummation of the Business Combination, at a redemption price of approximately $10 (€8.88) per share. After giving effect to the redemptions, there was approximately $116 million (€103 million) of cash held inside and outside of the Trust Account, including (i) the aggregate amount of proceeds from the Institutional Investors (as defined herein) and (ii) proceeds resulting from the fact that Baron and certain other Public Stockholders did not redeem a total of 4,915,956 Public Shares in connection with the Business Combination. The adjustments presented in the selected unaudited pro forma combined financial statements have been identified and presented to provide relevant information necessary for an accurate understanding of the combined Companies upon consummation of the Business Combination.

The historical combined carve-out financial statements and financial information of Codere Online Business have been prepared in accordance with Interim Financial Reporting (“IAS 34”) and in its presentation currency of the Euro. The unaudited restated historical financial statements of DD3 have been prepared in accordance with U.S. GAAP in its presentation currency of United States dollars. The unaudited restated condensed balance sheet of DD3 have been translated into Euros using the closing rate as of June 30, 2021 of US$1.00 to €0.84147. The unaudited restated condensed income statements were translated from U.S. dollar to EUR using the average exchange rate for each period, January 1, 2021 to June 30, 2021 €0.83008 per $1.00 and the period from September 30, 2020 (inception) through December 31, 2020 €0.87589 per $1.00.

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The unaudited restated financial statements of DD3 have been adjusted to give effect to the differences between U.S. GAAP and IFRS for the purposes of the selected unaudited pro forma combined financial information. For purposes of the selected unaudited pro forma combined statement of financial position as of June 30, 2021, two adjustments were required to convert DD3’s unaudited restated condensed balance sheet as of June 30, 2021 from U.S. GAAP to IFRS: (i) the reclassification of shares of DD3 Class A Common Stock subject to redemption from mezzanine equity to current liabilities and (ii) the reclassification of the Public Warrants from equity to current liabilities. For purposes of the selected unaudited pro forma combined income statements for the six months ended June 30, 2021 and for the year ended December 31, 2020, the conversion from U.S. GAAP to IFRS required adjusting DD3’s unaudited restated condensed statement of operations of DD3 for the period from September 30, 2020 (inception) through June 30, 2021 and for the period from September 30, 2020 (inception) through December 31, 2020 to reflect the reclassification of the Public Warrants from equity to current liabilities.

The selected unaudited pro forma combined financial information is only a summary and should be read in conjunction with the section titled “Unaudited Pro Forma Combined Financial Information.” The financial results may have been different had the companies always been combined. You should not rely on the selected unaudited pro forma combined financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the Combined Company will experience.

Selected Unaudited Pro Forma Combined Financial Information

(in thousands of Euros, except share and per share data)

In thousands, except share and per share data
Selected Unaudited Pro Forma Combined Income Statement – Six Months Ended June 30, 2021
Total expenses	€	(53,291	)
Operating loss	€	(13,347	)
Net loss	€	(13,512	)
Loss per share	€	(0.30	)
Weighted average shares outstanding – basic and diluted		45,121,956
Selected Unaudited Pro Forma Combined Income Statement – Year Ended December 31, 2020
Total expenses	€	(125,363	)
Operating loss	€	(54,866	)
Net loss	€	(46,772	)
Loss per share	€	(1.04	)
Weighted average shares outstanding – basic and diluted		45,121,956
Selected Unaudited Pro Forma Combined Balance Sheet – As of June 30, 2021
Total current assets	€	94,424
Total assets	€	95,322
Total current liabilities	€	16,380
Total liabilities	€	24,688
Total stockholders’ equity	€	70,654

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The Offering

Securities offered by the Selling Securityholders	We are registering the resale by the Selling Securityholders named in this prospectus, or their permitted transferees, of an aggregate of 7,997,500 Ordinary Shares and 37,000 Holdco Private Warrants.
	In addition, we are registering up to 37,000 Ordinary Shares issuable upon exercise of the Holdco Private Warrants.
Terms of the Offering	The Selling Securityholders will determine when and how they will dispose of the Ordinary Shares and Holdco Private Warrants registered under this prospectus for resale.
Ordinary Shares outstanding prior to the offering	As of the date of this prospectus, we had 45,121,956 Ordinary Shares issued and outstanding.
Ordinary Shares outstanding after the offering	45,158,956 Ordinary Shares (assuming the exercise for cash of 37,000 Holdco Private Warrants to purchase 37,000 Ordinary Shares).
Use of proceeds	We will not receive any of the proceeds from the sale of the Ordinary Shares or Holdco Private Warrants by the Selling Securityholders except with respect to amounts received by us due to the exercise of the Holdco Warrants. We expect to use the proceeds received from the exercise of the Holdco Warrants, if any, for general corporate purposes.
Nasdaq ticker symbol	The Ordinary Shares and Holdco Warrants are listed on Nasdaq under the symbols “CDRO” and “CDROW,” respectively.

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Risk Factors

An investment in the Ordinary Shares or Holdco Warrants involves a high degree of risk. In addition to the other information contained in (or incorporated by reference into) this prospectus, including the matters addressed under the heading “Forward-Looking Statements,” you should carefully consider the following risk factors before making and investment decision. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may have a material adverse effect on Holdco’s business, reputation, revenue, financial condition, results of operations and future prospects, in which event the market price of the Ordinary Shares and Holdco Warrants could decline, and you could lose part or all of your investment. Unless otherwise indicated, reference in this section and elsewhere in this prospectus to Codere Online’s business being adversely affected, negatively impacted or harmed will include an adverse effect on, or a negative impact or harm to, the business, reputation, revenue, results of operations, financial condition, and future prospects of Holdco.

Risks Related to Codere Online

Codere Online is an early stage company which has not yet demonstrated its ability to obtain profits and expects to incur significant expenses and continuing losses for the foreseeable future.

Codere Online has not produced a net profit in any of the periods covered by the Annual Combined Carve-out Financial Statements, the Interim Combined Carve-out Condensed Financial Statements or the 3Q Combined Carve-out Financial Information, and may not produce a net profit in the near future, or at all. Codere Online has incurred losses in the operation of its business driven primarily by its operating expenses, including, among others, marketing and professional services expenses, since its inception. Codere Online anticipates that its expenses will increase and that it will continue to incur losses in the future until at least it reaches full-scale commercial operation. If Codere Online fails to be commercially successful and realize sufficient revenues, its revenues grow slower than anticipated, or if operating expenses exceed Codere Online’s expectations, then Codere Online may not be able to achieve and sustain profitability in the near future or at all, which could materially and adversely affect its business, results of operations and financial condition.

Codere Online expects the rate at which it will incur losses to be significantly higher in future periods as it, among other things, expands in its core and expansion markets, increases its sales and marketing activities, implements technology enhancements, and increases its general and administrative functions to support its growing operations and its public company status. Codere Online may find that these efforts are more expensive than it currently anticipates or that these efforts may not result in the expected revenue growth, which could further increase Codere Online’s losses or otherwise materially and adversely affect its business, results of operations and financial condition.

Codere Online’s future performance may be significantly different from any prospective financial information, or illustrative financial information, that Holdco may have published in the past.

Holdco has, in the past, made certain prospective financial information, and illustrative financial information, public. Such information included Codere Online’s estimated 2021-2023 potential net gaming revenue for its core markets, Codere Online’s illustrative potential net gaming revenue and distribution beyond such period and an illustrative consolidated margin outlook for Codere Online’s core markets. Such information was prepared in good faith by Codere Online’s management based on certain estimates and assumptions at the time the prospective and illustrative financial information was prepared, including assumptions regarding the amount of proceeds that Holdco would receive as a result of the Business Combination. The amount of proceeds finally received by Holdco as a result of the Business Combination was lower than the amount assumed for purposes of preparing the prospective and illustrative financial information. As a result, Codere Online’s future performance may be significantly different from such information.

Further, such information was based on a number of assumptions and factors, many of which are outside Codere Online’s control, including, but not limited to:

● Codere Online’s ability to manage its growth;

● the ability to obtain, maintain or renew necessary regulatory authorizations, gaming licenses, approvals or findings of suitability (each, a “license”);

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● market size and demand for Codere Online’s online gaming products and services and its ability to capture market share;

● the timing and costs of existing and new marketing and promotional efforts;

● competition, including from established and future competitors;

● Codere Online’s ability to retain existing key management, to integrate recent hires and to attract, retain and motivate qualified personnel;

● changes in foreign currency exchange rates;

● the overall performance of the economies in the markets in which it operates or intends to operate in the future; and

● regulatory, legislative and political changes.

Unfavorable changes in any of these or other factors, many of which are beyond Codere Online’s control, could materially and adversely affect its business, results of operations and financial condition and cause Codere Online’s future performance to further depart from the prospective and illustrative financial information made public by Holdco in the past.

Codere Online has never operated as an independent company.

Holdco was incorporated on June 4, 2021 in connection with the spin-off of the online casino and sports betting businesses of the Codere Group, and Codere Online has no experience operating as an independent company. As Codere Online attempts to transition from being fully integrated in the Codere Group to operating as a separate company, it is difficult to forecast Codere Online’s future results, and Codere Online has limited insight into trends that may emerge and affect its business. The costs and timelines estimated by Codere Online to reach full-scale commercial operation are subject to inherent risks and uncertainties, including those involved in the transition to an independent company. There can be no assurance that Codere Online’s estimates related to the costs and time necessary to operate independently will prove accurate. These are complex processes that may be subject to delays, cost overruns and other unforeseen issues. Codere Online cannot guarantee that it or its partners will be able to develop the operating and administrative capabilities required to enable Codere Online to operate as an independent company, as well as to successfully maintain and expand its current operations.

You should consider Codere Online’s business and prospects in light of the risks and significant challenges it faces as a company with a limited operating history, including, among other things, with respect to its ability to:

● obtain, maintain and renew the necessary licenses in a timely and cost-effective manner;

● maintain and expand its customer base;

● successfully market its current and future products and services;

● properly price its products and services;

● successfully service its customers and maintain customer goodwill;

● maintain and improve its operational efficiency;

● successfully operate and improve its technology platform and maintain a reliable, secure, high-performance and scalable technology infrastructure;

● predict its future revenues and appropriately budget for its expenses;

● attract, retain and motivate qualified personnel;

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● anticipate trends that may emerge and affect its business;

● anticipate and adapt to changing market conditions, including technological developments and changes in competitive landscape;

● navigate an evolving and complex regulatory environment; and

● comply with applicable data protection and privacy regulations in any of the jurisdictions in which it operates.

In addition, even if Codere Online is able to bring its operations to market on time and on budget, there can be no assurance that new customers will embrace Codere Online’s products in significant numbers. Market conditions, many of which are outside of Codere Online’s control and subject to change, including general economic conditions, the availability and terms of financing, the impacts and ongoing uncertainties created by the COVID-19 pandemic, regulatory restrictions, changes in perceptions of the gaming industry, changes in policies and increased competition, will impact demand for Codere Online’s online casino and sports betting offerings, and ultimately Codere Online’s success.

If Codere Online fails to adequately address any or all of these risks and challenges, its business, results of operations and financial condition may be materially and adversely affected.

Codere Online’s independent registered public accounting firm has previously expressed substantial doubt about Codere Online’s ability to continue as a going concern.

The report issued by Ernst & Young, S.L., Codere Online’s independent registered public accounting firm, on the Annual Combined Carve-out Financial Statements includes an explanatory paragraph describing conditions that raise substantial doubt about Codere Online’s ability to continue as a going concern as described in Note 3(m) to the Annual Combined Carve-out Financial Statements. The Annual Combined Carve-out Financial Statements, the Interim Combined Carve-out Condensed Financial Statements and the 3Q Combined Carve-out Financial Information do not include any adjustments that might result from Codere Online’s inability to continue as a going concern. In November 30, 2021, subsequent to the issuance of the foregoing report by Ernst & Young, S.L., Codere Online completed the Business Combination, which resulted in gross proceeds of approximately $116 million to Codere Online, or approximately $103 million net of transaction fees and expenses. Accordingly, Codere Online expects the cash received from the Business Combination will be sufficient to fund Codere Online’s operations for at least twelve months. However, Codere Online’s expectation may prove to be inaccurate, Codere Online could spend its available financial resources much faster than currently expected and may have to seek additional external funding to finance its future operations. If Codere Online is unable to raise capital when needed or on acceptable terms, Codere Online could be forced to delay, reduce or eliminate its marketing and new territory expansion efforts. If Codere Online is unable to continue as a going concern, investors could suffer the loss of all or a substantial portion of their investment.

Codere Online has a limited operating history in many of the markets in which it operates and it is difficult to evaluate its future business prospects.

Codere Online has a limited operating history in many of the online casino and sports betting markets in which it operates, which are continuously evolving. Codere Online has been operating in Mexico since 2016, in Panama since 2018, in Italy since 2019, in Colombia since 2019 and in the City of Buenos Aires (Argentina) since December 2021. Part of Codere Online’s experience in these countries relates to a period in which the COVID-19 pandemic has had a significant impact on economic, political and social conditions and such conditions may not be representative of future conditions. Moreover, it is possible that Codere Online’s estimates of the total addressable market (“TAM”) opportunities in its core and expansion markets are based on certain assumptions which may prove to be incorrect. For example, TAM estimates for certain Latin American markets are based in part on gambling expenditure data of selected representative markets (United Kingdom, Australia, New Jersey, Spain and Italy) (source: H2 Gambling Capital) and adjusted based on relative macroeconomic data (GDP per capita, internet connectivity and gambling expenditure as a percentage of GDP), and this information may not be comparable and may overstate the TAM for Latin America. Furthermore, Codere Online’s expected expansion markets (Brazil, Chile, Peru, Puerto Rico, Uruguay and Argentina (beyond the City of Buenos Aires, where it started operating in December 2021)), may not open up through new regulatory frameworks and licensing regimes. Codere Online’s limited operating history in many of the online casino and sports betting markets in which it operates may hinder its ability to successfully meet its objectives and make it difficult for potential investors to evaluate its business or prospective operations. As a consequence, it is difficult to forecast Codere Online’s future results based upon its historical data.

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The online gaming industry is subject to extensive regulation (including applicable direct and indirect taxation, anti-corruption, anti-money laundering and economic sanctions laws) as well as licensing requirements. Codere Online’s business may be adversely affected if it is unable to comply with regulations or licensing requirements or any regulatory changes.

Regulatory requirements applicable to the online gaming industry vary from jurisdiction to jurisdiction. Because of the broad geographical reach of Codere Online’s operations, Codere Online is subject to a wide range of complex laws and regulations in the jurisdictions in which it operates. These regulations govern, for example, market access, advertisement, payouts, taxation, cash and anti-money laundering compliance procedures and other specific limitations, such as permissible forms of gaming and betting online. In addition to limiting the scope of Codere Online’s permitted activities, these regulations may limit the number and configuration of the online gaming and betting activities it may undertake. Gaming authorities, governments or other regulatory bodies may deny, revoke or suspend Codere Online’s licenses and impose fines or seize Codere Online’s assets if it is found to be in violation of any of these regulations. If a license is required by a regulatory authority, and Codere Online fails to seek or does not obtain the necessary license, then Codere Online may be prohibited from providing its online products or services in the relevant jurisdiction. Codere Online may also experience delays from time to time in the renewal of its licenses, which may result in disruptions to its business and the inability to provide its products or services. Upon the expiration of a license, a regulator could decide to offer that license to one or more third parties (through a competitive tender process or otherwise). In addition, it may issue additional licenses to third parties at any time. Renewing a license may be costly and time consuming, and Codere Online’s current licenses may not be renewed upon their expiration on favorable terms or at all. See “—Codere Online relies on licenses to conduct its operations, and the failure to renew or the termination of these licenses could have a material adverse effect on its business.”

Codere Online has implemented policies and procedures aimed at preventing and detecting violations of applicable gaming, anti-corruption and anti-money laundering laws and requirements. Despite Codere Online’s efforts to update and maintain such policies and procedures, they may prove to be inadequate or insufficient and Codere Online may be exposed to potential allegations of inappropriate conduct in the future. Codere Online operates in certain countries and regions with a reputation for heightened corruption risk where it may face challenges or be unsuccessful in implementing and ensuring compliance with the policies and procedures aimed at preventing and detecting violations of applicable gaming, anti-fraud, anti-corruption and anti-money laundering laws and requirements.

In addition, changes in existing laws or regulations, or changes in their interpretation, including laws or regulations with a direct impact on the gaming industry, such as laws or regulations that prohibit money laundering and financing of terrorist and other unlawful financial activities, could impact Codere Online’s profitability and restrict its ability to operate its business. In recent years, changes in existing laws or regulations have had a significant impact on the online gaming industry. As an online gaming operator, Codere Online has experienced and may continue to experience increasing regulatory pressure in the form of advertisement restrictions, taxation increases, limitations on payment methods, licensing and sponsorship restrictions, or limitations on promotions, maximum bets or prizes, among others.

For example, in Spain, online operators must pay a 20% tax on gross gaming revenue in addition to corporate income tax. This tax is reduced to 10% for those entities domiciled in the autonomous cities of Ceuta and Melilla, such as CDON, which is domiciled in Melilla. Players are required to declare any winnings over €1,600 and pay income tax on it. While there is a strict over-18s gambling policy, the Spanish government has recently taken several measures to reduce gaming advertising and exposure of online gaming to minors. Royal Decree 958/2020, of November 3, on the Commercial Communications of Gambling Activities, forbids gambling companies from appearing on uniform shirts of football clubs and sponsoring their stadium names. These restrictions have had a significant impact on the RM Sponsorship Agreement in Spain. On November 24, 2020, the RM Sponsorship Agreement was amended and terminated in respect of Spain only (without prejudice to the agreement remaining in force in the remaining applicable jurisdictions) at the end of the 2020/2021 football season due to newly-enacted advertising legal restrictions (which affect sponsorship) in Spain. In addition, advertising on television and on the Internet has been restricted to a four-hour window from 1 a.m. to 5 a.m. Furthermore, advertising on the internet must be done through the websites of the gaming operators. The Royal Decree also provides that bonus offers and promotions can only be marketed to existing players, as opposed to new players, among other significant advertising restrictions. Most of these restrictions have become effective following transitional periods ending on dates falling within the period from April to August 2021, so their full impact on Codere Online’s activities in Spain is still unclear, but could be material.

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Codere Online cannot be certain that laws, regulations or any authorities in the jurisdictions where it operates from time to time will not restrict Codere Online’s gaming advertising or marketing activities or use and license under the Sponsorship and Services Agreement, the RM Sponsorship Agreements or any other sponsorship agreements, including any future sponsorship agreements under the Sponsorship and Services Agreement, or the rights of Codere Online’s licensors under any such agreements. In addition, Codere Online cannot be certain that third-party services providers or contractors comply with any such laws or regulations in the jurisdictions where Codere Online or such third parties operate. For example, from time to time, Codere Online enters into agreements with third parties, such as affiliate marketers, whereby such third parties direct traffic to Codere Online’s websites and platforms in exchange for a commission or other type of performance-based reward. Any failure or perceived failure by such third parties to comply with applicable regulation, including by offering Codere Online’s online gaming products in violation of advertising restrictions or in jurisdictions where any such offering would be prohibited, may damage Codere Online’s reputation, result in sanctions and/or fines, adversely affect Codere Online’s ability to obtain or renew licenses and to enter any potential strategic partnership, or otherwise materially and adversely affect Codere Online’s business, results of operations and financial condition.

There can be no assurance that law enforcement or gaming regulatory authorities in the jurisdictions where Codere Online operates will not seek to restrict Codere Online’s business in such jurisdictions or to initiate investigations which may result in sanctions or enforcement proceedings affecting Codere Online. In addition, there can be no assurance that any such restrictions or investigations, to the extent they result in sanctions or enforcement proceedings, will not have a material adverse impact on Codere Online’s ability to retain and renew existing licenses or to obtain new licenses in such or other jurisdictions, or that they will not otherwise materially and adversely affect its business, results of operations and financial condition.

In Spain, CDON received several informal communications from the DGOJ, the Spanish gaming regulator, as part of its day-to-day monitoring actions on potential issues related to the reporting/operation of the licensed activities in Spain. Although this type of communication is not considered as binding, the DGOJ typically expects responses from the companies within a reasonable term. In several instances, CDON has not responded within the term. While CDON considers that the formal risks associated with its late response to the DGOJ’s informal communications are currently low, the DGOJ may initiate investigations or sanctions or enforcement proceedings in connection with such informal communications, any of which could have a material adverse effect on Codere Online’s business, results of operations and financial condition. Further, CDON has received and in the future may receive sanctions from the DGOJ and other authorities in connection with infringements of gaming regulations, which could individually or in the aggregate result in the imposition of civil and administrative penalties on Codere Online and could affect Codere Online’s ability to renew any of its licenses, including the CDON Licenses, which, individually or in the aggregate, could have a material adverse effect on Codere Online’s business, results of operations and financial condition. See “—Codere Online relies on licenses to conduct its operations, and the failure to renew or the termination of these licenses could have a material adverse effect on its business.”

In Mexico, LIFO self-reported to the Mexican tax authorities (“SAT”) 125 transactions between January 1, 2021 and August 31, 2021, within their respective statutory 30-day remedy period, involving player deposits that exceeded the required reporting thresholds and had not been duly reported under currently applicable Mexican anti-money laundering legislation. In addition, on September 8, 2021, LIFO self-reported to the SAT 264 additional transactions which had not been duly reported and were reported outside the statutory 30-day remedy period. Codere Online believes that this self-reporting may mitigate both the risk of being sanctioned and, if applicable, the amount of any sanction fees imposed. However there is a risk that, in addition to any economic sanctions imposed by the SAT, which could be material, the Mexican gaming regulator (SEGOB, as defined below) could impose additional sanctions on LIFO including a potential revocation of the LIFO License. There is also a risk that, because this self-reporting option can only be invoked once and LIFO already self-reported certain transactions outside the statutory remedy period in the past, SAT may determine that LIFO may not use this compliance through self-reporting option for the 264 additional self-reported transactions, and LIFO may be deemed a “repeat offender”. If LIFO is considered a “repeat offender” for such reason or because, following the self-reporting of the 264 additional transactions, LIFO commits a similar or otherwise qualifying infraction within two (2) years, SEGOB could impose additional or more severe sanctions on LIFO including a potential revocation of the LIFO License. Although Codere Online has designed and implemented a risk-mitigation action plan in Mexico to address these risks and to ensure all transactions are duly and timely reported in the future, if LIFO is deemed an offender or a “repeat offender”, significant economic sanctions could be imposed on LIFO and/or the LIFO License could be revoked, any of which could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

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In February 2022, Codere Online was informed that the Maltese Business Registry is in the process of conducting a routine legal and administrative audit of ONOL and has formally requested certain information with respect to ONOL. An unfavorable outcome of such audit or any related proceedings could result in sanctions or enforcement proceedings affecting Codere Online, any of which could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

Certain of the risks referred to above may be exacerbated with respect to Codere Online’s former “.com” business, which Codere Online disposed of on December 31, 2021. Codere Online offered, through Malta-based Aspire Global plc (“Aspire”), online gaming products via a “.com” website in various markets, including the United Kingdom, Germany, South Africa, Austria and Malta, under Codere Online’s Greenplay brand. Pursuant to an operator services agreement between OMSE and Aspire, Aspire operated the “.com” site and offered online gaming products to customers on either a regulated basis (i.e., pursuant to a local gaming license, as is the case in Austria, Malta and the United Kingdom) or on an unregulated basis pursuant to a Maltese gaming license in countries where the offering of any such online gaming products was not prohibited. Codere Online was responsible for the acquisition of online gaming customers in exchange for a share of the net gaming revenue generated by Aspire as operator of the “.com” site. This “.com” business activity generated limited revenues for Codere Online and was viewed by management as a non-core activity. Effective as of 31 December, 2021, Codere Newco, SEJO and OMSE entered into an asset purchase agreement, pursuant to which, among other things, OMSE assigned its position under the operator services agreement between OMSE and Aspire to Vita Media Group ApS in exchange for approximately €200 thousand. As Aspire operated the “.com” site, Codere Online depended on Aspire to comply with applicable regulation, including by not offering Codere Online’s online gaming products in jurisdictions where any such offering would have been prohibited. Any failure or perceived failure by Aspire to have complied with applicable regulation may damage Codere Online’s reputation, result in litigation, administrative enforcement, including sanctions and/or fines, adversely affect Codere Online’s ability to obtain or renew licenses and to enter any potential strategic partnership, or otherwise materially and adversely affect Codere Online’s business, results of operations and financial condition.

Codere Online relies on licenses to conduct its operations, and the failure to renew or the termination of these licenses could have a material adverse effect on its business.

Codere Online is required to obtain, renew and maintain licenses in order to conduct its operations. Certain of Codere Online’s licenses currently require that an operating retail presence be maintained (including, licenses in Mexico, Panama and Colombia). In addition, certain jurisdictions (such as Spain) require game-specific licenses in addition to a general license. Except as indicated below with respect to Mexico, Colombia, Panama and the City of Buenos Aires (Argentina), as part of the Restructuring and Exchange, the Codere Group transferred to subsidiaries of Holdco the licenses under which Codere Online operates in its core regions. For additional information on Codere Online’s licenses, see “Business—Our Markets.”

The transfer of the relevant licenses in Colombia, Panama and the City of Buenos Aires (Argentina) could not be completed by the time the Business Combination was consummated, and there is no assurance that such transfer will ever be completed, as the relevant transfer needs to be approved by the local regulator. While Holdco, through one or more of its subsidiaries, has entered a Restructuring Agreement with the relevant Codere Group entity holding the online license in each such jurisdiction to regulate, among other matters, the commercial exploitation of such licenses, until such time as their transfer is completed, Codere Online will be dependent on, among other factors outside of Codere Online’s control, the licensee’s good standing and maintenance of its license and Codere Online will face similar risks to those faced with respect to LIFO in Mexico, as described in the immediately succeeding paragraph. For additional information on the Restructuring Agreements, see “Certain Relationships and Related Party Transactions—Material Agreements.”

In Mexico, there is no plan for the existing license (which is owned by LIFO, a wholly-owned entity of the Codere Group) to be ever transferred to Holdco or one of its subsidiaries. In such jurisdiction, Codere Online operates through an “Asociación en Participación” or “AenP” (an unincorporated joint venture) with LIFO under which Codere Online, through SEJO, operates online gaming and is entitled to receive 99.99% of any distributed profits whereas LIFO is entitled to receive the remaining 0.1% of any such distributed profits. See “Certain Relationships and Related Party Transactions—Material Agreements—AenP Agreement” for additional information on the agreement with LIFO. As a result, in connection with its operations in Mexico, Codere Online is dependent on, among other factors outside of Codere Online’s control, LIFO’s good standing and maintenance of its license. If LIFO does not continue operating or otherwise does not maintain or renew the LIFO License, or if any disputes or disagreements arise between LIFO and Codere Online, Codere Online may be unable to continue operating in Mexico, which could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

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Further, gaming authorities may deny, revoke, suspend or refuse to renew any of Codere Online’s licenses (references in this prospectus to Codere Online’s licenses shall be deemed to include the licenses owned by the Codere Group entities in Mexico, Colombia, Panama and the City of Buenos Aires (Argentina) referred to above) and impose fines or seize assets if Codere Online or its partners, licensees or clients were found to be in violation of any relevant regulations, any of which could have a material adverse effect on Codere Online’s business, results of operations and financial condition. See “—The online gaming industry is subject to extensive regulation (including applicable direct and indirect taxation, anti-corruption, anti-money laundering and economic sanctions laws) as well as licensing requirements. Codere Online’s business may be adversely affected if it is unable to comply with regulations or licensing requirements or any regulatory changes.”

Codere Online may also have difficulty or face uncertainty in renewing its existing licenses or obtaining new ones, especially if the relevant regulations are unclear or change, or if new regulations are enacted. Codere Online is currently in the process of renewing and in the next three years intends to renew many of its licenses and it cannot assure that any of its licenses will be renewed or that they will be renewed on satisfactory terms or on a timely basis. Renewals of Codere Online’s licenses, if approved, may be subject to certain delays, upfront renewal fees, canon tax surcharges or changes to national and regional regulations of the online gaming industry. Additional changes may occur in the future that may have an impact on Codere Online’s ability to renew its licenses, such as changes in the license granting process (such as an open bidding process). Changes in national and regional authorities may also impact Codere Online’s license renewal processes, which may be subject to change from time to time. Consequently, there can be no assurance that Codere Online will be successful in renewing its operating licenses, or that new potential economic terms of renewals will be reasonable or attractive to Codere Online, which could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

Furthermore, the licenses under which Codere Online operates may be revoked by regulatory authorities in certain circumstances, even if Codere Online is in compliance with all relevant obligations. For example, in Mexico, the Secretaría de Gobernación (“SEGOB”) has complete and discretional authority regarding the granting, renewal, revocation or amendment of licenses. Consequently, Codere Online cannot provide any assurance as to whether the license under which it operates will be amended prior to, or renewed at, the end of its corresponding term. Furthermore, in Italy, the Italian Monopolies and Customs Agency may revoke a license for, among others, supervening reasons of public interest. The CDON Licenses in Spain require that Codere Online establish the necessary systems, controls and procedures to ensure that it complies with applicable rules, laws and regulations in its Spanish operations. If the systems, controls and procedures adopted are not sufficient to comply with the applicable rules, laws and regulations, Codere Online could be deemed to have breached key terms of the CDON Licenses, which may result in its loss. Moreover, an event of insolvency may constitute a breach of certain of Codere Online’s licenses and result in their revocation. For example, in Mexico, the LIFO License, under which Codere Online operates, could be automatically revoked if LIFO were to file for insolvency protection. There can be no assurance that Codere Online would maintain or be able to renew its licenses in the event of insolvency or other financial difficulty, including upon the filing or declaration of insolvency of Codere Newco or Codere New Topco S.A. (the parent company of the Codere Group), as such filing or declaration may be perceived to adversely affect the solvency of Codere Online as well.

In Spain, online gaming is regulated at a state level and any operator who wants to operate online gaming in more than one region (Comunidad Autónoma) requires the DGOJ, the Spanish gaming regulator, to grant a general state license. Retail-based gaming activities are regulated on a regional (Comunidad Autónoma) basis. Law 11/2021, of July 9 (“Law 11/2021”) on measures to prevent and fight against tax fraud, establishing policies against tax evasion practices which have a direct impact on the operation of the internal market, became effective on July 11, 2021 and amended various tax and gaming laws and regulations, including certain provisions of Law 13/2011, of May 27, on gaming regulation (the “Spanish Gaming Law”), which provides the regulatory framework for online gaming in Spain. Law 11/2021 amended section (c), paragraph 2 of Article 13 of the Spanish Gaming Law (the “Amendments”), providing that a natural or legal person may not hold a gaming license or authorization if any person, shareholder, officer, director or any other entity which is part of its corporate group, in the aggregate, has been sanctioned in the previous four (4) years, by virtue of a final or firm administrative ruling, with two (2) or more very serious (“muy grave”) infringements of gaming regulations at a state or regional (Comunidad Autónoma) level. Pursuant to the Spanish Gaming Law, the commission of two (2) serious (“grave”) infringements that are declared final or firm, within two (2) years, would amount to a very serious (“muy grave”) infringement and any subsequent serious (“grave”) infringements could amount to very serious (“muy grave”) infringements.

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CDON has received and in the future may receive sanctions from the DGOJ and other authorities in connection with infringements of gaming regulations. On September 24, 2021, CDON received a notification of a sanctions proceeding initiated by the DGOJ in connection with a serious (“grave”) infringement of gaming regulations for the failure to prevent the online gaming activities of at least one individual who was listed in the Spanish general register of gaming access bans. On October 7, 2021, Codere Online paid approximately €92 thousand in penalties. Additionally, on December 20, 2021, the DGOJ notified CDON of an additional sanctions proceeding in connection with certain marketing activities that constituted a serious (“grave”) infringement of gaming regulations. On December 29, 2021, Codere Online paid approximately €6 thousand in penalties. Further, as Holdco and CDON are deemed to be part of the Codere Group for these purposes, they may be adversely affected by the actions of other Codere Group entities. It is not clear whether the Amendments are effective retroactively, or whether the requirement with respect to the absence of sanctions applies only to any sanctions imposed from the date Law 11/2021 became effective. The Codere Group operates retail gaming activities in various Spanish regions (Comunidades Autónomas) and two of its operating companies, Codere Apuestas Galicia, S.L. and Codere Apuestas Extremadura, S.A.U., have been sanctioned with two (2) or more very serious (“muy grave”) infringements of gaming regulations in the past four (4) years. Codere Online operates online gaming in Spain through the CDON Licenses granted to CDON. If the DGOJ applies Law 11/2021 retroactively, there is a risk that the CDON Licenses may be terminated or may not be renewed due to the sanctions imposed on Codere Apuestas Galicia, S.L. and Codere Apuestas Extremadura, S.A.U. Furthermore, if DGOJ does not apply Law 11/2021 retroactively, if CDON or any other company within the Codere Group, in the aggregate, is sanctioned with two (2) or more very serious (“muy grave”) infringements of gaming regulations after the date Law 11/2021 became effective, CDON could be ineligible to have the CDON Licenses renewed. The termination of the CDON Licenses or any failure to renew the CDON Licenses could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

Failure to obtain new licenses, or maintain and renew existing licenses, could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

Changes in taxation or the interpretation or application of tax laws could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

The gaming industry is subject to significant taxation in most of the countries in which Codere Online operates. Taxes on gaming activities, including online games and sports betting, may be established or increased or new and more exacting regulations may be enacted. These existing or new taxes may be in the form of gaming taxes on Codere Online’s activity or indirect taxes on players (e.g., taxes on players’ deposits or prizes).

In recent years certain gaming taxes have increased, and they may continue to increase, in the jurisdictions in which Codere Online operates. For example, in 2020, several Mexican states introduced a new tax on “erogaciones” (players’ deposits or cash-in). The taxes were set at 10% in most cases and up to 16.5% in the state of Yucatan. While this tax does not currently impact Codere Online’s business in Mexico, as it has not been introduced in the Mexican state in which LIFO’s online server is registered (Guanajuato), it is possible that such a new tax, or a similar tax, will be implemented in such state in the future. As gaming taxes imposed by regional or national authorities apply to a significant percentage of Codere Online’s revenues, increases in gaming taxes may impact the profitability or possibility of being profitable of the affected operations and have a material adverse effect on its business, results of operations and financial condition.

Furthermore, some of Codere Online’s licenses are subject to taxation upon renewal, and Codere Online cannot be certain of the amounts of future renewal fees or canon tax surcharges attributable to its licenses if and when its licenses are renewed. See “—Codere Online relies on licenses to conduct its operations, and the failure to renew or the termination of these licenses could have a material adverse effect on its business.”

Any increases in taxation, or the implementation of any new taxes to which Codere Online’s operations may be subject, would increase its regulatory or tax compliance costs and could have a material adverse effect on its business, results of operations and financial condition.

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Codere Online’s failure to comply with regulations regarding the use of personal customer data could subject Codere Online to lawsuits or result in the loss of its customers’ goodwill and affect its business, results of operations and financial condition.

The actual and perceived integrity and security of an online gaming operation is critical to attracting gaming customers as Codere Online’s reputation depends to a large extent on the trust it is able to generate among its customers and other stakeholders. Codere Online collects information relating to its customers and potential customers for various business purposes, including regulatory, marketing and promotional purposes. The collection and use of personal data are governed by privacy laws and other regulations enacted in the various jurisdictions in which Codere Online operates. The large amount of information and data that is processed throughout Codere Online, increases the challenges of complying with data protection and privacy regulations. Compliance with applicable privacy regulations may increase Codere Online’s operating costs and/or adversely impact its ability to market its products and services to its customers. Any failure or perceived failure by Codere Online to comply with applicable laws or satisfactorily protect personal information could result in governmental enforcement actions, litigation, or negative publicity, any of which could inhibit Codere Online’s ability to grow its business. Moreover, there is a risk that measures adopted in response to these regulations may restrict Codere Online’s marketing activities and innovation. Conversely, Codere Online’s marketing activities and its efforts to promote innovation may result in increased compliance risks and costs.

Data privacy protection requires careful design of Codere Online’s actions and services, as well as strong internal procedures and rules that can be adapted to regulatory changes in each of the jurisdictions where Codere Online operates where necessary, all of which entails compliance risk. As Codere Online attempts to transition from being fully integrated in the Codere Group to operating as a separate company, Codere Online could suffer implementation delays, poor execution, or breaches of applicable data protection and privacy regulations in any of the jurisdictions in which it operates. In addition, privacy regulations continue to evolve, as a result, implementation standards and enforcement practices are likely to continue evolving for the foreseeable future. Due to the uncertainty and potentially conflicting interpretations of these laws, it is possible that such laws and regulations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or Codere Online’s practices.

In several jurisdictions, including Mexico and Spain, Codere Online has an obligation to report certain information to tax authorities regarding customer prizes or wagered amounts above certain amounts. In addition, in Spain and Italy, Codere Online is subject to Regulation (EU) 2016/679 of the European Parliament and of the Council of April 27, 2016, on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (“General Data Protection Regulation” or “GDPR”). Codere Online is also subject to national laws adopting the GDPR and to national data protection and privacy laws applicable in non-EU member states. The GDPR contains, among other things, high accountability standards that Codere Online must comply with such as, among others, strict requirements for providing information notices to individuals, rules on international data transfers and outsourcing, mandatory data protection impact assessments of certain processing operations, maintenance of an internal data processing register, restrictions on the collection and use of sensitive personal data and mandatory notification of data security breaches. The GDPR imposes administrative fines for data protection compliance violations of up to the greater of €20 million or 4% of the company’s global annual turnover.

Additionally, these laws and regulations apply not only to third-party transactions, but also to transfers of information among the entities and businesses that form Codere Online and other parties with which Codere Online has commercial relations. Codere Online is subject to laws and regulations regarding cross-border transfers of personal data, including laws relating to transfer of personal data outside of the European Economic Area (“EEA”). Codere Online relies on transfer mechanisms that it believes are permitted under these laws. Such mechanisms have received heightened regulatory and judicial scrutiny in recent years. If Codere Online cannot rely on existing mechanisms for transferring personal data from the EEA or other jurisdictions, because they are found not to be permitted under applicable law or otherwise, it could be prevented from transferring personal data of users or employees in those regions, limiting the transfer and processing of data and, in some cases, limiting Codere Online’s activities in certain locations. In addition, if Codere Online does not comply with the provisions regarding transmission of customer data contained in the GDPR, Codere Online could face very significant sanctions. In this regard, since 2020 penalties for data protection violations have increased significantly, with fines in the millions of euros. This has increased the public’s awareness of their privacy rights. As a result, if Codere Online failed to hold or transmit customer information in a secure manner, or if any loss of personal customer data were to otherwise occur, this could, among others, result in the loss of Codere Online’s existing customers’ goodwill and deter new customers from using its services or expose it to significant sanctions, which could adversely affect the manner in which Codere Online provides its services or otherwise materially affect Codere Online’s business, results of operations and financial condition.

Notwithstanding its efforts, Codere Online is exposed to the risk that data could be misappropriated, lost or disclosed, or processed in breach of data protection regulations, by it or on its behalf, including by any of Codere Online’s services providers under the Platform and Technology Services Agreement and the Sponsorship and Services Agreement and other parties with which Codere Online has commercial relations. Failure to maintain adequate data security and to comply with any relevant legal requirements by Codere Online or Codere Online’s services providers could result in the imposition of significant sanctions, damage to the Codere Online’s reputation and the loss of trust of customers and users, which could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

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An outbreak of disease or similar public health threat could have a material adverse impact on Codere Online’s business, results of operations and financial condition.

An outbreak of disease or similar public health threat, or fear of such an event, could have a material adverse impact on Codere Online’s business, results of operations and financial condition. In addition, outbreaks of disease could result in increased government restrictions and regulation, including quarantines of Codere Online’s personnel, which could adversely affect its operations.

The COVID-19 pandemic resulted in, among other things, the suspension, shortening, delay or cancellation of sporting events and sports leagues which may occur again in the future and, as it happened in the past, Codere Online may not have an attractive and interesting sports betting offer to sustain sufficient interest in its online sports betting products. Furthermore, shortened seasons for sports leagues may result in a smaller amount of wagers on sporting events throughout the course of each sport’s season. On the other hand, closures or capacity limitations at gaming halls and other similar establishments, lockdowns and other measures imposed in light of the COVID-19 pandemic have resulted in a significant increase in the level of activity for online casinos. If the threat of the COVID-19 pandemic diminishes, and retail establishments are progressively able to return to operations at or near pre-pandemic levels, Codere Online will face increased competition from such retail operators. More generally, as other forms of entertainment that were unavailable, or available on a limited basis, during the COVID-19 pandemic are able to resume their operations, Codere Online will face increased competition for consumers’ discretionary time and income from many more forms of entertainment that were unavailable, or available on a limited basis, during the COVID-19 pandemic. As a result, Codere Online’s business, results of operations and financial condition could be adversely affected.

If the COVID-19 pandemic continues, it may affect Codere Online’s employees, clients, partners and suppliers in ways which could materially and adversely affect Codere Online’s business, results of operations and financial condition. Furthermore, the COVID-19 pandemic and any preventive or protective actions that governments or Codere Online may take in respect of this coronavirus, or other variants thereof, may result in a period of business disruption, reduced customer traffic and reduced operations. The COVID-19 pandemic may also have the effect of heightening many of the other risks described in this “Risk Factors” section. Even after the COVID-19 pandemic has subsided, Codere Online may suffer an adverse effect to its business due to the global economic effect of the COVID-19 pandemic, changes in customers’ dynamics or otherwise, which could materially and adversely affect Codere Online’s business, results of operations and financial condition.

Codere Online’s business may be negatively impacted by volatility and other economic, market and political conditions in the markets in which it operates and in the locations in which its customers reside.

Codere Online currently operates in Spain, Italy, Mexico, Colombia, Panama and, since December 2021, the City of Buenos Aires (Argentina). In the six months ended June 30, 2021, Codere Online derived €25.6 million (or 61.5%) of its net gaming revenue from Spain, €12.8 million (or 30.8% from Mexico and €2.2 million (or 5.3%) from Colombia. In the year ended December 31, 2020, Codere Online derived €48.3 million (or 65.4%) of its consolidated revenue from Spain, €20.2 million (or 27.4%) from Mexico and €2.5 million (or 3.4%) from Colombia.

Codere Online’s business is, and is expected to continue to be, particularly sensitive to reductions in discretionary consumer spending, which is affected by general economic conditions and political conditions in the markets in which Codere Online conducts its operations. Economic contraction, which can eventually lead to an unstable job market, economic uncertainty and the perception by customers of weak or weakening economic conditions may cause a decline in demand for entertainment, including the online gaming products and services Codere Online offers. In addition, changes in discretionary consumer spending or consumer preferences could be driven by factors such as an unstable job market, changes in perceived or actual disposable consumer income and wealth or fears of war and acts of terrorism. Codere Online’s business, results of operations and financial conditions will be affected by economic conditions and volatility in the regions where it operates.

As of the date of this prospectus, Codere Online is particularly exposed to economic, market and political conditions in Spain. The Spanish economy experienced a decline in GDP of 10.8% in 2020 according to the Spanish National Institute of Statistics (Instituto Nacional de Estadística). Furthermore, after a protracted period of political uncertainty, a new coalition government was formed in January 2020 with support from certain regional parties. Political conditions under this government have been, and could continue to be, uncertain (particularly with respect to its negative stance against the gaming industry), given differences in the coalition parties’ political agendas and those of the various other parties whose support is needed to reach majorities in congress. In addition, economic indicators could deteriorate further due to specific policies, resulting in higher fiscal pressure, higher levels of public debt, higher unemployment and higher deficits. Political events related to the independence movement in Catalonia could continue to generate economic volatility and political uncertainty, reducing demand for Codere Online’s products and negatively affecting its business.

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Codere Online has international business operations, including in emerging countries in Latin America, which subjects Codere Online to additional costs and risks.

A significant portion of Codere Online’s operations are located in Latin America, particularly in Mexico, Colombia and Panama. Codere Online started operating in the City of Buenos Aires (Argentina) in December 2021. Furthermore and, subject to certain regulation being enacted, Codere Online intends to expand its business operations to other countries in the region, including Brazil, Chile, Peru, Puerto Rico, Uruguay and certain other regions of Argentina. As a result of its international operations, Codere Online is subject to a variety of risks and challenges in managing an organization operating in various countries, including, among others, those related to:

● general economic conditions in the countries in which Codere Online operates or intends to operate;

● regulatory changes;

● political unrest, terrorism and the potential for other hostilities;

● challenges caused by distance as well as language and cultural differences;

● public health risks;

● overlapping, changes in or onerous tax regimes;

● difficulties in transferring funds from certain countries; and

● reduced protection for intellectual property rights in some countries.

Moreover, some or all of these risks may be exacerbated in the case of Codere Online’s operations in emerging economies. Emerging economies may experience significant fluctuations in economic performance, political, labor or social unrest, acts of terrorism or other violence. In addition, operating in emerging markets may expose Codere Online to greater risks of loss due to expropriation, nationalization, confiscation of assets and property or the imposition of restrictions on foreign investments and repatriation of invested capital. Moreover, emerging market economies tend to have significantly higher corruption levels. Furthermore, Codere Online’s Latin American operations expose Codere Online to currency risks as many Latin American countries have experienced significant recessions, inflation, unemployment and social unrest and their economies may be more volatile than the European markets in which Codere Online operates, leading to currency devaluation.

Any of the foregoing factors could materially and adversely affect Codere Online’s business, results of operations and financial condition.

Fluctuations in the exchange rates between Codere Online’s operating currencies and the euro could adversely affect its results of operations.

Codere Online’s functional currency is the euro. Fluctuations in the exchange rates of Codere Online’s main non-euro operating currencies, mainly the Mexican peso, the Colombian peso and the Argentine peso (given the recent start of operations in the City of Buenos Aires (Argentina) in December 2021), could affect not only the economies of the relevant regions but also Codere Online’s business, results of operations and financial condition. In particular, fluctuations in exchange rates may result in foreign exchange gains or losses for Codere Online. Codere Online is therefore exposed to the risks associated with the fluctuation of these currencies relative to the euro. See Note 16 to the Annual Combined Carve-out Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosures about Market Risk—Exchange rate risk” for information on the impact of a 10% depreciation or appreciation of the euro against the main foreign currencies on Codere Online’s combined carve-out income statement and equity as of and for the six months ended June 30, 2021 and as of and for the years ended December 31, 2020 and 2019.

Any increase (decrease) in the value of the euro against any foreign currency of one of Codere Online’s non-euro operating entities will cause Codere Online to experience unrealized foreign currency translation losses (or gains) with respect to amounts already invested in such foreign currencies. Accordingly, Codere Online may experience a negative impact on its income statement and balance sheet with respect to its holdings solely as a result of foreign currency translation.

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Codere Online may not be able to manage growth in its business effectively.

Codere Online intends to leverage its operations in Spain and Mexico to expand its business in certain high-growth core Latin American markets (Colombia, Panama and the City of Buenos Aires), enter into new Latin American markets once they become regulated (Brazil, Chile, Peru, Puerto Rico, Uruguay and other regions of Argentina), and pursue options to access the large Hispanic market in the Unites States. As part of such expansion, Codere Online may make selective strategic investments, such as in strategic partnerships and acquisitions in the online gaming industry. Growth can place significant strain on Codere Online’s management resources and financial and accounting control systems as it requires that management identify and execute upon appropriate investments and subsequently integrate, train and manage increased numbers of employees. Codere Online may not be able to implement and enhance effectively the operations, infrastructure, systems and processes required to undertake growth. Further, Codere Online may not be able to attract, integrate, train, motivate or retain additional highly-qualified personnel. Unprofitable investments or expansions or an inability to integrate or manage new investments or expansions could adversely affect Codere Online’s business, results of operations and financial condition.

Codere Online may require additional capital to support its growth plans, and such capital may not be available on terms acceptable to Codere Online, or at all. This could hamper Codere Online’s growth and adversely affect its business.

Codere Online intends to make significant investments to support its business growth, including its expansion into new markets, and may require additional funds to respond to business challenges, including the need to develop new product offerings and features, enhance its existing platform, increase its marketing expenses, improve its operating infrastructure or acquire complementary businesses, personnel and technologies. Accordingly, Codere Online may need to engage in equity or debt financings to secure additional funds.

Codere Online’s ability to obtain additional capital, if and when required, will depend on its business plan, investor demand, Codere Online’s operating performance, capital markets conditions and other factors. If Codere Online raises additional funds by issuing equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of its currently issued and outstanding equity, and its existing shareholders may experience dilution. If Codere Online is unable to obtain additional capital when required, or on satisfactory terms, its ability to continue to support its business growth or to respond to business opportunities, challenges or unforeseen circumstances could be adversely affected, and Codere Online’s business, results of operations and financial condition may be harmed.

Codere Online operates in a highly competitive business environment and, as a result, its market share and business may be adversely affected by factors beyond its control.

In many of the markets in which Codere Online operates, it faces competition from a number of large companies, as well as other smaller operators. In addition, companies with whom Codere Online competes may be larger than Codere Online or may have greater financial resources than Codere Online does, which could materially and adversely affect its revenues and profitability. Increased competition could have an adverse effect on Codere Online’s ability to achieve and sustain profitability in the near future or at all and could impact future profit margins and cash flows. Furthermore, Codere Online faces and will continue to face competition from retail establishments, including those of the Codere Group for the discretionary spending of gaming customers, many of which divide their time between retail and online channels, as well as from certain other permitted online gaming and sports betting activities that may be undertaken by the Codere Group under the Relationship and License Agreement. See “—Codere Online may be affected by actions undertaken, or failed to be undertaken, by Codere Newco and other members of the Codere Group” for additional information.

Existing technology, as well as proposed or undeveloped technologies, may become more popular in the future and render Codere Online’s online products less profitable or even obsolete. In general, Codere Online’s ability to compete effectively in the online gaming market will depend on the acceptance by its customers of the products and services it offers. Codere Online cannot assure that it will be able to successfully develop, offer and market appropriate gaming products and services, which could in turn have a material adverse effect on its business, results of operations and financial condition.

Codere Online also faces competition from other existing and future public and private retail gaming establishments including gaming halls, slot route operators and, potentially, integrated destination resorts. Codere Online also competes, although to a limited extent, with lotteries, including national, regional and charitable ones. Moreover, Codere Online competes with illegal retail and online gaming activities, such as all forms of betting that circumvent public regulation, in particular, offshore gaming and operators that, as a result of their disregard of applicable regulations, may offer attractive pricing, promotions or other services. Such unregulated activities may drain significant portions of betting volumes away from the regulated industry. In particular, illegal betting could take away a portion of Codere Online’s regular customers. If such forms of gaming are successful in attracting Codere Online’s customers, its business, results of operations and financial condition could be materially adversely affected.

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Codere Online’s success is dependent on maintaining and enhancing the “Codere” brand.

Codere Online has been licensed by Codere Newco to operate under the “Codere” brand and Codere Online’s success is dependent in part on its ability to leverage such brand. Codere Online’s current and potential competitors may have greater name recognition and broader customer relationships and marketing resources than Codere Online does. In addition, as Codere Online does not own the “Codere” brand, even if it succeeds in its marketing efforts, the positioning of the “Codere” brand will depend primarily on the policies and success of the Codere Group.

In particular, any adverse change in the Codere Group’s reputation could, in turn, adversely affect Codere Online’s reputation. The Codere Group’s inability to maintain, enhance or strengthen the “Codere” brand, or any actions by any member of the Codere Group or any of its employees that may negatively affect the “Codere” brand or Codere Online’s reputation, could have a material adverse effect on Codere Online’s business, results of operations and financial condition. For example, the Codere Group has undergone a significant financial restructuring of its liabilities in recent years and is in the process of undergoing a further significant financial restructuring of its liabilities which may adversely impact the reputation of the Codere Group and, as a result, adversely affect Codere Online’s reputation and the “Codere” brand. See “—The Codere Group has undergone a significant financial restructuring of its liabilities which has recently affected its shareholding structure and may impact its strategy and operations, including its performance of the related-party agreements, which could potentially adversely affect Codere Online.”

Furthermore, actions by members of the Codere Group or any of its employees may negatively affect the “Codere” brand, which would in turn negatively affect the confidence of Codere Online’s clients, regulators or other parties and Codere Online’s reputation. Negative public opinion could result from actual or alleged conduct by the Codere Group entities in any number of activities or circumstances, including, among others, operations, employment-related offenses such as sexual harassment and discrimination, regulatory compliance, the use and protection of data and systems, and the satisfaction of client expectations, and from actions taken by regulators or others in response to such conduct. Furthermore, actions by the former controlling shareholders of the Codere Group, including any legal actions brought against the Codere Group and/or Codere Online, may adversely affect the reputation of the Codere Group and/or Codere Online, divert the attention of management and key personnel, result in substantial expense, or otherwise materially and adversely affect Codere Online’s business, results of operations and financial condition. See “—Codere Online is and may be party to legal, administrative and arbitration proceedings, including tax and other disputes with regulatory authorities, and may become party to future litigation or disputes that may adversely affect its business.”

In addition, Codere Online may lose the right to use the “Codere” brand if the Relationship and License Agreement is terminated. See “Certain Relationships and Related Party Transactions—Material Agreements—Relationship and License Agreement.” The Relationship and License Agreement may be terminated upon the occurrence of a change of control (described as the (direct or indirect) acquisition of the beneficial ownership of more than 50% of the share capital of Holdco or SEJO by a non-affiliated third party or a group of non-affiliated third parties acting in concert with each other) or a sale of substantially all of the assets of Codere Online on a consolidated basis to a non-affiliated third party or a group of non-affiliated third parties acting in concert with each other, among other termination events, linked to the failure of either party to perform or observe any material term, obligation, condition or agreement contained in such Relationship and License Agreement. For the avoidance of doubt, neither Holdco, nor Codere Newco nor one or more of Codere Newco’s future or current affiliates, successors, assignees or any entity acquiring all of the assets and/or business of Codere Newco shall be deemed to be non-affiliated parties for the purposes of the application of such change of control clauses in the Relationship and License Agreement.

Pursuant to the Relationship and License Agreement, Codere Online may also not be able to use the “Codere” brand in certain jurisdictions where Codere Online operates from time to time if the use or the registration of the “Codere” brand or any related licensed marks is not legal or otherwise permitted under applicable laws in such jurisdiction or the “Codere” brand or any related licensed marks cannot be used or registered without unreasonable or unusual efforts. For more information, see “Certain Relationships and Related Party Transactions—Material Agreements—Relationship and License Agreement.” Developing a new brand would require a substantial investment of resources, and there is no guarantee that Codere Online would be successful operating under a new brand.

Any of the foregoing could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

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Codere Online may be affected by actions undertaken, or failed to be undertaken, by Codere Newco and other members of the Codere Group.

Codere Online’s business may be adversely affected if other members of the Codere Group compete with Codere Online. In order to address this risk, as part of the Relationship and License Agreement entered into by SEJO and Codere Newco, Codere Newco has undertaken, among other commitments, not to invest or operate online gaming businesses within the Territory, as defined therein, or to undertake any other Restricted Activity, as defined therein, subject to certain exceptions. However, Codere Newco is allowed to pursue any regulated gambling and gaming business and related services accessible exclusively through physical retail or other offline channels. Furthermore, Codere Newco may terminate the Relationship and License Agreement in certain circumstances. For additional information on the Relationship and License Agreement, see “Certain Relationships and Related Party Transactions—Material Agreements—Relationship and License Agreement.” The Codere Group may elect to focus its investment and resources, including its marketing efforts, on its offline channels, which compete with Codere Online’s business, adversely affecting Codere Online.

Furthermore, due to the existing relationship between Codere Online and the Codere Group, any actual or alleged actions undertaken, or failed to be undertaken, by members of the Codere Group or any of its employees that may affect the “Codere” brand, their licenses, their relationship with governments or regulators, their customers or otherwise affect their reputation, could materially and adversely affect Codere Online’s business, results of operations and financial condition. See also “—The Codere Group has undergone a significant financial restructuring of its liabilities which has recently affected its shareholding structure and may impact its strategy and operations, including its performance of the related-party agreements, which could potentially adversely affect Codere Online”, “—Codere Online’s success is dependent on maintaining and enhancing the “Codere” brand” and, with respect to how actions of members of the Codere Group could affect Codere Online’s licenses, “Codere Online relies on licenses to conduct its operations, and the failure to renew or the termination of these licenses could have a material adverse effect on its business.”

The Codere Group has undergone a significant financial restructuring of its liabilities which has recently affected its shareholding structure and may impact its strategy and operations, including its performance of the related-party agreements, which could potentially adversely affect Codere Online.

The Codere Group has recently completed a significant financial restructuring of its liabilities. As part of the restructuring, the Codere Group’s business was recently transferred from Codere, S.A., the former Spanish-based parent company of the Codere Group, to a new Luxembourg-based holding company structure, Codere New Topco S.A. The new parent company of the Codere Group is majority owned by certain of Codere Group’s bondholders, who became equityholders of the business. Following shareholder approval in its extraordinary general shareholders’ meeting held on December 10, 2021, Codere, S.A. launched its liquidation process and requested the CNMV, the Spanish Stock Market Regulator, to suspend and delist its shares from the Spanish Stock Exchanges. Codere, S.A.’s shares were suspended from trading after market close on December 17, 2021 and are expected to remain as such until the approval of their final delisting. The composition of Codere New Topco S.A.’s board of directors is significantly different from the composition of Codere, S.A.’s board of directors. The restructuring process has also led to changes in the governing bodies of the entities of the Codere Group, including Codere Newco’s board of directors. Furthermore, the restructuring process could potentially affect the Codere Group’s ability to provide services to Codere Online or its performance of the related-party agreements (including the Sponsorship and Services Agreement, the Relationship and License Agreement, the Platform and Technology Services Agreement, the AenP Agreement or the Restrucring Agreements, on which Codere Online currently depends to conduct its business). Moreover, the restructuring process may adversely impact the reputation of the Codere Group and, as a result, adversely affect Codere Online’s reputation and the “Codere” brand, or otherwise adversely affect Codere Online’s business, results of operations and financial condition.

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Codere Online is dependent on Codere Newco and certain of its subsidiaries to provide Codere Online with certain services, which may not be sufficient to meet Codere Online’s needs, and Codere Online may have difficulty finding replacement services or be required to pay increased costs to replace these services to the extent that its services agreement with Codere Newco terminates.

Historically, Codere Newco and certain of its subsidiaries have provided certain services related to certain business functions including, among other services, general management, management control, internal audit, communication, legal, financial management, human capital, corporate security support, platform services and corporate development. Following the consummation of the Business Combination, Codere Newco has continued to provide many of these services under a Sponsorship and Services Agreement between Codere Online and Codere Newco. Such services are provided by Codere Newco either directly, through certain of its subsidiaries or through certain third-party services providers. See “Certain Relationships and Related Party Transactions—Material Agreements—Sponsorship and Services Agreement.”

In addition, under the Platform and Technology Services Agreement, the Providers (as defined herein) currently provide certain platform and technology services to OMSE’s online casino and sports betting business, including personnel, customer support, internal trading personnel, technical assistance and technology, IT operations, security and cybersecurity, systems, communications, equipment, software licenses and trading services. See “Certain Relationships and Related Party Transactions—Material Agreements—Platform and Technology Services Agreement.”

While these services are being provided to Codere Online by Codere Newco and certain of its subsidiaries, Codere Online will be dependent on them for services that are critical to Codere Online’s operation (including platform maintenance), and Codere Online’s operational ability to modify or implement changes with respect to such services and the amounts Codere Online pays for them may be limited. Should the Sponsorship and Services Agreement or the Platform and Technology Services Agreement terminate, Codere Online may not be able to replace these services or enter into appropriate third-party agreements on terms and conditions, including cost and quality of service, comparable to those that Codere Online receives from Codere Newco and the Providers under the Sponsorship and Services Agreement and the Platform and Technology Services Agreement, respectively. Although Codere Online may in the future choose to replace fully or partially the services provided by Codere Newco or the Providers, Codere Online may encounter difficulties replacing certain services or be unable to negotiate pricing or other terms as favorable as those Codere Online has or may in the future have in effect.

Codere Online’s failure to keep up with technological developments in the online gaming market could negatively impact its business, results of operations and financial condition.

The market for online gaming products and services is characterized by rapid technological developments, frequent new product and service offerings and evolving industry standards. The emerging character of these products and services and their evolution requires Codere Online to use technologies effectively and continue to improve the performance, features and reliability of its technology and information systems. The widespread adoption of new internet technologies or standards could require substantial expenditures to replace, upgrade, modify or adapt Codere Online’s technologies and systems, which could negatively impact its business, results of operations and financial condition. Additionally, Codere Online depends on the provision of certain services by Codere Newco and certain of its subsidiaries, and their operational ability to keep up with any technological developments or to modify, enhance, develop or otherwise implement changes with respect to such services may be limited. See “—Codere Online is dependent on Codere Newco and certain of its subsidiaries to provide Codere Online with certain services, which may not be sufficient to meet Codere Online’s needs, and Codere Online may have difficulty finding replacement services or be required to pay increased costs to replace these services to the extent that its services agreement with Codere Newco terminates.” Further, Codere Online’s failure to keep up with technological developments in the online gaming market could negatively impact its business, results of operations and financial condition.

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Online games and products are subject to life cycles. Furthermore, changes in consumer preferences, popularity and social acceptance of gaming and sports betting could harm Codere Online’s business.

Based on Codere Online’s net gaming revenue for the six months ended June 30, 2021 (defined as all gross amounts wagered of Codere Online less: (i) player wins, (ii) player bonuses and (iii) promotional bets), approximately 57% of Codere Online’s net gaming revenue is derived from its online sports betting offering, while approximately 43% derives from its online casino products (56% and 44%, respectively, for the year ended December 31, 2020). Following their introduction, online games and products generally peak and then decline in popularity. The introduction of new online games and products or the modification of existing online games or products is important to the successful operation of Codere Online’s business. Failure to introduce new online games or products or to modify existing online games or products and to retain or attract customers, as well as the introduction of new online games and products that prove to be unpopular, could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

Codere Online’s business depends on the appeal of its offerings to customers. Codere Online’s offerings compete with various other forms of online and retail gaming and sports betting. Changes in consumer preferences and any inability on Codere Online’s part to anticipate and react to such changes, or the ability of Codere Online’s competitors to adapt faster, could result in reduced demand for Codere Online’s offerings and erosion of its competitive and financial position.

Online casino and sports betting competes, not only with traditional gaming and sports betting establishments, but also with other leisure activities as a form of consumer entertainment and may lose popularity as new leisure activities arise or as other leisure activities become more popular. The popularity and acceptance of online casino and sports betting is also influenced by prevailing social mores, and changes in social mores could result in reduced acceptance of gaming and sports betting as a leisure activity. To the extent that the popularity of gaming or sports betting declines as a result of any of these factors or otherwise, the demand for Codere Online’s offerings may decline, which could have a material adverse effect on its business, results of operations and financial condition.

Codere Online’s network, information technology systems and accounting systems are subject to error, damage and interruption and may be vulnerable to hacker intrusion, cyberattacks and system breaches.

The online casino and sports betting offering by Codere Online depends, to a great extent, on the reliability and security of Codere Online’s information technology systems, software and network, which are subject to error, damage and interruption caused by human error, problems relating to telecommunications networks, software failure, natural disasters, sabotage, viruses and similar events. Any interruption in Codere Online’s systems could have a negative effect on the quality of services offered, on consumer demand and, therefore, on the volume of sales, which in turn could have a material adverse effect on its business, results of operations and financial condition.

Furthermore, Codere Online may be vulnerable to cyberattacks which could adversely affect its business. Examples include DDoS (distributed denial-of-service attacks, which are attacks designed to cause a network to be unavailable to its intended users) and other forms of cybercrime, such as attempts by computer hackers to gain access to Codere Online’s systems and databases, which may cause system failures or business disruption and could have a materially adverse effect on Codere Online’s business, results of operations and financial condition. For example, in November 2020, the Codere Group suffered a security incident consisting of an unauthorized query in its database, which, to Codere Online’s knowledge, did not compromise users’ account deposits or login credentials, and which Codere Group notified to the Spanish Data Protection Agency. While Codere Online will continue to implement measures designed to prevent such attacks, they are, by nature, technologically sophisticated and may be difficult or impossible to detect and defend against. If Codere Online’s prevention measures fail or are circumvented, Codere Online’s reputation may be harmed, which in turn could have a material adverse effect on its business, results of operations and financial condition.

Codere Online’s accounting and reporting systems may also be subject to error, damage and interruption and may result in the unintended misreporting of financial information. While Codere Online continues to develop internal controls and systems to anticipate such risks and increase the robustness of its accounting and reporting platform, there is no assurance that Codere Online’s accounting systems will not be compromised in the future. In addition, Codere Online’s business may be materially and adversely affected by breaches of security and system intrusions conducted for the purpose of stealing Codere Online’s customers’ personal information. Any such activity could harm Codere Online’s reputation and deter current or potential customers from using its services, which could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

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The success, including the margin, of existing or future online casino and sports wagering products and services depends on a variety of factors and may experience significant volatility.

Sports betting is a results driven industry. Pricing for each sports betting event is based on the statistical probability of each possible outcome happening. Codere Online’s theoretical profit is dependent on the implied probabilities of each event. Over a long period of time, the statistical model is expected to correctly project the win/lose rates and to produce the expected theoretical profit. The actual short-term results, however, can significantly differ from the implied probabilities, therefore causing significant short-term volatility in Codere Online’s margin (measured as net gaming revenue over gross amounts wagered). Additional factors causing margin volatility include the unequal distribution of the wagers compared to the implied probabilities, the skills and sports knowledge of customers, and the share of high-roller wagers. In addition, it is possible that Codere Online’s platform erroneously posts odds or is otherwise misprogrammed to pay out odds that are favorable to bettors, and bettors place wagers before the odds are corrected. Additionally, odds compilers (including odds publishing platforms and web pages) and risk managers are capable of human error, so even if Codere Online’s wagering products are subject to a capped payout, significant volatility can occur. For online casino, it is also possible that a random number generator outcome or game will malfunction and award errant prizes. As a result of the variability in these factors, the actual take rates (measured as customers’ winnings as a percentage of total amounts wagered) on Codere Online’s online casino and sports wagers may differ from the theoretical or projected take rates Codere Online has estimated and could result in the winnings of its customers exceeding those anticipated. The variability of take rates also has the potential to adversely affect Codere Online’s business, results of operations and financial condition.

Codere Online’s current and future performance relies upon continued compatibility between its app and the major mobile operating systems, third-party platforms continuing to allow distribution of its product offerings, high-bandwidth data capabilities and the interoperability of its platform with widely used mobile operating systems.

Codere Online’s users primarily access its online games and sports wagering product offerings through Codere Online’s app on their mobile devices, and Codere Online believes that this will continue to be the case going forward. To provide Codere Online’s users its product offerings through its app on their mobile devices, Codere Online’s app must be compatible with major mobile operating systems. Codere Online’s app relies upon third-party platforms to distribute its product offerings, interoperability of its platform with popular mobile operating systems, technologies, networks and standards and continued high-bandwidth data capabilities. Third parties with whom Codere Online does not have any formal relationships control the design of mobile devices and operating systems. These parties frequently introduce new devices, and from time to time they may introduce new operating systems or modify existing ones. Network carriers may also impact the ability to download apps or access specified content on mobile devices. Furthermore, Codere Online’s app relies upon third-party platforms for distribution of its product offerings. Codere Online’s games and online sports wagering product offerings are also distributed through certain websites (Codere.es, Codere.it, Codere.mx, Codere. co, Codere.pa, Codere.bet.ar), the Apple App Store and The Google Play store.

The promotion, distribution and operation of Codere Online’s app are subject to the respective distribution platforms’ standard terms and policies for application developers, which are very broad and subject to frequent changes and interpretation and may not be uniformly enforced across all applications and geographies and with all publishers. Moreover, Codere Online is, and will continue to be, dependent on the interoperability of its platform with popular mobile operating systems, technologies, networks, and standards that it does not control, such as the Android and iOS operating systems. Any changes, bugs, technical, or regulatory issues in such systems, Codere Online’s relationships with mobile manufacturers and carriers, or in their terms of service or policies that negatively affect its offerings’ functionality, reduce or eliminate Codere Online’s ability to distribute its offerings, provide preferential treatment to competitive products, limit Codere Online’s ability to deliver its offerings, or impose fees or other charges related to delivering its offerings, could adversely affect Codere Online’s product usage and monetization on mobile devices.

In addition, Codere Online’s products require high-bandwidth data capabilities for placement of time-sensitive wagers. If high-bandwidth capabilities do not continue to grow or grow more slowly than generally anticipated, particularly for mobile devices, Codere Online’s user growth, retention, and engagement may be negatively impacted. To deliver high-quality content over mobile cellular networks, Codere Online’s product offerings also must work well with a range of mobile technologies, systems, networks, regulations, and standards that Codere Online does not control. In particular, any future changes to the iOS or Android operating systems (which likely will occur) may impact the accessibility, speed, functionality, and other performance aspects of Codere Online’s platform. In addition, the adoption of any laws or regulations that adversely affect the growth, popularity, or use of the Internet, including laws governing Internet neutrality, could decrease the demand for Codere Online’s products and increase its cost of doing business. Specifically, any laws that would allow mobile providers to impede access to content, or otherwise discriminate against content providers like Codere Online over their data networks, could have a material adverse effect on its business, results of operations and financial condition.

Furthermore, if it becomes more difficult for Codere Online’s users to access and use its platform on their mobile devices, if Codere Online’s users may choose not to access or use its platform on their mobile devices, or if Codere Online’s users choose to use mobile products that do not offer access to its platform, Codere Online’s user growth, retention, and engagement could be materially harmed. Additionally, if any of the third-party platforms used for distribution of Codere Online’s product offerings were to limit or disallow advertising on their platforms or technologies were developed that block the display of Codere Online’s ads, Codere Online’s ability to generate revenue could be negatively impacted. These changes could materially impact Codere Online’s business activities and practices, and if Codere Online or its advertising partners are unable to timely and effectively adjust to those changes, there could be an adverse effect on Codere Online’s business, results of operations and financial condition.

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If Internet and other technology-based service providers experience service interruptions, Codere Online’s ability to conduct its business may be impaired.

A substantial portion of Codere Online’s network infrastructure is provided by third parties, including Internet service providers and other technology-based service providers. If Internet service providers experience service interruptions of any kind, communications over the Internet may be interrupted and impair Codere Online’s ability to conduct its business. Internet service providers and other technology-based service providers may in the future roll out upgraded or new mobile or other telecommunications services, such as 5G or 6G services, which may not be successful and thus may impact the ability of Codere Online’s users to access its platform or product offerings in a timely fashion or at all. There can be no assurance that the Internet infrastructure or Codere Online’s own network systems will continue to be able to meet the demand placed on it by the continued growth of the Internet, the overall online gaming industry and Codere Online’s users. Any difficulties Internet service providers and other technology-based service providers face, as well as certain decisions that such providers may take (on which Codere Online exercises no control), including if certain network traffic receives priority over other traffic (i.e., lack of net neutrality), may adversely affect Codere Online’s business. Any system failure as a result of reliance on third parties, such as network, software or hardware failure, including as a result of cyber-attacks, which causes a loss of Codere Online’s users’ property or personal information or a delay or interruption in Codere Online’s product offerings, including its ability to handle existing or increased traffic, could result in a loss of anticipated revenue, interruptions to Codere Online’s platform and product offerings, cause Codere Online to incur significant legal, remediation and notification costs, degrade the customer experience and cause users to lose confidence in Codere Online’s product offerings, any of which could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

Codere Online relies on third-party providers to validate the identity and location of its users, and if such providers fail to accurately confirm user information, Codere Online’s business, results of operations and financial condition could be adversely affected.

Codere Online cannot guarantee that the third-party geolocation and identity verification systems that it relies on will work effectively. Codere Online relies on these geolocation and identity verification systems to ensure it follows applicable laws and regulations and offers its products and services only in jurisdictions where it is allowed to and to customers who can legally use them. Any service disruption to those systems could prevent Codere Online from ensuring compliance with legal requirements. Additionally, incorrect or misleading geolocation and identity verification data with respect to current or potential users received from third-party service providers may result in Codere Online inadvertently allowing access to its offerings to individuals who are not permitted to access them, or otherwise inadvertently deny access to individuals who are permitted to access them, in each case based on inaccurate identity or geographic location determinations. Codere Online’s third-party geolocation services providers rely on their ability to obtain information necessary to determine geolocation from mobile devices, operating systems, and other sources. Changes, disruptions or temporary or permanent failure to access such sources by Codere Online’s third-party service providers may result in their inability to accurately determine the location of Codere Online’s users. Moreover, failure to maintain Codere Online’s existing contracts with third-party service providers, or to replace them, may result in Codere Online’s inability to access geolocation and identity verification data necessary for Codere Online’s operations. If any of these risks materializes, Codere Online may be subject to disciplinary action, fines, lawsuits, and Codere Online’s business, results of operations and financial condition could be adversely affected.

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Codere Online’s platforms contain third-party open source software components, and failure to comply with the terms of the underlying open source software licenses could restrict Codere Online’s ability to provide its offerings.

Codere Online’s platforms (certain of which are provided by the Codere Group) contain software modules licensed by third-party authors under “open source” licenses. The usage and distribution of open source software may entail greater risks than that of third-party commercial software, as open source licensors generally do not provide support, warranties, indemnification or other contractual protections regarding infringement claims or the quality of the software. In addition, the public availability of such software may make it easier for others to compromise Codere Online’s platforms.

In the past, there have been claims challenging the ownership of open source software against companies that incorporate open source software into their solutions. As such, Codere Online could be subject to lawsuits by parties claiming infringement of intellectual property rights in what Codere Online believes to be open source software. If Codere Online is held to have breached or failed to fully comply with all the terms and conditions of an open source software license, Codere Online could face infringement or other liability, or be required to seek costly licenses from third parties to continue providing its offerings on terms that are not economically feasible, to re-engineer Codere Online’s platforms, to discontinue or delay the provision of its offerings if re-engineering could not be accomplished on a timely basis or to make proprietary source code generally available, any of which could adversely affect its business, results of operations and financial condition.

Negative perceptions and negative publicity surrounding the gaming industry could damage Codere Online’s reputation or lead to increased regulation or taxation.

The gaming industry may be, and has been from time to time, perceived as an industry involved in political corruption, organized crime, money laundering, tax evasion and other criminal activities and most gaming companies, including Codere Online, face allegations from time to time relating to their and their partners’ involvement in illegal activities.

In addition, the gaming industry is exposed to negative publicity and attention generated by a variety of sources, including citizens’ groups, non-governmental organizations, media sources, local authorities, and other groups and institutions. In particular, in recent years, public attention has been drawn to findings or allegations of illegal betting and gaming, participation or alleged participation in gaming activities by minors, risks related to social issues such as addiction to online gaming and risks related to data protection and payment security. In addition, publicity regarding social issues related to the gaming industry, even if not directly connected to Codere Online or its business, could adversely impact Codere Online’s business, results of operations and financial condition. If the perception develops that the gaming industry is failing to address such concerns adequately, any accompanying political pressure may result in the gaming industry becoming subject to increased regulation, taxation, limitations on advertising or certain additional controls or restrictions to Codere Online’s operations. Future changes in regulation or taxation could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

Corruption, bribery and money-laundering are among the risks Codere Online faces in the course of its activity. Despite Codere Online’s efforts, it may fail to prevent irregular conduct and may face allegations regarding involvement in illegal activities. Further, Codere Online cannot assure that negative public perception toward gaming will not give rise to increased governmental scrutiny of its business or allegations of misconduct or illegal activity concerning it or its partners, or potential increased obligations and controls, any of which could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

Furthermore, in order to build and maintain its business, Codere Online must maintain the confidence of its customers, suppliers, analysts and other parties in its products and services, long-term financial viability and business prospects. Maintaining such confidence may be particularly challenging due to the negative perceptions surrounding the gaming industry and other factors largely outside of Codere Online’s control. If Codere Online were to lose the confidence of customers, suppliers, analysts or other parties, this could have a material adverse effect on Codere Online’s business, results of operations and financial condition. Furthermore, any actions by members of the Codere Group or any of its employees that may negatively affect the “Codere” brand or Codere Online’s reputation could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

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Codere Online is dependent upon its ability to provide secure online gaming products and to maintain the integrity of its employees and its reputation.

The integrity and security of online gaming operations are critical factors to attract and retain customers. Codere Online strives to set exacting standards of personal integrity for its employees and security for the online gaming systems that it provides to its customers. Codere Online’s reputation in this regard is an important factor in its business dealings with governmental authorities. For this reason, an allegation or a finding of illegal or improper conduct on Codere Online’s part, or on the part of one or more of its current or former employees, or an actual or alleged system security defect or failure, could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

Codere Online may fail to detect money laundering or fraudulent activities by its customers or third parties.

Codere Online is exposed to the risk of money laundering and fraudulent activities by its customers and third parties, including collusion between online customers and the use of sophisticated computer programs that automatically play skill games in its online gaming platform. In connection with Codere Online’s online betting activities, Codere Online has implemented internal control systems that monitor unusual transaction volumes or patterns and screen the personal details of the customer in order to minimize exposure to money laundering and fraud. Codere Online may not, however, be successful in protecting its customers and itself from such activities. In addition, Codere Online could be targeted by third parties, including criminal organizations, for committing fraudulent activities, such as attempts to compromise its system that processes and collects payment information, or attempts to use its betting services to engage in money laundering.

Codere Online’s network partners are required to abide by applicable laws, including those related to identifying the customers placing bets. Although Codere Online has controls in place, it may fail to detect non-compliance with applicable laws or with its policies by it or its Codere Online’s network partners. To the extent Codere Online is not successful in protecting its customers or itself from money laundering and fraudulent activities, Codere Online could be subject to criminal sanctions and administrative fines and could directly suffer losses or lose the confidence of its customer base, which could have a material adverse effect on its business, results of operations and financial condition. Codere Online’s failure to comply with such provisions could result in the imposition of criminal sanctions and/or fines on its directors, other penalties, revocation of concessions and licenses or operational bans, which could have a material adverse effect on Codere Online’s business, results of operations and financial condition. Furthermore, in Italy, Codere Online is subject to Italian Legislative Decree No. 231 of June 8, 2001, as amended (“Decree 231”), regulating quasi-criminal liability of corporate entities, including liability deriving from anti-money laundering violations committed in a company’s interest or for its benefit. In addition, under Spanish law, Codere Online can be held criminally liable if a number of requirements established in the Spanish Criminal Code are met, in particular, it is required that: (i) the criminal activity is carried out by a person acting on behalf of the company (such as its legal representatives, directors, agents, etc.) or by an employee; (ii) there is a failure by the company to observe its supervisory and control duties over its representatives (which shall be determined on a case by case basis taking into account all relevant circumstances); and (iii) the company benefits directly or indirectly from the aforementioned criminal activity. Any violations of Decree 231 and Article 31 bis of the Spanish Criminal Code could result in the imposition of fines and/or operational bans, and/or the revocation of concessions and licenses, and therefore could have a material adverse effect on Codere Online’s business, financial condition and results of operations. In particular, anti-money laundering laws and regulations require, among other requirements, that certain subsidiaries adopt and implement control policies and procedures which involve “know your customer” principles that comply with the applicable regulations (for customers and providers) and the reporting of suspicious or unusual transactions to the applicable regulatory authorities. While Codere Online has adopted policies and procedures intended to detect and prevent the use of Codere Online’s network for money laundering activities and by terrorists, terrorist organizations and other types of criminal organizations, those policies and procedures may fail to eliminate the risk that Codere Online’s network is used by other parties, without its knowledge, to engage in activities related to money laundering or other illegal activities. To the extent that Codere Online fails to detect money laundering or fraudulent activities by its customers or third parties, it could be subject to fines and other penalties by the relevant authorities. Codere Online cannot guarantee that relevant governmental agencies will not impose penalties or that such penalties will not adversely affect its business, results of operations and financial condition. Furthermore, illegal gaming may drain significant portions of gaming volume away from the regulated industry and adversely affect Codere Online’s business. See “—Codere Online operates in a highly competitive business environment and, as a result, its market share and business may be adversely affected by factors beyond its control.”

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Codere Online may be vulnerable to player fraud.

The online gaming industry is vulnerable to attacks by customers through collusion and fraud. Although Codere Online takes steps to minimize the opportunities for fraudulent play, Codere Online can provide no assurance that all instances of collusion and fraud will be detected. If Codere Online fails to detect instances of collusion and fraud either between players or between players and Codere Online’s employees or agents, it could suffer losses directly as a result of such collusion and fraud instances. Further, Codere Online’s customers participating in those games or bets subject to collusion or fraud could also suffer losses and may become dissatisfied with Codere Online’s products. Any of the foregoing could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

Further, Codere Online has been affected and may, in the future, continue to be affected by cases of identity theft and fraud. In fraud cases such as the Fraud Complaints (as defined herein), the offender is typically a third party who commits identity theft and opens a Codere player account under a false identity into which the fraud victim is instructed by the offender to deposit certain amounts, which the offender thereafter withdraws via ATMs without the victim’s consent. See “Business—Legal Proceedings” for more information on the Fraud Complaints. As of the date of this prospectus, amounts involved in identified fraud cases have not been material. However, any such fraud cases could result in the imposition of civil and criminal penalties and sanctions on Codere Online and could affect Codere Online’s ability to renew any of its licenses, including the CDON Licenses, which, individually or in the aggregate, could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

Increases in the amount or frequency of fraud or other types of misuse of Codere Online’s products and services could have reputational impact for Codere Online and could diminish customer confidence in Codere Online and its products and services, which could result in unfavorable media coverage or publicity and in the imposition of further regulatory restrictions on Codere Online or on the online gaming industry in general. Any of the foregoing factors could materially and adversely affect Codere Online’s business, results of operations and financial condition.

Codere Online’s intellectual property could be subject to infringement or misappropriation by third parties or claims of infringement of rights or misappropriation by third parties.

Codere Online’s intellectual property portfolio consists substantially of licensed intellectual property, including the “Codere” trademarks licensed pursuant to the Relationship and License Agreement, which agreement is described in “Certain Relationships and Related Party Transactions—Material Agreements—Relationship and License Agreement.” Codere Online relies on a combination of copyright and trademark laws, trade secret protection, confidentiality and non-disclosure agreements and other contractual provisions in order to protect its intellectual property. There can be no assurance that these efforts will be adequate, or that third parties will not infringe upon or misappropriate Codere Online’s proprietary rights, which could harm its business and competitive position. For example, consultants, vendors, former employees and current employees may breach their obligations regarding non-disclosure and restrictions on use of its intellectual property. In addition, intellectual property laws in Latin America and other jurisdictions may provide differing and limited protection, may not permit Codere Online to gain or maintain a competitive advantage and may not prevent Codere Online’s competitors from replicating its products or gaining access to its proprietary or licensed information and technology. Codere Online may also be subject to claims of infringement of the rights of others or party to claims to determine the scope and validity of the intellectual property rights of others. Such claims, whether valid or not, could require Codere Online to spend significant resources in litigation, pay damages, rebrand or re-engineer services, acquire licenses to third-party intellectual property and distract management’s attention away from the business, all of which may have a material adverse effect on Codere Online’s business, results of operations and financial condition.

In addition, Codere Online has acquired licenses to intellectual property rights from third parties, including from Codere Newco under the Relationship and License Agreement and the Sponsorship and Services Agreement (see “Certain Relationships and Related Party Transactions—Material Agreements”). If such third parties do not properly maintain or enforce the intellectual property rights subject to such licenses, or if such licenses are terminated, Codere Online could lose the right to use the licensed intellectual property, which could adversely affect Codere Online’s competitive position or its ability to commercialize certain of its technologies, products or services, any of which could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

In addition, Codere Online may not be able to use the “Codere” brand, other licensed intellectual property or its own intellectual property in certain jurisdictions where Codere Online operates if the use or the registration of any such intellectual property is not legal or otherwise permitted under applicable laws in such jurisdiction or any such intellectual property cannot be used or registered without unreasonable or unusual efforts. See “—Codere Online’s success is dependent on maintaining and enhancing the “Codere” brand.”

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Codere Online is and may be party to legal, administrative and arbitration proceedings, including tax and other disputes with regulatory authorities, and may become party to future litigation or disputes that may adversely affect its business.

Due to the nature of its business, Codere Online is and may be subject to a number of legal, administrative and arbitration proceedings from time to time, including tax and other disputes with regulatory authorities, and could become involved in legal, administrative and arbitration proceedings or investigations by government authorities in the future. See “—The online gaming industry is subject to extensive regulation (including applicable direct and indirect taxation, anti-corruption, anti-money laundering and economic sanctions laws) as well as licensing requirements. Codere Online’s business may be adversely affected if it is unable to comply with regulations or licensing requirements or any regulatory changes.” Codere Online cannot assure that it will prevail in any current and/or future disputes, and any adverse resolution of any such dispute could have a material adverse effect on its business, results of operations and financial condition.

The Martínez Sampedro family, which were the controlling shareholders of the Codere Group until April 2016, have brought several administrative, civil, mercantile, and criminal claims against the Codere Group, its directors, or its senior management during the past four years. While none of these claims have been successful so far, there is no guarantee that future claims or claims that are pending adjudication will also be resolved favorably to the Codere Group, its directors, or its senior management. As first reported in the Codere Group’s Earnings Results presentation filed by Holdco with the SEC on November 12, 2021, Codere Online has been made aware that Masampe S.L., José Antonio Martínez Sampedro, Luis Javier Martínez Sampedro and Encarnación Martínez Sampedro filed a criminal complaint with the Audiencia Nacional (a Spanish federal court) in July 2021 (as amended in September 2021), which was dismissed by the court due to a lack of jurisdiction. The plaintiffs appealed the decision in November 2021, which appeal was subsequently dismissed by the court. On December 21, 2021, the plaintiffs filed a second appeal against the court’s decision to dismiss the appeal, which second appeal was dismissed by the court on February 3, 2022. Based on the information currently available to Codere Online, Codere Online understands that the complaint: (i) makes allegations against certain directors, managers and shareholders of Codere, S.A., and certain of their respective affiliates and related parties for embezzlement and scheming to alter the price of things, including shares of Codere, S.A., breach of information rights, passing abusive resolutions, insolvency offences and unfair administration, and (ii) was amended in September 2021 to extend certain allegations of money laundering, payments to and from tax havens, breach of data protection rules and disclosure of secrets in relation to Codere Group’s online business (which may refer to Codere Online), and certain irregularities in the hiring process of certain of its executives, against Novelly (as defined below), Moshe Edree, M&G Plc and several other related entities. Codere Online and its current and former directors and officers may become involved in litigation, investigations or other proceedings involving the foregoing complaint or any related claims or allegations, any of which could have a material adverse effect on Codere Online’s business, results of operations and financial condition. Even if these claims are dismissed or otherwise terminated without imposing liability on Codere Online and its current and former directors and officers, defending a lawsuit may result in substantial expense to Codere Online, adversely affect its reputation and divert the attention of management and key personnel, any of which could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

As Codere Online grows and expands its operations, there is a risk that Codere Online will fail to maintain effective internal controls and its ability to produce timely and accurate financial statements or comply with applicable regulations could be adversely affected. Codere Online may identify material weaknesses in its internal control over financial reporting which it may not be able to remedy in a timely manner.

As a public company, Codere Online will act in an increasingly demanding regulatory environment, which requires it to comply with the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), the regulations of Nasdaq, the rules and regulations of the SEC, expanded disclosure requirements, accelerated reporting requirements and more complex accounting rules. Company responsibilities required by the Sarbanes-Oxley Act include establishing corporate oversight and adequate internal control over financial reporting and disclosure controls and procedures. Effective internal controls are necessary for Codere Online to produce reliable financial reports and are important to help prevent financial fraud. Commencing with 2022, Codere Online must perform system and process evaluation and testing of its internal control over financial reporting to allow Holdco’s management to report on the effectiveness of its internal control over financial reporting in its Form 20-F filing for that year, as required by Section 404 of the Sarbanes-Oxley Act. In the past, Codere Online has never been required to test its internal controls under the Sarbanes-Oxley Act and, as a result, it may experience difficulty in meeting these reporting requirements in a timely manner.

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Codere Online anticipates that the process of building its accounting and financial functions and infrastructure will require significant additional professional fees, internal costs and management efforts. Codere Online is in the process of implementing enhancements to its internal control system to combine and streamline the management of its financial, accounting, human resources and other functions. Any disruptions or difficulties in implementing such enhancements could adversely affect Codere Online’s controls and harm its business. Moreover, such disruptions or difficulties could result in unanticipated costs and diversion of management’s attention.

Material weaknesses were identified in DD3’s internal control over financial reporting with respect to DD3’s previously issued financial statements and the integration of DD3 may give rise to additional challenges. See “—Risks Related to the Recently Completed Business Combination—Material weaknesses were identified in DD3’s internal control over financial reporting with respect to DD3’s previously issued financial statements. These material weaknesses could adversely affect Holdco’s ability to report its results of operations and financial condition accurately and in a timely manner” and “—Risks Related to the Recently Completed Business Combination—Holdco may face litigation and other risks as a result of the material weakness in DD3’s internal control over financial reporting and the accounting of the Private Warrants and DD3 Class A Common Stock.”

Furthermore, measures adopted by Codere Online to enhance its internal control over financial reporting will not prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that its objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.

If Codere Online is not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, or if it is unable to maintain proper and effective internal controls, Codere Online may not be able to produce timely and accurate financial statements. If Codere Online cannot provide reliable financial reports or prevent fraud, its business and results of operations could be harmed, investors could lose confidence in its reported financial information and Codere Online could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities, any of which could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

Holdco will incur increased costs as a result of operating as a public company, and its management will devote substantial time to new compliance initiatives.

Codere Online recently became a public company and it expects to incur significant legal, accounting and other expenses that it did not incur as a private company, and these expenses may increase even more after Holdco is no longer an emerging growth company, as defined in Section 2(a) of the Securities Act. As a public company, Holdco is subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as rules adopted, and to be adopted, by the SEC and Nasdaq. Further, Holdco has become subject to the U.S. Foreign Corrupt Practices Act (“FCPA”). The anti-bribery provisions of the FCPA prohibit providing or promising to provide anything of value to a foreign official to gain an improper business advantage and they impose derivative liability on companies for the actions of its employees and for any third party acting on the company’s behalf, as well as individuals involved in or authorizing such conduct. Holdco’s management and other personnel will need to devote a substantial amount of time to new compliance initiatives. Moreover, Holdco expects these rules and regulations to substantially increase its legal and financial compliance costs and to make some activities more time consuming and costly. These rules and regulations, together with the nature of Holdco’s business, make it difficult and expensive for Holdco to obtain director and officer liability insurance from third-party insurers. As a result, in the future Holdco may need to continue to self-insure its directors and officers or may otherwise be required to accept policy limits or incur substantially higher costs to obtain coverage from third-party insurers. The impact of these requirements could also make it more difficult for Holdco to attract and retain qualified persons to serve on the Holdco Board or as senior managers. It is also possible that Holdco will be required to expand its employee base and hire additional employees to support its operations as a public company, which will increase its operating costs in future periods. Furthermore, Holdco is subject to onerous obligations under the Registration Rights and Lock-Up Agreement. Efforts to satisfy such obligations may divert the attention of management and key personnel and result in substantial expense.

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Holdco’s management has no experience in operating a publicly traded company in the United States.

While Holdco’s senior managers have been part of the Codere Group, whose parent company was publicly traded in Spain until Codere, S.A.’s shares were suspended from trading after market close on December 17, 2021 and has publicly traded debt in Euronext Dublin, they had no experience in the management of a standalone publicly traded company in the United States prior to the date of initial trading of the Ordinary Shares and Holdco Warrants on December 1, 2021. Holdco’s management team may not successfully or effectively manage its transition to a public company subject to significant regulatory oversight and reporting obligations under U.S. federal securities laws. Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it may require an increasing amount of their time to be devoted to these activities which will result in less time being devoted to the management and growth of Holdco’s business. Holdco may not have adequate personnel with the appropriate level of knowledge, experience, and training in the accounting policies, practices or internal control over financial reporting required of public companies in the United States.

Differences in views with current or future shareholders or partners may result in delayed decisions or in failures to agree on major matters, potentially adversely affecting certain of Codere Online’s businesses.

Differences in views among current or future shareholders or partners in Codere Online’s operations may result in delayed decisions or in failures to agree on major matters, potentially adversely affecting certain of Codere Online’s businesses and, in turn, Codere Online’s business, results of operations and financial condition. Failure to resolve disagreements with our current or future partners could have a material adverse effect on Codere Online’s business, results of operations and financial condition. Additionally, Codere Online may be forced to make certain decisions in the interest of its operations that might not be in agreement with its current or future partners and could result in litigation, arbitration or other legal procedures. Any of the foregoing could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

Codere Online depends on the skill and experience of its management and key personnel. The loss of managers or key and highly qualified personnel, or an inability to attract such personnel, could adversely impact Codere Online’s business.

The ability to maintain Codere Online’s competitive position and to implement its business strategy is dependent on Codere Online’s senior management team, which has many years of experience leading top tier global gaming operators and digital businesses, and key personnel with expertise in the online casino and sports betting space.

Codere Online’s management team is led by Moshe Edree, who became an employee of Codere Online in January 2022. See “Management—Chief Executive Officer Agreements” for information regarding the agreements entered into with Mr. Edree and the compensation payable thereunder. Mr. Edree holds a majority interest in Moha Digital Ltd, which in turn holds 50.1% of Marketplay Ltd, an online marketing company for gaming brands, with Aspire holding the remaining interest. Mr. Edree also acts as an advisor to Marketplay Ltd’s board of directors on marketing and strategy. Although Codere Online and Marketplay Ltd generally operate in different geographic markets, we can provide no assurance that an actual or potential conflict of interest does not exist or will not arise as a result of Mr. Edree’s ownership interest in, and advisory relationship with, Marketplay Ltd. If Codere Online is unable to successfully manage any actual or potential conflict of interest between Mr. Edree’s role as an employee of Codere Online, on the one hand, and his ownership interest in, and advisory relationship with, Marketplay Ltd, or any other ownership interest or relationship of his, on the other, this could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

Furthermore, Codere Online has in the past and may in the future rely on non-employee independent contractors in the ordinary course to carry out its business. Such non-employee independent contractors may have conflicts of interest in allocating their time and activity to matters relating to Codere Business. Furthermore, if any past or future independent contractors were, under relevant labor law, determined by the relevant authorities to be employees, Codere Online could be found to have tax withholding, social security and other employment obligations with respect to such contractors. As a result of the above, Codere Online’s dependence on non-employee independent contractors may expose it to risks that may have a material adverse effect on Codere Online’s business, results of operations and financial condition.

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Furthermore, Codere Online’s inability to retain certain members of the management team or other key personnel could have a material adverse effect on its business, results of operations and financial condition. Codere Online cannot guarantee that it will be able to retain its existing senior executive and management personnel or attract additional qualified senior executive and management personnel. Codere Online’s success depends, in part, on its ability to identify, hire, attract, train and develop other highly qualified personnel. Experienced and highly skilled employees are in high demand and competition for these employees can be intense. Codere Online may not be able to attract, develop or retain qualified personnel in the future, and its failure to do so could adversely affect Codere Online’s business, including the execution of its business strategy.

In addition, Codere Online’s local officers, directors and key employees are generally required, and shareholders may be required, to file applications with the gaming authorities in the jurisdictions in which Codere Online operates and are required to be licensed or found suitable by these gaming authorities. If the gaming authorities were to find an officer, director, key employee or shareholder unsuitable for licensing or unsuitable to continue having a relationship with Codere Online, Codere Online would have to sever all relationships with that person. Furthermore, the gaming authorities may require Codere Online to terminate the employment of any person who refuses to file appropriate applications. Any of the foregoing factors could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

Certain entities that form the Codere Online group may face tax liabilities as a result of their historical membership in the consolidated tax group of companies of which Codere, S.A. was the parent company.

Certain entities that form the Codere Online group were part of a consolidated tax group of companies of which Codere, S.A. was the parent company until the ongoing financial restructuring of Codere, S.A.’s liabilities was finalized in November 2021, and which is currently headed by Codere New Topco, S.A. (the “Codere Tax Group”). In accordance with Spanish taxation law, membership of a company in a tax group is conditional upon the fulfilment of certain requirements, with the principal condition being the direct or indirect participation of the parent company in the share capital of such company (currently, a minimum of 75% of the subsidiary’s share capital or 70% if the shares of the subsidiary are admitted to trading on a regulated market). Upon the consummation of the Business Combination, the Codere Group ceased to maintain the minimum participation shareholding required for any entity of the Codere Online group to remain part of the Codere Tax Group. However, the members of a tax consolidated group are jointly liable for the Spanish Corporate Income Tax and Value Added Tax debts corresponding to tax years in which they were part of a consolidated tax group. As a result, certain entities of the Codere Online group will remain jointly liable for any Corporate Income Tax and Value Added Tax corresponding to the Codere Tax Group for those tax periods in which they were part of the Codere Tax Group. As of the date of this prospectus, Spanish tax authorities are carrying out a Corporate Income Tax audit for 2017 and 2018 and a Value Added Tax audit for the period from June 2017 to December 2018, in each case in connection with certain entities of the Codere Tax Group, including Codere, S.A., Codere Newco and Codere Apuestas España, S.L.U., although the scope of the audits may be extended to other entities of the Codere Tax Group. If the entities that form the Codere Online group were to face tax liabilities as a result of their membership in the Codere Tax Group, Codere Online’s business, results of operations and financial condition could be materially and adversely affected.

Codere Online is dependent on credit and debit card payment service providers and other financial institutions to process payments and handle cash generated by its business.

Codere Online accepts credit and debit card payments from customers among other payment methods. Certain U.S.-based card processing and card-issuing institutions currently restrict the use of their credit cards for online betting and gaming transactions. If other major card processing or card-issuing companies stop accepting payment transactions for online betting and gaming operations, this could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

Furthermore, some gaming regulators such as the Gambling Commission in the United Kingdom have recently banned the use of credit cards to place bets online (and offline). Similar measures have been discussed in other markets such as Spain. If any such restrictions to credit cards or other payment methods were to be applied in any of the regions where Codere Online operates, there could be a material adverse effect on its business, results of operations and financial condition.

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Risk Factors Related to the Financial Information and this Prospectus

The Holdco Financial Statements, the Interim Combined Carve-out Condensed Financial Statements, the Annual Combined Carve-out Financial Statements and the 3Q Combined Carve-out Financial Information are not necessarily indicative of the results of operations and financial position of Codere Online.

Holdco was incorporated on June 4, 2021 and did not engage in any operations nor generate any revenues before the Exchange was completed on November 29, 2021. Holdco’s only activities until then were organizational activities and those necessary to prepare for the Business Combination. Holdco expects its expenses (and, to a lesser extent, its revenue) to increase substantially as a result of the consummation of the Exchange.

Given that Holdco has not had any significant operations until the consummation of the Exchange, the Holdco Financial Statements contain only a balance as of June 30, 2021 and the accompanying notes. Holdco’s incorporation is also accounted for in the Interim Combined Carve-out Condensed Financial Statements and the 3Q Combined Carve-out Financial Information. However, as Holdco did not exist during the periods covered by the Annual Combined Carve-out Financial Statements, it is not accounted for in the Annual Combined Carve-out Financial Statements.

As explained in greater detail in Notes 1 and 2 to the Annual Combined Carve-out Financial Statements, the combined carve-out financial information reflects the combination of the results of all of the entities and/or businesses that form the Codere Online Business. Except as provided in the Business Combination Agreement with respect to Mexico, where Codere Online operates under an “Asociación en Participación” or “AenP” (an unincorporated joint venture) with LIFO (the entity which holds the LIFO License) as asociante, and SEJO as asociado, pursuant to which SEJO has the right to receive 99.99% of any distributed profits (see “Certain Relationships and Related Party Transactions—Material Agreements—AenP Agreement”), Codere Newco was required to transfer to Holdco the Codere Online Business in accordance with the Business Combination Agreement or, if that was not possible, enter into Restructuring Agreements. Except as indicated below with respect to Colombia, Panama and the City of Buenos Aires (Argentina), upon the consummation of the Exchange, the Codere Online Business was transferred to Holdco. The transfer was structured in two steps: first, the transfer to SEJO of all the relevant entities and/or businesses that form the Codere Online Business that were not direct or indirect subsidiaries or businesses of SEJO as of the date of the Business Combination Agreement (as part of the Restructuring) and, secondly, the transfer of SEJO to Holdco (as part of the Exchange).

In Spain and Italy, CDON and Codere Scommese S.r.l., respectively, were transferred to, and became wholly-owned subsidiaries of, SEJO, which became in turn a subsidiary of Holdco upon consummation of the Exchange. In accordance with the Business Combination Agreement, as the planned corporate restructuring could not be consummated by October 1, 2021 with respect to Colombia, Panama and the City of Buenos Aires (Argentina), respectively, Restructuring Agreements were entered into on November 15, 2021 (except for the agreement that Codere Online Panama and ALTA entered into on December 1, 2021) between the relevant Codere Group entity holding the online license and a Codere Online entity. Such Restructuring Agreements generally govern the terms and conditions of, among other things, the assignment by the relevant Codere Group entity of assets, contracts, employees and permits, as applicable, necessary for the operation of the online gaming business by the Codere Online entity in Colombia, Panama and the City of Buenos Aires (Argentina), respectively, subject to the required authorizations. See “Certain Relationships and Related Party Transactions—Material Agreements.”

However, there is no guarantee that the consummation of the transactions contemplated by such agreements will not give rise to any breach, default or any unwarranted delays, costs or effects. As a result, the combined carve-out financial information included in this prospectus is not necessarily indicative of the results of operations and financial position that would have been achieved had Holdco and its subsidiaries owned and managed the Codere Online Business during the periods covered by the combined carve-out financial information included in this prospectus.

Moreover, the Holdco Financial Statements, the Interim Combined Carve-out Condensed Financial Statements, the Annual Combined Carve-out Financial Statements and the 3Q Combined Carve-out Financial Information do not reflect Codere Online’s proposed use of the proceeds of the Transactions, which seeks to enhance and expand its business and operations in the coming years, nor any incremental operating expenses (e.g. due to the reinforcement of the management team and/or related to third-party service providers) needed to support such enhancement and expansion of the business and operation as an independent, Nasdaq-listed company. They also do not reflect substantially all of the expenses (including legal, accounting, consulting and financial advisory fees) incurred by Holdco in connection with the Business Combination, as these expenses generally became payable after September 30, 2021, expenses incurred under the Related Party Agreements which became effective upon the consummation of the Business Combination or the start of operations in the City of Buenos Aires (following LOTBA’s approval in December 2021). Further, the Holdco Financial Statements do not reflect the Codere Online Business. Consequently, the Holdco Financial Statements, the Interim Combined Carve-out Condensed Financial Statements, the Annual Combined Carve-out Financial Statements and the 3Q Combined Carve-out Financial Information may not be indicative of the results of operations and financial position of Holdco.

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The unaudited pro forma combined financial information included in this prospectus is not necessarily indicative of the results of operations and financial position that would have been achieved had the Business Combination been consummated on the date indicated therein, or of the future consolidated results of operations or financial position of the Combined Company.

This prospectus includes unaudited pro forma combined financial information for the Combined Company. The unaudited pro forma combined income statement of the Combined Company combines the historical unaudited restated income statement of DD3 for the period from September 30, 2020 (inception) through December 31, 2020, and the historical unaudited restated income statement of DD3 for the period from September 30, 2020 (inception) through June 30, 2021 (after deducting DD3’s historical unaudited restated income statement of DD3 for the period from September 30, 2020 (inception) through December 31, 2020), with the audited combined carve-out income statement of Codere Online for the year ended December 31, 2020 and the unaudited combined carve-out results of Codere Online for the six months ended June 30, 2021 respectively, and gives pro forma effect to the Business Combination as if it had been consummated on January 1, 2020. The unaudited pro forma combined statement of financial position of the Combined Company combines the unaudited restated statement of financial position of DD3 as of June 30, 2021 and the unaudited combined carve-out statement of financial position of Codere Online as of June 30, 2021 and gives pro forma effect to the Business Combination as if it had been consummated on June 30, 2021. As of the time of the consummation of the Business Combination on November 30, 2021, DD3 had had no operating history and no revenues.

The unaudited pro forma combined financial information is presented for illustrative purposes only, is based on certain assumptions, addresses a hypothetical situation and reflects limited historical financial data. In particular, the pro forma combined financial information was prepared based on actual figures for DD3 redemptions and transaction costs related to the Business Combination applied retrospectively to the historical financial information of DD3 and Codere Online as of the dates and for the periods described above. The unaudited pro forma combined financial information was prepared on the basis of the redemption of 7,584,044 shares of DD3 Class A Common Stock into cash by Public Stockholders upon the consummation of the Business Combination, at a redemption price of approximately $10 (€8.88) per share. After giving effect to the redemptions, there was approximately $116 million (€103 million) of cash held inside and outside of the Trust Account, including (i) the aggregate amount of proceeds from the Institutional Investors and (ii) proceeds resulting from the fact that Baron and certain other Public Stockholders did not redeem a total of 4,915,956 Public Shares in connection with the Business Combination.

Furthermore, the unaudited pro forma combined financial information does not reflect Codere Online’s proposed use of the proceeds of the Transactions, which seeks to enhance and expand its business and operations in the coming years, nor any incremental operating expenses (e.g. due to the reinforcement of the management team and/or related to third-party service providers) needed to support such enhancement and expansion of the business and operation as an independent, Nasdaq-listed company. Moreover, the combined carve-out financial information which was used to prepare the unaudited pro forma combined financial information has certain limitations. See “—The Holdco Financial Statements, the Interim Combined Carve-out Condensed Financial Statements, the Annual Combined Carve-out Financial Statements and the 3Q Combined Carve-out Financial Information are not necessarily indicative of the results of operations and financial position of Codere Online.” Therefore, the unaudited pro forma combined financial information is not necessarily indicative of the results of operations and financial position that would have been achieved had the Business Combination been consummated on the dates indicated above, or of the future consolidated results of operations or financial position of the Combined Company. Accordingly, the Combined Company’s business, assets, cash flows, results of operations and financial condition may differ significantly from those indicated by the unaudited pro forma combined financial information included in this prospectus. For more information, please see the section entitled “Unaudited Pro Forma Combined Financial Information.”

To the extent a Selling Securityholder elects to sell his or her Ordinary Shares and/or Holdco Warrants without involving an underwriter, no underwriter will have conducted due diligence of Codere Online’s business, operations or financial condition or reviewed the disclosure in this prospectus in connection with such sale.

Section 11 of the Securities Act (“Section 11”) imposes liability on parties, including underwriters, involved in a securities offering if the registration statement contains a materially false statement or material omission. To effectively establish a due diligence defense against a cause of action brought pursuant to Section 11, a defendant, including an underwriter, carries the burden of proof to demonstrate that such defendant, after reasonable investigation, believed that the statements in the registration statement were true and free of material omissions. In order to meet this burden of proof, underwriters in a registered offering typically conduct extensive due diligence of the registrant and vet the registrant’s disclosure. Such due diligence may include calls with the issuer’s management, review of material agreements, and background checks on key personnel, among other investigations. The Selling Securityholders may choose to sell their Ordinary Shares and/or Holdco Warrants without involving an underwriter. In any such case, no underwriter will have conducted due diligence on Codere Online in order to establish a due diligence defense with respect to the disclosure presented in this prospectus. If such investigation had occurred, certain information in this prospectus may have been presented in a different manner or additional information may have been presented at the request of such underwriter.

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Risks Related to the Recently Completed Business Combination

Changes in value of Holdco Warrants could have a material effect on Holdco’s financial results.

On April 12, 2021, the staff of the SEC (the “SEC Staff”) issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies (“SPACs”)” (the “Staff Statement”), wherein the SEC Staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified under U.S. GAAP as liabilities on the SPAC’s balance sheet as opposed to being treated as equity. In light of the Staff Statement, DD3 undertook a process to re-evaluate the equity classification of its outstanding warrants issued in connection with the IPO, including the Private Warrants. As a result of such re-evaluation and pursuant to the guidance in ASC 815-40, the audit committee of DD3’s board of directors, in consultation with DD3’s management, determined that the Private Warrants should have been classified as derivative liabilities measured at fair value on DD3’s balance sheet, with any changes in fair value to be reported each period in earnings on DD3’s statement of operations.

Both the Holdco Public Warrants and the Holdco Private Warrants are classified as warrant liabilities under IFRS, with any changes in fair value to be reported each period in earnings on Holdco’s income statement. As a result of the recurring fair value measurement, the financial statements of Holdco (the parent company of DD3) may fluctuate quarterly based on factors which are outside Holdco’s control. Due to the recurring fair value measurement, Holdco expects that it will recognize non-cash gains or losses on the Holdco Warrants each reporting period and that the amount of such gains or losses could be material.

Material weaknesses were identified in DD3’s internal control over financial reporting with respect to DD3’s previously issued financial statements. These material weaknesses could adversely affect Holdco’s ability to report its results of operations and financial condition accurately and in a timely manner.

Following the issuance of the Staff Statement and prior to the consummation of the Business Combination, the audit committee of DD3’s board of directors, in consultation with DD3’s management, concluded that, in light of the Staff Statement, it was appropriate to restate DD3’s previously issued balance sheet as of December 10, 2020 and its financial statements as of December 31, 2020 and for the period from September 30, 2020 (inception) through December 31, 2020. See “—Changes in value of Holdco Warrants could have a material effect on Holdco’s financial results.” As part of such processes, DD3 identified a material weakness in its internal control over financial reporting related to the proper accounting classification and valuation of complex financial instruments. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented, or detected and corrected on a timely basis. Effective internal controls are necessary to provide reliable financial reports and prevent fraud.

Subsequent to the consummation of the Business Combination on November 30, 2021, the internal control structure of DD3 ceased to be in operation. Instead, the relevant internal control structure after completion of the Business Combination is that of Holdco. After consultation with DD3’s independent registered public accounting firm, Holdco’s management and audit committee identified a material weakness in DD3’s internal control over financial reporting with respect to DD3’s previously issued financial statements related to DD3’s application of ASC 480-10-S99-3A to its accounting and classification of the Public Shares. Holdco and DD3 concluded that DD3’s previously issued financial statements should be restated to classify all shares of DD3 Class A Common Stock subject to possible redemption in temporary equity. On January 26, 2022, Holdco’s audit committee authorized management to restate DD3’s previously issued (i) unaudited financial statements as of December 31, 2020 and for the period from September 30, 2020 (inception) through December 31, 2020, (ii) unaudited financial statements as of March 31, 2021 and for the period from September 30, 2020 (inception) through March 31, 2021 and (iii) unaudited financial statements as of June 20, 2021 and for the period from September 30, 2020 (inception) through June 30, 2021 (collectively, the “Affected Periods”), where Holdco concluded that the control deficiency that resulted in the incorrect classification of the Public Shares constituted a material weakness related to the proper accounting classification and valuation of complex financial instruments. Historically, a portion of the Public Shares was classified as permanent equity to maintain stockholders’ equity greater than $5 million on the basis that DD3 would not redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001, as described in the amended and restated certificate of incorporation of DD3 in effect prior to the consummation of the Business Combination. Pursuant to such re-evaluation of DD3’s application of ASC 480-10-S99-3A to its accounting and classification of the Public Shares, Holdco and DD3 determined that the Public Shares included certain provisions that required classification of all of the Public Shares as temporary equity regardless of the net tangible assets redemption limitation that was contained in the amended and restated certificate of incorporation of DD3, resulting in the filing of amendments to DD3’s quarterly reports on Form 10-Q/A for each of the Affected Periods with the SEC on January 27, 2022. DD3 has also revised its interpretation of net tangible assets to include temporary equity in net tangible assets. In addition, in connection with the change in presentation for the Public Shares, the Company determined it should restate its earnings per share calculation to allocate income and losses shared pro rata between the shares of DD3 Class A Common Stock and DD3 Class B Common Stock. Additionally, DD3’s previously issued financial statements as of December 31, 2020 and for the period from September 30, 2020 (inception) through December 31, 2020 were restated to classify Private Warrants as derivative liabilities measured at fair value on DD3’s balance sheet, as described under “—Changes in value of Holdco Warrants could have a material effect on Holdco’s financial results” above.

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As a result, financial statements issued with respect to the Affected Periods prior to date of the amendments to DD3’s quarterly reports on Form 10-Q/A should not be relied upon. Holdco will present this restatement in a prospective manner in all future filings. Under this approach, the previously issued financial statements of DD3 included in the Proxy Statement and in Holdco’s registration statement on Form F-4 (File No. 333-258759) initially filed by Holdco with the SEC on August 12, 2021, as amended, will not be amended to reflect DD3’s restated financial statements for the Affected Periods, but historical amounts presented in the current and future filings will reflect DD3’s restated financial statements, as applicable.

Additionally, in connection with the preparation of DD3’s audited financial statements for the period from September 30, 2020 (inception) through September 30, 2021, DD3 identified an accrual that was not initially recorded in the financial statements for such period. The accrual was recorded in the audited financial statements for the period from September 30, 2020 (inception) through September 30, 2021 and appropriately reflected in the financial statements contained in the Form 10-K filed by DD3 with the SEC on February 16, 2022. As part of such processes, DD3 identified a material weakness in its internal control over financial reporting related to the process of recording accounts payable and accrued expenses.

As described above, the relevant internal control structure after completion of the Business Combination is that of Holdco. Holdco is in the process of implementing enhancements to its internal control system to combine and streamline the management of its financial, accounting, human resources and other functions (see “—Risks Related to Codere Online—As Codere Online grows and expands its operations, there is a risk that Codere Online will fail to maintain effective internal controls and its ability to produce timely and accurate financial statements or comply with applicable regulations could be adversely affected. Codere Online may identify material weaknesses in its internal control over financial reporting which it may not be able to remedy in a timely manner, continued to evaluate steps to remediate the material weakness”). Holdco can give no assurance that the measures Holdco has taken to remediate these material weakness surrounding DD3’s historical financial statements will prevent any future material weaknesses or deficiencies in internal control over financial reporting. In the future, those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of financial statement and any additional remediation measures may be time consuming and costly.

Holdco may face litigation and other risks as a result of the material weakness in DD3’s internal control over financial reporting and the accounting of the Private Warrants and DD3 Class A Common Stock.

As a result of the restatements and material weaknesses, including the change in accounting for the Private Warrants, the change in the classification of all of the DD3 Class A Common Stock as temporary equity, the revision of the interpretation of net tangible assets to include temporary equity in net tangible assets, the change in the calculation of earnings per share and the accrual that was not initially recorded, all as described in “—Material weaknesses were identified in DD3’s internal control over financial reporting with respect to DD3’s previously issued financial statements. These material weaknesses could adversely affect Holdco’s ability to report its results of operations and financial condition accurately and in a timely manner” and other matters raised or that may in the future be raised by the SEC in connection with SPACs, Holdco (as the current parent company of DD3) and DD3 may face potential litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the material weakness in DD3’s internal control over financial reporting and the preparation of DD3’s financial statements, the restatement of DD3’s historical financial information and DD3’s historical financial information included in its public filings prior to such restatements, including the Proxy Statement and Holdco’s registration statement on Form F-4 (File No. 333-258759), as amended. As of the date of this prospectus, Holdco has no knowledge of any such litigation or dispute. However, Holdco can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

As a result of the foregoing matters, Holdco and DD3 may become subject to additional risks and uncertainties, including, among others, unanticipated costs for accounting and legal fees, governmental agency investigations, and inquiries by Nasdaq or other regulatory bodies, which could cause investors to lose confidence in Holdco’s and DD3’s reported financial information and could subject Holdco and DD3 to civil or criminal penalties, shareholder class actions or derivative actions. Holdco and DD3 could face monetary judgments, penalties or other sanctions that could have a material adverse effect on Codere Online’s business, financial condition and results of operations and could cause the price of the Ordinary Shares and Holdco Warrants to decline. If any such actions occur, they will, regardless of the outcome, consume a significant amount of management’s time and attention and may result in additional legal, accounting, insurance and other costs.

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Heightened scrutiny on SPACs and SPAC business combinations by regulatory bodies may adversely affect Holdco.

The SEC and other regulatory bodies have expressed concerns related to SPACs and private operating companies that, like Holdco, are going public through business combinations with SPACs. Areas of focus include potential deficiencies in the due diligence SPACs perform before acquiring assets, whether payouts to sponsors are sufficiently disclosed to investors and whether target companies may be unprepared for the rigorous financial reporting and internal control requirements expected of public companies. Heightened scrutiny is likely to result in increased SPAC-related enforcement activity which could cause investors to lose confidence in SPACs and SPAC business combinations, and may also result in increased litigation, any of which could have a material adverse effect on Holdco’s business, results of operations and financial condition and could cause a decline in the market price of Holdco’s securities.

Certain former shareholders of DD3 may pursue rescission rights and related claims.

Any Public Stockholder of DD3 who purchased Public Shares as part of the Public Units in the IPO (excluding the Sponsor and the Forward Purchasers) who did not exercise his or her Redemption Rights and held its Public Shares at the time of the Business Combination might may be able to allege that some aspects of the Business Combination are inconsistent with the disclosure contained in the prospectus issued by DD3 in connection with the offer and sale in the IPO of the Public Units, including the structure of the Business Combination, and seek rescission of the purchase of the Public Units such holder acquired in the IPO. A successful claimant for damages under federal or state law could be awarded an amount to compensate for the decrease in the value of such holder’s shares caused by the alleged violation (including, possibly, punitive damages), together with interest, while retaining the shares. If stockholders bring successful rescission claims against DD3 and/or Holdco, Holdco’s results of operations could be adversely affected and, in any event, Holdco may be required in connection with the defense of such claims to incur expenses and divert employee attention from other business matters.

Holdco may be required to take write-downs or write-offs, restructuring and impairment or other charges as a result of the Business Combination and may face litigation as a result thereof.

Holdco may be forced to write-down or write off assets, restructure its operations, or incur impairment or other charges resulting from the integration of DD3 or other elements of the Business Combination (including the Exchange) that could result in Holdco reporting losses or losses greater than those previously reported. Even though these charges may be non-cash items and may not have an immediate impact on Holdco’s liquidity, the fact that Holdco reports charges of this nature could contribute to negative market perceptions about Holdco or its securities. In addition, charges of this nature may cause Holdco to violate net worth or other covenants to which it may be subject or to be unable to obtain future financing on favorable terms or at all. Further, Shareholders who were former shareholders of DD3 may seek to claim that the resulting reduction in the value of their shares was due to the breach by DD3’s officers or directors of a duty of care or other fiduciary duty owed to them, or they may bring a private claim under securities laws that the prospectus relating to the Business Combination contained an actionable material misstatement or material omission, any of which could have a material adverse effect on Holdco’s business, results of operations and financial condition.

Holdco may face litigation as a result of the Business Combination or past actions or omissions of DD3.

Holdco may become subject to legal proceedings and claims that arise from the Business Combination or past actions or omissions of DD3 (including any outstanding claims against DD3 as of the Closing Date). Such litigation, whether or not meritorious, may result in substantial costs, divert management’s attention and resources, affect Holdco’s reputation, or otherwise have a material adverse effect on Holdco’s business, results of operations and financial condition and could cause a decline in the market price of Holdco’s securities.

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Additional Risk Factors Related to Holdco’s Securities

Holdco is controlled by Codere Newco and Codere Newco’s interests may not be aligned with Holdco’s interests or the interests of other shareholders.

Codere Newco, a member of the Codere Group, owns 66.49% of the outstanding Ordinary Shares. As long as Codere Newco owns at least 50% of the outstanding Ordinary Shares, Codere Newco will have, except as otherwise described in this prospectus, the ability to determine certain corporate actions requiring shareholder approval, including the election and removal of directors and the size of the Holdco Board unless it is already determined in the articles of association of Holdco.

Furthermore, pursuant to the Nomination Agreement, from the Closing Date until the date on which Holdco holds its second general meeting of shareholders after the Closing Date at which directors are to be elected, including any adjournment or postponement thereof (the “Sponsor Proposal Period”), the Holdco Board will consist of seven (7) directors and (i) Codere Newco will have the right to propose for appointment four (4) directors, with at least one (1) of them having to qualify as an independent director and one (1) or more of them who may be required by Codere Newco to qualify as a Luxembourg tax resident (collectively, the “Codere Newco Directors”); (ii) the Sponsor will have the right to propose for appointment two (2) directors, with at least one (1) of them having to qualify as an independent director (collectively, the “Sponsor Directors”); and (iii) Codere Newco and the Sponsor will have the right to jointly propose for appointment one (1) additional director who shall qualify as an industry expert and not be an affiliate of either Codere Newco or the Sponsor (the “Industry Expert Independent Director”). After the Sponsor Proposal Period, Codere Newco will have the right to propose for appointment five (5) directors, with at least two (2) of them having to qualify as independent directors (subject to independence requirements under applicable securities exchange rules that may require a greater number of independent directors). Both during and after the Sponsor Proposal Period, at least one (1) of the Codere Newco Directors shall qualify as a Luxembourg tax resident. This could have the effect of delaying or preventing a change in control or otherwise discouraging a potential acquirer from attempting to obtain control of Holdco, which could cause the market price of Ordinary Shares to decline or prevent shareholders from realizing a premium over the market price for Ordinary Shares. Codere Newco’s interests may conflict with Holdco’s interests as a company or the interests of Holdco’s other shareholders.

There can be no assurance that the Ordinary Shares or the Holdco Warrants will continue to be listed on Nasdaq or that Holdco will be able to comply with the continued listing standards of Nasdaq.

The Ordinary Shares and Holdco Warrants are currently listed on Nasdaq. Holdco may continue exploring the possibility of also applying to list its Ordinary Shares and Holdco Warrants on a recognized securities exchange in a member state of the European Union, which has not yet been identified, although no assurance can be given that any such additional listing will be sought or approved. If Nasdaq delists the Ordinary Shares or Holdco Warrants from trading on its exchange for failure to meet the continued listing standards, Holdco and its shareholders could face significant material adverse consequences including:

● a limited availability of market quotations for its securities;

● reduced liquidity for its securities;

● a determination that Ordinary Shares are a “penny stock” which will require brokers trading in the Ordinary Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for its securities;

● limited or no news or analyst coverage; and

● a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” So long as the Ordinary Shares and the Holdco Warrants are listed on Nasdaq, they will be covered securities. Although the states are preempted from regulating the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if Holdco ceased to be listed on Nasdaq, its securities would not be covered securities and it would be subject to regulation in each state in which it offers its securities.

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A market for the Ordinary Shares and the Holdco Warrants may not develop and the market price of such securities may be volatile.

The trading of Ordinary Shares and Holdco Warrants has and may continue to be volatile. Since the date of initial trading on December 1, 2021, the prices of the Ordinary Shares and Holdco Warrants have declined from $9.42 and $1.66 at the time of initial trading, respectively, to $4.94 and $0.46 as at February 22, 2022, with limited trading volumes. Holdco may continue exploring the possibility of also applying to list its Ordinary Shares and Holdco Warrants on a recognized securities exchange in a member state of the European Union, which has not yet been identified, although no assurance can be given that any such additional listing will be sought or approved. An active trading market for Holdco’s securities may never develop or, if developed, it may not be sustained. In addition, the price of Holdco’s securities may fluctuate significantly. Factors that could cause fluctuations in the price of such securities include:

● actual or anticipated variations in operating results and the results of competitors;

● changes in performance projections by Codere Online or by any securities analysts that might cover Holdco’s securities, if any;

● conditions or trends in the industry, including regulatory changes;

● announcements by Codere Online or its competitors of significant acquisitions, strategic partnerships or divestitures;

● announcements of investigations or regulatory scrutiny of Codere Online’s operations or lawsuits filed against it or the Codere Group;

● additions or departures of key personnel; and

● issuances or sales of Ordinary Shares, including by key investors following expiration of the lock-up arrangements.

Additionally, in the event of a secondary listing of the Ordinary Shares and the Holdco Warrants on a securities exchange in a member state of the European Union (in addition to Nasdaq), trading of the Ordinary Shares and the Holdco Warrants will take place in different currencies (U.S. dollars on Nasdaq and euros on a securities exchange in a member state of the European Union), and at different times (resulting from different time zones, different trading days and different public holidays in the United States and in the relevant member state of the European Union). The trading prices of Ordinary Shares and Holdco Warrants on these two markets may differ due to these and other factors and Holdco cannot predict the effect of this potential dual listing on the value of the Ordinary Shares or the Holdco Warrants. Further, the dual listing of the Ordinary Shares and the Holdco Warrants may reduce the liquidity of these securities in one or both markets and may adversely affect the development of an active trading market for the Ordinary Shares and the Holdco Warrants in the United States.

Further, if Holdco’s securities become delisted from Nasdaq or, if applicable, the relevant securities exchange in a member state of the European Union for any reason, the liquidity and price of such securities may be more limited than if they were quoted or listed on Nasdaq or such other securities exchange. Moreover, broad general economic, political, market and industry factors may adversely affect the price of Holdco’s securities, regardless of Codere Online’s actual operating performance.

You may be unable to sell your securities unless a market can be established or sustained.

If securities or industry analysts do not publish or cease publishing research or reports about Holdco, its business, or its market, or if they change their recommendations regarding the Ordinary Shares adversely, then the price and trading volume of the Ordinary Shares could decline.

The trading market for the Ordinary Shares may be influenced by the research reports that industry or securities analysts may publish about Holdco, its business, its market, or its competitors. If securities or industry analysts do not publish or cease publishing research or reports about Holdco, the Ordinary Share price and trading volume would likely be negatively impacted. If any of the analysts who may cover Holdco change their recommendation regarding the Ordinary Shares adversely, or provide more favorable relative recommendations about Holdco’s competitors, the price of the Ordinary Shares would likely decline. If any analyst were to cease coverage of Holdco or fail to regularly publish reports on it, Holdco could lose visibility in the financial markets, which could cause the Ordinary Share price and/or trading volume (and, consequently, the price and/or trading volume of the Holdco Warrants) to decline.

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Holdco may issue additional Ordinary Shares or other equity securities without your approval, which would dilute your ownership interest and may depress the market price of the Ordinary Shares.

As of the date of this prospectus, Holdco has 45,121,956 issued and outstanding Ordinary Shares. Holdco’s articles of association authorize Holdco to issue Ordinary Shares and rights relating to Ordinary Shares for the consideration and on the terms and conditions established by the Holdco Board in its sole discretion, whether in connection with financings, acquisitions, investments, equity incentive plans or otherwise. Any Ordinary Shares issued, including in connection with the exercise of Holdco Warrants or any equity incentive plans that Holdco may adopt in the future, would dilute the percentage ownership held by you.

Holdco’s issuance of additional Ordinary Shares or other equity securities of equal or senior rank could have the following effects:

● Holdco’s existing shareholders’ proportionate ownership interest in Holdco will decrease;

● the amount of cash available per share, including for payment of dividends in the future, may decrease;

● the relative voting strength of each previously outstanding Ordinary Share may be diminished; and

● the market price of the Ordinary Shares and Holdco Warrants may decline.

Holdco may amend the terms of the Holdco Warrants in a manner that may be adverse to holders with the approval by the holders of at least 50% of the then outstanding Holdco Public Warrants. As a result, the exercise price of such warrants could be increased, the exercise period could be shortened and the number of Ordinary Shares purchasable upon exercise of a warrant could be decreased, all without your approval.

The terms of the Holdco Warrants may be amended without the consent of any holder (i) to cure any ambiguity or correct any mistake or to cure, correct or supplement any defective provision, or (ii) to add or change any other provisions with respect to matters or questions that the parties deem to not adversely affect the interests of the registered holders of the Holdco Warrants. In addition, Holdco may amend the terms of the Holdco Warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding Holdco Public Warrants approve of such amendment. The ability to amend the terms of such warrants is unlimited and examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash or stock, shorten the exercise period or decrease the number of shares of Ordinary Shares purchasable upon exercise of a warrant.

Holdco may redeem your unexpired Holdco Warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

None of the Holdco Private Warrants will be redeemable by Holdco so long as they are held by the initial purchasers of the Private Warrants or their permitted transferees. Once such Holdco Private Warrants are transferred (other than to permitted transferees under the Warrant Agreement), Holdco may redeem such Holdco Private Warrants in the same manner as the Holdco Public Warrants. Holdco may redeem Holdco Public Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of the Ordinary Shares equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within a 30 trading-day period commencing at any time after the Holdco Warrants become exercisable and ending on the third business day prior to proper notice of such redemption provided that on the date Holdco gives notice of redemption and during the entire period thereafter until the time Holdco redeems the warrants, Holdco has an effective registration statement under the Securities Act covering the Ordinary Shares issuable upon exercise of the Holdco Warrants and a current prospectus relating to them is available. As of the date of this prospectus, the trading price of Ordinary Shares has not reached the $18.00 threshold. If and when the Holdco Warrants become redeemable by Holdco, Holdco may exercise its redemption right even if Holdco is unable to register or qualify the underlying securities for sale under all applicable state securities laws. In the event Holdco determined to redeem the Holdco Public Warrants, holders would be notified of such redemption as described in the Warrant Agreement. Specifically, Holdco would be required to fix a date for the redemption (the “Redemption Date”). Notice of redemption would be mailed by first class mail, postage prepaid, by Holdco not less than 30 days prior to the Redemption Date to the registered holders of the Holdco Public Warrants to be redeemed at their last addresses as they appear on the registration books. In addition, beneficial owners of the redeemable warrants will be notified of such redemption via Holdco’s posting of the redemption notice to DTC. Redemption of the Holdco Public Warrants could force you (i) to exercise your Holdco Public Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your Holdco Public Warrants at the then-current market price when you might otherwise wish to hold your Holdco Public Warrants or (iii) to accept the nominal redemption price which, at the time the Holdco Public Warrants are called for redemption, is likely to be substantially less than the market value of your Holdco Public Warrants.

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There can be no assurance that the Holdco Warrants will be in the money at the time they become exercisable or thereafter, and they may expire worthless.

The exercise price for the Holdco Warrants is $11.50 per Ordinary Share (subject to adjustment), and the exercise period will commence 30 days following the Closing and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. There can be no assurance that the Holdco Warrants will be in the money following the time they become exercisable and prior to their expiration, and as such, the Holdco Warrants may expire worthless.

It is not anticipated that any dividend will be paid to the Holdco Shareholders for the foreseeable future.

There are no current plans to pay cash dividends on the Ordinary Shares. The declaration, amount and payment of any future dividends will be at the sole discretion of the Holdco Board. The Holdco Board may take into account general and economic conditions, Holdco’s financial condition and operating results, Holdco’s available cash, current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, implications on the payment of dividends by Holdco to its shareholders and such other factors as the Holdco Board may deem relevant. Accordingly, Holdco is not expected to pay any dividends on the Ordinary Shares in the foreseeable future.

The sale of Ordinary Shares and/or Holdco Warrants by the Selling Securityholders may adversely affect the market price of Holdco’s securities.

Under the Subscription Agreements, Holdco agreed that, within 30 calendar days after the Closing, Holdco would file with the SEC the Registration Statement (as defined in the Subscription Agreements) registering the Ordinary Shares received by the Subscribers in connection with the Business Combination. In addition, pursuant to the Registration Rights and Lock-Up Agreement, Holdco agreed that, within 30 calendar days after the Closing Date, it would file with the SEC a registration statement to permit the public resale of certain Ordinary Shares and Holdco Warrants (including underlying securities) held by the Holders (as defined in the Registration Rights and Lock-Up Agreement). The registration statement of which this prospectus forms part aims to fulfill these contractual obligations. Any future sale of these additional Ordinary Shares and Holdco Warrants and their trading in the public market may have an adverse effect on the market price of Holdco’s securities.

Risks Related to Investment in a Luxembourg Company and Holdco’s Status as a Foreign Private Issuer and Emerging Growth Company

As long as Holdco is a foreign private issuer, Holdco is exempt from a number of U.S. securities laws and rules promulgated thereunder and is permitted to publicly disclose less information than U.S. public companies. This may limit the information available to holders of Holdco’s securities.

Holdco qualifies as a “foreign private issuer,” as defined in the SEC’s rules and regulations, and, consequently, Holdco is not subject to all of the disclosure requirements applicable to public companies organized within the United States. For example, Holdco is exempt from certain rules under the Exchange Act that regulate disclosure obligations and procedural requirements related to the solicitation of proxies, consents or authorizations applicable to a security registered under the Exchange Act. In addition, Holdco’s senior managers and directors are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and related rules with respect to their purchases and sales of Holdco’s securities. For example, some of Holdco’s key executives may sell a significant amount of Ordinary Shares and such sales are not required to be disclosed as promptly as public companies organized within the United States would have to disclose. Accordingly, once such sales are eventually disclosed, the price of Holdco’s securities may decline significantly. Moreover, Holdco is not be required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. public companies. Holdco is also not be subject to Regulation FD under the Exchange Act, which would prohibit Holdco from selectively disclosing material nonpublic information to certain persons without concurrently making a widespread public disclosure of such information. Accordingly, there may be less publicly available information concerning Holdco than there is for U.S. public companies.

As a foreign private issuer, Holdco is required to file an annual report on Form 20-F within four months of the close of each fiscal year ended December 31 and furnish reports on Form 6-K relating to certain material events promptly after Holdco publicly announces these events. However, because of the above exemptions for foreign private issuers, which Holdco relies on, Holdco Shareholders are not afforded the same information generally available to investors holding shares in U.S. public companies that are not foreign private issuers.

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Holdco may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses. This would subject Holdco to U.S. GAAP reporting requirements which may be difficult for it to comply with.

As a “foreign private issuer,” Holdco would not be required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act and related rules and regulations. Under those rules, the determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect to Holdco on June 30, 2022.

In the future, Holdco could lose its foreign private issuer status if a majority of its ordinary shares are held by residents in the United States and it fails to meet any one of the additional “business contacts” requirements. Although Holdco intends to follow certain practices that are consistent with U.S. regulatory provisions applicable to U.S. companies, Holdco’s loss of foreign private issuer status would make such provisions mandatory. The regulatory and compliance costs to Holdco under U.S. securities laws if it is deemed a U.S. domestic issuer may be significantly higher. If Holdco is not a foreign private issuer, Holdco will be required to file periodic reports and prospectuses on U.S. domestic issuer forms with the SEC, which are more detailed and extensive than the forms available to a foreign private issuer. In addition, Holdco would become subject to Regulation FD, aimed at preventing issuers from making selective disclosures of material information. Holdco also may be required to modify certain of its policies to comply with good governance practices associated with U.S. domestic issuers. Such conversion and modifications will involve additional costs. In addition, Holdco may lose its ability to rely upon exemptions from certain corporate governance requirements of Nasdaq that are available to foreign private issuers. For example, Nasdaq’s corporate governance rules require listed companies to have, among other things, a majority of independent board members and independent director oversight of executive compensation, nomination of directors, and corporate governance matters. Nasdaq rules also require shareholder approval of certain share issuances, including approval of equity compensation plans. As a foreign private issuer, Holdco is permitted to follow home country practice in lieu of the above requirements. As long as Holdco relies on the foreign private issuer exemption to certain of Nasdaq’s corporate governance standards, a majority of the directors on the Holdco Board are not required to be independent directors, it is not required to have a compensation committee, it is not required to have a nominating and corporate governance committee and it is not required to obtain shareholder approval of equity compensation plans. Also, Holdco would be required to change its basis of accounting from IFRS as issued by the IASB to U.S. GAAP, which may be difficult and costly for it to comply with. If Holdco loses its foreign private issuer status and fails to comply with U.S. securities laws applicable to U.S. domestic issuers, Holdco may have to de-list from Nasdaq and could be subject to investigation by the SEC, Nasdaq and other regulators, among other materially adverse consequences.

If Holdco no longer qualifies as a foreign private issuer, it may be eligible to take advantage of certain exemptions from Nasdaq’s corporate governance standards if it continues to qualify as a “controlled company.” As of the date of this prospectus, Codere Newco owns approximately 66.49% of the issued and outstanding Ordinary Shares. As a result, Holdco is a “controlled company” within the meaning of Nasdaq rules. Under these rules, a company in respect of which more than 50% of the voting power for the election of directors is held by an individual, a group, or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including:

● the requirement that a majority of its board of directors consist of independent directors;

● the requirement that compensation of its senior managers be determined by a majority of the independent directors of the board or a compensation committee comprised solely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and

● the requirement that director nominees be selected, or recommended for the board’s selection, either by a majority of the independent directors of the board or a nominating and corporate governance committee comprised solely of independent directors with a written charter addressing the committee’s purpose and responsibilities.

As long as Holdco elects to take advantage of these exemptions, holders of Holdco’s securities will not have the same protections afforded to holders of securities of companies that are subject to all the Nasdaq corporate governance standards.

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The JOBS Act permits “emerging growth companies” like Holdco to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies.

Holdco currently qualifies as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. As such, Holdco takes advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as it continues to be an emerging growth company, including the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act. As a result, Holdco Shareholders may not have access to certain information they deem important.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as it is an emerging growth company. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. Holdco has elected to avail itself of such extended transition period, which means that when a standard is issued or revised, and it has different application dates for public or private companies, Holdco, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of Holdco’s financial statements with those of another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Holdco cannot predict if investors will find the Ordinary Shares and/or Holdco Warrants less attractive because it relies on these exemptions. If some investors find the Ordinary Shares and/or Holdco Warrants less attractive as a result, there may be a less active trading market and the price for the Ordinary Shares and/or Holdco Warrants may be more volatile.

Holdco may not qualify as an emerging growth company in the future and may incur increased legal, accounting and compliance costs associated with Section 404 of the Sarbanes-Oxley Act or other matters as a result.

Holdco is organized under the laws of Luxembourg and substantially all of its assets are located outside the United States. It may be difficult for you to obtain or enforce judgments or bring original actions against Holdco or the members of its board of directors in the United States.

Holdco is organized under the laws of the Grand Duchy of Luxembourg. In addition, substantially all of its assets are located outside the United States. Furthermore, we understand that all but one of Holdco’s directors and members of the senior management team reside outside the United States as of the date of this prospectus. Investors may not be able to effect service of process within the United States upon Holdco or these persons or enforce judgments obtained against Holdco or these persons in U.S. courts, including judgments in actions predicated upon the civil liability provisions of the U.S. federal securities laws. Likewise, it also may be difficult for an investor to enforce in U.S. courts judgments obtained against Holdco or these persons in courts located in jurisdictions outside the United States, including judgments predicated upon the civil liability provisions of the U.S. federal securities laws. Awards of punitive damages in actions brought in the United States or elsewhere are generally not enforceable in Luxembourg.

As there is no treaty in force on the reciprocal recognition and enforcement of judgments in civil and commercial matters between the United States and Luxembourg, courts in Luxembourg will not automatically recognize and enforce a final judgment rendered by a U.S. court. A valid judgment obtained from a court of competent jurisdiction in the United States may be entered and enforced through a court of competent jurisdiction in Luxembourg, subject to compliance with the enforcement procedures (exequatur). The enforceability in Luxembourg courts of judgments rendered by U.S. courts will be subject, prior to any enforcement in Luxembourg, to the procedure and the conditions set forth in the Luxembourg procedural code, which conditions may include the following as of the date of this prospectus (which may change):

● the judgment of the U.S. court is final and enforceable (exécutoire) in the United States;

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● the U.S. court had jurisdiction over the subject matter leading to the judgment (that is, its jurisdiction was in compliance both with Luxembourg private international law rules and with the applicable domestic U.S. federal or state jurisdictional rules);

● the U.S. court applied to the dispute the substantive law that would have been applied by Luxembourg courts (based on recent case law and legal doctrine, it is not certain that this condition would still be required for an exequatur to be granted by a Luxembourg court);

● the judgment was granted following proceedings where the counterparty had the opportunity to appear and, if it appeared, to present a defense, and the decision of the foreign court must not have been obtained by fraud, but in compliance with the rights of the defendant;

● the U.S. court acted in accordance with its own procedural laws; and

● the decisions and the considerations of the U.S. court must not be contrary to Luxembourg’s international public policy rules or have been given in proceedings of a tax or criminal nature or rendered subsequent to an evasion of Luxembourg law (fraude à la loi). Awards of damages made under civil liabilities provisions of the U.S. federal securities laws, or other laws, which are classified by Luxembourg courts as being of a penal or punitive nature (for example, fines or punitive damages), might not be recognized by Luxembourg courts. Ordinarily, an award of monetary damages would not be considered as a penalty, but if the monetary damages include punitive damages, such punitive damages may be considered a penalty.

In addition, actions brought in a Luxembourg court against Holdco, the members of the Holdco Board, its senior managers, or the experts named herein to enforce liabilities based on U.S. federal securities laws may be subject to certain restrictions. In particular, Luxembourg courts generally do not award punitive damages. Litigation in Luxembourg also is subject to rules of procedure that differ from the U.S. rules, including, with respect to the taking and admissibility of evidence, the conduct of the proceedings and the allocation of costs. Proceedings in Luxembourg would have to be conducted in the French or German language, and all documents submitted to the court would, in principle, have to be translated into French or German. For these reasons, it may be difficult for a U.S. investor to bring an original action in a Luxembourg court predicated upon the civil liability provisions of the U.S. federal securities laws against Holdco, the members of the Holdco Board, its senior managers, or the experts named herein. In addition, even if a judgment against Holdco, the members of the Holdco Board, its senior managers, or the experts named in this prospectus based on the civil liability provisions of the U.S. federal securities laws is obtained, a U.S. investor may not be able to enforce it in U.S. or Luxembourg courts.

Pursuant to article 8.10 of the articles of association of Holdco, subject to the exceptions and limitations listed below and mandatory provisions of Luxembourg law, the directors, senior managers or agents of Holdco will be entitled to indemnification from Holdco to the fullest extent permitted by Luxembourg law against liability and expenses reasonably incurred or paid by him or her in connection with any claim, action, suit, or proceeding in which he or she would be involved by virtue of his or her being or having been a director, senior manager or agent of Holdco and against amounts paid or incurred by him or her in the settlement thereof. Luxembourg law permits Holdco to keep directors indemnified against any expenses, judgments, fines and amounts paid in connection with liability of a director towards a third party for breach of the articles of association of Holdco or of the provisions of the 1915 Law, except in connection with criminal offenses, bad faith, willful misconduct, gross negligence or fraud. The rights to and obligations of indemnification among or between Holdco and any of its current or former directors and senior managers are generally governed by the laws of Luxembourg and subject to the jurisdiction of the Luxembourg courts, unless such rights or obligations do not relate to or arise out of such persons’ capacities listed above. Although there is doubt as to whether U.S. courts would enforce this indemnification provision in an action brought in the United States under U.S. federal or state securities laws, this provision could make it more difficult to obtain judgments outside Luxembourg or from non-Luxembourg jurisdictions that would apply Luxembourg law against Holdco’s assets in Luxembourg.

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Luxembourg and European insolvency and bankruptcy laws are substantially different from U.S. insolvency and bankruptcy laws and may offer Holdco Shareholders less protection than they would have under U.S. insolvency and bankruptcy laws.

As a company organized under the laws of the Grand Duchy of Luxembourg and with its registered office in Luxembourg, Holdco is subject to Luxembourg insolvency and bankruptcy laws in the event any insolvency proceedings are initiated against it, including, among other things, Council and European Parliament Regulation (EU) 2015/848 of May 20, 2015 on insolvency proceedings (recast). Should courts in another European country determine that the insolvency and bankruptcy laws of that country apply to Holdco in accordance with and subject to such European Union regulations, the courts in that country could have jurisdiction over the insolvency proceedings initiated against Holdco. Insolvency and bankruptcy laws in Luxembourg or the relevant other European country, if any, may offer Holdco Shareholders less protection than they would have under U.S. insolvency and bankruptcy laws and make it more difficult for them to recover the amount they could expect to recover in a liquidation under U.S. insolvency and bankruptcy laws.

The rights of Holdco Shareholders may differ from the rights they would have as shareholders of a United States corporation, which could adversely impact trading in Ordinary Shares and Holdco’s ability to conduct equity financings.

Holdco’s corporate affairs are governed by Holdco’s articles of association and the laws of the Grand Duchy of Luxembourg, including the 1915 Law. The rights of Holdco Shareholders and the responsibilities of its directors and senior managers under Luxembourg law are different from those applicable to a corporation incorporated in the United States. For example, under Delaware law, the board of directors of a Delaware corporation bears the ultimate responsibility for managing the business and affairs of a corporation. In discharging this function, directors of a Delaware corporation owe fiduciary duties of care and loyalty to the corporation and its stockholders. Luxembourg law imposes a duty on directors of a Luxembourg company to: (i) act in good faith with a view to the best interests of a company; and (ii) exercise the care, diligence, and skill that a reasonably prudent person would exercise in a similar position and under comparable circumstances. Although under Delaware law the board of directors bears the ultimate responsibility for management, in certain circumstances a stockholder may bring a derivative action on behalf of a corporation to enforce a corporation’s rights against fiduciaries. Under Luxembourg law, the board of directors has sole authority to decide whether to initiate legal action to enforce a company’s rights (other than, in certain circumstances, an action against members of the Holdco Board, which may be initiated by the general meeting of the shareholders, or, subject to certain conditions, by minority shareholders holding together at least 10% of the voting rights in the company). Further, under Luxembourg law, there may be less publicly available information about Holdco than is regularly published by or about U.S. issuers. In addition, Luxembourg laws governing the securities of Luxembourg companies may not be as extensive as those in effect in the United States, and Luxembourg laws and regulations in respect of corporate governance matters might not be as protective of minority shareholders as are state corporation laws in the United States. Therefore, Holdco Shareholders may have more difficulty in protecting their interests in connection with actions taken by Holdco’s directors, senior managers or principal shareholders than they would as shareholders of a corporation incorporated in the United States. As a result of these differences, Holdco Shareholders may have more difficulty protecting their interests than they would as shareholders of a U.S. issuer.

Foreign direct investment restrictions in Spain may be applicable if any foreign investor holds directly or indirectly 10% or more of the share capital of Holdco.

The Spanish Government has enacted restrictions regarding foreign direct investment (“FDI”) in Spain. As a general rule, if a foreign investor (i.e., a non-EU or non-EFTA investor, or a EU and EFTA investor that is deemed to be beneficially owned by a non-EU or non-EFTA investor) acquires, directly or indirectly, 10% or more of a Spanish entity’s share capital (including, potentially, Holdco’s Spanish subsidiaries), or otherwise acquires control of such entity, such investment needs to be pre-approved by the relevant Spanish authorities if the Spanish entity operates in one of the sectors that according to article 7.bis of Spanish Law 19/2003, of July 4, have an impact on the public security, public order or public health or if such foreign investor is either (i) controlled directly or indirectly by a foreign government (including federal governments, governmental agencies, armed forces and equivalent public entities); (ii) has invested in other EU member states in sectors which may have an impact on the public security, public order or public health of such member state; and (iii) there is a risk that such investor carries out illegal activities which affect public order, public security and/or public health of Spain. Failure to obtain such prior approval, where required, will render an acquisition null and void. In addition, sanctions could be imposed in an amount equivalent to the restricted investment.

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Risks Relating to U.S. Taxes

The Internal Revenue Service may not agree that Holdco should be treated as a non-U.S. corporation for U.S. federal income tax purposes.

A corporation is generally considered for U.S. federal income tax purposes to be a tax resident in the jurisdiction of its organization or incorporation. Accordingly, under the generally applicable U.S. federal income tax rules, Holdco, which is incorporated under the laws of Luxembourg, should be classified as a non-U.S. corporation (and, therefore, not a U.S. tax resident) for U.S. federal income tax purposes. However, Section 7874 of the Internal Revenue Code of 1986, as amended (the “Code”) provides an exception to this general rule. Under Section 7874, a corporation created or organized outside the United States will nevertheless be treated as a U.S. corporation for U.S. federal income tax purposes (and, therefore, as a U.S. tax resident subject to U.S. federal income tax on its worldwide income) if each of the following three conditions are met: (i) the non-U.S. corporation, directly or indirectly, acquires substantially all of the properties held directly or indirectly by a U.S. corporation (including through the acquisition of all of the outstanding shares of the U.S. corporation); (ii) the non-U.S. corporation’s “expanded affiliated group” does not have “substantial business activities” in the non-U.S. corporation’s country of organization or incorporation and tax residence relative to the expanded affiliated group’s worldwide activities (this test is referred to as the “substantial business activities test”); and (iii) after the acquisition, the former shareholders of the acquired U.S. corporation hold at least 80%, or in certain circumstances 60%, as described below (by either vote or value) of the shares of the non-U.S. acquiring corporation by reason of holding shares in the U.S. acquired corporation (taking into account the receipt of the non-U.S. corporation’s shares in exchange for the U.S. corporation’s shares) as determined for purposes of Section 7874 (this test is referred to as the “Ownership Test”). Where the non-U.S. acquiring corporation is a tax resident of a different jurisdiction than an acquired non-U.S. corporation acquired in connection with the acquisition of the U.S. corporation, the Ownership Test will generally be satisfied if the shareholders of the acquired U.S. corporation receive at least 60% of the stock of the non-U.S. acquiring corporation. Under Treasury regulations, in certain circumstances shareholders of the acquired U.S. corporation may be treated as owning stock of the non-U.S. acquiring corporation for purposes of the Ownership Test in excess of their actual ownership stake in the non-U.S. acquiring corporation. Since Holdco is incorporated under the laws of Luxembourg, the Ownership Test would generally be satisfied if the stockholders of DD3 were treated as owning at least 60% of the stock of Holdco on the Merger date.

For purposes of Section 7874 of the Code the first two conditions described above were met with respect to the Business Combination because Holdco acquired indirectly all of the assets of DD3 through the Merger, and Holdco, including its “expanded affiliated group,” did not satisfy the substantial business activities test upon consummation of the Merger. As a result, whether Section 7874 applies to cause Holdco to be treated as a U.S. corporation for U.S. federal income tax purposes following the Merger would depend on the satisfaction of the Ownership Test.

Based upon the terms of the Merger and the rules for determining share ownership under Section 7874 and the Treasury Regulations promulgated thereunder, Holdco believes that for purposes of the Ownership Test the ownership percentage of DD3 stockholders in Holdco was less than 60%. Accordingly, Holdco believes that it should not be treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874. However, the rules for determining ownership under Section 7874 are complex, unclear in some respects, and the subject of ongoing and recent legislative and regulatory review. Accordingly, there can be no assurance that the Internal Revenue Service (“IRS”) would not assert a contrary position or that such an assertion would not be sustained by a court.

If Holdco were treated as a U.S. corporation for U.S. federal income tax purposes, it could be subject to substantial liability for additional U.S. income taxes. In addition, the gross amount of any dividend paid to its non-U.S. shareholders could be subject to 30% U.S. withholding tax, subject to the provisions of any applicable income tax treaty.

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If Holdco is a passive foreign investment company for U.S. federal income tax purposes for any taxable year, U.S. holders of Ordinary Shares or Holdco Warrants could be subject to adverse U.S. federal income tax consequences.

If Holdco is treated as a “passive foreign investment company” (a “PFIC”), within the meaning of Section 1297 of the Code for any taxable year during which a U.S. shareholder holds Ordinary Shares, certain adverse U.S. federal income tax consequences may apply to such U.S. shareholder. PFIC status depends on the composition of a company’s income and assets and the fair market value of its assets from time to time, as well as on the application of complex statutory and regulatory rules that are subject to potentially varying or changing interpretations. Based on the composition of Holdco income and assets, and value of its assets including goodwill (which is based in part on the current price of the Ordinary Shares), Holdco does not expect to be a PFIC for its 2021 taxable year. However, because the tests for determining PFIC status are applied annually after the close of each taxable year and it is difficult to predict accurately future income and assets relevant to this determination, because Holdco holds a substantial amount of cash, and because the price of the Ordinary Shares may fluctuate significantly (and has declined since the closing of the Merger), there can be no assurance that Holdco will not be a PFIC for any taxable year.

If Holdco were treated as a PFIC, a U.S. shareholder generally would be subject to adverse U.S. federal income tax consequences, such as taxation at the highest marginal ordinary income tax rates on capital gains and on certain actual or deemed distributions, interest charges on certain taxes treated as deferred, and additional reporting requirements. Under proposed Treasury regulations that have a retroactive effective date, if finalized, options to acquire stock of a PFIC would be subject to the same rules. Certain elections (such as a mark-to-market election) may be available to U.S. shareholders to mitigate some of the adverse tax consequences resulting from PFIC treatment, but U.S. holders will not be able to make similar elections with respect to the Holdco Warrants. See “Material U.S. Federal Income Tax Considerations—U.S. Holders—Passive Foreign Investment Company Rules.”

If a U.S. person is treated as owning at least 10% of Ordinary Shares, such person may be subject to adverse U.S. federal income tax consequences.

If a U.S. person is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of Ordinary Shares, such person may be treated as a “United States shareholder” with respect to any of Holdco’s direct and indirect non-U.S. subsidiaries (together, “Holdco Group”) that is a “controlled foreign corporation,” or CFC, for U.S. federal income tax purposes. Because the Holdco Group includes DD3, which is a U.S. subsidiary, under constructive ownership attribution rules Holdco’s non-U.S. subsidiaries could be treated as CFCs even if Holdco itself is not a CFC.

If Holdco or any of its subsidiaries is a CFC, 10% “United States shareholders” will be subject to adverse income inclusion and reporting requirements. Holdco is not required to assist holders in determining whether Holdco or any of its non-U.S. subsidiaries is treated as a CFC or whether any holder is treated as a United States shareholder with respect to any of such CFCs or furnish to any holder information that may be necessary to comply with reporting and tax paying obligations.

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Use of Proceeds

All of the Ordinary Shares and Holdco Private Warrants offered by the Selling Securityholders pursuant to this prospectus will be sold by the Selling Securityholders for their respective accounts. We will not receive any of the proceeds from these sales.

We will receive up to an aggregate of approximately $71,875,000 from the exercise of the Holdco Public Warrants and $2,127,500 from the exercise of the Holdco Private Warrants, assuming the exercise in full of all such Holdco Warrants for cash. We expect to use the net proceeds from the exercise of the Holdco Warrants for general corporate purposes. Our management will have broad discretion over the use of proceeds from the exercise of the Holdco Warrants.

There is no assurance that the holders of the Holdco Warrants will elect to exercise any or all of the Holdco Warrants. To the extent that the Holdco Private Warrants are exercised on a “cashless basis,” the amount of cash we would receive from the exercise of the Holdco Warrants will decrease.

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Market Price of our Securities

The Ordinary Shares and Holdco Warrants began trading on Nasdaq under the symbols “CDRO” and “CDROW,” respectively, on December 1, 2021. On February 22, 2022, the closing sale prices of the Ordinary Shares and Holdco Warrants were $4.94 and $0.46, respectively.

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Unaudited Pro Forma Combined Financial Information

Introduction

The following unaudited pro forma combined financial information is being provided to aid you in your analysis of the financial aspects of the Business Combination.

The unaudited pro forma combined statement of financial position as of June 30, 2021 gives pro forma effect to the Business Combination as if it had been consummated as of that date. The unaudited pro forma combined income statements for the six months ended June 30, 2021 and the twelve months ended December 31, 2020 gives pro forma effect to the Business Combination as if it had occurred as of January 1, 2020, the beginning of the earliest period presented. This information should be read together with the Annual Combined Carve-out Financial Statements, the Interim Combined Carve-out Condensed Financial Statements, DD3’s audited financial statements as of September 30, 2021 and for the period from September 30, 2020 (inception) through September 30, 2021 and related notes included in this prospectus and elsewhere in the registration statement of which this prospectus forms part, DD3’s unaudited restated interim financial statements as of June 30, 2021 and for the period from September 30, 2020 (inception) through June 30, 2021, as included in the Restated Q3 10-Q and DD3’s unaudited restated interim financial statements as of December 31, 2020 and for the period from September 30, 2020 (inception) through December 31, 2020, as included in the Restated Q1 10-Q, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Selected Combined Carve-Out Financial Data of Codere Online”, “Selected Historical Financial Data of DD3” and other financial information included elsewhere in this prospectus.

The unaudited pro forma combined statement of financial position as of June 30, 2021 has been prepared using the following:

● Codere Online Business’s unaudited interim combined carve-out condensed statement of financial position as of June 30, 2021, as included elsewhere in this prospectus, including the Interim Combined Carve-out Condensed Financial Statements; and

● DD3’s unaudited restated condensed balance sheet as of June 30, 2021, as included in the Restated Q3 10-Q, including DD3’s unaudited restated financial statements as of June 30, 2021.

The unaudited pro forma combined income statement for the six months ended June 30, 2021 has been prepared using the following:

● Codere Online Business’s unaudited interim combined carve-out condensed income statement for the six months ended June 30, 2021, as included elsewhere in this prospectus, including the Interim Combined Carve-out Condensed Financial Statements; and

● DD3’s restated condensed statement of operations was derived from the unaudited restated condensed statement of operations of DD3 for the period from September 30, 2020 (inception) through June 30, 2021, as included in the Restated Q3 10-Q after deducting the unaudited restated condensed statement of operations of DD3 for the period from September 30, 2020 (inception) through December 31, 2020, as included in the Restated Q1 10-Q.

The unaudited pro forma combined income statement for the year ended December 31, 2020 has been prepared using the following:

● Codere Online Business’s combined carve-out income statement for the year ended December 31, 2020, as included elsewhere in this prospectus, in the Annual Combined Carve-out Financial Statements; and

● DD3’s unaudited restated condensed statement of operations for the period from September 30, 2020 (inception) through December 31, 2020, as included in the Restated Q1 10-Q. DD3’s audited financial statements as of September 30, 2021 and for the period from September 30, 2020 (inception) through September 30, 2021 have not been used in the preparation of this unaudited pro forma combined financial information.

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The Interim Combined Carve-out Condensed Financial Statements included in this prospectus and elsewhere in the registration statement of which this prospectus forms part have been prepared in accordance with IAS 34, “Interim Financial Reporting” issued by the IASB and in its presentation currency of the Euro. The Interim Combined Carve-out Condensed Financial Statements do not include all of the information required for full annual financial statements and should be read in conjunction with the Annual Combined Carve-out Financial Statements. The restated financial statements of DD3 included in the Restated Q3 10-Q and the Restated Q1 10-Q have been prepared in accordance with U.S. GAAP in its presentation currency of United States dollars. The restated financial statements of DD3 have been adjusted to give effect to the differences between U.S. GAAP and IFRS for the purposes of the unaudited pro forma combined statement of financial position as of June 30, 2021 and the unaudited pro forma combined income statements for the six months ended June 30, 2021 and for the year ended December 31, 2020 (see below).

The restated financial statements of DD3 have been translated into Euros for purposes of the unaudited pro forma combined statement of financial position as of June 30, 2021 (see below).

The unaudited pro forma combined financial information has been presented for informational purposes only and is not necessarily indicative of what Codere Online’s actual financial position or results of operations would have been had the Business Combination been completed as of the dates indicated. In addition, the unaudited pro forma combined financial information does not purport to project the future financial position or operating results of Codere Online. The unaudited pro forma combined financial information is presented for illustrative purposes only, is based on certain assumptions, addresses a hypothetical situation and reflects limited historical financial data. In particular, the pro forma combined financial information was prepared based on actual figures for DD3 redemptions and transaction costs related to the Business Combination applied retrospectively to the historical financial information of DD3 and Codere Online as of the dates and for the periods described above. The assumptions and estimates underlying the unaudited pro forma adjustments are described in the accompanying notes. Actual results may differ materially from the assumptions used to present the unaudited pro forma combined financial information. Management of Codere Online and DD3 made significant estimates and assumptions in the determination of the pro forma adjustments. As the unaudited pro forma combined financial information has been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented. As a result, this unaudited pro forma combined financial information should be read in conjunction with the financial information indicated above.

Description of the Business Combination

Under the principles established in the Business Combination Agreement, among other things, (i) Codere Newco contributed the SEJO Ordinary Shares to Holdco in exchange for additional ordinary shares of Holdco that were subscribed for by Codere Newco (the Exchange), (ii) as a result of the Exchange, SEJO became a wholly-owned subsidiary of Holdco and Codere Newco continued to hold all the issued and outstanding Ordinary Shares and (iii) Merger Sub merged with and into DD3, with DD3 surviving such merger and becoming a direct wholly-owned subsidiary of Holdco (the Merger).

Accounting for the Business Combination

The Business Combination was structured in two steps. First, a capital reorganization where Codere Newco contributed the SEJO Ordinary Shares to Holdco in exchange for additional ordinary shares of Holdco that were subscribed for by Codere Newco (the Exchange). As a result of the Exchange, SEJO became a wholly-owned subsidiary of Holdco and Holdco continued to be a wholly-owned subsidiary of Codere Newco. This first step of the Business Combination is accounted for as a business combination under common control, using predecessor values. The acquisition of DD3 took place as a second step after the internal reorganization, which is accounted for within the scope of IFRS 2 (Share-based Payment). Under this method of accounting, there is no business combination accounting and no recognition of goodwill, as a result of DD3 not being recognized as a business as defined by IFRS 3 (Business Combination) given it consisted predominantly of cash in the Trust Account. On the basis of the guidance in IFRS 2:13A on unidentifiable goods and services, any difference between the fair value of the shares deemed to have been issued by the accounting acquirer (Holdco) and the fair value of the accounting acquiree’s (DD3) identifiable net assets represents a service received by the accounting acquirer; and regardless of the level of monetary or non-monetary assets owned by the non-listed operating entity, the entire difference should be considered to be payment for a service of a stock exchange listing for its shares, and no amount should be considered a cost of raising capital. Such service received in the form of a stock exchange listing is preliminarily estimated to be $40.7 (€34.2) million (see calculation below) and does not meet the definition of an asset and, therefore, is recognized as an expense.

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Basis of Pro Forma Presentation

The adjustments presented on the unaudited pro forma combined financial information have been identified and presented to provide an understanding of the Combined Company upon consummation of the Business Combination explained above for illustrative purposes.

The following unaudited pro forma combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” Release No. 33-10786 replaces the existing pro forma adjustment criteria with simplified requirements to depict the accounting for the Business Combination (“Transaction Accounting Adjustments”) and present the reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). Holdco has elected not to present Management’s Adjustments and will only be presenting Transaction Accounting Adjustments in the unaudited pro forma combined financial information. The adjustments presented in the unaudited pro forma combined financial information have been identified and presented to provide relevant information necessary for an understanding of the Company upon consummation of the Business Combination.

The financial results may have been different had the companies always been combined. You should not rely on the unaudited pro forma combined financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the results that the Combined Company have experienced in any periods following the consummation of the Business Combination or will experience in the future. Codere Online and DD3 have not had any historical relationship prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

The unaudited restated financial statements of DD3 have been adjusted to give effect to the differences between U.S. GAAP and IFRS for the purposes of the unaudited pro forma combined financial information. For purposes of the unaudited pro forma combined statement of financial position as of June 30, 2021, two adjustments were required to convert DD3’s unaudited restated condensed balance sheet as of June 30, 2021 from U.S. GAAP to IFRS: (i) the reclassification of shares of DD3 Class A Common Stock subject to redemption from mezzanine equity to current liabilities and (ii) the reclassification of the Public Warrants from equity to current liabilities. For purposes of the unaudited pro forma combined income statements for the six months ended June 30, 2021 and for the year ended December 31, 2020, the conversion from U.S. GAAP to IFRS required adjusting DD3’s unaudited restated condensed statement of operations of DD3 for the period from September 30, 2020 (inception) through June 30, 2021 and for the period from September 30, 2020 (inception) through December 31, 2020 to reflect the reclassification of the Public Warrants from equity to current liabilities. The adjustments presented in the unaudited pro forma combined financial information have been identified and presented to provide relevant information necessary for an accurate understanding of the Combined Company after giving effect to the Business Combination.

The unaudited pro forma combined financial information has been prepared on the basis of the redemption of 7,584,044 shares of DD3 Class A Common Stock into cash by Public Stockholders upon the consummation of the Business Combination, at a redemption price of approximately $10 (€8.88) per share. After giving effect to the redemptions, there was approximately $116 million (€103 million) of cash held inside and outside of the Trust Account, including (i) the aggregate amount of proceeds from certain institutional investors (Baron, MG, Larrain and DD3 Capital and their permitted transferees) pursuant to the Forward Purchase Agreements and Subscription Agreements (together, with their permitted transferees, the “Institutional Investors”) and (ii) proceeds resulting from the fact that Baron and certain other Public Stockholders did not redeem a total of 4,915,956 Public Shares in connection with the Business Combination.

Included in the shares outstanding and weighted average shares outstanding as presented in the unaudited pro forma combined financial information are an aggregate of 30,000,000 Ordinary Shares that were held by Codere Newco at the time of the consummation of the Business Combination.

In addition, immediately prior to the consummation of the Business Combination, there were 6,435,000 DD3 Warrants issued and outstanding, consisting of 6,250,000 Public Warrants and 185,000 Private Warrants. Each whole DD3 Warrant entitled the holder thereof to purchase one share of DD3 Class A Common Stock at a price of $11.50 per share (subject to adjustment). Upon conversion of the DD3 Warrants into Holdco Warrants, such warrants represented the right purchase one Ordinary Share at a price of $11.50 per share (subject to adjustment). See “Description of Securities–Holdco Warrants” for further information on the Holdco Warrants.

57

The following table summarizes the pro forma weighted average number of Ordinary Shares outstanding. The weighted average number of shares computation that is used in the calculation of the loss per share excludes the effect of Holdco Warrants to purchase 6,435,000 Ordinary Shares because the inclusion of any of these securities would be anti-dilutive in a loss per share scenario.

	Pro Forma Combined
Weighted average shares calculation, basic and diluted
Ordinary Shares issued in exchange for Public Shares(1)		3,915,956
Ordinary Shares issued in exchange for Private Shares		370,000
Of which:
Held by Sponsor		296,000
Held by other Private Shareholders		74,000
Ordinary Shares issued in exchange for DD3 Class B Common Stock		3,125,000
Other Ordinary Shares issued to Institutional Investors(2)		7,711,000
Ordinary Shares held by Codere Newco		30,000,000
Weighted Average Ordinary Shares Outstanding, basic and diluted		45,121,956
Percentage held by Codere Newco		66.5	%
Percentage held by Public Stockholders(1)		8.8	%
Percentage held by Sponsor and permitted transferees(3)		7.6	%
Percentage held by Institutional Investors(4)		17.1	%

Note: Percentages may not add to 100% due to rounding.

(1) Consists of 3,915,956 Ordinary Shares held by Public Stockholders that did not redeem their shares of DD3 Class A Common Stock (excludes Ordinary Shares issued in exchange for 996,069 Baron IPO Shares and 3,931 additional Public Shares acquired by Baron in the IPO).

(2) Consists of 7,711,000 Ordinary Shares issued in exchange for (i) 6,711,000 shares of DD3 Class A Common Stock issued pursuant to the Forward Purchase Agreements and the Subscription Agreements and (ii) 996,069 Baron IPO Shares and 3,931 additional Public Shares acquired by Baron in the IPO. Excludes Ordinary Shares issued in exchange for Private Shares and shares of DD3 Class B Common Stock.

(3) Consists of 3,421,000 Ordinary Shares issued to the Sponsor and its permitted transferees in exchange for 3,125,000 shares of DD3 Class B Common Stock and 296,000 Private Shares.

(4) Consists of 7,785,000 Ordinary Shares issued in exchange for (i) 6,711,000 shares of DD3 Class A Common Stock issued pursuant to the Forward Purchase Agreements and the Subscription Agreements, (ii) 996,069 Baron IPO Shares and 3,931 additional Public Shares acquired by Baron in the IPO and (iii) 74,000 Private Shares. Excludes Ordinary Shares issued in exchange for shares of DD3 Class B Common Stock.

58

UNAUDITED Pro Forma Combined STATEMENT OF FINANCIAL POSITION

AS OF JUNE 30, 2021

(in thousands of Euros)

	Codere Online Business (IFRS Historical)			DD3 (U.S. GAAP Historical) in USD		DD3 (U.S. GAAP Historical) converted into Euros (1)		DD3 IFRS conversion (2)			DD3 (U.S. GAAP Historical) as converted		Transaction Accounting Adjustments (Assuming Real Redemptions)				Pro Forma Combined (Assuming Real Redemptions as of June 30, 2021)
Non-Current Assets
Intangible assets		782			-		-		-			-		-				782
Property, plant and equipment		113			-		-		-			-		-				113
Right-of-use assets		3			-		-		-			-		-				3
Cash and marketable securities held in Trust Account		-			125,039		105,217		-			105,217		(105,217	)	(9)		-
Total Non-Current Assets		898			125,039		105,217		-			105,217		(105,217	)			898
Current Assets
Trade receivables and other current assets		1,173			167		141		-			141		-				1,314
Current financial assets		3,330			-		-		-			-		-				3,330
Cash and cash equivalents		6,584			386		325		-			325		(3,698	)	(3)		89,780
														(63,851	)	(11)
														56,504		(5)
														105,217		(9)
														(11,301	)	(10)
Total Current Assets		11,087			553		466		-			466		82,871				94,424
Total Assets		11,985			125,592		105,683		-			105,683		(22,346	)			95,322
Liabilities and Shareholders’ Equity
Non-Current Liabilities
Borrowings		-			-		-		-			-		-				-
Lease obligations		-			-		-		-			-		-				-
Warrant liability		-			287		241		8,047			8,288		-				8,288
Ordinary shares subject to redemption		-			-		-		-			-		-				-
Total Non-Current Liabilities		-			287		241		8,047			8,288		-				8,288
Current Liabilities
Lease obligations		3			-		-		-			-		-				3
Provisions		49			163		137		-			137		-				186
Accrued offering costs		-			-		-		-			-		-				-
Borrowings		1,139			-		-		-			-		-				1,139
Trade payables and other current liabilities		18,749			-		-		-			-		(3,698	)	(3)		15,051
Ordinary shares subject to redemption		-			-		-		97,137			97,137		(97,137	)	(6)		-
Total Liabilities		19,940			450		379		105,184			105,563		(100,835	)			24,668
Class A common stock subject to possible redemption					125,000		105,184		(105,184	)		-
Shareholders’ Equity
Codere Online (SEJO)
Share capital		60			-		-		-			-		(60	)	(4)		-
Retained earnings (accumulated deficit)		(47,308	)		-		-		-			-		47,308		(4)		-
Translation reserve		1,061			-		-		-			-		(1,061	)	(4)		-
Other reserves		38,107			-		-		-			-		(38,107	)	(4)		-
Minority Interest		125			-		-		-			-		(125	)	(4)		-
DD3
Class A common stock		-			-		-		-			-		1		(5)		-
														1		(6)
														(2	)	(7)
Class B common stock		-			-		-		-			-		-				-
Additional paid in capital		-			-		-		111			111		56,504		(5)		-
														97,136		(6)
														(153,751	)	(8)
Accumulated deficit		-			142		120		(111	)		9		(9	)	(8)		-
Holdco
Share capital		-			-		-		-			-		30,000		(4)		45,122
														15,122		(8)
Share premium		-			-		-		-			-		9,353		(4)		113,381
														(63,851	)	(11)
														2		(7)
														172,900		(8)
														(5,023	)	(10)
Retained earnings (accumulated deficit)		-			-		-		-			-		(6,278	)	(10)		(87,849	)
														(34,263	)	(8)
														(47,308	)	(4)
Other reserves		-			-		-		-			-		-				-
Total Shareholders’ Equity		(7,955	)		142		120		-			120		78,489				70,654
Total Liabilities and Shareholders’ Equity		11,985			125,592		105,683		-			105,683		(22,346	)			95,322

59

Transaction Accounting Adjustments to the unaudited Pro forma Combined Statement of Financial Position

(in thousands of Euros, except share and per-share data)

The Codere Online balance sheet was derived from the unaudited combined carve-out statement of financial position of Codere Online Business as of June 30, 2021. The DD3 balance sheet was derived from the unaudited restated condensed balance sheet of DD3 as of June 30, 2021.

The adjustments included in the unaudited pro forma combined statement of financial position as of June 30, 2021 are as follows:

Reclassification/Alignment

(1) The unaudited restated financial statements of DD3 as of June 30, 2021 were prepared in accordance with U.S. GAAP and presented in U.S. dollars. The unaudited condensed balance sheet was translated from U.S. dollars to EUR using the closing exchange rate, as of June 30, 2021, of €0.84147 per $1.00.

(2) Reflects the U.S. GAAP to IFRS conversion adjustment related to the reclassification of DD3’s mezzanine equity (Class A Common Stock subject to possible redemption) into Current Liabilities (Borrowings) and the reclassification of the Public Warrants from equity to warrant liabilities due, among others, to the change in the functional currency of the issuer of the warrant following the initial recognition of the instrument by DD3. Private Warrants were classified as warrant liabilities under U.S. GAAP. The fair value of DD3’s Public Warrants ($9.6 (€8.0) million) has been determined based on the closing prices for DD3 Public Warrants as of June 30, 2021 ($1.53) converted into Euros at a rate of €0.84147 per $1.00. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value will be recognized in the Income Statement. The fair value of DD3’s Private Warrants ($0.3 (€0.2) million) correspond to the fair value presented in DD3’s restated financial statements as of June 30, 2021.

(3) Prior to the Business Combination, Codere Online Business distributed all the cash in excess of the restricted cash (amounts held on behalf of customers in their player accounts/wallets and cash deposited in a bank guarantee in Panama) (i.e. contribution of the business on cash-free basis) recorded in the Codere Online Business’s unaudited combined carve-out statement of financial position as of June 30, 2021. The cash distribution results in a reduction in the Cash and cash equivalents balance ($4.2 (€3.7) million) with a corresponding impact in Trade payables and other current liabilities.

Transaction Accounting Adjustments

(4) Pursuant to the Business Combination, Codere Newco contributed shares representing 100% of the share capital of SEJO to Holdco in exchange for additional Ordinary Shares that were subscribed for by Codere Newco. As a result, the adjustment reflects the non-monetary contribution of the ordinary shares of SEJO at book value ($-8.9 (€-7.9) million). Holdco equity is presented considering a total of 30 million Ordinary Shares issued and outstanding at a nominal value of €1.00 per share with the corresponding difference between SEJO book values ($-53.2 (€-47.3) million) presented in share premium.

(5) Reflects the $77.1 (€68.5) million cash received through the primary issuance of 7.71 million DD3 Shares to certain institutional investors (Baron, MG and DD3 Capital) and their permitted transferees pursuant to the Forward Purchase Agreements and the Subscription Agreements for $10 (€8.88) per share, at a nominal value of $0.0001 per share with the corresponding difference in Additional paid in capital, immediately prior to the Business Combination.

(6) Reflects the reclassification of 12,500,000 DD3 Class A Common Stock shares subject to possible redemption from Current Liabilities (Borrowings) into DD3 equity at a redemption value of $10 (€8.88) per share with a nominal value of $0.0001 per share with the corresponding difference in Additional paid in capital.

(7) Reflects the exchange of each of the 3,125,000 shares of DD3 Class B Common Stock for one share of DD3 Class A Common Stock and the subsequent exchange of all shares of Class A Common Stock issued and outstanding after the redemption mentioned in item (6) above and after the Class B Conversion, for the right to receive one Ordinary Share for each share of DD3 Class A Common Stock.

60

(8) The Merger is accounted for under IFRS 2 as DD3 is not considered to be a business under IFRS 3. To reflect the combination, the equity of DD3 is eliminated and the equity of Holdco stays as the accounting acquirer. The difference in the fair value of Ordinary Shares transferred to holders of DD3 Common Stock in excess of the net assets of DD3 represents a service cost for listing of Ordinary Shares and is accounted for as a share-based payment in accordance with IFRS 2. The cost of the service, which is a non-cash expense, is preliminarily estimated to be $40.7 (€34.2) million and is accounted for as an expense for Holdco at the time of the consummation of the Business Combination.

	Per Share Value*		Shares		Fair Value (in 000s)
Shares of Class B Common Stock	€	7.93		3,125,000	€	24,771
Shares of Class A Common Stock**	€	7.93		5,282,025	€	44,869
DD3 Warrants	€	1.40		6,435,000	€	8,989
				14,842,025	€	75,629
Net assets of DD3					€	41,366
Excess of net assets					€	34,263

^* Closing prices as of November 30, 2021 for shares of DD3 Class A Common Stock and DD3 Warrants were $9.42 and $1.66 per security, respectively, converted into Euros at a rate of €0.84147 per $1.00.

** Consists of (i) 3,915,956 shares of DD3 Class A Common Stock held by Public Stockholders that did not redeem their shares, (ii) the Private Shares and (iii) the Baron IPO Shares.

(9) To reflect the release of cash from marketable securities held in the Trust Account.

Fees

(10) To reflect the payment of an aggregate of up to $13.4 (€11.9) million of DD3 and Codere Online transaction expenses related to the Business Combination. Transaction costs incurred by DD3, $5.9 (€5.0) million, have been considered incremental cost and reflected as a reduction in Cash and Cash Equivalents and a corresponding reduction in Share Premium, however, transaction costs incurred by Codere Online, $7.5 (€6.3) million, have been reflected as a reduction in Cash and Cash Equivalents and a corresponding reduction in Retained Earnings (i.e. increase in accumulated deficit). Codere Online’s cost expensed through accumulated deficit is included in the unaudited pro forma combined income statement for the year ended December 31, 2020.

Redemption

(11) Reflects DD3 stockholders exercising their redemption rights for cash, amounting to $75.9 (€63.9) million of the total $125 (€105) million held in the Trust Account.

61

UNAUDITED Pro Forma Combined INCOME STATEMENT

SIX MONTHS ENDED JUNE 30, 2021

(in thousands of Euros, except share and per share data)

	Codere Online Business (IFRS Historical)			DD3 (U.S. GAAP Historical) in USD			DD3 (U.S. GAAP Historical) converted into Euros (12)			DD3 IFRS conversion (13)		DD3 (U.S. GAAP Historical) as converted			Transaction Accounting Adjustments (Assuming Real Redemptions)				Pro Forma Combined (Assuming Real Redemptions) for the period ended June 30, 2021
Revenue		39,944			-			-			-		-			-				39,944
													-
Personnel expenses		(2,985	)		-			-			-		-			-				(2,985	)
Depreciation and amortization		(377	)		-			-			-		-			-				(377	)
Other operating expenses		(49,695	)		-			-			-		-			-				(49,695	)
Formation and operating costs		-			(281	)		(234	)		-		(234	)		-				(234	)
Total operating expenses		(53,057	)		(281	)		(234	)		-		(234	)		-				(53,291	)
Operating income/(loss)		(13,113	)		(281	)		(234	)		-		(234	)		-				(13,347	)
Finance income		-			-			-			-		-			-				-
Finance costs		68			-			-			-		-			-				68
Interest earned on marketable securities held in trust account		-			39			32			-		32			(32	)	(16)		-
Unrealized loss on marketable securities held in trust account		-			1			1			-		1			(1	)	(16)		-
Change in fair value of warrant liability		-			(104	)		(86	)		89		3			-				3
Net financial results		68			(64	)		(53	)		89		36			(33	)			71
Net income/(loss) before tax		(13,045	)		(345	)		(287	)		89		(198	)		(33	)			(13,276	)
Income tax benefit/(expense)		(222	)		-			-			-		-			(14	)	(17)		(236	)
Net income/(loss) for the year		(13,267	)		(345	)		(287	)		89		(198	)		(47	)			(13,512	)
Attributable to equity holders of the Parent		(13,300	)										(198	)		(47	)			(13,512	)
Attributable to non-controlling interests		33																		-
Weighted average shares outstanding, basic and diluted		60,000			3,183,095			3,183,095												45,121,956
Basic and diluted earnings per share attributable to equity holders of the parent (Euro)		(221.67	)		(0.11	)		(0.09	)											(0.30	)

62

UNAUDITED Pro Forma Combined INCOME STATEMENT

TWELVE MONTHS ENDED DECEMBER 31, 2020

(in thousands of Euros, except share and per share data)

	Codere Online Business (IFRS Historical)			DD3 (U.S. GAAP Historical) in USD			DD3 (U.S. GAAP Historical) converted into Euros (12)			DD3 IFRS conversion (13)			DD3 (U.S. GAAP Historical) as converted			Transaction Accounting Adjustments (Assuming Real Redemptions)				Pro Forma Combined (Assuming Real Redemptions) for the year ended December 31, 2020
Revenue		70,497			-			-			-			-			-				70,497
Personnel expenses		(5,157	)		-			-			-			-			-				(5,157	)
Depreciation and amortization		(932	)		-			-			-			-			-				(932	)
Other operating expenses		(78,657	)		-			-			-			-			(34,263	)	(14)		(119,198	)
																	(6,278	)	(15)
Formation and operating costs		-			(87	)		(76	)		-			(76	)		-				(76	)
Total operating expenses		(84,746	)		(87	)		(76	)		-			(76	)		(40,541	)			(125,363	)
Operating income/(loss)		(14,249	)		(87	)		(76	)		-			(76	)		(40,541	)			(54,866	)
Finance income		-			-			-			-			-			-				-
Finance costs		(520	)		-			-			-			-			281		(16)		(239	)
Interest earned on marketable securities held in trust account		-			5			4			-			4			(4	)	(16)		-
Unrealized loss on marketable securities held in trust account		-			(6	)		(5	)		-			(5	)		5		(16)		-
Change in fair value of warrant liability		-			(74	)		(65	)		(209	)		(274	)		-				(274	)
Net financial results		(520	)		(75	)		(66	)		(209	)		(275	)		282				(513	)
Net income/(loss) before tax		(14,769	)		(162	)		(142	)		(209	)		(351	)		(40,259	)			(55,379	)
Income tax benefit/(expense)		(1,510	)		-			-			-			-			10,117		(17)		8,607
Net income/(loss) for the year		(16,279	)		(162	)		(142	)		(209	)		(351	)		(30,142	)			(46,772	)
Attributable to equity holders of the Parent		(16,274	)											(351	)		(30,142	)			(46,772	)
Attributable to non-controlling interests		(5	)											-			-				-
Weighted average shares outstanding, basic and diluted		60,000			2,569,457			2,569,457													45,121,956
Basic and diluted earnings per share attributable to equity holders of the parent (Euro)		(271.23	)		(0.06	)		(0.06	)												(1.04	)

63

Transaction Accounting Adjustments to the unaudited Pro forma Combined Income Statement

(in thousands of Euros, except share and per-share data)

The Codere Online income statement was derived from the unaudited combined carve-out income statement of Codere Online Business for the six months ended June 30, 2021 and the combined carve-out income statement of Codere Online Business for the year ended December 31, 2020. The DD3 income statement was derived from the unaudited restated condensed statement of operations of DD3 for (i) the period from September 30, 2020 (inception) through June 30, 2021 after deducting the first quarter from the unaudited restated condensed statement of operations of DD3 and (ii) the period from September 30, 2020 (inception) through December 31, 2020.

The adjustments included in the unaudited pro forma combined statement income statement from January 1, 2020 through June 30, 2021 are as follows:

Reclassification/Alignment

(12) The unaudited restated financial statements of DD3 as of June 30, 2021 were prepared in accordance with U.S. GAAP and presented in U.S. dollars. The unaudited condensed income statement was translated from U.S. dollar to EUR using the average exchange rate for each period, January 1, 2021 to June 30, 2021 €0.83008 per $1.00 and the period from September 30, 2020 (inception) through December 31, 2020 €0.87589 per $1.00.

(13) Reflects the fair value change of the Public Warrants, as detailed in item (2) above. The adjustment in the unaudited pro forma income statement for the twelve months ended December 31, 2020 and for the six months ended June 30, 2021 amounts to $-0.2 (€-0.2) million and $0.1 (€0.1) million, respectively.

Transaction Accounting Adjustments

(14) The Merger is accounted for under IFRS 2, as detailed in item (8) above. The adjustment includes the IFRS 2 service cost that has been adjusted in the unaudited pro forma income statement for the twelve months ended December 31, 2020, although it is a nonrecurring adjustment in nature.

Fees

(15) The Codere Online transaction expenses related to the Business Combination explained in item (10) have been reflected in the unaudited combined carve-out income statement of the combined entities for the twelve months ended December 31, 2020, although it is a nonrecurring adjustment in nature. The $7.5 (€6.3) million represent the best estimate of these transaction expenses as established in section 11.03 of the Business Combination Agreement.

(16) Represents an adjustment to eliminate interest income on marketable securities in the amount of $39 (€32) thousand and $5 (€4) thousand for the six months ended June 30, 2021 and the period from September 30, 2020 (inception) through December 31, 2020, respectively, to eliminate unrealized losses on marketable securities in the amount of $1 (€1) thousand and $6 (€5) thousand for the six months ended June 30, 2021 and the period from September 30, 2020 (inception) through December 31, 2020, respectively, held in the Trust Account as of the beginning of the period and to eliminate interest expenses related to the Codere Online Business indebtedness capitalization explained in the Interim Combined Carve-out Condensed Financial Statements in the amount of $321 (€281) thousand for the period from September 30, 2020 (inception) through December 31, 2020. For the six months ended June 30, 2021 there were no interest expense recognized in the Codere Online Business income statement consequently no elimination has been performed in the unaudited pro-forma Income Statement for that period.

(17) To record normalized blended statutory income tax benefit rate of 25%, which is the statutory rate in Spain, for pro forma financial presentation purposes resulting in the recognition of an income tax benefit.

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Loss per share

The calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that DD3’s initial public offering occurred as of the beginning of the earliest period presented. In addition, as the Business Combination is being reflected as if it had occurred at the beginning of the periods presented, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares have been outstanding for the entire periods presented. This calculation is retroactively adjusted to eliminate the number of shares redeemed for the entire period. The loss per share computation performed below excludes the effect of the DD3 Warrants to purchase 6,435,000 shares of DD3 Class A Common Stock because the inclusion of any of these securities would be anti-dilutive in a loss per share scenario.

(in thousands of EUR, except share and per share information)	Pro Forma Combined
Six Months Ended June 30, 2021
Loss for the period attributable to the owners of the parent		(13,512	)
Basic attributable loss per share	€	(0.30	)
Diluted attributable loss per share	€	(0.30	)
Twelve Months Ended December 31, 2020
Loss for the year attributable to the owners of the parent		(46,772	)
Basic attributable loss per share	€	(1.04	)
Diluted attributable loss per share	€	(1.04	)
Pro forma weighted average number of shares outstanding		45,121,956
Basic pro forma weighted average number of shares outstanding		45,121,956
Diluted pro forma weighted average number of shares outstanding		45,121,956

65

Management’s Discussion and Analysis of
Financial Condition and Results of Operations

The following discussion and analysis provides information which Codere Online’s management believes is relevant to an assessment and understanding of Codere Online’s results of operations and financial condition. This discussion and analysis should be read together with the section of this prospectus entitled “Selected Historical Combined Carve-Out Financial Data of Codere Online,” “Selected Historical Financial Data of Holdco” and the Interim Combined Carve-out Condensed Financial Statements, the Annual Combined Carve-out Financial Statements and the Holdco Financial Statements that are included elsewhere in this prospectus. This discussion and analysis should also be read together with the section of this prospectus entitled “Business” and the unaudited pro forma combined financial information that are included elsewhere in this prospectus.

In addition to historical financial information, this discussion and analysis contains forward-looking statements based upon current expectations that involve risks, uncertainties and assumptions. See the section entitled “Cautionary Note Regarding Forward-Looking Statements.” Actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” or elsewhere in this prospectus.

This discussion and analysis contains certain financial measures, in particular the presentation of EBITDA, which are not presented in accordance with IFRS. These non-GAAP financial measures are being presented because they provide Codere Online’s management and readers of this prospectus with additional insight into Codere Online’s operational performance relative to historical periods and relative to its competitors. These non-GAAP financial measures are not a substitute for any IFRS financial information. Readers of this prospectus should use these non-GAAP financial measures only in conjunction with the comparable IFRS financial measures. Reconciliations of EBITDA to Net Income/(Loss), the most comparable IFRS measure, are provided in this prospectus.

For purposes of this section, references to financial data of Codere Online refer to financial data of the Codere Online Business.

Overview

Codere Online is an international online casino gaming and sports betting company focused on providing its customers with a safe and enjoyable online gaming experience. Codere Online currently operates primarily in Spain, Italy, Mexico, Colombia, Panama and, since December 2021, the City of Buenos Aires (Argentina), where it offers its users the ability to play online casino games and bet on sports events. Codere Online seeks to innovate and expand its product offering on its established and flexible technology platform as it pursues its vision to be the leading online casino gaming and sports betting operator in Latin America. Codere Online maintains a wide and updated catalogue of online casino games with over 1,300 titles from more than 30 third-party content providers.

As part of the Codere Group, Codere Online expects to leverage the “Codere” brand, a well-recognized brand in the gaming industry across Spain and Latin America, by providing customers with an online gaming experience consistent with the Codere Group’s retail footprint. The Codere Group is a leading international gaming operator founded in 1980 with a presence across Spain, Italy and Latin America, including in all of the markets where Codere Online operates. The Codere Group had nearly 57,000 slots in over 10,000 controlled and third-party retail venues throughout Latin America, Spain and Italy as of December 31, 2019 (approximately 34,000 slots and 9,700 retail venues as of June 30, 2021 and 23,000 slots and 6,600 retail venues as of December 31, 2020, as a result of COVID-19 temporary closings).

In 2014, the Codere Group entered into the online gaming business in Spain to pursue new avenues of growth and diversification of its revenue streams, first through Desarrollo Online de Juegos Regulados, S.A. and CDON, and Codere Apuestas, S.A.U. in Madrid, Spain, and afterwards independently through Codere Online, which was created to lead the Codere Group’s expansion into the online casino gaming and sports betting markets beyond Spain. To enhance its business, in 2018, the Codere Group recruited an experienced online management team led by industry veteran Moshe Edree with top tier online casino gaming and sports betting expertise. As of the date of this prospectus, Codere Online has approximately 165 employees, including directors, intermediate managers, technicians and administrative personnel based in Spain, Mexico, Colombia, Panama, Argentina, Israel, Malta and Gibraltar. Codere Online operates under the “Codere” brand across all of its markets.

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Codere Online believes it is well-positioned for continued growth with the support of the “Codere” brand, its dedicated and highly-experienced management team and an established and flexible technology platform, and due to other macroeconomic and industry tailwinds. Codere Online believes that this privileged combination of expertise, brand recognition and infrastructure across multiple jurisdictions will not only support its continued success in the markets in which it operates, but also allow Codere Online to capture market share in existing markets and in other expansion markets in the future. In particular, Codere Online seeks to expand into other markets in Latin America (many of which are expected to be regulated in the near future), including Brazil, Chile, Peru, Puerto Rico and Uruguay, as well as Argentina (beyond the City of Buenos Aires, where it started operating in December 2021), subject to obtaining the required regulatory approvals once such markets become regulated. Additionally, Codere Online intends to pursue options to access the large Hispanic market in the United States (an estimated 60 million people as of 2019, according to the U.S. Census Bureau) in the future.

Codere Online’s product offering and platform are designed to create exciting online casino gaming and sports betting experiences for its customers. Codere Online’s established and flexible technology platform has an extensive track record of successfully serving its customers and provides the business with a solid foundation for future growth.

Codere Online has established itself as a leading operator across a number of markets since it began operations. According to Codere Online’s estimates, Codere Online’s market share in the online gaming markets of Mexico, Colombia, Panama and Spain ranged between approximately 3% and 11% in each of such markets in terms of net gaming revenue. Codere Online estimates that it had the second largest market share in both Mexico and Panama online gaming markets in terms of net gaming revenue. Codere Online’s management believes that current market shares have been adversely affected by the financial constraints faced by the Codere Group and are not fully reflective of Codere Online’s potential. In the future, Codere Online expects to use a substantial part of the proceeds of the Business Combination, which was consummated in November 2021, to fund customer acquisition costs. Such proceeds, paired with the fact that Codere Online’s marketing spend is currently estimated to be below market leaders in Spain and Mexico and the other competitive advantages detailed herein, are expected to serve as a foundation for its plan to seek a rapid acquisition of customers and market share growth in Spain, Mexico and our other markets.

In the City of Buenos Aires, where Codere Online started operating in December 2021, Codere Online, through Iberargen S.A., was the first operator to receive approval for its platform implementation program in October 2020 by the City of Buenos Aires’ regulator, LOTBA (Lotería de Buenos Aires). In addition, Codere Online expects to benefit from the Codere Group’s leading retail presence in the Province of Buenos Aires, where it operates 13 bingo halls and has approximately a 42% market share (based on gross gaming revenue according to Codere Online’s estimates as of February 2020).

For the six months ended June 30, 2021, Codere Online’s revenues grew to €39.9 million compared to €30.0 million for the six months ended June 30, 2020, mainly due to strong revenue trends in Spain, despite regulatory headwinds, and substantial growth achieved across Latin America on the back of a significant increase in average monthly active players, partially due to the impact from the COVID-19 pandemic on sporting events (i.e. cancellation of events) during the six months ended June 30, 2020. Codere Online’s revenues grew to €70.5 million for the year ended December 31, 2020 from €61.6 million for the year ended December 31, 2019 driven mainly by substantial growth of online casino wagering in Spain and Mexico, partially offset by a decrease in sports betting activity, which was negatively impacted by the cancellation or postponement of sporting events as a result of the COVID-19 pandemic.

Recent Trading and Certain Other Recent Developments

For the nine months ended September 30, 2021, Codere Online’s net gaming revenue (calculated as shown in the second table immediately below) grew to €61.9 million compared to €51.1 million for the nine months ended September 30, 2020, as a result mainly of the 51% period-on-period increase in net gaming revenue in Mexico. Net gaming revenue in Spain increased by 10% period-on-period, but the overall performance was adversely affected by the changes in regulation that came into effect starting in May 2021, with the three months ended September 30, 2021 being the first full quarter of operations in which the ability to offer player bonuses and other marketing activities has been curtailed.

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The following table sets forth the distribution of our net gaming revenue by geographic area for the three months ended September 30, 2021 and 2020 and for the nine months ended September 30, 2021 and 2020.

	For the three months ended September 30,							For the nine months ended September 30,
(in thousands of euros)	2021		2020		%			2021		2020		%
Net Gaming Revenue
Spain		11.6		12.3		(6	%)		37.2		33.8		10	%
Mexico		7.1		5.6		26	%		19.9		13.2		51	%
Colombia		0.9		0.8		8	%		3.1		1.8		75	%
Other		0.7		0.9		(25	%)		1.7		2.2		(25	%)
Total		20.2		19.7		3	%		61.9		51.1		21	%

Note: Amounts in the table above have been subject to rounding adjustments. Percentages in the table above have been calculated on the basis of such amounts prior to rounding.

The following table reconciles the total net gaming revenue figures shown above with our accounting revenue.

	For the three months ended September 30,							For the nine months ended September 30,
(in thousands of euros)	2021		2020		%			2021		2020		%
Accounting Revenue		19.1		18.7		2	%		59.1		48.6		22	%
(+) Accounting Adjustments(1)		1.1		1.0		7	%		2.8		2.5		12	%
Net Gaming Revenue		20.2		19.7		3	%		61.9		51.1		21	%

Note: Amounts in the table above have been subject to rounding adjustments. Percentages in the table above have been calculated on the basis of such amounts prior to rounding.

(1) Accounting adjustments primarily reflect differences in recognition of revenue related to certain partner and affiliate agreements in place in Colombia and our ‘.com’ business, which Codere Online disposed of on December 31, 2021, along with the value added tax (VAT) impact from entry fees in Mexico.

The following table shows our average monthly active players by geographic area for the periods indicated.

	For the three months ended September 30,							For the nine months ended September 30,
(in thousands)	2021		2020		%			2021		2020		%
Average Monthly Active Players(1)
Spain		28.2		29.0		(3	%)		32.2		25.7		25	%
Mexico		16.8		16.0		5	%		17.0		12.1		40	%
Colombia		18.1		8.8		105	%		16.4		7.4		120	%
Other		0.9		0.1		n.m.			0.7		0.2		277	%
Total		64.0		54.0		19	%		66.2		45.4		46	%

Note: Amounts in the table above have been subject to rounding adjustments. Percentages in the table above have been calculated on the basis of such amounts prior to rounding.

(1) “Active players” are defined as players that have placed a real money bet (i.e., excludes free bets) in the period.

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The Restructuring Agreements were entered into in Colombia, Panama and the City of Buenos Aires (Argentina) on November 15, 2021, except for the agreement that Codere Online Panama and ALTA entered into on December 1, 2021. Such Restructuring Agreements generally govern the terms and conditions of, among other things, the assignment by the relevant Codere Group entity of assets, contracts, employees and permits, as applicable, necessary for the operation of the online gaming business by the Codere Online entity in Colombia, Panama and the City of Buenos Aires (Argentina), respectively, subject to the required authorizations. See “Certain Relationships and Related Party Transactions—Material Agreements.”

On November 30, 2021, the Business Combination was consummated. The transaction resulted in gross proceeds of approximately $116 million to Codere Online, or approximately $103 million net of transaction fees and expenses. The Ordinary Shares and Holdco Warrants began trading on the Nasdaq Capital Market on December 1, 2021, under the symbols “CDRO” and “CDROW,” respectively. Codere Online became the first online gaming operator in Latin America to become publicly listed in the United States.

In December 2021, LOTBA authorized Codere Online (through a license granted to Iberargen, S.A.) to start operating in the City of Buenos Aires (Argentina).

Going Concern

The report issued by Ernst & Young, S.L., Codere Online’s independent registered public accounting firm, on the Annual Combined Carve-out Financial Statements includes an explanatory paragraph describing conditions that raise substantial doubt about Codere Online’s ability to continue as a going concern as described in Note 3(m) to the Annual Combined Carve-out Financial Statements. The Annual Combined Carve-out Financial Statements, the Interim Combined Carve-out Condensed Financial Statements and the 3Q Combined Carve-out Financial Information do not include any adjustments that might result from Codere Online’s inability to continue as a going concern. In November 30, 2021, subsequent to the issuance of the foregoing report by Ernst & Young, S.L., Codere Online completed the Business Combination, which resulted in gross proceeds of approximately $116 million to Codere Online, or approximately $103 million net of transaction fees and expenses. Accordingly, Codere Online expects the cash received from the Business Combination will be sufficient to fund Codere Online’s operations for at least twelve months. However, Codere Online’s expectation may prove to be inaccurate, Codere Online could spend its available financial resources much faster than currently expected and may have to seek additional external funding to finance its future operations. If Codere Online is unable to raise capital when needed or on acceptable terms, Codere Online could be forced to delay, reduce or eliminate its marketing and new territory expansion efforts. If Codere Online is unable to continue as a going concern, investors could suffer the loss of all or a substantial portion of their investment.

Incorporation of Holdco and Preparation of Holdco Financial Statements, Interim Combined Carve-out Condensed Financial Statements, Annual Combined Carve-out Financial Statements and 3Q Combined Carve-out Financial Information

Holdco was incorporated on June 4, 2021 and did not engage in any operations nor generate any revenues before the Exchange was completed on November 29, 2021. Holdco’s only activities until then were organizational activities and those necessary to prepare for the Business Combination. Holdco expects its expenses (and, to a lesser extent, its revenue) to increase substantially as a result of the consummation of the Exchange.

Given that Holdco has not had any significant operations until the consummation of the Exchange, the Holdco Financial Statements contain only a balance as of June 30, 2021 and the accompanying notes. Holdco’s incorporation is also accounted for in the Interim Combined Carve-out Condensed Financial Statements and the 3Q Combined Carve-out Financial Information. However, as Holdco did not exist during the periods covered by the Annual Combined Carve-out Financial Statements, it is not accounted for in the Annual Combined Carve-out Financial Statements.

As explained in greater detail in Notes 1 and 2 to the Annual Combined Carve-out Financial Statements, the combined carve-out financial information reflects the combination of the results of all of the entities and/or businesses that form the Codere Online Business. Except as provided in the Business Combination Agreement with respect to Mexico, where Codere Online operates under an “Asociación en Participación” or “AenP” (an unincorporated joint venture) with LIFO (the entity which holds the LIFO License) as asociante, and SEJO as asociado, pursuant to which SEJO has the right to receive 99.99% of any distributed profits (see “Certain Relationships and Related Party Transactions—Material Agreements—AenP Agreement”), Codere Newco was required to transfer to Holdco the Codere Online Business in accordance with the Business Combination Agreement or, if that was not possible, enter into Restructuring Agreements. Except as indicated below with respect to Colombia, Panama and the City of Buenos Aires (Argentina), upon the consummation of the Exchange, the Codere Online Business was transferred to Holdco. The transfer was structured in two steps: first, the transfer to SEJO of all the relevant entities and/or businesses that form the Codere Online Business that were not direct or indirect subsidiaries or businesses of SEJO as of the date of the Business Combination Agreement (as part of the Restructuring) and, secondly, the transfer of SEJO to Holdco (as part of the Exchange).

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In Spain and Italy, CDON and Codere Scommese S.r.l., respectively, were transferred to, and became wholly-owned subsidiaries of, SEJO, which became in turn a subsidiary of Holdco upon consummation of the Exchange. In accordance with the Business Combination Agreement, as the planned corporate restructuring could not be consummated by October 1, 2021 with respect to Colombia, Panama and the City of Buenos Aires (Argentina), respectively, Restructuring Agreements were entered into on November 15, 2021 (except for the agreement that Codere Online Panama and ALTA entered into on December 1, 2021) between the relevant Codere Group entity holding the online license and a Codere Online entity. Such Restructuring Agreements generally govern the terms and conditions of, among other things, the assignment by the relevant Codere Group entity of assets, contracts, employees and permits, as applicable, necessary for the operation of the online gaming business by the Codere Online entity in Colombia, Panama and the City of Buenos Aires (Argentina), respectively, subject to the required authorizations. See “Certain Relationships and Related Party Transactions—Material Agreements.”

Moreover, the Holdco Financial Statements, the Interim Combined Carve-out Condensed Financial Statements, the Annual Combined Carve-out Financial Statements and the 3Q Combined Carve-out Financial Information do not reflect Codere Online’s proposed use of the proceeds of the Transactions, which seeks to enhance and expand its business and operations in the coming years, nor any incremental operating expenses (e.g. due to the reinforcement of the management team and/or related to third-party service providers) needed to support such enhancement and expansion of the business and operation as an independent, Nasdaq-listed company. They also do not reflect substantially all of the expenses (including legal, accounting, consulting and financial advisory fees) incurred by Holdco in connection with the Business Combination, as these expenses generally became payable after September 30, 2021, expenses incurred under the Related Party Agreements which became effective upon the consummation of the Business Combination or the start of operations in the City of Buenos Aires (following LOTBA’s approval in December 2021). Further, the Holdco Financial Statements do not reflect the Codere Online Business. Consequently, the Holdco Financial Statements, the Interim Combined Carve-out Condensed Financial Statements, the Annual Combined Carve-out Financial Statements and the 3Q Combined Carve-out Financial Information may not be indicative of the results of operations and financial position of Holdco. See “Risk Factors—Risk Factors Related to the Financial Information and this Prospectus—The Holdco Financial Statements, the Interim Combined Carve-out Condensed Financial Statements, the Annual Combined Carve-out Financial Statements and the 3Q Combined Carve-out Financial Information are not necessarily indicative of the results of operations and financial position of Codere Online.”

The Business Combination and Preparation of Pro Forma Combined Financial Information

On June 21, 2021, DD3, Codere Newco, SEJO, Holdco and Merger Sub entered into the Business Combination Agreement. Pursuant to the Business Combination Agreement, on November 30, 2021, following the effectiveness of the transactions contemplated by the Exchange and the Merger, the parties consummated the Business Combination and SEJO and DD3 became direct wholly-owned subsidiaries of Holdco.

This prospectus includes unaudited pro forma combined financial information for the Combined Company. The unaudited pro forma combined income statement of the Combined Company combines the historical unaudited restated income statement of DD3 for the period from September 30, 2020 (inception) through December 31, 2020, and the historical unaudited restated income statement of DD3 for the period from September 30, 2020 (inception) through June 30, 2021 (after deducting DD3’s historical unaudited restated income statement of DD3 for the period from September 30, 2020 (inception) through December 31, 2020), with the audited combined carve-out income statement of Codere Online for the year ended December 31, 2020 and the unaudited combined carve-out results of Codere Online for the six months ended June 30, 2021 respectively, and gives pro forma effect to the Business Combination as if it had been consummated on January 1, 2020. The unaudited pro forma combined statement of financial position of the Combined Company combines the unaudited restated statement of financial position of DD3 as of June 30, 2021 and the unaudited combined carve-out statement of financial position of Codere Online as of June 30, 2021 and gives pro forma effect to the Business Combination as if it had been consummated on June 30, 2021. As of the time of the consummation of the Business Combination on November 30, 2021, DD3 had had no operating history and no revenues.

The unaudited pro forma combined financial information is presented for illustrative purposes only, is based on certain assumptions, addresses a hypothetical situation and reflects limited historical financial data. In particular, the pro forma combined financial information was prepared based on actual figures for DD3 redemptions and transaction costs related to the Business Combination applied retrospectively to the historical financial information of DD3 and Codere Online as of the dates and for the periods described above. The unaudited pro forma combined financial information was prepared on the basis of the redemption of 7,584,044 shares of DD3 Class A Common Stock into cash by Public Stockholders upon the consummation of the Business Combination, at a redemption price of approximately $10 (€8.88) per share. After giving effect to the redemptions, there was approximately $116 million (€103 million) of cash held inside and outside of the Trust Account, including (i) the aggregate amount of proceeds from the Institutional Investors and (ii) proceeds resulting from the fact that Baron and certain other Public Stockholders did not redeem a total of 4,915,956 Public Shares in connection with the Business Combination.

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Furthermore, the unaudited pro forma combined financial information does not reflect Codere Online’s proposed use of the proceeds of the Transactions, which seeks to enhance and expand its business and operations in the coming years, nor any incremental operating expenses (e.g. due to the reinforcement of the management team and/or related to third-party service providers) needed to support such enhancement and expansion of the business and operation as an independent, Nasdaq-listed company. Moreover, the combined carve-out financial information which was used to prepare the unaudited pro forma combined financial information has certain limitations. See “—Incorporation of Holdco and Preparation of Holdco Financial Statements, Interim Combined Carve-out Condensed Financial Statements, Annual Combined Carve-out Financial Statements and 3Q Combined Carve-out Financial Information.” Therefore, the unaudited pro forma combined financial information is not necessarily indicative of the results of operations and financial position that would have been achieved had the Business Combination been consummated on the dates indicated above, or of the future consolidated results of operations or financial position of the Combined Company. Accordingly, the Combined Company’s business, assets, cash flows, results of operations and financial condition may differ significantly from those indicated by the unaudited pro forma combined financial information included in this prospectus. For more information, please see the section entitled “Unaudited Pro Forma Combined Financial Information.” See also “Risk Factors—Risk Factors Related to the Financial Information and this Prospectus—The unaudited pro forma combined financial information included in this prospectus is not necessarily indicative of the results of operations and financial position that would have been achieved had the Business Combination been consummated on the date indicated therein, or of the future consolidated results of operations or financial position of the Combined Company.”

Key Factors Affecting Operating Results

The following factors have affected, and are expected to continue to affect, our business, results of operations, financial condition and prospects:

COVID-19

COVID-19 has significantly impacted the economic conditions around the world. Beyond disruptions in normal business operations, one of the main impacts of the pandemic on Codere Online’s business was the rescheduling, reconfiguring, suspension, postponement and cancellation of major sports seasons and sporting events, which adversely affected Codere Online’s online sports betting business (which accounts for roughly half of its revenue). At the same time, Codere Online has benefited from a change in consumer habits as a result of people being required to stay in their homes or otherwise voluntarily staying in their homes. The temporary closures of gaming and sports betting facilities and the imposition of capacity limitations on such venues due to COVID-19 have caused an increase in new users utilizing online casino gaming and sports betting who may continue to wager online even though land-based venues have generally reopened, albeit with operating restrictions, which may provide additional opportunities for Codere Online to market online gaming and sports wagering to traditional land-based gaming and sports wagering users. There are other ways in which COVID-19 may affect our business. If, despite the safety protocols we have in place, a high percentage of Codere Online’s employees and/or a subset of its key employees and executives are infected or otherwise adversely impacted by COVID-19, Codere Online’s ability to continue to operate effectively may be negatively impacted. The ultimate impact of this pandemic, including its impact on customer behavior, on Codere Online’s financial condition and operating results is unknown, but could be material, and will depend, in part, on the length of time that disruptions resulting from COVID-19 continue to exist.

Industry Opportunity and Competitive Landscape

Codere Online operates within the global entertainment and gaming industry, which is comprised of diverse products and offerings that compete for consumers’ time and disposable income. Our short-to-medium focus is on replicating our Spanish online strategy in certain high growth core markets in Latin America, including Mexico, Colombia, Panama and the City of Buenos Aires (Argentina). We will also seek to expand into new markets in Latin America as they become regulated, including Brazil, Chile, Peru, Puerto Rico, Uruguay and certain other regions of Argentina (beyond the City of Buenos Aires). We may also pursue options to access the Hispanic market in the United States. As Codere Online prepares to enter new jurisdictions, it expects to face significant competition from other established industry players, some of which may have more experience in online casino gaming and sports betting and have access to more resources. Codere Online believes that its online gaming platform, experience operating in different jurisdictions, the “Codere” brand and its marketing strategies which appeal to customers and its many unique product offerings and bonus features will enable Codere Online to compete with such established industry players.

Codere Online’s performance may vary from one jurisdiction to the next as a result of the level of competition in each jurisdiction among other factors.

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Legalization, Regulation and Taxation

While Codere Online’s financial growth prospects relate mainly to its business in the markets in which it already operates, Codere Online intends to expand its business to additional regions in Latin America (Brazil, Chile, Peru, Puerto Rico, Uruguay and Argentina (beyond the City of Buenos Aires, where it started operating in December 2021)).

Codere Online’s expansion to such regions depends on the legalization of online casino gaming and sports betting across Latin America, a trend that Codere Online believes is in its early stage. Online casino gaming and sports betting may expand further due to many factors, including that countries are seeking ways to increase revenues. Codere Online’s strategy is to enter new jurisdictions that open up through new regulatory frameworks and licensing regimes, where Codere Online believes it is financially prudent for it to enter.

The process of securing and maintaining the necessary licenses or partnerships to operate in a given jurisdiction may take longer than Codere Online anticipates or not be successful at all. See “Risk Factors—Risks Related to Codere Online—Codere Online relies on licenses to conduct its operations, and the failure to renew or the termination of these licenses could have a material adverse effect on its business.” In addition, legislative or regulatory restrictions and gaming taxes may make it less attractive or more difficult for Codere Online to do business in a particular jurisdiction. Further, certain jurisdictions require Codere Online to have a relationship with a land-based gaming venue for online gaming and sports wagering access, which tends to increase expenses.

In addition, as an online gaming operator, Codere Online has experienced and may continue to experience increasing regulatory pressure in the form of advertisement restrictions, taxation increases, limitations on payment methods, licensing and sponsorship restrictions, limitations on promotions and maximum bets or prizes, among others. Other laws or regulations with a direct impact on the gaming industry include laws or regulations that prohibit money laundering and financing of terrorist and other unlawful financial activities. Changes to any such laws and regulations could impact Codere Online’s profitability and restrict its ability to operate its business. See “Risk Factors—Risks Related to Codere Online—The online gaming industry is subject to extensive regulation (including applicable direct and indirect taxation, anti-corruption, anti-money laundering and economic sanctions laws) as well as licensing requirements. Codere Online’s business may be adversely affected if it is unable to comply with regulations or licensing requirements or any regulatory changes.”

Finally, governments impose taxes on online casino gaming and sports betting, which may vary substantially between jurisdictions and be subject to changes. See “Risk Factors—Risks Related to Codere Online—Changes in taxation or the interpretation or application of tax laws could have a material adverse effect on Codere Online’s business, results of operations and financial condition.”

Ability to Acquire, Retain and Monetize Users

Codere Online’s ability to effectively market is critical to operational success. Using experience, dynamic learnings and analytics, Codere Online leverages marketing to acquire, convert and retain customers. Codere Online uses a variety of paid marketing channels, in combination with compelling offers and unique product features, to attract and engage customers. Furthermore, Codere Online optimizes its marketing spend using and exhaustively analyzing data collected since the beginning of its operations. Codere Online’s marketing spend is based on a model that considers a variety of factors, including the products offered in each jurisdiction, the performance of the different marketing channels, predicted lifetime value, marginal costs and expenses and behavior of users across various product offerings. Where paid marketing is concerned, Codere Online leverages a broad array of advertising channels, including television, radio, social media platforms, sponsorships, affiliates and paid and organic search, and other digital channels. These efforts are concentrated within the specific jurisdictions where Codere Online operates or intends to operate. Codere Online believes that there is significant benefit to having a flexible approach to advertising spending as it can move its advertising spending around based on dynamic outreach. These investments and personalized promotions are intended to increase consumer awareness and drive engagement. While Codere Online is continuing to assess the efficiency of its marketing and promotion activities, it is difficult for Codere Online to predict when it will achieve its longer-term profitability objectives.

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Managing Wagering Risk

The online casino gaming and sports betting businesses are characterized by an element of chance and the outcome of external results. Accordingly, Codere Online employs theoretical and projected take rates, based on historical data, to estimate how a certain type of online casino or sports wager, on average, will perform in the long run. Although each online casino or sports wager generally performs within a defined statistical range of outcomes in the long run, actual outcomes may vary for any given period, particularly in the short term. In the short term, for online casino and sports wagering, the element of chance and the outcome of external results may affect take rates; these take rates, particularly for online sports wagering, may also be affected in the short term by factors that are largely beyond Codere Online’s control, such as unanticipated event outcomes, a user’s skill, experience and behavior, the mix of games played or wagers placed, the financial resources of users, the volume of wagers placed and the amount of time spent gambling. For online casino games, it is very rare, but possible, that a random number generator outcome or game will malfunction and award errant prizes. For online sports wagering, it is possible that Codere Online’s platform erroneously posts odds or is otherwise misprogrammed to pay out odds that are highly favorable to bettors, and bettors place wagers before the odds are corrected. Additionally, odds compilers and risk managers are capable of human error, so even if Codere Online’s wagering products are subject to a capped payout, significant volatility can occur. As a result of the variability in these factors, the actual take rates on Codere Online’s online casino games and sports wagers may differ from the theoretical or projected take rates it has estimated and could result in the winnings of Codere Online’s online casino games or sports bet’s users exceeding those anticipated. The variability of take rates also has the potential to adversely affect Codere Online’s business, results of operations, financial condition, prospects and cash flows.

Codere Online seeks to mitigate these risks through data science and analytics and rules built into its platform, as well as active management of its amounts at risk at a point in time, but it may not always be able to do so successfully. In particular, as part of its platform, Codere Group’s Trading and Risk team is responsible for implementing the pricing strategy (i.e., setting and continuously adjusting, based on averaging activity, the fixed odds) defined by Codere Online and its furtherance of Codere Online’s online sports betting offering, as well as identifying fraudulent activity. Codere Group’s Trading and Risk team, which counts with approximately 30 in-house traders, receives, reviews and compares the odds received by third-party feed providers to Codere Online’s strategy and informs management on the risk assumed as a result of the accumulated amount of bets in the event that they exceed the amounts established as per risk management parameters in place at the time. Further, Codere Group’s traders continuously monitor competitor pricing across a wide range of sporting events to ensure that Codere Online’s betting markets are competitive. For additional information, see “Business—Technology Platform.”

Seasonality and Mix of Revenue Based on Time Period in Markets

Codere Online’s profitability will generally depend on how long it has been operating in each jurisdiction. Generally, but not always, Codere Online’s level of profitability will increase with more years in a jurisdiction. Further, Codere Online’s sports betting business experiences seasonality based on the relative popularity of certain sports. Although exciting sporting events occur throughout the year, Codere Online’s online sports wagering users are most active during the season of the main sport league in a given jurisdiction as well as during any worldwide events.

Limited Operating History and Potential for Growth

Codere Online has a limited operating history in the online casino gaming and sports betting industry, which is continuously evolving. Codere Online is in the development stage and, consequently, its results of operations may differ significantly from the financial data included herein. As early stage companies, Codere Online has limited experience and has not yet demonstrated its ability to obtain profit. Codere Online has not produced a net profit in any of the periods covered by the Annual Combined Carve-out Financial Statements, the Interim Combined Carve-out Condensed Financial Statements or the 3Q Interim Combined Financial Information, and may not produce a net profit in the near future, or at all. See “Risk Factors—Risks Related to Codere Online—Codere Online is an early stage company which has not yet demonstrated its ability to obtain profits and expects to incur significant expenses and continuing losses for the foreseeable future.”

Additionally, Codere Online intends to make significant investments to support its business growth using the proceeds of the Business Combination and may require additional funds to respond to business challenges, including the need to develop new product offerings and features or enhance its existing platform, improve its operating infrastructure or acquire technologies and attract and retain personnel. There is no assurance that Codere Online’s business growth strategy will be successful. Consequently, any predictions about future performance may not be as accurate as they would be if Codere Online had a history of successfully operating in the online gaming industry or if Codere Online was going to continue to operate in accordance with past practice.

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Independent Operations and Listing

Codere Online has no experience operating as an independent company or as a Nasdaq-listed company. Historically, Codere Newco and certain of its subsidiaries have provided certain services related to corporate functions including, among other services, general management, management control, internal audit, communication, legal, financial management, human capital, corporate security support, platform services and corporate development. Following the consummation of the Business Combination, Codere Newco has continued to provide many of these services under a Sponsorship and Services Agreement between Codere Online and Codere Newco. While these services are being provided to Codere Online by Codere Newco and certain of its subsidiaries, Codere Online will be dependent on them for services that are critical to Codere Online’s operation, and Codere Online’s operational flexibility to modify or implement changes with respect to such services and the amounts Codere Online pays for them will be limited. Codere Online’s results of operations may be affected by its dependency on these services.

Furthermore, as a public company, Codere Online will act in an increasingly demanding regulatory environment, which requires it to comply with the Sarbanes-Oxley Act, the regulations of Nasdaq, the rules and regulations of the SEC, expanded disclosure requirements, accelerated reporting requirements and more complex accounting rules. Company responsibilities required by the Sarbanes-Oxley Act include establishing corporate oversight and adequate internal control over financial reporting and disclosure controls and procedures. Codere Online anticipates that the process of building its accounting and financial functions and infrastructure, and complying with the rules and regulations referred to above, will require significant additional professional fees, internal costs and management efforts.

In addition, Holdco is subject to onerous obligations under the Registration Rights and Lock-Up Agreement. Efforts to satisfy such obligations may divert the attention of management and key personnel and result in substantial expense.

Key Components of Statements of Operations

Revenue

Codere Online earns revenue primarily through online gambling, offering a suite of games similar to those available in land-based casinos and gambling establishments, as well as sports betting. In addition, revenue includes income generated from admission fees charged to customers in Mexico for access to the online system/platform as well as for the management of customers’ online accounts.

Online casino games

Online casino offerings typically include the full portfolio of games available in land-based gaming halls, such as slot machines, table games and bingo. For these offerings, Codere Online functions similarly to land-based casinos, generating revenue, as users play against the house. There is certain volatility with online casino wagering, as with land-based wagering, but as the volume of wagers placed increases, the revenue retained from wagers placed becomes easier to predict. Codere Online’s experience has been that online casino margins are less volatile than online sports margins.

Codere Online’s online gaming offerings consist of a combination of licensed content from leading suppliers in the industry. Third-party content is subject to standard revenue-sharing agreements specific to each supplier, whereby the supplier receives a percentage of the gaming revenue generated from the games played on Codere Online’s platform. In exchange, Codere Online receives a limited license to offer the games on its platform to users in jurisdictions where use is approved by the regulatory authorities.

Codere Online maintains a wide and updated catalogue of online casino games with over 1,300 titles from more than 30 third-party content providers. Codere Online believes that its ability to offer a wide array of online gaming products effectively reduces its customer acquisition costs and player churn by providing a superior product offering to customers.

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Online sports betting and other bets

Online sports betting involves a user placing a wager on an event at some fixed odds (a “proposition”) determined by Codere Online. If the user wins, Codere Online pays out the bet. If the user loses, Codere Online keeps the amount wagered. Codere Online takes risk on any such wager to the extent that its “book” (i.e., wagers accepted for either or all proposition bet outcomes) may not be balanced and, depending on the result of the event, Codere Online may generate an aggregate win or loss on the overall book. Codere Online’s seeks to generate revenue by setting odds such that there is a built-in theoretical margin in each proposition offered to its users. While different outcomes of the events may cause volatility in Codere Online’s revenue, Codere Online believes it can deliver a fairly stable sports betting margin over the long term.

As part of the platform, Codere Group’s Trading and Risk team is responsible for implementing the pricing strategy (i.e., setting and continuously adjusting, based on averaging activity, the fixed odds) defined by Codere Online and its furtherance of Codere Online’s online sports betting offering. For a more detailed description, see “Business—Technology Platform.” In addition to traditional pre-match wagering, where Codere Online has a robust offering with historical data, odds statistics and latest teams and players news, Codere Online offers other sports wagering products such as live betting. Codere Online has also incorporated live streaming of sporting events into its online sports betting offering, on a round-the-clock basis and with industry-leading match visualization features.

Codere Online’s sports betting business has a vast and diversified offering with over 350,000 live events per year throughout most major sports taking place around the world, which helps to minimize the impact of seasonality. Nonetheless, seasonality has an effect in certain periods of the year given the relative popularity of certain local sports, such as top tier football in Europe.

Supporting Entities

Consists of revenue generated by OMSE, Codere Israel Marketing Support Services LTD and Codere (Gibraltar) Marketing Services LTD (collectively, the “Supporting Entities”). The Supporting Entities provide support services, such as marketing and management services, to the operating entities of Codere Online. Therefore, the majority of the revenue generated by the Supporting Entities is eliminated in the consolidation process, as a result of offsetting the corresponding expenses from the relevant operating entities.

Personnel expenses

Personnel expenses consist primarily of wages, salaries and similar expenses, as well as, to a lesser extent, social security contributions payable by Codere Online and other social contributions. As noted above, personnel expenses reflected in the Interim Combined Carve-out Condensed Financial Statements and the Annual Combined Carve-out Financial Statements and personnel expenses calculated for purposes of the 3Q Combined Carve-out Financial Information do not account for certain personnel expenses resulting from Codere Online’s transition into an independent company.

Depreciation and amortization

Depreciation and amortization consists primarily of the amortization of intangible assets and, to a much lesser extent, depreciation of property, plant and equipment and amortization of right-of-use assets. For additional information on Codere Online’s amortization of intangible assets, see Note 5 to the Annual Combined Carve-out Financial Statements.

Due to the online nature of the business, investments in property, plant and equipment are not significant.

Other operating expenses

Other operating expenses consists primarily of marketing expenses, professional services and other expenses, gambling taxes, casino license royalties (which consists of fees paid to third parties for the commercialization of their casino games) as well as utilities, repairs and maintenance, among other expenses. Additionally, expenses incurred as a result of the Related Party Agreements (some of which became effective upon the consummation of the Business Combination) are recorded under this heading. Professional services and other expenses mainly include: (i) streaming services contracted to external parties offered to our customers as complement to our sports complete betting offer, (ii) the payment processing which allows our customers to deposit and withdraw money using user-friendly platforms from payment processing providers and (iii) some of our less popular sports odds are hired to external providers and this service expense is included in the professional services and other expenses line. Additionally, included within this heading are expenses related to our customer relationship management tools.

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Codere Online expects to significantly increase its marketing expenses in the future and intends to use a significant portion of the proceeds of the Transactions to boost its marketing expenditure in its core markets. In particular, Codere Online will seek to sign new high profile sponsorships, increase its presence in traditional and acquisition media and engage marketing agencies.

Marketing efforts vary significantly from region to region:

● Spain. The market in Spain is mature. Therefore, while Codere Online continuously seeks to acquire new customers from its competitors, it mainly focuses its marketing efforts on its existing customers to drive an increase in spending. Recently, the most notable marketing initiative in Spain has been the sponsorship agreement with Real Madrid. Nonetheless, on November 24, 2020, the RM Sponsorship Agreement was amended and terminated in respect of Spain only (without prejudice to the agreement remaining in force in the remaining applicable jurisdictions) at the end of the 2020/2021 football season due to newly-enacted advertising legal restrictions (which affect sponsorship) in Spain. On October 7, 2021, the RM Sponsorship Agreement was further amended to, among other things, extend the term of the RM Sponsorship Agreement for four (4) additional football seasons, until June 30, 2026 (with either party having a right to terminate the agreement at the end of the 2022-2023 football season) and amend the applicable territory to only include Mexico, South America, Central America, Puerto Rico and Dominican Republic. The Codere Group has forged a strong relationship with Real Madrid in these last years and is currently exploring new avenues of collaboration in the future. Codere Online benefits from and has use rights to the existing, and any future amended, sponsorship agreement with Real Madrid. See the section entitled “Certain Relationships and Related Party Transactions—Material Agreements—Sponsorship and Services Agreement.”

● Mexico. The market in Mexico is expanding. Therefore, Codere Online focuses on gaining new customers through its marketing initiatives and loyalty programs. The most notable marketing sponsorship agreement in Mexico in 2021 is the one with the football team Rayados in Monterrey, a leading team in the local league, a deal which Codere Online closed in early 2021 in order to replicate its Spanish business model. The most notable marketing sponsorship agreement in 2020 was the one with the U.S. National Basketball Association.

● Colombia. The market in Colombia is expanding. Therefore, Codere Online focuses on gaining new customers through its marketing initiatives and loyalty programs. In Colombia, Codere Online has various sponsorships with sports celebrities.

● Argentina. Codere Online started operating in the City of Buenos Aires (Argentina) in December 2021. In order to boost its brand positioning, Codere Online has recently entered into a sponsorship agreement with one of the two most important football teams in Argentina, River Plate. Starting in June 2021, the “Codere” brand was added to the sleeve of the uniform shirt of players and, for the 2022/2023 season, it will be on the front of the uniform shirt.

Finance costs

Finance costs consists primarily of both realized and unrealized foreign exchange gains/(losses) that have been created due to the fluctuation of the exchange rates between the euro and the other currencies, mainly the Mexican peso, the Colombian peso and the Panamanian balboa, that Codere Online uses in its operations as well as interest expense related to Codere Online’s outstanding loans and borrowings from related parties. Certain intra-group indebtedness was capitalized on June 30, 2021 (see “—Liquidity and Capital Resources—Indebtedness”). In addition, any other outstanding loans and borrowings from related parties were capitalized prior to the consummation of the Business Combination.

Income tax expense

Income tax expense represents the sum of the tax currently payable and deferred tax, if any. The tax currently payable is based on taxable income for the year. Taxable income differs from income before tax as reported in the combined carve-out income statement because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. Codere Online’s current tax is calculated using rates applicable for the tax period that have been enacted or substantively enacted by the end of the reporting period.

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Results of Operations

Comparison of the six months ended June 30, 2021 and 2020

The following table sets forth Codere Online’s combined carve-out income statements for the periods indicated:

	For the six months ended June 30,						Change
(in thousands of euros)	2021			2020			€			%
	(unaudited)
Revenue		39,944			29,975			9,969			33.3	%
Personnel expenses		(2,985	)		(2,611	)		(374	)		14.3	%
Depreciation and amortization		(377	)		(543	)		166			(30.6	%)
Other operating expenses		(49,695	)		(32,610	)		(17,085	)		52.4	%
Operating expenses		(53,057	)		(35,764	)		(17,293	)		48.4	%
OPERATING INCOME/(LOSS)		(13,113	)		(5,789	)		(7,324	)		126.5	%
Finance income/(costs)		68			(245	)		313			n.m.
Net financial results		68			(245	)		313			n.m.
NET INCOME/(LOSS) BEFORE TAX		(13,045	)		(6,034	)		(7,011	)		116.2	%
Income tax benefit/(expense)		(222	)		(743	)		(521	)		(70.1	%)
NET INCOME/(LOSS) FOR THE PERIOD		(13,267	)		(6,777	)		(6,490	)		95.8	%
Attributable to equity holders of the parent		(13,300	)		(6,773	)		(6,527	)		96.4	%
Attributable to non-controlling interest		33			(4	)		37			n.m.

Revenue

Revenue increased €10.0 million, or 33.3%, to €39.9 million for the six months ended June 30, 2021 from €29.9 million for the six months ended June 30, 2020.

For the six months ended June 30, 2021 and the six months ended June 30, 2020, sports betting revenue amounted to €23.5 million and €16.6 million, respectively and online casino wagering revenue amounted to €16.5 million and €13.3 million, respectively.

The following table sets forth the distribution of our revenues by geographic area for the six months ended June 30, 2021 and the six months ended June 30, 2020.

	For the six months ended June 30,						Change
(in thousands of euros)	2021			2020			€			%
	(unaudited)
Spain		25,641			21,512			4,129			19.2	%
Mexico		11,549			6,940			4,609			66.4	%
Colombia		2,048			870			1,178			135.4	%
Other Operations		483			118			365			309.3	%
Supporting Entities		19,019			13,991			5,028			35.9	%
Intercompany eliminations		(18,796	)		(13,456	)		(5,340	)		39.7	%
Total		39,944			29,975			9,969			33.3	%

Revenue in Spain increased €4.1 million, or 19.2%, to €25.6 million for the six months ended June 30, 2021 from €21.5 million for the six months ended June 30, 2020. Revenue in Mexico increased €4.6 million, or 66.4%, to €11.5 million for the six months ended June 30, 2021 from €6.9 million for the six months ended June 30, 2020 and revenue in Colombia increased €1.2 million, or 135.4%, to €2.0 million for the six months ended June 30, 2021 from €0.9 million for the six months ended June 30, 2020.

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The increase in revenue in Spain and Mexico for the six months ended June 30, 2021 compared to the six months ended June 30, 2020 was primarily due to the fact that the number and variety of sporting events, many of which had been cancelled due to the COVID-19 pandemic beginning in mid-March of 2020, returned at, or near to, pre-pandemic levels starting in June 2020 through the first half of 2021. The return of sporting events, coupled with increased marketing, despite regulatory headwinds in Spain limiting Codere Online’s (and other online gaming operators) ability to offer player bonuses and other marketing activities in Spain, resulted in an increase in the number of customers and in increased wages per customer both in the online casino and sports betting businesses. Additionally, as the central and regional governments began to lift lockdown and mobility and business restrictions in the second half of 2020, retail establishments, including Codere retail branches, progressively were able to return to operations at or near pre-pandemic levels, allowing retail customers to operate their online accounts from Codere retail locations, which they had not been able to do while such restrictions were in place.

Revenue generated by the Supporting Entities increased €5.0 million, or 35.9%, to €19.0 million for the six months ended June 30, 2021 from €14.0 million for the six months ended June 30, 2020. This increase was primarily due to the increases in operations in Spain, Mexico and Colombia. The intercompany eliminations shown in the table above relate primarily to the revenue from the Supporting Entities.

Personnel expenses

Personnel expenses were €3.0 million for the six months ended June 30, 2021 and €2.6 million for the six months ended June 30, 2020. There were no significant changes in personnel between the two periods despite the growth in operations. This is due to the nature of the business, where operations are primarily run by employees at central service centers in Malta and Israel, and additional employees are generally not needed to grow the business at the operating locations. Therefore, personnel expenses do not increase proportionally with revenue.

Depreciation and amortization

Depreciation and amortization remained stable at €0.4 million for the six months ended June 30, 2021 compared to €0.5 million for the six months ended June 30, 2020. This was primarily due to the fact that there were no significant changes in fixed assets or intangibles between the two periods.

Other operating expenses

Other operating expenses increased €17.1 million, or 52.4%, to €49.7 million for the six months ended June 30, 2021 from €32.6 million for the six months ended June 30, 2020. The increase was primarily due to increases in professional services and other expenses and marketing expenses. Included within the professional services and other expenses line is expenses for our streaming service. Codere Online expanded its overall streaming service in 2021 to offer more sporting events, which resulted in increased costs. Additionally, expenses in the first six months of 2020 were impacted by cancellations of sporting events starting in the second half of March 2020 due to the COVID-19 pandemic, as Codere Online did not incur broadcast costs during that time. The number of sporting events slowly began to increase starting in June 2020.

The following table sets forth the breakdown of our other operating expenses for the six months ended June 30, 2021 and the six months ended June 30, 2020.

	For the six months ended June 30,				Change
(in thousands of euros)	2021		2020		€			%
	(unaudited)
Gambling taxes		4,437		3,530		907			25.7	%
Leases		287		258		29			11.2	%
Utilities, repairs and maintenance		410		525		(115	)		(21.9	%)
Professional services and other expenses		19,426		10,874		8,552			78.6	%
Casino license royalties		1,977		1,785		192			10.8	%
Marketing expenses		23,158		15,638		7,520			48.1	%
Total		49,695		32,610		17,085			52.4	%

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Marketing expenses

Marketing expenses increased €7.5 million, or 48.1%, to €23.2 million for the six months ended June 30, 2021 from €15.7 million for the six months ended June 30, 2020. Codere Online believes that marketing is a major driver of growth for its business. Codere Online focuses on traditional marketing (including TV, radio and press), digital marketing (including social media and affiliation networks) and sports sponsorships.

Operating income/(loss)

As a result of the foregoing, operating loss increased €7.3 million, or 126.5%, to €13.1 million for the six months ended June 30, 2021 from €5.8 million for the six months ended June 30, 2020.

Net financial results

Net financial results was income of €0.1 million for the six months ended June 30, 2021, compared to an expense of €0.2 million for the six months ended June 30, 2020. The change was primarily due to more favorable foreign exchange differences.

Net income/(loss) before tax

As a result of the foregoing, net loss before tax increased €7.0 million, or 116.2%, to €13.0 million for the six months ended June 30, 2021 from €6.0 million for the six months ended June 30, 2020.

Income tax benefit/(expense)

Income tax expense decreased €0.5 million, or 70.1%, to €0.2 million for the six months ended June 30, 2021 from €0.7 million for the six months ended June 30, 2020. This was primarily due to the fact that Codere Online had a higher net loss for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020.

Net income/(loss) for the period

As a result of the foregoing, net loss for the period increased €6.5 million, or 95.8%, to €13.3 million for the six months ended June 30, 2021 from €6.8 million for the six months ended June 30, 2020.

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Comparison of the year ended December 31, 2020 to the year ended December 31, 2019

The following table sets forth Codere Online’s combined carve-out income statements for the periods indicated:

	For the year ended December 31,						Change
(in thousands of euros)	2020			2019			€			%
Revenue		70,497			61,583			8,914			14.5	%
Personnel expenses		(5,157	)		(5,102	)		(55	)		1.1	%
Depreciation and amortization		(932	)		(1,193	)		261			(21.9	%)
Other operating expenses		(78,657	)		(71,165	)		(7,492	)		10.5	%
Operating expenses		(84,746	)		(77,460	)		(7,286	)		9.4	%
OPERATING INCOME/(LOSS)		(14,249	)		(15,877	)		1,628			(10.3	%)
Finance costs		(520	)		(269	)		(251	)		93.3	%
Net financial results		(520	)		(269	)		(251	)		93.3	%
NET INCOME/(LOSS) BEFORE TAX		(14,769	)		(16,146	)		1,377			(8.5	%)
Income tax benefit/(expense)		(1,510	)		53			(1,563	)		n.m.
NET INCOME/(LOSS) FOR THE YEAR		(16,279	)		(16,093	)		(186	)		1.2	%
Attributable to equity holders of the parent		(16,274	)		(16,191	)		(83	)		0.5	%
Attributable to non-controlling interest		(5	)		98			(103	)		(105.1	%)

Revenue

Revenue increased €8.9 million, or 14.5%, to €70.5 million for the year ended December 31, 2020 from €61.6 million for the year ended December 31, 2019.

For the year ended December 31, 2020 and the year ended December 31, 2019, sports betting revenue amounted to €33.9 million and €36.3 million, respectively, online casino wagering revenue amounted to €25.3 million and €15.7 million, respectively, and income generated in Mexico from admission fees charged to customers for access to the online system/platform and the management of customers’ online accounts amounted to €11.3 million and €9.6 million, respectively.

The following table sets forth the distribution of our revenues by geographic area for the year ended December 31, 2020 and the year ended December 31, 2019.

	For the year ended December 31,						Change
(in thousands of euros)	2020			2019			€			%
Spain		48,279			44,058			4,221			9.6	%
Mexico		18,422			15,222			3,200			21.0	%
Colombia		2,355			1,505			850			56.5	%
Other Operations		329			731			(402	)		(55.0	%)
Supporting Entities		31,046			27,743			3,303			11.9	%
Intercompany eliminations		(29,934	)		(27,676	)		(2,258	)		8.2	%
Total		70,497			61,583			8,914			14.5	%

Revenue in Spain increased €4.2 million, or 9.6%, to €48.3 million for the year ended December 31, 2020 from €44.1 million for the year ended December 31, 2019. This increase was primarily due to an increase in gambling revenues as a result of increased marketing and increased spending per customer in the online casino business. Business closures, capacity limitations, stay-at-home orders and other measures imposed in light of the COVID-19 pandemic have resulted in a significant increase in online businesses. However, the COVID-19 pandemic also resulted in the cancellation and postponement of several sporting events. During approximately two and a half months during 2020 there were no sporting events and, therefore, there were no revenues earned on sports betting during that time.

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Revenue in Mexico increased €3.2 million, or 21.0%, to €18.4 million for the year ended December 31, 2020 from €15.2 million for the year ended December 31, 2019 and revenue in Colombia increased €0.9 million, or 56.5%, to €2.4 million for the year ended December 31, 2020 from €1.5 million for the year ended December 31, 2019. These increases were primarily due to an increase in gambling revenues as a result of increased marketing and increased spending per customer. The increase was partially offset by the impacts of the cancellation or postponement of sporting events and the closure of retail facilities, given the still limited credit card usage in the region. Furthermore, the increase was offset in part by the depreciation of the average exchange rates of the relevant local currencies against the euro.

Revenue generated by the Supporting Entities increased €3.3 million, or 11.9%, to €31.0 million for the year ended December 31, 2020 from €27.7 million for the year ended December 31, 2019. This increase was primarily due to the increases in operations in Spain, Mexico and Colombia. The intercompany eliminations shown in the table above relate primarily to the revenue from the Supporting Entities.

Personnel expenses

Personnel expenses remained stable at €5.2 million for the year ended December 31, 2020 as compared to €5.1 million for the year ended December 31, 2019. This was primarily due to the fact that there were no significant changes in personnel between the two periods despite the growth in operations due to the nature of the business, where operations are primarily run by employees at central service centers in Malta and Israel. Therefore, personnel expenses do not necessarily change in proportion to changes in revenue.

Depreciation and amortization

Depreciation and amortization decreased €0.3 million, or 21.9%, to €0.9 million for the year ended December 31, 2020 from €1.2 million for the year ended December 31, 2019. The decrease was primarily due to certain intangible assets being fully amortized in 2019 coupled with less additions to intangible assets during 2020 as compared to 2019.

Other operating expenses

Other operating expenses increased €7.5 million, or 10.5%, to €78.7 million for the year ended December 31, 2020 from €71.2 million for the year ended December 31, 2019. The increase was primarily due to increases in the expenses related to revenue such as gambling taxes, casino license royalties and payment processing expenses. Additionally, the COVID-19 pandemic had an impact on expenses, as some governments, such as the Spanish government, imposed restrictions on marketing that resulted in Codere Online not spending as much as it had planned. As a result, marketing expenses were broadly in line with those of 2019. Furthermore, Codere Online faced funding limitations due to the financial condition of the Codere Group, which was significantly affected by the closure of its retail establishments.

The following table sets forth the breakdown of our other operating expenses for the year ended December 31, 2020 and the year ended December 31, 2019.

	For the year ended December 31,				Change
(in thousands of euros)	2020		2019		€		%
Gambling taxes		8,867		7,402		1,465		19.8	%
Leases		575		488		87		17.8	%
Utilities, repairs and maintenance		1,258		285		973		341.4	%
Professional services and other expenses		28,639		26,320		2,319		8.8	%
Casino license royalties		4,255		2,241		2,014		89.9	%
Marketing expenses		35,063		34,429		634		1.8	%
Total		78,657		71,165		7,491		10.5	%

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Marketing expenses

Marketing expenses increased €0.6 million, or 1.8%, to €35.1 million for the year ended December 31, 2020 from €34.5 million for the year ended December 31, 2019. Due to the disruptions caused by COVID-19 in 2020, Codere Online was not able to fully conduct its planned marketing spend for the year ended December 31, 2020. Therefore, marketing expenses increased by a smaller margin than Codere Online’s other operating expenses for the year ended December 31, 2020.

Operating income/(loss)

As a result of the foregoing, operating loss decreased €1.7 million, or 10.3%, to €14.2 million for the year ended December 31, 2020 from €15.9 million for the year ended December 31, 2019.

Finance costs

Finance costs increased €0.2 million, or 93.3%, to €0.5 million for the year ended December 31, 2020 from €0.3 million for the year ended December 31, 2019. The increase was primarily due to an increase in interest expense related to the participating intra-group loans (all of which were capitalized on June 30, 2021 (see “—Liquidity and Capital Resources—Indebtedness”)) partially offset by more favorable foreign exchange differences.

Net income/(loss) before tax

As a result of the foregoing, net loss before tax decreased €1.3 million, or 8.5%, to €14.8 million for the year ended December 31, 2020 from €16.1 million for the year ended December 31, 2019.

Income tax benefit/(expense)

There was €1.5 million of income tax expense for the year ended December 31, 2020, compared with €0.1 million of income tax benefit for the year ended December 31, 2019. The change was primarily due to a decrease in permanent differences.

Net income/(loss) for the year

As a result of the foregoing, net loss for the year was €16.3 million for the year ended December 31, 2020 and €16.1 million for the year ended December 31, 2019.

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Liquidity and Capital Resources

Liquidity

Codere Online has incurred losses in the operation of its business driven primarily by its operating expenses, including, among others, marketing and professional services expenses, since its inception. Codere Online anticipates that its expenses will increase and that it will continue to incur losses in the future until at least it reaches full-scale commercial operation.

Codere Online measures liquidity in terms of its ability to fund the cash requirements of its business operations, including working capital needs, contractual obligations and other commitments, with cash flows from operations and other sources of funding. Since inception and up to the consummation of the Business Combination, Codere Online has funded the cash requirements of its business operations primarily through cash flows from operations and shareholder contributions and other financing obtained from the Codere Group. 

Codere Online had €6.6 million in cash and cash equivalents as of June 30, 2021 (€10.9 million and €8.0 million as of December 31, 2020 and 2019, respectively), of which €2.8 million was restricted (€2.6 million and €2.5 million as of December 31, 2020 and 2019, respectively). Restricted cash corresponded to cash from Spanish clients where the regulation requires Codere Online to maintain one (1) euro as restricted cash for each euro the customer has in the virtual wallet. Upon the consummation of the Business Combination, Codere Online received approximately $116 million in cash (approximately $103 million net of transaction fees and expenses). Based on the above and on its current level of operations, Codere Online believes that cash on hand and cash generated from operations will be adequate to meet its anticipated obligations under its contracts, borrowings requirements and working capital needs for the next twelve months. However, Codere Online cannot provide any assurance that this will be the case or that Codere Online will be commercially successful or achieve or sustain profitability in the future. See “Risk Factors—Risks Related to Codere Online—Codere Online is an early stage company which has not yet demonstrated its ability to obtain profits and expects to incur significant expenses and continuing losses for the foreseeable future.”

Codere Online expects its working capital requirements to continue to increase in the immediate future, as it consolidates its position in the Spanish market, invests in becoming an operator of reference in the Latin American market, launches its operations in Argentina (following LOTBA’s approval in December 2021), increases its marketing expenses and enhances its platform. As a result thereof, Codere Online may seek additional funding in the future, including through a combination of equity or debt financings, third-party funding or other sources and arrangements. If any needed financing is not available, or if the terms of financing are less desirable than Codere Online expects, it may be forced to decrease its level of investment in its platform, new product launches or related marketing initiatives or to scale back its existing operations, which could have an adverse impact on Codere Online’s business and financial prospects.

Indebtedness

As of June 30, 2021, December 31, 2020 and December 31, 2019, Codere Online’s indebtedness primarily consisted of current and non-current financial liabilities in the form of borrowings with related parties.

Codere Online’s borrowings, which amounted to €1.1 million as of June 30, 2021 (€39.2 million and €51.7 million as of December 31, 2020 and 2019, respectively), consisted of €1.1 million of current borrowings (€17.8 million and €30.3 million as of December 31, 2020 and 2019, respectively) and no non-current borrowings (€21.4 million as of December 31, 2020 and 2019). On June 30, 2021, Codere Online capitalized €38.5 million of its current and non-current borrowings with entities from the Codere Group, thus significantly reducing Codere Online’s debt. As of December 31, 2020 and 2019, current borrowings related to short-term loans, mainly composed of debt with entities from the Codere Group and amounted to €17.8 million and €29.9 million, respectively. As of December 31, 2020 and 2019, the non-current borrowings related to participating loans from entities in the Codere Group.

As of December 31, 2020, the average interest rate on debt extended by Codere Group companies was 6.0%. All transactions between Codere Online and other Codere Group companies were made at arm’s-length.

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The table below provides certain summary information on the outstanding participating intra-group loans as of December 31, 2020.

Lender	Debtor	Principal Amount (in Euros)		Loan Date	Expiration Date(1)	Interest Rate
Codere España, S.L.	CDON		75,500	12/30/2011	12/30/2023		6	%
Codere España, S.L.	CDON		50,000	12/30/2014	12/30/2023		6	%
Codere España, S.L.	CDON		15,000	03/01/2015	03/01/2024		6	%
Codere España, S.L.	CDON		3,000,000	06/01/2015	05/31/2024		6	%
Codere España, S.L.	CDON		600,000	12/30/2015	12/30/2024		6	%
Codere España, S.L.	CDON		3,500,000	12/30/2016	12/30/2021		6	%
Codere España, S.L.	CDON		6,000,000	12/30/2017	12/30/2022		6	%
Codere España, S.L.	CDON		300,000	12/30/2018	12/30/2023		6	%
Codere España, S.L.	CDON		2,650,000	12/23/2019	01/16/2024		6	%
Codere Newco	SEJO		250,000	03/01/2019	03/01/2024		6	%
Codere España, S.L.	CDON		5,000,000	12/31/2019	12/31/2024		6	%
			21,440,500

(1) Codere Online capitalized all of the intra-group non-current financial liabilities included in the above table on June 30, 2021.

In addition, Codere Online had the following intra-group current financial liabilities as of December 31, 2020. Except for the intra-group current financial liabilities from other retail companies ($746,000), all the liabilities in the table below were capitalized on June 30, 2021.

Lender	Debtor	Principal Amount (in Euros)
Codere Newco	SEJO		9,048,000
Codere Italia S.P.A	Codere Scommese S.r.l.		1,339,000
Codere España, S.L.	Codere Online S.A.U.		6,644,000
Other retail companies	Codere Online S.A.U.		746,000
Total			17,777,000

Codere Online had negative equity of €8.0 million as of June 30, 2021 (€39.9 million and €31.3 million as of December 31, 2020 and 2019, respectively). The vast majority of this negative equity is the result of net losses generated in previous years by companies that are part of the combined perimeter of the Annual Combined Carve-out Financial Statements. The increase in equity as of June 30, 2021 of €31.9 million compared to December 31, 2020 was due to the capitalization of €43.4 million of intra-group borrowings and trade payables and other current assets on June 30, 2021, as further described below.

Additionally, Codere Online had negative working capital amounting to €8.9 million as of June 30, 2021 (€19.7 million and €12.0 million as of December 31, 2020 and 2019, respectively). The negative working capital at December 31, 2020 and 2019 was generated mainly by debts with the Codere Group for the financing received for the expansion of the online business. The decrease in negative working capital from December 31, 2020 to June 30, 2021 was primarily due to the capitalization of the majority of the Codere Online’s current borrowings with Codere Group entities.

On June 30, 2021, Codere Online reduced its debt held with Codere Group entities through the capitalization of €38.5 million of its current and non-current borrowings and €4.9 million of its trade payables and other current liabilities held with Codere Group entities for total capitalized liabilities of €43.4 million. This significantly reduced current borrowings and reduced non-current borrowings to €0. The debt that was capitalized had been formalized between Codere España, S.L. and Codere Online for €28.1 million, Codere Newco and OMSE for €4.4 million, Codere Newco and SEJO for €9.5 million and Codere Scommese S.r.l and Codere Italy S.A.U. for €1.4 million.

Additionally, pursuant to the Business Combination Agreement, prior to the Merger Effective Time, Codere Newco and SEJO either capitalized or canceled all outstanding indebtedness of SEJO and its subsidiaries by Codere Newco or any of its subsidiaries (other than Holdco) so that at the Exchange Effective Time neither SEJO nor any of its subsidiaries had any indebtedness outstanding.

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Cash Flows Summary

Presented below is a summary of Codere Online’s combined carve-out operating, investing and financing cash flows for the periods indicated:

	For the Six Months Ended June 30,						For the Year Ended December 31,
(in thousands of euros)	2021			2020			2020			2019
	(Unaudited)
Net cash provided by/(used in):
Operating activities		(4,524	)		(1,005	)		3,856			(1,242	)
Investing activities		(31	)		(381	)		(72	)		(275	)
Financing activities(1)		221			100			(175	)		6,814
Effect of exchange rate on cash and cash equivalents		17			207			(726	)		91
Net change in cash and cash equivalents		(4,317	)		(1,079	)		2,883			5,388

(1) Relates mainly to intra-group loans and lease payments for the six months ended June 30, 2021, lease payments for the six months ended June 30, 2020 and intra-group loans for the years ended December 31, 2020 and 2019.

Cash Flows from Operating Activities

Net cash used in operating activities was €4.5 million for the six months ended June 30, 2021 compared to €1.0 million for the six months ended June 30, 2020. The change of €3.5 million was primarily due to the increase in the marketing expenditure in the first half of 2021, which contrasted with the lower marketing expenditure in the first half of 2020 due to the restrictions on marketing that were in place as a result of the pandemic. In the first half of 2021, Codere Online significantly increased its spending on marketing until May 2021, when new marketing restrictions became effective in Spain (see “Risk Factors—Risks Related to Codere Online—The online gaming industry is subject to extensive regulation (including applicable direct and indirect taxation, anti-corruption, anti-money laundering and economic sanctions laws) as well as licensing requirements. Codere Online’s business may be adversely affected if it is unable to comply with regulations or licensing requirements or any regulatory changes”). The increase in marketing expenses driving the cash outflow was partially offset by an increase in revenue as a result of an increase in the number of customers and in increased wages per customer both in the online casino and sports betting businesses. An additional driver of the increase in cash used in operating activities was a result of the Company’s increase in professional services and other expenses, including higher expenses for the streaming service due to additional sports being added to the service as well as increased broadcast costs.

Net cash provided by operating activities was €3.9 million for the year ended December 31, 2020 compared to net cash used in operating activities of €1.2 million for the year ended December 31, 2019. The change of €5.1 million was primarily due to changes in working capital, specifically, an increase in income taxes payable as compared to 2019.

Cash Flows from Investing Activities

Net cash used in investing activities was approximately €0.1 million for the six months ended June 30, 2021 compared to €0.4 million for the six months ended June 30, 2020. The decrease in net cash used in investing activities was primarily due to Codere Online having no payments for investments during the six months ended June 30, 2021 compared to payments for investments of €0.3 million during the six months ended June 30, 2020.

Net cash used in investing activities was approximately €0.1 million for the year ended December 31, 2020 compared to €0.3 million for the year ended December 31, 2019. The change of €0.2 million was primarily due to the decrease in receivables from payment service providers as a result of the decrease in deposits made by customers through these payment service providers to their online wallets compared to 2019.

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Cash Flows from Financing Activities

Net cash provided by financing activities was €0.2 million for the six months ended June 30, 2021 compared to €0.1 million for the six months ended June 30, 2020. The change was mainly attributable to the drawdown of €0.5 million of additional debt from Codere Group entities by Codere Online in the first half of 2021.

Net cash used in financing activities was €0.2 million for the year ended December 31, 2020 compared to cash flows provided by financing activities of €6.8 million for the year ended December 31, 2019. The change was mainly attributable to the drawdown, in 2019, of €7.9 million of additional debt from Codere Group entities by Codere Online.

Trade Receivables and Other Current Assets

Codere Online’s trade receivables and other current assets, which amounted to €1.2 million as of June 30, 2021 (€1.7 million and €29.7 million as of December 31, 2020 and 2019, respectively), consisted primarily of receivables from the Codere Group companies, current tax asset related to value added tax (VAT), prepaid expenses and other receivables. Fluctuations in trade receivables and other current assets were mainly driven by changes in receivables from the Codere Group companies. There was no significant change in trade receivables and other current assets from December 31, 2020 to June 30, 2021. Trade receivables and other current assets decreased €28.0 million to €1.7 million as of December 31, 2020 from €29.7 million as of December 31, 2019, which was also primarily due to the agreement to settle Codere Online debt with Codere Group companies. The settlement agreement allowed Codere Online to offset historical trade receivable and trade payable balances as part of the reorganization of intragroup debt, including a trade receivable balance from Codere Apuestas España, S.A.U., amounting to €25.4 million immediately before the amounts were settled on December 31, 2020.

Trade Payables and Other Current Liabilities

Codere Online’s trade payables and other current liabilities, which amounted to €18.7 million as of June 30, 2021 (€19.2 million and €23.8 million as of December 31, 2020 and 2019, respectively), consisted of trade payables, customer online wallets and other current liabilities. Fluctuations in trade payables and other current liabilities are mainly driven by the growth of the business. As described above, on June 30, 2021, Codere Online capitalized €43.4 million of its liabilities with Codere Group companies, which included trade payables and other current liabilities amounting to €4.9 million immediately prior to being capitalized on June 30, 2021.

Contractual Obligations and Commitments

The following table summarizes Codere Online’s contractual obligations and other commitments for cash expenditures as of June 30, 2021, and the years in which these obligations were due:

	Payments Due by Period
(in thousands of euros)	Total		Less than 1 Year		1-5 Years		More than 5 Years
Contractual Obligations:
Non-current borrowings		-		-		-		-
Current borrowings		1,138		1,138		-		-
Total		1,138		1,138		-		-

Off-Balance Sheet Arrangements

As of June 30, 2021, Codere Online did not have any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

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Critical Accounting Policies and Estimates

The Holdco Financial Statements, the 3Q Combined Carve-out Financial Information, the Interim Combined Carve-out Condensed Financial Statements and the Annual Combined Carve-out Financial Statements, have been prepared in accordance with IFRS, as issued by the IASB and pursuant to the interpretations issued by the Interpretation Committee of the IASB. The Interim Combined Carve-out Condensed Financial Statements have been prepared in accordance with IAS 34, “Interim Financial Reporting” issued by the IASB, do not include all of the information required for full annual financial statements and should be read in conjunction with the Annual Combined Carve-out Financial Statements.

The preparation of these financial statements requires Codere Online to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Codere Online’s estimates are based on its historical experience and on various other factors that Codere Online believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions. Codere Online believes that the accounting policies discussed below are critical to understanding its historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

While Codere Online’s significant accounting policies are described in the notes to its Annual Combined Carve-out Financial Statements, Codere Online believes that the following accounting policies require a greater degree of judgment and complexity and are the most critical to understanding its financial condition and historical and future results of operations. For additional information on Codere Online’s critical accounting policies and estimates, see Note 3 to the Annual Combined Carve-out Financial Statements.

Basis of combination

The Interim Combined Carve-out Condensed Financial Statements and the Annual Combined Carve-out Financial Statements were prepared using Codere Group’s historical figures including all revenues, expenses, assets and liabilities attributed to the Codere Online Business. In addition, other operating expenses include certain general and administrative services provided by Codere. Codere Online believes that by including these costs, the combined carve-out income statements include a reasonable estimate of actual costs incurred to operate its business. However, such expenses may not be indicative of the actual level of expense that would have been incurred by Codere Online if it had operated as an independent, publicly-traded company during the precedent periods or of the costs expected to be incurred in the future. Further, the Interim Combined Carve-out Condensed Financial Statements and the Annual Combined Carve-out Financial Statements do not account for the Restructuring Agreements that were recently entered into in Colombia, Panama (except for the agreement that Codere Online Panama and ALTA entered into on December 1, 2021) and the City of Buenos Aires (Argentina), where the effective transfer of part or all of the Codere Online Business is pending. See “Risk Factors—Risk Factors Related to the Financial Information and this Prospectus—The Holdco Financial Statements, the Interim Combined Carve-out Condensed Financial Statements, the Annual Combined Carve-out Financial Statements and the 3Q Combined Carve-out Financial Information are not necessarily indicative of the results of operations and financial position of Codere Online” and “Certain Relationships and Related Party Transactions—Material Agreements.” Codere Online’s management believes that the intercompany eliminations and adjustments necessary for a fair presentation of the combined carve-out financial statements in accordance with IFRS, as issued by IASB, have been made.

Financial instruments

Financial assets and financial liabilities are recognized when a Codere Online group entity becomes a party to the contractual provisions of a financial instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, other than financial assets and financial liabilities at fair value through net income or loss, are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through net income or loss are recognized immediately in the combined carve-out income statement. For additional information on Codere Online’s accounting policies on financial instruments, including with regard to the impairment of financial assets and derecognition of financial assets and liabilities, see Note 3.f) to the Annual Combined Carve-out Financial Statements.

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Revenue

Revenue from contracts with customers is recognized when service is provided to the customer at an amount that reflects the consideration to which Codere Online expects to be entitled in exchange for those services. Codere Online has generally concluded that it is the principal in its revenue arrangements because it typically controls the services before providing them to the customer.

Online gambling

Codere Online generates its revenues from online gambling, including online casino and sports betting. Codere Online recognizes revenue from online gambling at the point in time at the conclusion of each wager and is recorded as gambling revenue in the accompanying combined carve-out income statement. Codere Online reports all the wins as revenue and Codere Online’s provider’s share is reported in other operating expenses.

Balances related to revenue

A contract liability is the obligation to provide the gambling service to a customer for which Codere Online has received consideration from the customer, at which time a contract liability is recognized under trade payables and other current liabilities. For example, online sports betting involves a player placing a wager on a particular outcome of a sporting event at some fixed odds.

Quantitative and Qualitative Disclosures about Market Risk

Codere Online is exposed to a variety of market and other risks, including the effects of changes in foreign currency exchange rates and liquidity, as well as credit risks and other risks and hazard events.

Liquidity risk

Codere Online is exposed to liquidity risk in the event that a mismatch arises between its financing needs, including operating and financial expenses and investments, and its sources of financings, including revenues, divestments and credit lines from financial institutions and financial instruments from related parties (including capital contributions).

Codere Online’s general financial policy consists of managing liquidity to ensure that funds required for future obligations are available via cash from operations and, at times, other financing sources from related parties and/or third parties.

Exchange rate risk

Codere Online is exposed to exchange rate risk given that its functional currency is the euro and the value of any financial assets and liabilities denominated in a different currency is subject to variations as a result of fluctuations in the relevant exchange rates.

The balances of Codere Online related to foreign currency are considered non-significant and almost all with related parties. With the aim to protect its solvency and financial results, Codere Online actively manages exchange rate risks through internal policies to control the exposure of balances to foreign currency in order to minimize the risks associated with exchange rate variations and optimize its financial costs.

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Sensitivity analysis

The following table details the sensitivity of Codere Online’s combined carve-out income statement (net loss) and changes in equity for the six months ended June 30, 2021, to a 10% increase and decrease, as indicated below, in the euro against the relevant foreign currencies (Colombian peso (COP), Mexican peso (MXN) and Israeli new shekel (ILS)). The analysis assumes that all variables, in particular interest rates, remain constant.

(in thousands of euros)			Sensitivity -10%				Sensitivity +10%
Currency	Exchange rate as of June 30, 2021		Income statement		Equity		Income statement			Equity
COP/EUR		4,464.43		8		-		(8	)		-
MXN/EUR		23.66		22		-		(22	)		-
ILS/EUR		3.87		4		-		(4	)		-

The following tables detail the sensitivity of Codere Online’s combined carve-out income statement (net loss) and changes in equity for the years ended December 31, 2020 and 2019, to a 10% increase and decrease, as indicated below, in the euro against the relevant foreign currencies (Colombian peso (COP), Mexican peso (MXN) and Israeli new shekel (ILS)). The analysis assumes that all variables, in particular interest rates, remain constant.

(in thousands of euros)			Sensitivity -10%					Sensitivity +10%
Currency	Exchange rate as of December 31, 2020		Income statement			Equity		Income statement		Equity
COP/EUR		4,212.0		(44	)		-		44		-
MXN/EUR		24.5		(212	)		-		212		-
ILS/EUR		3.9		(6	)		-		6		-

(in thousands of euros)			Sensitivity -10%					Sensitivity +10%
Currency	Exchange rate as of December 31, 2019		Income statement			Equity		Income statement			Equity
COP/EUR		3,681.5		59			-		(59	)		-
MXN/EUR		21.2		(11	)		-		11			-
GBP/EUR		0.8		21			-		(21	)		-
ILS/EUR		3.9		(1	)		-		1			-

Credit risk

Codere Online is exposed to the risk of a counterparty to an agreement not complying with its contractual obligations, thus negatively affecting results of operations of Codere Online. Codere Online’s main financial assets exposed to credit risk are trade receivables and other current assets and current financial assets.

Impairment provisions are determined on the basis of lifetime expected credit losses, including those expected at the individual level, using reasonable and supportable forward-looking information, based on the best information available at the date of authorizing the financial statements for issue. They are re-estimated at every reporting date on an individual basis, using the following criteria:

● the age of the debt;

● the existence of financial difficulties, including bankruptcy proceedings; and

● an analysis of the debtor’s ability to repay the loan extended.

As described in Note 3 to the Annual Combined Carve-out Financial Statements, Codere Online’s historical credit loss experience between Codere Group entities is nil. The expected credit loss is estimated based on external risk parameters that are publicly available, such as the probability of default (PD) of the Codere Group and a loss given at default (LGD) of 100%.

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Non-GAAP Financial Data

In addition to the measures expressly defined in the IFRS, Codere Online also uses EBITDA, which is a non-GAAP measure, for decision-making. Codere Online believes EBITDA is useful in evaluating Codere Online’s operating performance, as it is similar to measures reported by its public competitors and is regularly used by security analysts, institutional investors and other interested parties in analyzing operating performance and prospects. EBITDA is not intended to be a substitute for any IFRS financial measure and, as calculated, may not be comparable to other similarly-titled measures of performance of other companies in other industries or within the same industry. EBITDA should not be viewed in isolation or as a substitute for the measures presented according to IFRS.

EBITDA is calculated as net income/(loss), after adding back interest expense, income tax expense (benefit) and depreciation and amortization.

Comparison of the six months ended June 30, 2021 and 2020

The following table sets forth a reconciliation of EBITDA to net income/(loss) for the six months ended June 30, 2021 and the six months ended June 30, 2020.

	For the six months ended June 30,						Change
(in thousands of euros)	2021			2020			€			%
Net income/(loss) for the period		(13,267	)		(6,777	)		(6,490	)		95.8	%
Interest expense(1)		94			52			42			80.8	%
Income tax expense/(benefit)		222			743			(521	)		(70.1	%)
Depreciation and amortization		377			543			(166	)		(30.6	%)
EBITDA		(12,574	)		(5,439	)		(7,135	)		131.2	%

(1) Interest expense was calculated by summing all interest expense accounts that are included within finance costs in the combined carve-out income statements.

The following table sets forth EBITDA by segment for the six months ended June 30, 2021 and the six months ended June 30, 2020.

	For the six months ended June 30,						Change
(in thousands of euros)	2021			2020			€			%
Spain		(2,059	)		2,522			(4,581	)		n.m.
Mexico		(4,662	)		(3,352	)		(1,310	)		39.1	%
Colombia		(1,754	)		(452	)		(1,302	)		288.1	%
Other Operations		(278	)		(148	)		(130	)		87.8	%
Supporting Entities		(3,644	)		(3,606	)		(38	)		1.1	%
Intercompany Eliminations		(177	)		(403	)		226			(56.1	%)
EBITDA		(12,574	)		(5,439	)		(7,135	)		131.2	%

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EBITDA (Spain)

EBITDA from Spain corresponds to net income/(loss), after adding back interest expense, income tax expense (benefit) and depreciation and amortization from Codere Online’s assets based in Spain.

The following table provides a reconciliation of EBITDA from Spain to net income/(loss) from Spain for the six months ended June 30, 2021 and the six months ended June 30, 2020.

	For the six months ended June 30,					Change
(in thousands of euros)	2021			2020		€			%
Net income/(loss) for the period		(1,971	)		1,676		(3,647	)		n.m.
Interest expense		-			-		-			0.0	%
Income tax expense/(benefit)		(181	)		559		(740	)		n.m.
Depreciation and amortization		93			287		(194	)		(67.6	%)
EBITDA from Spain		(2,059	)		2,522		(4,581	)		n.m.

In Spain, Codere Online recorded negative EBITDA of €2.1 million for the six months ended June 30, 2021 and positive EBITDA of €2.5 million for the six months ended June 30, 2020. The year-on-year change was primarily due to the Company generating operating losses of €2.2 million for the six months ended June 30, 2021 compared to operating income of €2.2 million for the six months ended June 30, 2020 in Spain. The shift from operating income to an operating loss between the two periods was due to an increase in other operating expenses of €8.6 million, which was primarily a result of an increase in marketing expenses of €6.4 million (on a gross basis, before intercompany eliminations) in the first half of 2021, which contrasted with the lower marketing expenditure in the first half of 2020 due to the restrictions on marketing that were in place as a result of the pandemic. In the first half of 2021, Codere Online significantly increased its spending on marketing until May 2021, when new marketing restrictions became effective in Spain. Further contributing to the increase in operating loss was an increase in professional services and other expenses of €0.8 million (on a gross basis, before intercompany eliminations), which was primarily related to the expansion of Codere Online’s streaming services offered as well as increased broadcasting costs due to sporting events resuming. As a result, operating expenses in the first half of 2021 increased at a higher rate than revenues, and Codere Online recorded negative EBITDA for the first half of 2021.

EBITDA (Mexico)

EBITDA from Mexico corresponds to net income/(loss), after adding back interest expense, income tax expense (benefit) and depreciation and amortization from Codere Online’s assets based in Mexico.

The following table provides a reconciliation of EBITDA from Mexico to net income/(loss) from Mexico for the six months ended June 30, 2021 and the six months ended June 30, 2020.

	For the six months ended June 30,						Change
(in thousands of euros)	2021			2020			€			%
Net income/(loss) for the period		(4,664	)		(3,353	)		(1,311	)		39.1	%
Interest expense		-			-			-			0.0	%
Income tax expense/(benefit)		-			-			-			0.0	%
Depreciation and amortization		2			1			1			100.0	%
EBITDA from Mexico		(4,662	)		(3,352	)		(1,310	)		39.1	%

EBITDA from Mexico decreased €1.3 million to negative EBITDA of €4.7 million for the six months ended June 30, 2021 from negative EBITDA of €3.4 million for the six months ended June 30, 2020. The year-on-year change was primarily due to an increase in operating loss from €3.4 million to €4.8 million, which was driven mainly by an increase in other operating expenses of €6.0 million partially offset by an increase in revenue of €4.6 million. The increase in other operating expenses was related primarily to the increase in marketing expenses in the first half of 2021 of €3.0 million (on a gross basis, before intercompany eliminations), and the increase in professional services and other expenses of €1.3 million (on a gross basis, before intercompany eliminations) which was primarily related to the expansion of Codere Online’s streaming services offered as well as increased broadcasting costs due to sporting events resuming.

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EBITDA (Colombia)

EBITDA from Colombia corresponds to net income/(loss), after adding back interest expense, income tax expense (benefit) and depreciation and amortization from Codere Online’s assets based in Colombia.

The following table provides a reconciliation of EBITDA from Colombia to net income/(loss) from Colombia for the six months ended June 30, 2021 and the six months ended June 30, 2020.

	For the six months ended June 30,						Change
(in thousands of euros)	2021			2020			€			%
Net income/(loss) for the period		(1,755	)		(452	)		(1,303	)		288.3	%
Interest expense		-			-			-			0.0	%
Income tax expense/(benefit)		-			-			-			0.0	%
Depreciation and amortization		1			-			1			n.m.
EBITDA from Colombia		(1,754	)		(452	)		(1,302	)		288.1	%

EBITDA from Colombia decreased €1.3 million to negative EBITDA of €1.8 million for the six months ended June 30, 2021 from negative EBITDA of €0.5 million for the six months ended June 30, 2020. The decrease was primarily due to an increase in operating loss from €0.5 million to €1.8 million, which was driven mainly by an increase in other operating expenses of €2.4 million partially offset by an increase in revenue of €1.5 million. The increase in other operating expenses was related primarily to the increase in marketing expenses in the first half of 2021 of €1.8 million (on a gross basis, before intercompany eliminations).

EBITDA (Supporting Entities)

EBITDA from the Supporting Entities corresponds to net income/(loss), after adding back interest expense, income tax expense (benefit) and depreciation and amortization from Codere Online’s assets based in Malta, Gibraltar and Israel.

The following table provides a reconciliation of EBITDA from the Supporting Entities to net income/(loss) from the Supporting Entities for the six months ended June 30, 2021 and the six months ended June 30, 2020.

	For the six months ended June 30,						Change
(in thousands of euros)	2021			2020			€			%
Net income/(loss) for the period		(4,482	)		(4,318	)		(164	)		3.8	%
Interest expense		204			212			(8	)		(3.8	%)
Income tax expense/(benefit)		403			245			158			64.5	%
Depreciation and amortization		231			255			(24	)		(9.4	%)
EBITDA from the Supporting Entities		(3,644	)		(3,606	)		(38	)		1.1	%

EBITDA from the Supporting Entities remained stable at negative EBITDA of €3.6 million for the six months ended June 30, 2021 and for the six months ended June 30, 2020.

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Comparison of the year ended December 31, 2020 to the year ended December 31, 2019

The following table sets forth a reconciliation of EBITDA to net income/(loss) for the year ended December 31, 2020 and the year ended December 31, 2019.

	For the year ended December 31,						Change
(in thousands of euros)	2020			2019			€			%
Net income/(loss) for the year		(16,279	)		(16,093	)		(186	)		1.2	%
Interest expense		394			194			200			103.1	%
Income tax expense/(benefit)		1,510			(53	)		1,563			n.m.
Depreciation and amortization		932			1,193			(261	)		(21.9	)%
EBITDA		(13,443	)		(14,759	)		1,316			(8.9	%)

The following table sets forth EBITDA by segment for the year ended December 31, 2020 and the year ended December 31, 2019.

	For the year ended December 31,						Change
(in thousands of euros)	2020			2019			€			%
Spain		4,723			(248	)		4,971			n.m.
Mexico		(7,866	)		(6,538	)		(1,328	)		20.3	%
Colombia		(1,250	)		(2,483	)		1,233			(49.7	%)
Other Operations		(134	)		181			(315	)		(174.0	%)
Supporting Entities		(8,480	)		(5,442	)		(3,038	)		55.8	%
Intercompany eliminations		(436	)		(229	)		(207	)		90.4	%
EBITDA		(13,443	)		(14,759	)		1,316			(8.9	%)

EBITDA (Spain)

EBITDA from Spain corresponds to net income/(loss), after adding back interest expense, income tax expense (benefit) and depreciation and amortization from Codere Online’s assets based in Spain.

The following table provides a reconciliation of EBITDA from Spain to net income/(loss) from Spain for the year ended December 31, 2020 and the year ended December 31, 2019.

	For the year ended December 31,					Change
(in thousands of euros)	2020		2019			€			%
Net income/(loss) for the year		2,895		(650	)		3,545			n.m.
Interest expense		281		56			225			401.8	%
Income tax expense/(benefit)		1,077		(400	)		1,477			n.m.
Depreciation and amortization		470		746			(276	)		(37.0	)%
EBITDA from Spain		4,723		(248	)		4,971			n.m.

In Spain, Codere Online recorded positive EBITDA of €4.7 million for the year ended December 31, 2020 compared to negative EBITDA of €0.3 million for the year ended December 31, 2019. The year-on-year change was primarily due to the increase in operating income from a loss of €1.0 million to income of €4.3 million, which was driven mainly by an increase in revenue of €4.2 million and a decrease in other operating expenses of €0.9 million.

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EBITDA (Mexico)

EBITDA from Mexico corresponds to net income/(loss), after adding back interest expense, income tax expense (benefit) and depreciation and amortization from Codere Online’s assets based in Mexico.

The following table provides a reconciliation of EBITDA from Mexico to net income/(loss) from Mexico for the year ended December 31, 2020 and the year ended December 31, 2019.

	For the year ended December 31,						Change
(in thousands of euros)	2020			2019			€			%
Net income/(loss) for the year		(7,867	)		(6,539	)		(1,328	)		20.3	%
Interest expense		-			-			-			-
Income tax expense/(benefit)		-			-			-			-
Depreciation and amortization		1			1			-			-
EBITDA from Mexico		(7,866	)		(6,538	)		(1,328	)		20.3	%

EBITDA from Mexico decreased €1.3 million, or 20.3%, to negative EBITDA of €7.9 million for the year ended December 31, 2020 from negative EBITDA of €6.6 million for the year ended December 31, 2019. The decrease was primarily due to an increase in operating loss from €6.5 million to €7.9 million, which was driven mainly by an increase in other operating expenses of €4.5 million partially offset by an increase in revenue of €3.2 million. The increase in other operating expenses was related primarily to the increase in marketing expenses.

EBITDA (Colombia)

EBITDA from Colombia corresponds to net income/(loss), after adding back interest expense, income tax expense (benefit) and depreciation and amortization from Codere Online’s assets based in Colombia.

The following table provides a reconciliation of EBITDA from Colombia to net income/(loss) from Colombia for the year ended December 31, 2020 and the year ended December 31, 2019.

	For the year ended December 31,						Change
(in thousands of euros)	2020			2019			€		%
Net income/(loss) for the year		(1,252	)		(2,483	)		1,231		(49.6	)%
Interest expense		-			-			-		-
Income tax expense/(benefit)		-			-			-		-
Depreciation and amortization		2			-			-		-
EBITDA from Colombia		(1,250	)		(2,483	)		1,233		(49.7	%)

In Colombia, Codere Online recorded negative EBITDA of €1.3 million for the year ended December 31, 2020 and negative EBITDA of €2.5 million for the year ended December 31, 2019. The change was primarily due to a decrease in operating loss from €2.5 million to €1.3 million, which was driven mainly by an increase in revenue of €0.9 million and a decrease in other operating expenses of €0.4 million.

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EBITDA (Supporting Entities)

EBITDA from the Supporting Entities corresponds to net income/(loss), after adding back interest expense, income tax expense (benefit) and depreciation and amortization from Codere Online’s assets based in Malta, Gibraltar and Israel.

The following table provides a reconciliation of EBITDA from the Supporting Entities to net income/(loss) from the Supporting Entities for the year ended December 31, 2020 and the year ended December 31, 2019.

	For the year ended December 31,						Change
(in thousands of euros)	2020			2019			€			%
Net income/(loss) for the year		(9,935	)		(6,514	)		(3,421	)		52.5	%
Interest expense		448			241			207			85.9	%
Income tax expense/(benefit)		551			385			166			43.1	%
Depreciation and amortization		456			446			10			2.2	%
EBITDA from the Supporting Entities		(8,480	)		(5,442	)		(3,038	)		55.8	%

EBITDA from the Supporting Entities decreased €3.0 million, or 55.8%, to negative EBITDA of €8.5 million for the year ended December 31, 2020 from negative EBITDA of €5.5 million for the year ended December 31, 2019. The decrease was primarily due to an increase in operating loss from €6.0 million to €9.3 million, which was driven mainly by an increase in other operating expenses of €6.8 million partially offset by an increase in revenue of €3.3 million.

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Business

Overview

Codere Online is an international online casino gaming and sports betting company focused on providing its customers with a safe and enjoyable online gaming experience. Codere Online currently operates primarily in Spain, Italy, Mexico, Colombia, Panama and, since December 2021, the City of Buenos Aires (Argentina), where it offers its users the ability to play online casino games and bet on sports events. Codere Online seeks to innovate and expand its product offering on its established and flexible technology platform as it pursues its vision to be the leading online casino gaming and sports betting operator in Latin America. Codere Online maintains a wide and updated catalogue of online casino games with over 1,300 titles from more than 30 third-party content providers.

As part of the Codere Group, Codere Online expects to leverage the “Codere” brand, a well-recognized brand in the gaming industry across Spain and Latin America, by providing customers with an online gaming experience consistent with the Codere Group’s retail footprint. The Codere Group is a leading international gaming operator founded in 1980 with a presence across Spain, Italy and Latin America, including in all of the markets where Codere Online operates. The Codere Group had nearly 57,000 slots in over 10,000 controlled and third-party retail venues throughout Latin America, Spain and Italy as of December 31, 2019 (approximately 34,000 slots and 9,700 retail venues as of June 30, 2021 and 23,000 slots and 6,600 retail venues as of December 31, 2020, as a result of COVID-19 temporary closings).

In 2014, the Codere Group entered into the online gaming business in Spain to pursue new avenues of growth and diversification of its revenue streams, first through Desarrollo Online de Juegos Regulados, S.A. and CDON, and Codere Apuestas, S.A.U. in Madrid, Spain, and afterwards independently through Codere Online, which was created to lead the Codere Group’s expansion into the online casino gaming and sports betting markets beyond Spain. To enhance its business, in 2018, the Codere Group recruited an experienced online management team led by industry veteran Moshe Edree with top tier online casino gaming and sports betting expertise. As of the date of this prospectus, Codere Online has approximately 165 employees, including directors, intermediate managers, technicians and administrative personnel based in Spain, Mexico, Colombia, Panama, Argentina, Israel, Malta and Gibraltar. Codere Online operates under the “Codere” brand across all of its markets.

Codere Online believes it is well-positioned for continued growth with the support of the “Codere” brand, its dedicated and highly-experienced management team and an established and flexible technology platform, and due to other macroeconomic and industry tailwinds. Codere Online believes that this privileged combination of expertise, brand recognition and infrastructure across multiple jurisdictions will not only support its continued success in the markets in which it operates, but also allow Codere Online to capture market share in existing markets and in other expansion markets in the future. In particular, Codere Online seeks to expand into other markets in Latin America (many of which are expected to be regulated in the near future), including Brazil, Chile, Peru, Puerto Rico and Uruguay, as well as Argentina (beyond the City of Buenos Aires, where it started operating in December 2021), subject to obtaining the required regulatory approvals once such markets become regulated. Additionally, Codere Online intends to pursue options to access the large Hispanic market in the United States (an estimated 60 million people as of 2019, according to the U.S. Census Bureau) in the future.

Codere Online’s product offering and platform are designed to create exciting online casino gaming and sports betting experiences for its customers. Codere Online’s established and flexible technology platform has an extensive track record of successfully serving its customers and provides the business with a solid foundation for future growth.

Codere Online has established itself as a leading operator across a number of markets since it began operations. According to Codere Online’s estimates, Codere Online’s market share in the online gaming markets of Mexico, Colombia, Panama and Spain ranged between approximately 3% and 11% in each of such markets in terms of net gaming revenue. Codere Online estimates that it had the second largest market share in both Mexico and Panama online gaming markets in terms of net gaming revenue. Codere Online’s management believes that current market shares have been adversely affected by the financial constraints faced by the Codere Group and are not fully reflective of Codere Online’s potential. In the future, Codere Online expects to use a substantial part of the proceeds of the Business Combination, which was consummated in November 2021, to fund customer acquisition costs. Such proceeds, paired with the fact that Codere Online’s marketing spend is currently estimated to be below market leaders in Spain and Mexico and the other competitive advantages detailed herein, are expected to serve as a foundation for its plan to seek a rapid acquisition of customers and market share growth in Spain, Mexico and our other markets.

In the City of Buenos Aires, where Codere Online started operating in December 2021, Codere Online, through Iberargen S.A., was the first operator to receive approval for its platform implementation program in October 2020 by the City of Buenos Aires’ regulator, LOTBA (Lotería de Buenos Aires). In addition, Codere Online expects to benefit from the Codere Group’s leading retail presence in the Province of Buenos Aires, where it operates 13 bingo halls and has approximately a 42% market share (based on gross gaming revenue according to Codere Online’s estimates as of February 2020).

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For the six months ended June 30, 2021, Codere Online’s revenues grew to €39.9 million compared to €30.0 million for the six months ended June 30, 2020, mainly due to strong revenue trends in Spain, despite regulatory headwinds, and substantial growth achieved across Latin America on the back of a significant increase in average monthly active players, partially due to the impact from the COVID-19 pandemic on sporting events (i.e. cancellation of events) during the six months ended June 30, 2020. Codere Online’s revenues grew to €70.5 million for the year ended December 31, 2020 from €61.6 million for the year ended December 31, 2019 driven mainly by substantial growth of online casino wagering in Spain and Mexico, partially offset by a decrease in sports betting activity, which was negatively impacted by the cancellation or postponement of sporting events as a result of the COVID-19 pandemic.

Codere Online’s Plan

Codere Online aims to become the leading online casino gaming and sports betting operator in Latin America. Codere Online intends to use the proceeds of the Transactions to support its growth plan. In particular, it intends to increase its marketing expenditure in its core markets by signing new high profile sponsorships, increasing its presence in traditional and acquisition media and engaging marketing agencies. It also intends to undertake technology enhancements to support growth, including the continuous improvement of its mobile application features, the implementation of a new bonus engine and a player and content management system upgrade. Finally, it intends to assess options to expand into new high growth markets that are expected to open up through new regulatory frameworks and licensing regimes, in particular, Brazil, Chile, Peru, Uruguay, Puerto Rico and Argentina (beyond the City of Buenos Aires) and fund any resulting licensing costs.

Codere Online’s experience in Latin America is expected to serve as a foundation in the pursuit of options to access the large Hispanic market in the United States in the future, which the Company believes is currently under-penetrated. In particular, Codere Online believes the following to be key factors for any such future expansion: the football-first focus of the sports betting business leveraging sponsorships with football clubs (including Real Madrid, Rayados, River Plate) and/or former football players (such as Carlos Valderrama in Colombia), an online casino product configuration tailored to Hispanic customers (emphasizing electronic bingo and roulette), adapted marketing messaging and promotional campaigns based on cultural associations and affinities, experienced Spanish-speaking call center and customer service, tested Spanish-language front end user interface and experience operating under multiple regulatory regimes across a number of jurisdictions.

Market Opportunity

As stated above, Codere Online aims to become the leading online casino gaming and sports betting operator in Latin America, which is a fast-growing part of the larger global gaming industry. Online casino gaming and sports betting include all online casino games played on a computer or mobile device such as slots, video poker, electronic table games and live dealer table games, bingo and online sports wagering. While the global online casino gaming and sports betting market has experienced significant growth in the last decade, it still remains in the early innings as customers continue to adopt online and mobile platforms, even more so across our Latin American core and intended expansion markets.

Furthermore, the COVID-19 pandemic has served as a catalyst to accelerate growth in the online casino gaming and sports betting industry as many people have spent, and continue to spend, more time at home. The COVID-19 pandemic has changed the manner in which people work and live, with an increased use and dependence on technology and a need for at-home entertainment options. The number of people engaging in online casino gaming and sports betting has increased significantly as a result of these changes, some of which are currently expected to become permanent users.

In Latin America, Codere Online currently operates in Mexico, Colombia, Panama and, since December 2021, the City of Buenos Aires (Argentina). Latin America is expected to represent a key market opportunity within the global online casino gaming and sports betting industry. While most of the region’s online casino gaming and sports betting markets are not yet regulated (markets are either unregulated or have express prohibitions), regulatory frameworks are expected to be underway over the medium-term in regions such as Brazil, Chile, Peru, Puerto Rico, Uruguay and Argentina (excluding the City of Buenos Aires, where there is already a regulatory framework in place). Some key markets have already opened in recent years through new regulatory frameworks and licensing regimes, including Panama in 2018, Colombia in 2019 and the City of Buenos Aires (Argentina) in 2021. As a result, the Latin American region, which has historically been dominated by unregulated and/or illegal offshore market operators is opening up to regulated, on-shore market operators such as Codere Online. The Latin American online casino gaming and sports betting market is expected to not only experience a shift of customers from offshore operators to regulated operators like Codere Online, but also to grow by attracting new users that previously did not participate, due to a lack of trust playing with offshore operators, a lack of payment processing solutions, lack of local customer support or otherwise.

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A recent example of the impact that regulation may produce in terms of rapid growth in the sports betting market is that of the United States, which has grown from $0.4 billion in gross gaming revenue in 2018 to $2.8 billion for the 12-month period ending May 31, 2021 (source: VIXIO GamblingCompliance), and is expected by some estimates to expand into a $39 billion TAM in 2033, according to Goldman Sachs projections. On May 14, 2018, the U.S. Supreme Court issued an opinion determining that the Professional and Amateur Sports Protection Act of 1992 (“PASPA”) was unconstitutional. PASPA prohibited a state from “authorizing by law” any form of sports betting. In striking down PASPA, the U.S. Supreme Court opened the door for state-by-state authorization of sports betting. In the two years since the U.S. Supreme Court’s decision, sports wagering is live or regulated in 23 states and the District of Columbia (as of July 20, 2021, according to VIXIO GamblingCompliance). Of those 24 jurisdictions, 16 authorized statewide online sports wagering while eight remain retail-only (i.e., on-premise sports betting in casinos or other retail locations), according to VIXIO GamblingCompliance. While the overall industry is still nascent, growth has been strong and, for example, for the six-month period ending February 29, 2020 (the last full month prior to COVID-19 sports shutdowns in the United States), online sports wagering revenue in New Jersey, the first state to regulate sports wagering after PASPA was struck down, grew 99% year-over-year including 134% growth in online sports wagering revenue (source: New Jersey Division of Gaming Enforcement).

Moreover, broader demographic tailwinds in Latin America are expected to contribute to the growth of the Latin America online casino gaming and sports betting market. In particular, although the percentage of internet connectivity, smartphone and e-commerce penetration remains low, it has increased substantially over the past five years according to eMarketer and the United Nations International Telecommunication Union database (2019) and it is expected to continue to improve, further broadening Codere Online’s TAM. In particular, Codere Online believes that it will have an estimated $8.0 billion TAM opportunity (by 2027), across its core and expected expansion markets (assuming they become regulated). This figure is based on Codere Online’s estimates, which are based on the gross gaming revenue per capita in comparable markets (based on H2 Gambling Capital data) and adjusted for gross domestic product per capita, the percentage of population with internet connectivity and gambling expenditure as a percentage of GDP.

The Codere Group was an early entrant in Latin America, with retail operations dating back to 1984, and has developed market expertise while facing limited competition from global gaming operators, allowing for a significant first mover advantage. Codere Online believes that it will benefit from its relationship with the Codere Group and its expansive retail footprint of over 10,000 controlled and third-party retail venues as of December 31, 2019 (approximately 6,600 retail venues as of December 31, 2020 as a result of COVID-19 temporary closings) and over three million registered clients in Spain, Italy, Mexico, Colombia, Panama and Argentina, to create value through the existing omnichannel business model. Furthermore, Codere Online expects to continue to have significant support from the Codere Group through several contractual arrangements described in “Certain Relationships and Related Party Transactions.”

Codere Online is led by a seasoned management team of industry experts with decades of experience leading top tier global gaming operators and digital businesses that we believe will enable Codere Online to continue to achieve success in the online casino and sports betting space. With more than 17 years of experience, Moshe Edree, who serves as Codere Online’s Chief Executive Officer, has an extensive track record in senior operating roles at leading online casino gaming and sports betting operators such as Ladbrokes and PartyGaming. Oscar Iglesias, who serves as Codere Online’s Chief Financial Officer (CFO), has over 20 years of experience and previously served as CFO and Head of Corporate Development for Franklyn Hotels & Resorts, Principal of WL Ross & Co. and financial (REGAL) and research (gaming) analyst at Bear Stearns. Gonzalo de Osma, who serves as Codere Online’s Chief Accounting Officer, has over 15 years of experience and previously served as Finance Planning Manager and CFO for Mexico for the Codere Group. Aviv Sher, who serves as Codere Online’s Chief Operating Officer (COO), has over 15 years of experience and previously served as COO of NeoGames and chief executive officer (CEO) of Prime Gaming. Alberto Telias, who serves as Codere Online’s Chief Marketing Officer, has over 11 years of experience and previously served as Marketing Manager at William Hill and Head of Paid Social Media at The Stars Group. Yaiza Rodríguez, who serves as Codere Online’s General Counsel, has over 10 years of experience, and previously worked as an M&A and corporate finance attorney in Herbert Smith Freehills and Cuatrecasas. Erez Leket, who serves as Codere Online’s Head of Product, has over 15 years of experience and previously served as Business Change Manager at Kindred and Senior Product Manager at William Hill. Deborah Guivisdalsky, who serves as Codere Online’s Head of CRM and VIP, has over 15 years of experience and previously served as Head of Customer Experience at Jackpot.com and Head of VIP Digital at Ladbrokes.

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Codere Online’s Investment Highlights

Codere Online’s investment highlights include the following:

Critical market opportunity to capitalize on the expansive Latin American TAM, with limited competition from global gaming operators

We believe Codere Online is well-positioned to capitalize on the expansive Latin American TAM. As described above, Latin America is expected to represent a key market opportunity within the global online casino gaming and sports betting industry, underpinned by the rapidly increasing internet connectivity, smartphone use and e-commerce penetration. While most of the region’s online casino gaming and sports betting markets are currently either unregulated or have express prohibitions, regulatory frameworks are expected to be introduced over the medium-term in regions such as Brazil, Chile, Peru, Puerto Rico, Uruguay and Argentina (excluding the City of Buenos Aires, where there is already a regulatory framework in place). Codere Online has been operating in Mexico since 2016 (full commercial launch in 2019), in Panama since 2018, in Colombia since 2019 and in the City of Buenos Aires (Argentina) since December 2021.

As a result of its existing operations and access to significant capital from this transaction, we believe that Codere Online has an advantage to capture a leading share of the approximately $3.0 billion estimated TAM opportunity by 2027 in its core and expected expansion markets (assuming they become regulated) in Latin America, with estimated TAMs of approximately $1.0 billion and $2.0 billion, respectively (as per Codere Online’s estimates based on H2 Gambling data for gross gaming revenue per capita in comparable markets, and adjusted for gross domestic product per capita, the percentage of population with internet connectivity and gambling expenditure as a percentage of GDP). Such advantage is based on, among other factors, (i) the deployment of the well-known “Codere” brand throughout the region, (ii) Codere Online’s already-established deep relationships with media/marketing channels, payment processing solutions companies and other suppliers, and (iii) the leading and well established retail presence of the Codere Group throughout the region (and relationships with governments and regulators), which Codere Online considers to be unique with respect to its competitors, and which serve as the foundation for the Codere Group’s omnichannel strategy.

The Codere Group has extensive experience as a leading retail gaming operator in Latin America (over 35 years). In particular, the Codere Group has been present in Colombia for over 35 years, in Argentina for around 30 years, in Mexico for over 20 years and in Panama for around 15 years. Further, Codere was named Casino Operator of the Year at the SBC Awards Latinoamérica in November 2021.

Accretive omnichannel opportunity leveraging leading retail footprint throughout Latin America

Codere Online has a unique opportunity to leverage the retail footprint of the Codere Group, underpinning Codere Online’s omnichannel business model. The ability to attract customers from the Codere Group’s retail operations is a relevant component of Codere Online’s success. Solely with respect to the markets in which Codere Online currently operates (Spain, Italy, Mexico, Colombia and Panama), the Codere Group’s retail database has over three million registered clients. The Codere Group’s omnichannel strategy consists of cross-selling initiatives and coordinated promotional campaigns leveraging the retail customer databases, enhanced payment processing options (i.e., cash withdrawals and deposits in retail locations), improved customer service (on premise face-to-face communication) and an affiliate program that incentivizes the Codere Group’s retail business to drive customers to the online business. Codere Online’s management believes that this omnichannel strategy serves as an important advantage in promoting Codere Online’s products to new customers and enhances their overall customer experience.

Moreover, through this omnichannel strategy, Codere Online reduces customer acquisition costs, as many players are already in the Codere Group eco-systems, resulting in lower marketing expenditures and increased player lifetime values, as loyalty leads to higher spend and/or retention.

Codere Online expects Mexico to serve as a blueprint for its broader omnichannel strategy in Latin America. According to Codere Online, the expected average net gaming revenue to be generated by each omnichannel customer in Mexico during the first five years following such customer’s first deposit is 2.8x greater than for pure online customers. Furthermore, targeting high-value, brand-aware omnichannel players in Mexico is expected to increase conversion of online registrations to first time depositors by over 50% during the course of Codere Online’s five-year business plan.

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Established and flexible technology platform in place to support growth in core markets and expansion to new markets

Pursuant to the Platform and Technology Services Agreement entered into with the Codere Group, Codere Online has exclusive access (subject to certain exceptions) to an established and flexible platform and technology services, which are expected to support Codere Online’s growth in Spain, Colombia, Panama and the City of Buenos Aires and its expansion into new markets (Codere Online operates in Mexico and Italy pursuant to a turn-key solution with Playtech and a similar arrangement with Microgame, respectively). In particular, Codere Online’s platform supports slots, video bingo, live casino, table games, sports live streaming and pre-match and live sports betting in all of the regions in which Codere Online operates (where such products are authorized). One of the key features of Codere Online’s platform is that it is substantially independent from third-parties, which enables Codere Online to control and develop its own product roadmap with highly customizable capabilities, including dynamic content and an offer of over 1,300 titles. Furthermore, the platform has multiple capabilities, such as language, currency, brand or device, and standard integration features with third parties, including 13 casino and slot game providers, over 12 payment gateways and one (1) sports betting provider. Codere Online’s platform also allows real time data monitoring and counts with the security certification ISO/IEC 27001. For more information about Codere Online’s platform, see “—Technology Platform.” For more information about the Platform and Technology Services Agreement, see the section entitled “Certain Relationships and Related Party Transactions—Material Agreements—Platform and Technology Services Agreement.”

Highly effective and established online & mobile sportsbook / online casino

Codere Online’s management team has decades of experience building, implementing and marketing online sports and casino products for its customers. Codere Online’s platform has been developed with an omnichannel approach that seeks to offer online players the same product offering and features as in retail locations. Codere Online has developed and adapted its front end to match industry standards and become a leading platform provider, delivering easy click to bet experience. Codere Online has also incorporated several third-party tools that seek to enhance customer experience such as Betsense and Player props, that allow for sophisticated bets. Codere Online has also strived to simplify payment processing. In Colombia, Codere Online currently has one of the most advanced cashier propositions in the market, allowing its customers to pick their favorite deposit method.

Based on Codere Online’s net gaming revenue for the six months ended June 30, 2021 (defined as all gross amounts wagered of Codere Online less: (i) player wins, (ii) player bonuses and (iii) promotional bets), approximately 57% of Codere Online’s net gaming revenue is derived from its online sports betting offering, while approximately 43% derives from its online casino products (56% and 44%, respectively, for the year ended December 31, 2020). The online sportsbook is supported by approximately 30 dedicated in-house traders offering over 350,000 live events per year throughout most major sports. Codere Online’s management team is able to effectively leverage its online sportsbook to cross-sell to its online casino platform, which provides the team with an efficient and low cost customer acquisition tool. Codere Online’s online casino product offers customers over 1,300 titles from over 30 different third-party content providers, including Evolution Gaming, Habanero, Netent, MGA, Softbet, Zitro among others.

Robust marketing strategy drives efficient acquisition of high-value players

“Codere” is a well-known brand in the gaming industry. Since its inception in 1980, the “Codere” brand has been associated with high-quality, highly distributed sports betting and casino gaming. The Codere Group maintains a geographically diverse portfolio in Europe and Latin America with nearly 57,000 slots in over 10,000 controlled and third-party retail venues throughout Latin America, Spain and Italy as of December 31, 2019 (approximately 34,000 slots and 9,700 retail venues as of June 30, 2021 and 23,000 slots and 6,600 retail venues as of December 31, 2020, as a result of COVID-19 temporary closings). Venues include the Codere Group-controlled bars, arcades, sports betting shops, and gaming halls, as well as third-party venues where the Codere Group offers its slot and/or sports betting products.

Codere Online has leveraged the “Codere” brand and the retail business to convert existing and new retail customers into online gaming customers initially through a focus on online sports betting activities and through a mix of both traditional and digital marketing strategies (adapted as needed in each market).

As is typical in high-growth industries, operators in the online gaming industry have allocated a significant amount of their capital investment to marketing to rapidly acquire customers and capture market share. Historically, Codere Online has been able to keep customer acquisition costs relatively low while achieving significant growth as a result of selected and targeted marketing investment, the extensive use of digital marketing channels and an intensive use of customer relationship management (“CRM”) tools, which has resulted in attractive returns on investment. In particular, Codere Online has deployed a client-centric strategy, focused on providing a high-quality and differentiated experience to each of its clients. Codere Online believes that its marketing strategy through digital media, traditional media, marketing agencies, campaign production and sponsorships drives an efficient acquisition of high-value players. Codere Online’s strategy is intended to adapt to each country’s idiosyncrasy. For example, given regulatory advertising limitations, Codere Online expects its marketing investment in Spain to be more targeted and focused on high-yielding digital channels aiming to acquire customers, drive superior return on marketing investment and shorter cost per acquisition payback periods. In Mexico, however, Codere Online plans to invest more heavily in traditional media aiming to not only acquire customers but also accelerate brand-building and drive long-term market share growth, while still aiming to maintain attractive returns on marketing investment and cost per acquisition payback periods.

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Well-positioned to capitalize on the large untapped Hispanic market opportunity in the United States

Codere Online’s experience in Latin America is expected to serve as a foundation in the pursuit of options to access the large Hispanic market in the United States in the future, which the Company believes is currently under-penetrated. In particular, Codere Online believes the following to be key factors for any such future expansion: the football-first focus of the sports betting business leveraging sponsorships with football clubs (including Real Madrid, Rayados and River Plate) and/or former players (such as Carlos Valderrama in Colombia), an online casino product configuration tailored to Hispanic customers (emphasizing electronic bingo and roulette), adapted marketing messaging and promotional campaigns based on cultural associations and affinities, experienced Spanish-speaking call center and customer service, tested Spanish-language front end user interface and experience operating under multiple regulatory regimes across a number of jurisdictions.

Our Products

Codere Online offers its users the ability to play a wide range of online casino games and to bet online on sports events.

Online casino games

Online casino offerings typically include the full portfolio of games available in land-based gaming halls, such as slot machines, table games and bingo. For these offerings, Codere Online functions similarly to land-based casinos, generating revenue, as users play against the house. There is certain volatility with online casino wagering, as with land-based wagering, but as the volume of wagers placed increases, the revenue retained from wagers placed becomes easier to predict. Codere Online’s experience has been that online casino margins are less volatile than online sports margins.

Codere Online’s online gaming offerings consist of a combination of licensed content from leading suppliers in the industry. Third-party content is subject to standard revenue-sharing agreements specific to each supplier, whereby the supplier receives a percentage of the gaming revenue generated from the games played on Codere Online’s platform. In exchange, Codere Online receives a limited license to offer the games on its platform to users in jurisdictions where use is approved by the regulatory authorities.

Codere Online maintains a wide and updated catalogue of online casino games with over 1,300 titles from more than 30 third-party content providers. Codere Online believes that its ability to offer a wide array of online gaming products effectively reduces its customer acquisition costs and player churn by providing a superior product offering to customers.

Online sports betting and other bets

Online sports betting involves a user placing a wager on an event at some fixed odds (a “proposition”) determined by Codere Online. If the user wins, Codere Online pays out the bet. If the user loses, Codere Online keeps the amount wagered. Codere Online takes risk on any such wager to the extent that its “book” (i.e., wagers accepted for either or all proposition bet outcomes) may not be balanced and, depending on the result of the event, Codere Online may generate an aggregate win or loss on the overall book. Codere Online seeks to generate revenue by setting odds such that there is a built-in theoretical margin in each proposition offered to its users. While the outcomes of sporting events may cause volatility in Codere Online’s revenue, Codere Online believes it can deliver a fairly stable sports betting margin over the long term.

As part of the platform, the Codere Group’s Trading and Risk team is responsible for implementing the pricing strategy (i.e., setting and continuously adjusting, based on averaging activity, the fixed odds) defined by Codere Online and its furtherance of Codere Online’s online sports betting offering. For a more detailed description, see “—Technology Platform.” In addition to traditional pre-match wagering, where Codere Online has a robust offering with historical data, odds statistics and latest teams and players news, Codere Online offers other sports wagering products such as live betting. Codere Online has also incorporated live streaming of sporting events into its online sports betting offering, on a round-the-clock basis and with industry-leading match visualization features.

Codere Online’s sports betting business has a vast and diversified offering with over 350,000 live events per year throughout most major sports taking place around the world, which helps to minimize the impact of seasonality. Nonetheless, seasonality has an effect in certain periods of the year given the relative popularity of certain local sports, such as top tier football in Europe.

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Technology Platform

Codere Online, pursuant to the Technology and Platform Services Agreement entered into with the Codere Group, has access to an established and flexible platform that supports online slots, video bingo, live casino, table games, sports live streaming and pre-match and live sports betting in most of the regions in which Codere Online operates (initially Spain, Colombia, Panama and the City of Buenos Aires by the end of 2021 and, expectedly, its Latin American expansion markets). Codere Online operates in Mexico and Italy pursuant to a turn-key solution with Playtech and a similar arrangement with Microgame, respectively. The Playtech and Microgame partnerships enable Codere Online’s management team to leverage leading platforms tailored and proven in the Mexico and Italian markets, respectively. Codere Online’s management team’s extensive experience successfully operating with different technology platforms across various markets allows Codere Online to selectively determine which technology platform is best suited for each market and whether Codere Online’s proprietary technology platform or a 3^rd party solution will best position the business for success.

To further enhance its platform, Codere Online expects to use part (approximately $10-15 million) of the proceeds of the Business Combination to support the development of additional capabilities in order to maintain and enhance the platform. These capabilities are intended to be developed mostly in-house and to feature, within its functional scope, fraud and payments systems, customer relationship management and content management systems (CRM and CMS, respectively), as well as, within its non-functional scope, further improvements in digital architecture, front-end performance, quality assurance, development, security and operations (DevSecOps) resources, and customer service.

Codere Online expects its platform, as improved by these future enhancements, to allow for more efficient and effective CRM campaigns. In particular, Codere Online’s CRM strategy aims to identify customers and drive them to their preferences and most profitable channels, while leveraging all management tools (including email, SMS, push notifications, social media and automated calls) to create manual and automatic campaigns for every moment of the player life cycle, using bonus rewards and top tier content.

The graphic below depicts the integration and orchestration capabilities of the Codere Group’s platform, including the expected improvements referred to above.

(1) Includes technology and operating capabilities provided by the Codere Group (on an exclusive basis within the Codere Group, subject to certain exceptions) pursuant to the Technology and Platform Services Agreement.

(2) AI predictive risk segmentation work in progress.

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In addition to implementing Codere Online’s pricing strategy, the Codere Group’s Trading and Risk team, which counts with approximately 30 in-house traders, receives, reviews and compares the odds received by third-party feed providers to Codere Online’s strategy and informs management on the risk assumed as a result of the accumulated amount of bets in the event that they exceed the amounts established as per risk management parameters in place at the time. Furthermore, the Codere Group’s traders continuously monitor competitor pricing across a wide range of sporting events to ensure that Codere Online’s betting markets are competitive.

The below operational flow chart summarizes the trading and risk management functions undertaken by the Codere Group with respect to Codere Online’s sports betting operations through its platform.

Our Markets

Spain

Codere Online started its online gaming business in Spain in 2014 and launched its mobile app in 2016. The current online casino and sports betting product offering in this market includes slots, video bingo, table games (including live) and sports betting (pre-match and live). As of June 30, 2021 and December 31, 2020, Codere Online had approximately 28,330 and 34,740 average monthly active players in this market, respectively, of which a majority accessed its products via mobile, desktop and, to a lesser extent, tablet devices.

The Codere Group has been the official betting sponsor of Real Madrid since 2016. In April 2019, it renewed its sponsorship agreement with Real Madrid for the following three seasons, with the option to renew it through two additional one-year extensions, subject to certain conditions. Nonetheless, on November 24, 2020, the RM Sponsorship Agreement was amended and terminated in respect of Spain only (without prejudice to the agreement remaining in force in the remaining applicable jurisdictions) at the end of the 2020/2021 football season due to newly-enacted advertising legal restrictions (which affect sponsorship) in Spain. On October 7, 2021, the RM Sponsorship Agreement was further amended to, among other things, extend the term of the RM Sponsorship Agreement for four (4) additional football seasons, until June 30, 2026 (with either party having a right to terminate the agreement at the end of the 2022-2023 football season) and amend the applicable territory to only include Mexico, South America, Central America, Puerto Rico and Dominican Republic. The Codere Group has forged a strong relationship with Real Madrid in these last years and is currently exploring new avenues of collaboration in the future. Codere Online benefits from and has use rights to the existing, and any future amended, sponsorship agreement with Real Madrid. See the section entitled “Certain Relationships and Related Party Transactions—Material Agreements—Sponsorship and Services Agreement.”

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Online gaming legislation was enacted at the national level in 2012 and the Spanish gaming regulator is DGOJ. Online operators in Spain must be based in the Spanish territory or otherwise be domiciled in the European Union and must apply for two licenses: a general license for the development of a betting business, and a game-specific license, which is required to operate each type of game, such as slots, blackjack, American or French roulette and poker. The general license is for a ten (10)-year term and the game-specific license is for a minimum of one (1)-year term and a maximum of a five (5)-year term and are renewable for another equivalent period (that is, ten (10) or one (1) to five (5) years, as applicable). Furthermore, each autonomous region has the power to regulate gaming, including online gaming, within its region.

Codere Online’s general licenses were granted in June 2012 for a period of ten (10) years and were recently extended for ten (10) additional years (until May 31, 2032). According to the DGOJ, there were 78 active national licenses in the Spanish national online gaming market as of September 30, 2021. Operators mainly offer seven different game types: bingo, poker, roulette, black jack, baccarat, complementary games and slots.

In 2020, the gross gaming revenue for the market was approximately €851 million, which represents a 22% CAGR between 2015 and 2020. The following table sets forth the development of online gaming in terms of gross gaming revenue and the CAGR for that period:

	Year ended December 31,												CAGR %
	2020		2019		2018		2017		2016		2015		(2015 to 2020)
	(In millions of euros)
Casino		478		367		333		242		183		135		29	%
Casino (excl. Bingo and Poker)		351		273		238		171		116		67		39	%
Bingo		17		13		13		11		9		8		16	%
Poker		110		81		82		60		58		60		13	%
Sports betting		365		378		365		309		236		178		16	%
Other		8		3		1		6		7		4		14	%
Total online gaming		851		748		699		557		426		317		22	%

Source: DGOJ, National online gaming market report Q4-2020.

In recent years, advertising expenditures increased mainly driven by TV campaigns and Spanish “La Liga” (football) team sponsorships. Many operators, including Codere Online, signed sponsorship agreements with football clubs. The advertising restrictions set forth in Royal Decree 958/2020, dated November 3, 2020 on the Commercial Communications of Gambling Activities have led to a sharp decrease in this type of expenditures and the agreements signed with the various football clubs must be terminated by the end of the 2020/21 season.

This decree forbids gambling companies from appearing on uniform shirts of football clubs and sponsoring their stadium names. In addition, advertising on television has been restricted to a four-hour window from 1 a.m. to 5 a.m. Furthermore, advertising on the internet must be done through the web pages of the game operators. Moreover, bonus offers and promotions can only be marketed to existing players, as opposed to new players, among other significant advertising restrictions. Most of these restrictions have become effective following transitional periods ending on dates falling within the period from April to August 2021, so their impact on Codere Online’s activities is still unclear.

The following table sets forth information on the approximate average amount of active and new online gaming users in the Spanish market for the years indicated:

	Year ended December 31,												CAGR %
	2020		2019		2018		2017		2016		2015		(2015 to 2020)
	(In thousands of players)
Active accounts		2,934		2,544		2,555		2,171		1,997		1,532		14	%
New accounts		1,482		1,367		1,474		1,381		1,278		982		9	%

Source: DGOJ

In 2018, the Spanish Government set a flat tax rate of 20% on gross win for all forms of online gambling. This tax is reduced to 10% for those entities domiciled in the autonomous cities of Ceuta and Melilla, such as CDON, which is domiciled in Melilla. Players are required to declare any winnings over €1,600 and pay income tax on it.

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Italy

Italy is the second largest gaming market in Europe after the United Kingdom. The Italian gaming market includes land-based and online casino and sports betting. While the Italian online gaming market is highly competitive and regulated (including significant limitations on advertising), Codere Online has opted to enter the market recently in order to, among other factors, leverage its current retail footprint through an omnichannel strategy (as part of the Codere Group) and market knowledge, and establish a presence in one of the largest online gaming markets in Europe with a significant opportunity to benefit from further market growth and geographic diversification. In order to expedite its entry in this market, Codere Online has partnered with Microgame in order to offer its product offering through Microgame’s platform. Microgame is a leading multi-channel Italian-focused gaming platform with a strong track record in both the online and land-based gaming sectors.

Online gaming was legalized in Italy in 2006 with the introduction of online sports betting. The Italian regulator is Agenzia delle Dogane e dei Monopoli (ADM). Codere Online’s Italy License has a three (3)-year term and expires on December 31, 2022. There were 83 online games concessionaries in Italy as of June 30, 2021. An online concession generally permits the concession holder to operate any number of online games.

The following table sets forth the development of online gaming in Italy in terms of gross gaming revenue and the CAGR for the 2015–2020 period:

	Year ended December 31,												CAGR %
	2020		2019		2018		2017		2016		2015		(2015 to 2020)
	(In millions of euros)
Casino		1,478		1,007		885		750		608		510		24	%
Casino (excl. Bingo and Poker)		1,212		831		710		569		388		288		33	%
Bingo		56		38		28		28		27		25		18	%
Poker		210		138		147		153		193		197		1	%
Sports betting		1,056		783		685		589		382		294		29	%
Total online gaming		2,534		1,790		1,570		1,339		990		804		26	%

Source: H2 Gambling Capital, onshore revenue only, as of July 15, 2021

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Mexico

Mexico is the largest gaming market in Latin America and includes land-based and online gaming. Codere Online started its online operations in Mexico in 2016, followed by a full commercial launch in 2019. The current online casino and sports betting product offering in this market includes slots, video bingo, table games (including live) and sports betting (pre-match and live). As of June 30, 2021 and December 31, 2020, Codere Online had approximately 13,530 and 18,230 average monthly active players in this market, respectively, of which a majority accessed its products via mobile, desktop and, to a lesser extent, tablet devices.

Despite having one of the oldest regulatory frameworks for gaming operations, Mexican regulations have evolved to allow for new forms of gaming, including online, and local authorities have interpreted that license holders are allowed to take online bets. Mexican authorities have drafted new gaming regulation to replace the archaic 1947 law in order to, among others, regulate online gaming. The new law was passed by the Chamber of Deputies in December 2014, but it has not been considered by the Senate. Nonetheless, based on a 2004 regulatory decree, the Mexican regulator, Secretaría de Gobernación (SEGOB), awarded several online licenses to local licensed land-based operators that allow online gaming since 2016, but to qualify for a license, operators must operate a retail establishment in Mexico. Codere Online does not own a license but rather operates through an “Asociación en Participación” or “AenP” (an unincorporated joint venture) with LIFO, a wholly-owned entity of the Codere Group, under which Codere Online, through SEJO, operates online gaming and is entitled to receive 99.99% of any distributed profits whereas LIFO is entitled to receive the remaining 0.1% of any such distributed profits. See “Certain Relationships and Related Party Transactions—Material Agreements—AenP Agreement” for additional information on the agreement with LIFO.

The LIFO License expires in May 2027. Although Codere Online is not aware of reliable publicly available data regarding the number of licensed operators in Mexico, it estimates that there are at least 15 online gaming operators in the country, including Caliente, PlayCity, Bigbola and Logrand. According to Codere Online’s estimates, Caliente is the largest online operator in Mexico, followed by Codere Online and PlayCity, with the remainder of competitors lacking a significant market share. The LIFO License could be automatically revoked if LIFO were to file for insolvency protection. There can be no assurance that Codere Online would maintain or be able to renew the LIFO License in the event of insolvency or other financial difficulty, including upon the filing or declaration of insolvency of Codere Newco, Codere, S.A. (the former parent company of the Codere Group) or Codere New Topco S.A. (the current parent company of the Codere Group), as such filing or declaration may be perceived to adversely affect the solvency of Codere Online as well.

The following table sets forth the development of online gaming in Mexico in terms of gross gaming revenue and the CAGR for the 2016–2020 period:

	Year ended December 31,										CAGR %
	2020		2019		2018		2017		2016		(2016 to 2020)
	(In millions of MXN)
Casino		2,302		1,601		1,289		996		751		32	%
Casino (excl. Bingo and Poker)		1,671		1,174		938		715		531		33	%
Bingo		399		272		222		175		135		31	%
Poker		232		155		129		106		86		28	%
Sports betting		1,525		1,504		1,224		892		689		22	%
Total online gaming		3,827		3,105		2,513		1,888		1,441		28	%

Source: H2 Gambling Capital, onshore revenue only, as of July 15, 2021

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Colombia

The Colombian gaming market includes land-based and online casino and sports betting. Colombia was the first Latin American country to introduce nationwide European-style online gambling regulation in 2015. Codere Online started operating in Colombia in 2018. The current online casino and sports betting product offering in this market includes online slots, video bingo, table games (including live) and sports betting (pre-match and live). As of June 30, 2021 and December 31, 2020, Codere Online had approximately 20,035 and 8,825 average monthly active players in this market, respectively, of which a majority accessed its products via mobile, and desktop.

Online gaming is regulated by the Colombian gaming regulator, Coljuegos, under the definition of “novelty games.” In October 2016, the Colombian Government approved the “eGaming Act” formally liberalizing a wide range of online products including online casino, sports betting, and poker, making Colombia the first Latin American country to establish a detailed regulatory framework for the operation of online gaming. Coljuegos was entrusted with the licensing process and enforcement of the new regulations.

In November 2017, Codere Colombia, S.A. was issued the Colombia License for a period of five (5) years (until November 15, 2022). Pursuant to the Business Combination Agreement and the Colombia Restructuring Agreements, the Codere Group will seek to transfer the Colombia License to Codere Online, but such transfer may not be effected if Coljuegos fails to grant the required authorization. Pending the effective transfer of the Colombia License, the relevant entities of the Codere Group and the Codere Online group, respectively, will exploit the license under a Joint Accounts Agreement (contrato de cuentas en participacion), pursuant to which the Codere Online entity will have the right to receive 99.00% of any distributed profits. See the section entitled “Certain Relationships and Related Party Transactions—Material Agreements” for additional information.

According to Coljuegos, in January 2020, there were 18 authorized licensed online gaming operators in Colombia, including Bwin, Sportium, Codere, Luckia, Rush Street and Betfair.

The following table sets forth the development of online gaming in Colombia in terms of gross gaming revenue and CAGR for the 2018–2020 period (Coljuegos awarded the first interactive gaming license in June 2017):

	Year ended December 31,						CAGR %
	2020		2019		2018		(2018 to 2020)
	(In millions of COP)
Casino		359,397		273,820		97,296		92	%
Casino (excl. Bingo and Poker)		235,268		187,014		56,603		104	%
Bingo		18,197		-		-		N.A.
Poker		105,932		86,807		40,693		61	%
Sports betting		334,222		173,365		148,272		50	%
Total online gaming		693,619		447,185		245,568		68	%

Source: H2 Gambling Capital, onshore revenue only, as of July 15, 2021

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Panama

Panama’s gaming market includes land-based and online casino and sports betting. Codere Online started its online operations in Panama in 2018. The current online product offering in this market is limited to sports betting (pre-match and live). As of June 30, 2021 and December 31, 2020, Codere Online had approximately 750 and 530 average monthly active players in this market, respectively.

Online gaming was first authorized in 2002 and was initially limited to foreign-facing websites, which are barred from serving Panamanian citizens. The Panamanian regulator is the Panama Gambling Control Board. Resolution No. 236 dated March 21, 2016, allows land-based operators to capture wagering on international sports events through the Internet from retail registered customers, provided that a previous authorization is granted by the Panama Gaming Control Board. Resolution No. 11 dated March 6, 2020 provided for the issuance of standalone online gaming licenses (allowing for both casino and sports betting). In May 2021, ALTA, a subsidiary within the Codere Group, was awarded the ALTA License for a 20-year term to conduct online gaming operations in Panama starting on December 1, 2021, subject to compliance with certain requirements. As described under “Certain Relationships and Related Party Transactions—Material Agreements—Panama Restructuring Agreements”, Codere Online may request the transfer of the ALTA License from ALTA to Codere Online, but such transfer is subject to the authorization from the Panama Gambling Control Board. Until the ALTA License is transferred to Codere Online, Codere Online will operate the ALTA License under the agreement that Codere Online Panama and ALTA entered into on December 1, 2021.

To Codere Online’s knowledge, there are at least two other licensed online gaming operators in Panama: Betcris and Caliente.

The following table sets forth the development of online gaming in Panama in terms of gross gaming revenue and CAGR for the 2015–2020 period:

													CAGR %
	2020		2019		2018		2017		2016		2015		(2015 to 2020)
	(In millions of USD)
Casino		5.2		4.0		3.9		3.7		3.4		3.2		10	%
Casino (excl. Bingo and Poker)		4.2		3.2		3.1		2.9		2.7		2.5		10	%
Bingo		0.8		0.6		0.6		0.5		0.5		0.5		10	%
Poker		0.3		0.2		0.2		0.2		0.2		0.2		4	%
Sports betting		7.0		7.4		7.2		6.5		6.2		5.4		5	%
Total online gaming		12.2		11.4		11.1		10.1		9.7		8.7		7	%

Source: H2 Gambling Capital, offshore revenue only, as of July 15, 2021

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Argentina

Argentina is one of the largest gaming markets in Latin America. The gaming industry in Argentina consists of lotteries, gaming halls and horse racetracks. In October 2020, Codere Online was the first online operator to receive regulatory approval from the City of Buenos Aires’ regulator for its proposed platform implementation program, which was a first step towards being awarded a full online betting and casino license in the City of Buenos Aires, as described below.

In Argentina, gaming is regulated at the provincial rather than federal level. A few provinces, including Misiones, Corrientes, Entre Ríos, Río Negro and Tucumán, have issued basic online gaming regulation. There are increasing initiatives from the State Lotteries and Casinos Association (ALEA) to issue federal regulation based on European models.

Online legislation in the City of Buenos Aires was enacted in 2018, and the regulator and exclusive holder of the rights to exploit online gaming within the City of Buenos Aires is Lotería de Buenos Aires (LOTBA). LOTBA launched a process in 2020 to grant permits to distribute and commercialize online gaming within the City of Buenos Aires. In March 2021, LOTBA granted the Buenos Aires License to Iberargen S.A., a subsidiary within the Codere Group, for a period of five (5) years and, in December 2021, authorized Iberargen, S.A. to operate in the City of Buenos Aires thereunder. Pursuant to the Business Combination Agreement and the Argentina Restructuring Agreement, the Codere Group will seek to transfer the Buenos Aires License granted to Iberargen S.A. to Codere Online, but such transfer may not be effected if LOTBA fails to grant the required authorization. Pending LOTBA’s approval of such transfer, Iberargen, S.A. has agreed to exploit such license pursuant to the instructions of the relevant Codere Online group entity, and any resulting expenses and income will be assigned to such entity. If, however, LOTBA finally rejects the transfer of the Buenos Aires License, and there is no reasonable likelihood that it will grant a new license to the relevant Codere Online group entity during the term of the Buenos Aires License, Iberargen, S.A. and the relevant entity of the Codere Online group will enter into a Temporary Union Contract (contrato de union transitoria) and exploit the license thereunder, with the Codere Online entity receiving 99.00% of any distributed profits. See the section entitled “Certain Relationships and Related Party Transactions—Material Agreements” for additional information.

Codere Online is not aware of reliable publicly available data regarding the online gaming activity in the City of Buenos Aires (Argentina).

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Intellectual Property

Codere Online does not currently own any material registered intellectual property. Codere Online’s intellectual property portfolio consists substantially of licensed intellectual property, including the “Codere” trademarks licensed pursuant to the Relationship and License Agreement, which agreement is described in “Certain Relationships and Related Party Transactions—Material Agreements—Relationship and License Agreement.” Pursuant to such agreement, Codere Newco has granted Codere Online, subject to certain limitations and exemptions, an exclusive, sublicenseable and non-transferable license to use certain “Codere” trademarks (and other trademarks related to Codere Online’s business) and domain names. In addition, pursuant to the Sponsorship and Services Agreement, Codere Online became the licensee of certain rights, marks, names, images, designations, anthems, photographs and brands set forth under the RM Sponsorship Agreement, as well as the licensee or assignee, as applicable, of new sponsorship rights under sponsorship agreements entered into by Codere Newco and certain of its affiliates as negotiated and agreed between SEJO and Codere Newco from time to time (see “Certain Relationships and Related Party Transactions—Material Agreements—Sponsorship and Services Agreement”). Furthermore, Codere Newco is the licensee of certain additional intellectual property under the Platform and Technology Services Agreement, which agreement is described in “Certain Relationships and Related Party Transactions—Material Agreements—Platform and Technology Services Agreement.”

Codere Online licenses certain third-party intellectual property (such as games) under licenses and service agreements with those third parties, including through agreements with gaming content creators and service providers. Although Codere Online believes the licenses under the Relationship and License Agreement, the Sponsorship and Services Agreement, the Platform and Technology Services Agreement and these third-party agreements will be sufficient for the operation of Codere Online’s business in the foreseeable future, these licenses limit the use of the licensed intellectual property in specific manners and for specific time periods and Codere Online relies entirely on such rights granted by third parties or affiliates to operate its business. Codere Online may also rely in part on the counterparties to the Relationship and License Agreement, the Sponsorship and Services Agreement, the Platform and Technology Services Agreement and such other third-party agreements to appropriately register, protect and defend the licensed intellectual property.

Codere Online’s online gaming offering consists of a combination of licensed content from leading suppliers in the industry. Third-party content is subject to standard revenue-sharing agreements specific to each supplier, whereby the supplier receives a percentage of the gaming revenue generated from the games played on Codere Online’s platform. In exchange, Codere Online receives a limited license to offer the games on its platform to users in jurisdictions where use is approved by the regulatory authorities.

Government Regulation

Codere Online is subject to various laws and regulations. For summary information on certain laws and regulations affecting Codere Online’s business, see “Regulation Applicable to Codere Online’s Business.”

Compliance

Codere Online has an internal compliance program designed to ensure that it complies with legal and regulatory requirements, including with regard to money laundering prevention in connection with its online casino and sports betting activities. Additionally, Codere Online employs various methods and tools across its operations such as geolocation blocking, which restricts access based upon the user’s geographical location determined through a series of data points such as mobile devices and Wi-Fi networks; age verification to ensure its users are old enough to participate; routine monitoring of user activity; and risk-based user due diligence to ensure the funds used by its users are legitimately derived. Codere Online has a zero-tolerance approach to fraud and collusion.

In accordance with anti-money laundering laws and regulations, Codere Online adopts and implements control policies and procedures that comply with the applicable regulations and reports suspicious transactions to the applicable regulatory authorities.

Anti-money laundering, corruption and bribery are among the risks Codere Online faces in the course of its activity. With the aim of combatting and preventing this problem, in addition to the policies adopted at a Codere Group level, Holdco has recently adopted the “Codere Online Group Anti-corruption Policy,” which Codere Online expects will be accessible through its corporate website.

Codere Online’s platform has been built from the ground up to meet the needs of differing regulatory regimes, including configurable regulatory and responsible gaming controls such as responsible gaming tests, operator alerts on player behavior, deposit limits, betting limits, loss limits, session limits, reality checks, balance thresholds and intended gaming amounts. These features allow the operators’ customers control of their gaming to allow them to play responsibly.

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Responsible and Safer Gaming

Codere Online views the safety and welfare of its users as critical to its business. Codere Online is committed to industry-leading responsible gaming practices and seeks to provide its users with the resources and services they need to play responsibly. These practices, resources and services include deposit limits, voluntary restrictions on access and use of certain offerings, temporary self-exclusion and cooling-off periods, voluntary permanent exclusion from Codere Online’s offerings and applications and data science technology, which is able to flag any suspicious or abnormal betting activity. Codere Online prominently promotes its responsible gaming tools, resources and initiatives on its websites and mobile applications, which are supported by an established and flexible technology platform. Codere Online also maintains a self-excluded user list, which prohibits self-identified users from placing bets or participating in real-money gaming and have embedded the software to limit or restrict the amount individual users spend. Codere Online also trains its frontline personnel to identify signs of problematic gaming, ensuring that it is not only utilizing data and technology but also its human resources.

In Spain, members of the gaming sector (representing approximately 70% of gaming activity sector-wide) have founded Cejuego, Spain’s leading gaming trade association, with the aim of providing additional information about the industry and its customers to the public and confront existing perceptions with real data and facts. The Codere Group has been a member of Cejuego since 2018 and keeps a constant dialogue with key interest groups. Additionally, in 2019, Codere Online joined Jdigital, the Spanish Association for Digital Gaming, reinforcing its commitment to responsible gaming and to developing its business in a way that minimizes the social impact of its entertainment offerings through the implementation of best practices, transparency and collaboration with regulators.

Codere Online’s commitments to responsible gaming are based on four main principles: transparency, education, information and self-exclusion. To these ends, the Codere Group, together with Codere Online, has established and continues to develop responsible gaming programs in accordance with its Corporate Social Responsibility Policy. The Codere Group is currently developing specific programs centered around cooperation with communities, associations and non-profit organizations, through donations, volunteer programs and trainings.

Competition

In the online casino and sports betting space, which is vast and rapidly expanding, Codere Online considers any company competing for the time and disposable income of customers within the markets in which it operates to be a competitor, including retail casino and sports betting companies. In addition, there are several gaming companies in Spain, Italy and Latin America that currently provide online casino, online sports betting, or both, including, but not limited to, 888, Bet365, Betcris, Caliente, Entain, Flutter, Lottomatica, Rush Street, Snaitech, Sportium and William Hill.

Codere Online believes the principal competitive factors in the business include reliability, brand recognition, product offering, the ability to acquire and retain users, regulatory compliance, market access, customer service and innovation.

Agreements with the Codere Group

Codere Online has entered into several agreements with other members of the Codere Group, including the Sponsorship and Services Agreement, the Relationship and License Agreement, the AenP Agreement, the Platform and Technology Services Agreement and the Restructuring Agreements. For information on the main terms of such agreements, see “Certain Relationships and Related Party Transactions.” Codere Online believes that its relationship with the Codere Group will be beneficial to Codere Online and in furtherance of its goal to maximize value for its stake holders.

Employees

As of the date of this prospectus, Codere Online has approximately 165 employees, including directors, intermediate managers, technicians and administrative personnel based in Spain, Mexico, Colombia, Panama, Argentina, Israel, Malta and Gibraltar, most of whom are full-time, direct employees of Codere Online. Operations are primarily run by employees at central service centers in Malta and Israel. Codere Online has in the past and may in the future rely on non-employee independent contractors in the ordinary course to carry out its business. None of Codere Online’s employees are represented by a labor organization. Only in Spain our employees are subject to statutory collective bargaining arrangements.

Property

Codere Online leases from Codere Newco a portion of the space within the offices of the Codere Group headquarters located at Avenida de Bruselas, 26 in Alcobendas (Madrid, Spain). Codere Online also has the right to use certain office space and equipment within the Codere Group headquarters. Codere Online also leases office spaces in Melilla (Spain), Malta, Gibraltar and Israel from third-parties.

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Legal Proceedings

From time to time, Codere Online may be involved in various legal proceedings and subject to claims that arise in the ordinary course of business. Codere Online may be and in some cases has been subject to claims, lawsuits, government or regulatory investigations, subpoenas, inquiries or audits, and other proceedings involving areas such as online gambling regulation, intellectual property, consumer protection, privacy, data protection, labor and employment, immigration, import and export practices, product labeling, competition, accessibility, securities, tax, marketing and communications practices, commercial disputes, anti-fraud, anti-money laundering, anti-corruption, counter-terrorist financing, sanctions, related civil and criminal litigation and other matters.

For example, on September 24, 2021, CDON received a notification of a sanctions proceeding initiated by the DGOJ in connection with a serious (“grave”) infringement of gaming regulations for the failure to prevent the online gaming activities of at least one individual who was listed in the Spanish general register of gaming access bans. On October 7, 2021, Codere Online paid approximately €92 thousand in penalties. For additional information on this and other sanctions and regulatory proceedings in Spain and other jurisdictions, see “Risk Factors—Risks Related to Codere Online—The online gaming industry is subject to extensive regulation (including applicable direct and indirect taxation, anti-corruption, anti-money laundering and economic sanctions laws) as well as licensing requirements. Codere Online’s business may be adversely affected if it is unable to comply with regulations or licensing requirements or any regulatory changes” and “Risk Factors—Risks Related to Codere Online—Codere Online relies on licenses to conduct its operations, and the failure to renew or the termination of these licenses could have a material adverse effect on its business.”

Additionally, CDON and its legal representative received notices of criminal charges for fraud before the Juzgado de Instrucción nº 1 of San Sebastián in Spain in May 2021 and before the Juzgado de Primera Instancia e Instrucción nº 3 of Collado Villalba (Madrid) in Spain in August 2021 (collectively, the “Fraud Complaints”). The Fraud Complaints involve third parties who allegedly committed identity theft and opened Codere player accounts under false identities which were ultimately used to commit fraud for an amount of €1,200 and €140, respectively. CDON’s legal representative appeared for a preliminary hearing in connection with the San Sebastián Fraud Complaint, and a further hearing, with an additional claimant, was held on October 19, 2021. The investigation phase of the proceeding has been extended until August 2022. The Fraud Complaint in Collado Villalba has been provisionally dismissed.

While it is not currently possible to make a reliable assessment or to quantify the financial impact or predict the outcome or timing of the foregoing proceedings and complaints, they could result in the imposition of civil, administrative and criminal penalties and sanctions on Codere Online and could affect Codere Online’s ability to renew any of its licenses, including the CDON Licenses, which, individually or in the aggregate, could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

The Martínez Sampedro family, which were the controlling shareholders of the Codere Group until April 2016, have brought several administrative, civil, mercantile, and criminal claims against the Codere Group, its directors, or its senior management during the past four years. While none of these claims have been successful so far, there is no guarantee that future claims or claims that are pending adjudication will also be resolved favorably to the Codere Group, its directors, or its senior management. As first reported in the Codere Group’s Earnings Results presentation filed by Holdco with the SEC on November 12, 2021, Codere Online has been made aware that Masampe S.L., José Antonio Martínez Sampedro, Luis Javier Martínez Sampedro and Encarnación Martínez Sampedro filed a criminal complaint with the Audiencia Nacional (a Spanish federal court) in July 2021 (as amended in September 2021), which was dismissed by the court due to a lack of jurisdiction. The plaintiffs appealed the decision in November 2021, which appeal was subsequently dismissed by the court. On December 21, 2021, the plaintiffs filed a second appeal against the court’s decision to dismiss the appeal, which second appeal was dismissed by the court on February 3, 2022. Based on the information currently available to Codere Online, Codere Online understands that the complaint: (i) makes allegations against certain directors, managers and shareholders of Codere, S.A., and certain of their respective affiliates and related parties for embezzlement and scheming to alter the price of things, including shares of Codere, S.A., breach of information rights, passing abusive resolutions, insolvency offences and unfair administration, and (ii) was amended in September 2021 to extend certain allegations of money laundering, payments to and from tax havens, breach of data protection rules and disclosure of secrets in relation to Codere Group’s online business (which may refer to Codere Online), and certain irregularities in the hiring process of certain of its executives, against Novelly (as defined below), Moshe Edree, M&G Plc and several other related entities. Codere Online and its current and former directors and officers may become involved in litigation, investigations or other proceedings involving the foregoing complaint or any related claims or allegations, any of which could have a material adverse effect on Codere Online’s business, results of operations and financial condition. Even if these claims are dismissed or otherwise terminated without imposing liability on Codere Online and its current and former directors and officers, defending a lawsuit may result in substantial expense to Codere Online, adversely affect its reputation and divert the attention of management and key personnel, any of which could have a material adverse effect on Codere Online’s business, results of operations and financial condition.

Except as disclosed above, Codere Online is not currently a party to any legal proceedings the outcome of which, if determined adversely to Codere Online, are believed by it to, either individually or taken together, have a material adverse effect on its business, operating results, cash flows or financial condition. Regardless of the outcome, litigation has the potential to have an adverse impact on Codere Online because of defense and settlement costs, diversion of management resources, and other factors.

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Management

Corporate Governance

Notable features of the corporate governance of Holdco include:

● Holdco’s independent directors will meet as needed in executive sessions without the presence of its executive directors or non-independent directors;

● the audit committee of the Holdco Board is composed of independent directors (see “—Board of Directors” for more information on the composition of the Holdco Board);

● at least one of Holdco’s directors qualify as an “audit committee financial expert” as defined by the SEC and serves on the audit committee; and

● Holdco has implemented a range of other corporate governance best practices, in furtherance of the alignment of Holdco’s interests with those of Holdco Shareholders.

Non-Classified Board of Directors

In accordance with Holdco’s articles of association, the Holdco Board is not divided into classes of directors, but the Holdco Shareholders may decide to appoint directors of two different classes, namely the class A directors and the class B directors.

Independence of our Board of Directors

A majority of the Holdco Board members are independent directors and the Holdco Board has an independent audit committee. See “—Board of Directors” for more information on the composition of the Holdco Board.

Foreign Private Issuer Exemption

As a “foreign private issuer,” as defined by the SEC, Holdco is permitted to follow, and does follow, home country corporate governance practices, instead of certain corporate governance practices required by Nasdaq for U.S. domestic issuers. Holdco intends to take all actions necessary for it to maintain compliance as a foreign private issuer under the applicable corporate governance requirements of the Sarbanes-Oxley Act of 2002, the rules adopted by the SEC and the Nasdaq corporate governance rules and listing standards.

As indicated above, as a foreign private issuer Holdco is permitted to comply with Luxembourg corporate governance practices instead of certain corporate governance rules of Nasdaq, provided that Holdco discloses which requirements it is not following and the equivalent requirement in Luxembourg. Holdco relies on the foreign private issuer exemption to certain of Nasdaq’s corporate governance standards with respect to matters related to its audit committee, compensation committee requirements, independent director oversight of executive compensation, proxy solicitation, quorum and shareholder approval. In particular, Holdco has opted not to establish a compensation committee or a nominating and corporate governance committee and, as of the date of this prospectus, the audit committee may not satisfy all of the corporate governance rules of Nasdaq applicable to U.S. domestic companies listed on Nasdaq. Holdco may decide to rely upon the “foreign private issuer exemption” for purposes of opting out of some or all of the corporate governance rules applicable from time to time to U.S. domestic companies.

Because Holdco is a foreign private issuer, its directors and senior management are not subject to short-swing profit and insider trading reporting obligations under Section 16 of the Exchange Act. They will, however, be subject to the obligations to report changes in share ownership under Section 13 of the Exchange Act and related SEC rules.

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Controlled Company

For purposes of the rules of the Nasdaq, Holdco is a “controlled company.” Under the Nasdaq rules, controlled companies are companies of which more than 50% of the voting power for the election of directors is held by an individual, a group, or another company. Codere Newco owns approximately 66.49% of the issued and outstanding Ordinary Shares. Accordingly, Holdco is eligible and may in the future decide to take advantage of exemptions from certain Nasdaq corporate governance standards applicable to controlled companies.

Board of Directors

As of the date of this prospectus, the Holdco Board is composed of seven directors:

Name	Age	Title
Patrick Joseph Ramsey(1)	48	Director and Chairman of the Holdco Board
Moshe Edree(2)	55	Director and Chief Executive Officer
Oscar Iglesias(2)	47	Director and Chief Financial Officer
Alejandro Rodino(2)	48	Director
Laurent Teitgen(2)	43	Director
Dr. Martin M. Werner(3)	58	Director
Daniel Valdez(3)	36	Director

(1) Jointly nominated by Codere Newco and the Sponsor, pursuant to the Nomination Agreement.

(2) Nominated by Codere Newco, pursuant to the Nomination Agreement.

(3) Nominated by the Sponsor, pursuant to the Nomination Agreement.

Pursuant to the Nomination Agreement, during the Sponsor Proposal Period, the Holdco Board will consist of seven (7) directors and (i) Codere Newco will have the right to propose for appointment four (4) Codere Newco Directors; (ii) the Sponsor will have the right to propose for appointment two (2) Sponsor Directors; and (iii) Codere Newco and the Sponsor will have the right to jointly propose for appointment the Industry Expert Independent Director. After the Sponsor Proposal Period, Codere Newco will have the right to propose for appointment five (5) directors, with at least two (2) of them having to qualify as independent directors (subject to independence requirements under applicable securities exchange rules that may require a greater number of independent directors). Both during and after the Sponsor Proposal Period, at least one (1) of the Codere Newco Directors shall qualify as a Luxembourg tax resident.

Codere Newco will have the right to propose for reappointment the Codere Newco Directors and the Sponsor will have the right to propose for reappointment the Sponsor Directors appointed within the Sponsor Proposal Period; provided that one (1) Sponsor Director shall not have the right to serve as director past the second annual shareholders’ meeting of Holdco after the Closing Date and the second Sponsor Director shall not have the right to serve as director past the third annual shareholders’ meeting of Holdco after the Closing Date.

Pursuant to the Nomination Agreement, the Holdco audit committee shall include at least one (1) Codere Newco Director and one (1) Sponsor Director (in either case only to the extent such director (i) qualifies as an independent director and (ii) meets the heightened independence requirements applicable to audit committees under the SEC rules and regulations and under the criteria established by the Nasdaq). Further, Codere Newco will have the right, but not the obligation, to propose for appointment one (1) non-executive, non-independent director as an observer to the audit committee to be appointed by the Holdco Board, subject to compliance with Rule 10A-3 under the Exchange Act.

The initial term of office of each director will be for a maximum period of one (1) year until the annual general meeting of the shareholders of Holdco to be held in 2022, in each case beginning on the day immediately following the date of his/her appointment.

The following is a brief summary of the business experience of the current members of the Holdco Board. Unless otherwise indicated, the business address for the members of Holdco Board is the same as Holdco’s business address: 7 rue Robert Stümper, L-2557 Luxembourg, Grand Duchy of Luxembourg.

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Patrick Joseph Ramsey. Mr. Ramsey currently serves as the Chairman of the Holdco Board and as a member of the audit committee of the Holdco Board. Mr. Ramsey started his career at Harrah’s (now Caesars Entertainment), where he held various management and executive positions around the United States. In 2008, he joined Multimedia Games, a Nasdaq-listed casino gaming technology company, and became the Chief Executive Officer of that business in 2010. The company was sold in December of 2014. After the sale, he joined Aristocrat Technologies, a global gaming technology company, as the Chief Digital Officer and currently serves as the Lead US Director for the Board and the Chairman of the Regulatory and Compliance Committee. In addition, he is a member of the Board of Directors of Simplebet, a member of the Operating Council of Arrow International and serves as a consultant to EPR Properties, a publicly traded REIT focused on experiential real estate. Mr. Ramsay also serves on the Executive Committee for the TPC Shriners Invitational Golf Tournament, he is the Vice Chairman of the Board of Trustees and the head wrestling coach for The Meadows School, and serves as an investor and Board Observer to Worldwide Golf. Mr. Ramsey holds a BA in Economics from Harvard University and an MBA from the Kellogg School of Management at Northwestern University.

Moshe Edree. Mr. Edree currently serves as the Chief Executive Officer of Holdco and as a member of the Holdco Board. Mr. Edree has served as SEJO’s Chief Executive Officer since January 1, 2022. He has also served as Chief Operating Officer and Director in one of the subsidiaries of the Codere Group since 2018, for which he planned and executed a reorganization process and took on responsibility for developing Codere Online. Mr. Edree had various roles in his around two decades of experience in management and directorship in the online gaming world. Between 2012 and 2016, Mr. Edree held an ownership interest as a shareholder of the company that provided services to Ladbrokes to set up its online division. He took a leading role in establishing Ladbroke’s online division and optimizing its digital processes. Between 2010 and 2014, Mr. Edree served as non-executive director of NetPlay TV PLC. Between 2009 and 2012, he also served as Chief Operating Officer of Playtech Turnkey Solution, where he also provided strategic guidance on planning, business and market development for Playtech B2C Partnership. Previously, he was a shareholder and held the office of CEO at IMIntermedia Ltd. Mr. Edree was also a shareholder and partner of Europartners and, since 2012, has served as chairman of Amandi Energy, Ghana. Mr. Edree is founder, owner and holds the office of Chief Executive Officer at Media Serve Ltd. He also serves as director in the board of directors of Top Archive Ltd and Twin City Ltd and provides services to Marketplay Ltd as an advisor to its board of directors on marketing and strategy. In addition, since 2010, Mr. Edree has been a shareholder of Luckyfishgames.com, where he oversaw the creation of this platform focusing on soft casino games tailored to social networks. Mr. Edree earned a Bachelor of Science from the Tel Aviv University and the Holon Institute of Technology in Israel, as well as a Bachelor of Arts from the Pratt University in New York, and a Master of Science in Project Management from the University of Bridgeport (Connecticut).

Oscar Iglesias. Mr. Iglesias currently serves as the Chief Financial Officer of Holdco and as a member of the Holdco Board. Mr. Iglesias has served since 2015 as Deputy CFO of Codere Group and, since 2017, as Director of Corporate Development. Mr. Iglesias has served as officer and as a member of the board of directors of multiple subsidiaries of the Codere Group and continues to serve as a member of the board of directors of CCJV S.A.P.I. de C.V. and HR Mexico City Project Co. S.A.P.I. de C.V., two subsidiaries of the Codere Group. His previous experience includes CFO and Head of Corporate Development for Franklyn Hotels & Resorts (Barcelona), principal with the private equity group WL Ross & Co. LLC (New York), and roles within the investment banking and equity research departments of Bear, Stearns & Co. Inc. (New York). Mr. Iglesias graduated from the McIntire School of Commerce at the University of Virginia and has an MBA from Columbia Business School. Oscar is a citizen of both the United States and Spain.

Alejandro Rodino. Mr. Rodino currently serves as a member of the Holdco Board and as a non-voting observer of the audit committee of the Holdco Board. Mr. Rodino is currently Chief Strategy and Corporate Officer for Codere Group, prior to that he also served as COO of the Spanish retail business and was a member of the Office of the CEO. Mr. Rodino provides consultancy and other services to the Codere Group under a consultancy contract between the Codere Group and Jusvil, S.A. Mr Rodino has extensive experience in the gaming industry having been involved with Codere Group either as advisor or employee since 2003. Mr Rodino is also a co-founder of G3M Partners a gaming consultancy founded in 2012, which worked for several years as an operating partner of certain investment funds that have been shareholders of the Codere Group. Prior to Codere Group, Mr Rodino was an investment banker at Violy, Byorum & Partners, based out of New York, where he worked on several M&A, Capital Raising and Strategic advisory assignments for clients in Latin America. He also worked as a management consultant in Buenos Aires, Argentina. Mr. Rodino earned a Bachelor’s degree in Economics from the Catholic University of Argentina as well as an MBA from the Instituto de Empresa in Madrid.

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Laurent Teitgen. Mr. Teitgen currently serves as a member of the Holdco Board and as a member of the audit committee of the Holdco Board. He has also served as a member of the board of directors and as a member of the audit committee of the board of NeoGames S.A. since April 2017. Mr. Teitgen currently serves on the board of directors of Ellomay Luxembourg Holdings S.à r.l., Chelsey Investissement S.C.A., Menora Central Europe Investments S.A., MiddleCap Group S.A. and Kaman Lux Holding S.à r.l. Mr. Teitgen is also the Head of the accounting department at Fiduciaire Jean-Marc Faber S.à r.l. Mr. Teitgen is a resident of Luxembourg and previously held positions with BDO, Intertrust, and TASL (now Orangefield/Vistra). Mr. Teitgen holds a B.A. in Accounting and Financial Management with a specialization in Accounting Review from Université de Lorraine, IUT Henri Poincaré, France.

Dr. Martin M. Werner. Dr. Werner currently serves as a member of the Holdco Board and as the Chairman of the audit committee of the Holdco Board. Dr. Werner was DD3’s Chief Executive Officer and Chairman of the Board of DD3 until the consummation Business Combination. Since January 2021, Dr. Werner has also served as the Chief Executive Officer and Chairman of the Board of DD3 Acquisition Corp. III (“DD3 Acquisition III”). Dr. Werner served as the Chief Executive Officer and Chairman of DD3 Acquisition Corp. I (“DD3 Acquisition I”) from July 2018 until the consummation of its business combination with Betterware de México, S.A.B de C.V. (NASDAQ: BWMX) (“Betterware”) in March 2020, and continues to serve as a member of Betterware’s board of directors. He is a co-founding partner of DD3 Capital, a private investment and financial services firm headquartered in Mexico City that provides a wide range of financial services to clients including, among others, merger and acquisitions advisory, equity and debt capital raising advisory and advisory in highly structured debt financing and financial restructurings. Prior to founding DD3 Capital in 2016, Dr. Werner worked at Goldman Sachs for 16 years (2000 – 2016) becoming a Managing Director in 2000 and a Partner in 2006. He was co-head of the Investment Banking Division for Latin America and the country head of the Mexico office. From 2011 to December 2019, Dr. Werner served as the Chairman of the board of directors of Red de Carreteras de Occidente (RCO), one of Mexico’s largest private concessionaires operating more than 760 kilometers of toll roads, which was previously owned by Goldman Sachs Infrastructure Partners, from 2007 until its sale to Abertis Infraestructuras S.A. and GIC Special Investments Pte Ltd. Prior to his time with Goldman Sachs, Dr. Werner served in the Mexican Treasury Department as the General Director of Public Credit from 1995 to 1997, and as Deputy Finance Minister from 1997 to 1999. Among his numerous activities, he was in charge of restructuring Mexico’s public debt during the financial crisis of 1994 and 1995. Dr. Werner is the second largest investor of Banca Mifel, a leading mid-market Mexican bank with $3.3 billion in assets and a credit portfolio of $2.0 billion. He was previously a member of the Board of Directors of Grupo Comercial Chedraui, a leading supermarket chain in Mexico and the United States, and is currently a member of the Board of Directors of Empresas ICA, a leading infrastructure construction company in Mexico, and of Grupo Aeroportuario del Centro Norte, one of Mexico’s largest airport operators. He is a member of Yale University’s School of Management Advisory Board. Dr. Werner holds a bachelor’s degree in economics from Instituto Tecnológico Autónomo de Mexico (ITAM) and a Ph.D. in economics from Yale University.

Daniel Valdez. Mr. Valdez currently serves as a member of the Holdco Board. Mr. Valdez served as an independent director of the board of directors of DD3 until the consummation of the Business Combination. He has also served as a director (alternate) for Betterware since December 2018, when his co-led special purpose vehicle, Promotora Forteza, S.A. de C.V., acquired a minority stake in the business. He is a Managing Partner of Alternative Investments and Portfolio Manager (Public Equities) for MG Capital. Mr. Valdez has also served as an independent member of investment committees for several public and private investment trusts. Prior to joining MG Capital, he held Senior Analyst positions at prominent hedge funds: Sigma Capital Management from 2012 to 2014; Eton Park Capital Management from 2011 to 2012; and Surveyor Capital (Citadel) from 2010 to 2011. Prior to joining Surveyor Capital, Mr. Valdez worked as an Investment Banking Associate for Morgan Stanley in New York from 2008 to 2010. While at Morgan Stanley, he joined the Technology, Media & Telecom group executing several initial equity offerings, mergers and acquisitions, and debt offerings transactions. Mr. Valdez earned an MBA from the Harvard Business School and a Bachelor of Science from Stanford University.

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Audit Committee

The audit committee of the Holdco Board consists of Dr. Martin M. Werner, Laurent Teitgen and Patrick Joseph Ramsey. Dr. Werner serves as the Chairman of the audit committee. All three members of the audit committee meet the requirements for independence and financial literacy under the applicable rules and regulations of the SEC and the corporate governance rules of Nasdaq, in each case applicable to foreign private issuers. Dr. Werner, Mr. Teitgen and Mr. Ramsey are audit committee financial experts as defined by the SEC rules and have the requisite financial experience as defined by the corporate governance rules of Nasdaq. Codere Online expects that the charter for the audit committee will be accessible through its corporate website. The reference to Holdco’s website address in this prospectus does not include or incorporate by reference the information on Holdco’s website into this prospectus.

In addition, Alejandro Rodino serves as a non-voting observer of the audit committee of the Holdco Board.

Holdco’s audit committee will be responsible for, among other things:

● appointing, compensating, retaining, evaluating, terminating and overseeing Holdco’s independent registered public accounting firm;

● discussing with Holdco’s independent registered public accounting firm their independence from management;

● reviewing, with Holdco’s independent registered public accounting firm, the scope and results of their audit;

● approving all audit and permissible non-audit services to be performed by Holdco’s independent registered public accounting firm;

● overseeing the financial reporting process and discussing with management and Holdco’s independent registered public accounting firm the annual financial statements that Holdco files with the SEC;

● overseeing Holdco’s financial and accounting controls and compliance with legal and regulatory requirements;

● reviewing Holdco’s policies on risk assessment and risk management;

● reviewing related person transactions; and

● establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters.

Risk Oversight

The Holdco Board is responsible for overseeing Holdco’s risk management process. The Holdco Board focuses on Holdco’s general risk management strategy, the most significant risks facing Holdco, and oversees the implementation of risk mitigation strategies by management. Holdco’s audit committee will also be responsible for discussing Holdco’s policies in particular with respect to financial and accounting risk assessment and risk management.

Code of Ethics

Holdco’s Code of Ethics is applicable to Holdco’s directors and senior management and complies with the rules and regulations of Nasdaq and the SEC. Codere Online expects that the Code of Ethics will be accessible through its corporate website. In addition, Holdco intends to post on the Corporate Governance section of its website all disclosures that are required by law or Nasdaq listing standards concerning any amendments to, or waivers from, any provision of the Code of Ethics. The reference to Holdco’s website address in this prospectus does not include or incorporate by reference the information on Holdco’s website into this prospectus.

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Senior Management

The following persons serve as Holdco’s senior managers: 

Name	Age	Title
Moshe Edree(1)	55	Chief Executive Officer
Oscar Iglesias(2)	47	Chief Financial Officer
Gonzalo de Osma	49	Chief Accounting Officer
Aviv Sher	41	Chief Operating Officer
Alberto Telias	39	Chief Marketing Officer
Yaiza Rodríguez	35	General Counsel
Erez Leket	49	Head of Product
Deborah Guivisdalsky	41	Head of CRM/VIP

(1) Mr. Edree is an employee of Codere Online since January 1, 2022. For further information, see “—Chief Executive Officer Agreements”.

(2) Mr. Iglesias is an employee of Codere Online since January 1, 2022.

For biographical information concerning Messrs. Moshe Edree and Oscar Iglesias, see “—Board of Directors”.

Gonzalo de Osma. Mr. de Osma currently serves as the Chief Accounting Officer of Holdco. Mr. de Osma has been Codere Group’s Digital Division Chief Financial Officer and member of its Board of Directors since September 2018. Mr. De Osma had various roles in his more than 14-year career at Codere Group and, prior to joining the Digital Division, he was Chief Financial Officer and member of the Board of Directors and Steering Committee of the Codere Group’s Mexican Business unit where it supervised a diversified portfolio, including gaming halls, racetrack, an exhibition center and an amusement park. At that moment, Mr. De Osma lead negotiations on the first international bank loan granted to a Mexican gaming company. In 2017, Mr. De Osma actively participated in the valuation, negotiation and final purchase of a minority stake in the main Mexican Subsidiary of the Codere Group. Previously, he was responsible for the successful merger integration of the joint business under which the Codere Group operated in Mexico. Additionally, he has led several M&A projects, productivity initiatives and implemented cost reductions. Mr. De Osma earned a Bachelor in Business Administration by the University of Wales.

Aviv Sher. Mr. Sher currently serves as the Chief Operating Officer of Holdco. Mr. Sher has been Codere Group’s Digital Division Director of Operations for the past three years. Mr. Sher is also the Israeli site manager and director. Mr. Sher oversees all the day-to-day operations across Codere Group sites globally, supervising various teams. Previously, Mr. Sher was General Manager at Primegaming for nine years, where it helped to build a company from five to 50 employees and grew the company online portfolio from one brand to multiple brands. Mr. Sher was a founding team member of Neogames (Nasdaq: NGMS), where it helped to build all its divisions from scratch and left while holding the role of COO three years later. Mr. Sher has a BA and an MBA with finance specialty from Bar Ilan University.

Alberto Telias. Mr. Telias currently serves as the Chief Marketing Officer of Holdco. Mr. Telias has been with Codere Group since 2018, first as Acquisition Marketing Manager and, since 2020, as digital Chief Marketing Officer. Mr. Telias served as Head of Paid Social for the Stars Group from 2016 working with the brand PokerStars in all of the regions where they had operations and introducing the new brands of the group PokerStars Casino and BetStars to the regulated markets. In 2010, he joined William Hill as an account manager to take responsibility of the media on the new license acquired by the company in Spain and after three years working on positioning the brand in the Spanish market he moved to take responsibility of the new channel of communication of such company, Paid Social, for all of the countries where it operated. In 2008, he earned a Bachelor of Business and Administration with mention in Marketing at Universidad Nacional Andres Bello.

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Yaiza Rodriguez. Mrs. Rodriguez currently serves as the General Counsel of Holdco. Ms. Rodríguez has been a member of the corporate legal department of Codere Group since 2016, focusing on M&A, corporate finance and restructuring matters. Her previous experience includes working as an M&A and corporate finance attorney in Herbert Smith Freehills and Cuatrecasas. Ms. Rodríguez has an L.L.B. in English Law and European Legal Studies from the University of Reading, an LL.M. in Business Law from Instituto de Empresa and is admitted to the New York Bar, qualified as a Solicitor in England & Wales and qualified as a Spanish attorney.

Erez Leket. Mr. Leket currently serves as the Head of Product of Holdco. Erez Leket has served since 2019 as Codere Online’s Product Department Manager. Mr. Leket is responsible for the product strategy & roadmap, across all product verticals. Mr. Leket counts with over 9 years of experience in the gaming industry and has a successful history of launching mobile and digital products to significant international markets.

Deborah Guivisdalsky. Mrs. Guivisdalsky currently serves as the Head of CRM/VIP of Holdco. Mrs. Guivisdalsky has been Codere Group’s Malta site manager for the past four years. She was responsible for the opening of the offices in Malta and the establishment of the different teams and departments. Mrs. Guivisdalsky currently oversees all the day-to-day operations across the different teams sitting in Malta such as Fraud, Payments, VIP and CRM. Previously, Mrs. Guivisdalsky worked at Ladbrokes as Head of VIP in Gibraltar where she created and managed a team of 60 persons. Previously, Mrs. Guivisdalsky was Head of Casino at Xwise, where she helped to build the teams and managed employees directly under her responsibility. Mrs. Guivisdalsky was also in charge of the operations handling for VIP, CRM and Customer Support as part as her tasks for over seven years.

Compensation of Directors and Senior Management

Director Compensation

Luxembourg law does not provide for limitations with respect to the aggregate annual compensation paid to the members of Holdco Board, such compensation should however be consistent with Holdco’s compensation policy.

The general meeting of the shareholders of Holdco will determine the remuneration of Holdco directors. On November 26, 2021, the sole shareholder of Holdco resolved to authorize the payment of a maximum amount of €225 thousand (excluding VAT) as aggregate compensation to the directors who are entitled to compensation under the Nomination Agreement for serving on the Holdco Board until the annual shareholders’ meeting of Holdco to be held in 2022. Changes to such compensation policy will require a vote of the general meeting of the shareholders of Holdco by simple majority of votes cast.

Pursuant to the Nomination Agreement, only Patrick Joseph Ramsey and Laurent Teitgen (the “Remunerated Directors”) are entitled to compensation for serving on the Holdco Board. None of the other five (5) directors are expected to be entitled to compensation for serving on the Holdco Board and/or the audit committee, other than the reimbursement for reasonable and documented out-of-pockets expenses.

Executive Compensation

Decisions with respect to the compensation of certain members of Holdco’s senior management are expected to be made by the Holdco Board.

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Aggregate Compensation of Directors and Senior Management

For the year ended December 31, 2020, the aggregate base compensation paid by the Codere Group to the group of individuals currently serving as members of the senior management team of Holdco was approximately €1.2 million. This amount does not include other de-minimis benefits including, but not limited to, relocation travel, professional and business expenses and benefits in kind reimbursed or paid by the Codere Group. The amount also does not include certain retention awards paid in January 2022 by the Codere Group to certain senior managers in the aggregate amount of approximately €0.5 million in cash under Codere Group’s long term incentive plan (which expired on December 31, 2021). In addition, variable compensation paid for the year ended December 31, 2020 by Codere Online Business to certain individuals who are currently serving as Holdco’s senior managers amounted to €0.3 million in the aggregate.

With respect to the members of the Holdco Board, Alejandro Rodino renders services to the Codere Group through Jusvil S.A. and GE3M, S.R.L., an affiliate of Jusvil, S.A., with whom the Codere Group entered into a consultancy contract on February 27, 2020, superseding a prior consultancy contract dated January 12, 2018 and amended on November 13, 2019. For the year ended December 31, 2020, Jusvil S.A. and GE3M, S.R.L. invoiced an aggregate of approximately €1.3 million to the Codere Group. Dr. Martin M. Werner and Daniel Valdez did not receive any compensation from the Codere Group or from DD3 for the year ended December 31, 2020. Commencing on December 7, 2020 through the consummation of the Business Combination, DD3 was obligated to pay the Sponsor $10,000 per month for providing DD3 with general and administrative services, including office space, utilities and administrative support. However, this arrangement was solely for DD3’s benefit and was not intended to provide DD3’s former officers or directors, including Dr. Martin M. Werner and Daniel Valdez, compensation in lieu of a salary. To Holdco’s knowledge, other than the $10,000 per month administrative fee and the repayment of loans from the Sponsor, no compensation or fees of any kind, including finder’s, consulting fees and other similar fees, have been paid to the Sponsor, members of DD3’s management team or their respective affiliates, for services rendered prior to or in connection with the consummation of the Business Combination. Certain out-of-pocket expenses incurred by such individuals in connection with activities on DD3’s behalf are reimbursable. There is no limit on the amount of out-of-pocket expenses reimbursable by DD3.

Except as disclosed above, as of the date of this prospectus, none of the members of the Holdco Board or the senior management team of Holdco have received any other compensation, benefits in kind or pension, retirement or similar benefits from Codere Online for the year ended December 31, 2020.

Incentive Plan

Holdco intends to adopt one or more long-term incentive plans with the main objective of enhancing the alignment between senior management and director interests with those of Codere Online and Holdco Shareholders and to strengthen the retention and motivation of senior management and directors in the long term.

On February 2, 2022, the Holdco Board approved the terms and conditions of a long-term incentive plan (the “LTIP”) which has been submitted to the Holdco Shareholders for their approval at a meeting expected to be held in March 2022. The LTIP is expected to include compensation in the form of share options, restricted shares, and/or other cash- and/or equity-based deferred payments payable upon the achievement of certain long-term operating and/or financial objectives. The LTIP is intended to be primarily for the benefit of certain existing and future senior managers of Holdco and the Remunerated Directors, and may include certain employees and independent contractors providing services to Codere Online. It is expected that all long-term incentives granted to the beneficiaries under the LTIP will be subject to a 5-year general vesting period in order to promote the long-term retention of the beneficiaries. Compensation under the LTIP would be in accordance with the beneficiary’s expected role, responsibilities and contribution to the business of Holdco, among other things.

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Chief Executive Officer Agreements

Managing Director Services Agreement

Prior to January 1, 2022, Mr. Edree, who currently serves as the Chief Executive Officer of Holdco, served as Holdco’s Managing Director and provided services to Codere Online Business as an independent contractor pursuant to a services agreement entered into by Mr. Edree, Novelly Investments Limited, a British Virgin Islands company majority-owned by him (“Novelly”), and Codere Online Business’s subsidiary, OMSE, with an effective date as of October 9, 2018 (as amended on November 30, 2020, the “Edree Services Agreement”). Under the Edree Services Agreement, Mr. Edree and Novelly agreed to provide, on an exclusive dedication basis (subject to their right to continue to manage certain identified holdings), certain services in exchange for a fixed annual fee payable by OMSE to Novelly of €250,000, plus a variable annual fee of up to €125,000, depending on the fulfillment of certain objectives each year. A success fee was also payable by OMSE calculated as 8% of the incremental value (as defined in the Edree Services Agreement) that is created at Codere Online, subject to a cap of €10 million, due to the services provided by Novelly. The success fee vested at a rate of 20% per year for two years (and 12% thereafter), being fully vested on the seventh anniversary of the effective date, or earlier upon the consummation of a company sale event (as defined therein). The Edree Services Agreement included a non-compete provision during the term of the agreement and for 18 months thereafter. Such provision excluded any services provided by Mr. Edree and Novelly to the companies set forth on a schedule to such agreement.

On December 31, 2021, the original parties to the Edree Services Agreement and Codere Newco agreed to amend and terminate the Edree Services Agreement (“Addendum No. 2”). Pursuant to Addendum No.2, Codere Newco agreed to become the sole obligor and assume any payment obligations and other obligations of OMSE with respect to the success fee vested up to December 31, 2021 payable to Novelly under the Edree Services Agreement. Addendum No. 2 was subject to the condition that the Holdco Board ratified the signing of Addendum No. 2 and the Edree Executive Employment Agreement (as defined below) on or before March 31, 2022, which condition was satisfied on February 2, 2022.

The Edree Services Agreement and Addendum No.2 are included as exhibits to the registration statement of which this prospectus forms part.

Chief Executive Officer Employment Agreement

Mr. Edree currently serves as the Chief Executive Officer of Holdco pursuant to an executive employment agreement (“contrato laboral de alta dirección”) entered into by Mr. Edree and SEJO, dated January 1, 2022 (the “Edree Executive Employment Agreement”), which the Holdco Board ratified on February 2, 2022. Under the Edree Executive Employment Agreement, Mr. Edree accepted his employment as Codere Online’s Chief Executive Officer and undertook to provide certain services under the supervision of the Holdco Board and SEJO’s board of directors, on an exclusive dedication basis (subject to Mr Edree’s right to continue to manage certain identified entities under certain terms and conditions), for an indefinite term in exchange for a fixed annual salary payable by SEJO of €250,000, plus (i) a variable annual compensation of up to €125,000, depending on the fulfillment of certain objectives each year, (ii) the right to participate in the LTIP, (iii) an annual housing allowance in the amount of €25,000 and (iv) the right to indemnification under Codere Online’s insurance for directors and senior managers from time to time. The Edree Executive Employment Agreement includes a non-compete provision during the term of the agreement and for 12 months thereafter (subject to Mr Edree’s right to continue to manage certain identified entities under certain terms and conditions) and a non-solicit provision for 24 months after the term of the agreement. As consideration for the non-compete and non-solicit, Mr. Edree will be entitled to receive €250,000 upon termination of the agreement.

Share Ownership

As of the date of this prospectus, Dr. Martin M. Werner and Mr. Daniel Valdez did not beneficially own any Ordinary Shares or Holdco Warrants. As of the date of this prospectus, none of the remaining members of the Holdco Board or the senior management team of Holdco, beneficially owned any Ordinary Shares or Holdco Warrants.

Please see “Beneficial Ownership of Securities” for information on the beneficial ownership of Ordinary Shares and Holdco Warrants as of the date of this prospectus.

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Regulation Applicable to Codere Online’s Business

Codere Online is subject to various laws and regulations that affect its ability to operate in the online casino gaming and sports betting industries. These industries are generally subject to extensive and evolving regulations that could change based on political and social norms and that could be interpreted in ways that could negatively impact Codere Online’s business. The below summary is not intended to be exhaustive or comprehensive and there are other laws and regulations that affect Codere Online’s business.

The gaming industry, which includes online casino gaming and sports betting, is heavily regulated and in order to continue its operations, Codere Online must maintain licenses and pay gaming taxes or a percentage of revenue in each jurisdiction in which it operates. Codere Online’s business is subject to extensive regulation under the laws, rules and regulations of the jurisdictions in which it operates. These laws, rules and regulations generally concern the responsibility, financial stability, integrity and character of the owners, managers and persons with material financial interests in gaming operations, along with the integrity and security of Codere Online’s online casino gaming and sports betting offerings. Violations of laws or regulations in one jurisdiction could result in disciplinary action in that and other jurisdictions.

Gaming laws are generally based upon declarations of public policy designed to protect gaming consumers and the viability and integrity of the gaming industry. Gaming laws also may be designed to protect and maximize state and local tax revenues, as well as to enhance economic development and tourism. To accomplish these public policy goals, gaming laws establish stringent procedures to ensure that participants in the gaming industry meet certain standards of character and responsibility. Among other things, gaming laws may require gaming industry participants to, among others:

● ensure that unsuitable individuals and organizations have no role in gaming operations;

● establish procedures designed to prevent cheating and fraudulent practices;

● establish and maintain anti-money laundering practices and procedures;

● establish and maintain responsible accounting practices and procedures;

● maintain effective controls over their financial practices, including establishing minimum procedures for internal fiscal affairs and the safeguarding of assets and revenues;

● maintain systems for reliable record keeping;

● file periodic reports with gaming regulators;

● establish programs to promote responsible gaming; and

● enforce minimum age requirements.

Typically, a national or regional regulatory environment is established by statute and underlying regulations and is administered by one or more regulatory agencies which regulate the affairs of owners, managers and persons with financial interests in gaming operations. Among other things, gaming authorities in the various jurisdictions in which Codere Online conducts or intends to conduct its business may:

● adopt rules and regulations under the implementing statutes;

● interpret and enforce gaming laws and regulations;

● impose fines and penalties for violations;

● review the character and fitness of participants in gaming operations and make determinations regarding their suitability or qualification for licensure;

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● grant licenses for participation in gaming operations;

● collect and review reports and information submitted by participants in gaming operations;

● review and approve certain transactions, which may include acquisitions or change-of-control transactions of gaming industry participants and securities offerings and debt transactions in which such participants engage; and

● establish and collect fees and taxes in jurisdictions where applicable.

While Codere Online believes that it is in compliance in all material respects with all applicable online casino gaming and sports betting laws, licenses and regulatory requirements, Codere Online cannot assure that its activities or the activities of its users will not become the subject of any regulatory, tax or law enforcement investigation, proceeding or other governmental action or that any such proceeding or action, as the case may be, would not have a material adverse impact on Codere Online or its business, results of operations and financial condition.

Licensing and suitability determinations

In order to operate in certain jurisdictions, Codere Online must obtain either a temporary or permanent license or determination of suitability from the responsible authorities. Some of such jurisdictions require operators to operate through retail establishments in order to qualify for an online license. Codere Online seeks to ensure that it obtains all necessary licenses to develop and put forth its offerings in the jurisdictions in which it operates and where its users are located.

Gaming laws require Codere Online, and may require each of its subsidiaries engaged in gaming operations, and certain of its directors, officers and employees and, in some cases, certain of its shareholders to be found suitable by gaming authorities. Licenses and suitability findings require a determination that the applicant is qualified. Where not mandated by statute, rule or regulation, gaming authorities typically have broad discretion in determining who must apply for a license or finding of suitability and whether an applicant qualifies for licensing or should be deemed suitable to conduct operations within a given jurisdiction. When determining to grant a license to an applicant, gaming authorities generally consider: (i) the financial stability, integrity, responsibility and suitability of the applicant and its applicable affiliated entities and individuals (including verification of the applicant’s sources of funding); (ii) the quality and security of the applicant’s online real-money gaming platform, hardware and related software, including the platform’s ability to operate in compliance with local regulation, as applicable; (iii) the applicant’s history; (iv) the applicant’s ability to operate its gaming business in a socially responsible manner; and (v) in certain circumstances, the effect on competition.

Gaming authorities may, subject to certain administrative procedural requirements, (i) deny an application, or limit, condition, revoke or suspend any license issued, or suitability finding made, by them; (ii) impose fines, either on a mandatory basis or as a consensual settlement of regulatory action; (iii) demand that named individuals or shareholders be disassociated from a gaming business; and (iv) in serious cases, liaise with local prosecutors to pursue legal action, which may result in civil or criminal penalties.

Events that may trigger revocation of a gaming license or another form of sanction vary by jurisdiction. However, typical events include, among others: (i) conviction in any jurisdiction of certain persons with an interest in, or key personnel of, the licensee of an offense that is punishable by imprisonment or may otherwise cast doubt on such person’s integrity; (ii) failure to comply with any material term or condition of the gaming license; (iii) declaration of, or otherwise engaging in, certain bankruptcy, insolvency, winding-up or discontinuance activities, or an order or application with respect to the same; (iv) obtaining the gaming license by a materially false or misleading representation or in some other improper way; (v) violation of applicable anti-money laundering or terrorist financing laws or regulations; (vi) failure to meet commitments to users, including social responsibility commitments; (vii) failure to pay in a timely manner all gaming or betting taxes or fees due; or (viii) determination by the gaming authority that there is another material and sufficient reason to revoke or impose another form of sanction upon the licensee. For example, in Mexico, the LIFO License could be automatically revoked if LIFO were to file for insolvency protection. There can be no assurance that Codere Online would maintain or be able to renew its licenses in the event of insolvency or other financial difficulty, including upon the filing or declaration of insolvency of Codere Newco or the parent company of the Codere Group from time to time, as such filing or declaration may be perceived to adversely affect the solvency of Codere Online as well.

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As noted above, in addition to Codere Online and its direct and indirect holding companies and subsidiaries, gaming authorities generally also have the right to investigate individuals or entities having a material relationship to, or material involvement with, Codere Online or any of its affiliates, to determine whether such individual or entity is suitable as a business associate. Specifically, as part of Codere Online’s obtaining online casino gaming and sports betting licenses, certain of Codere Online’s officers, directors, and employees and in some cases, certain of its shareholders (typically, beneficial owners of more than 5% of a company’s outstanding equity, with most jurisdictions providing that “institutional investors” (as defined by a particular jurisdiction) can seek a waiver of these requirements) may be required to file applications with the gaming authorities and may be required to be found suitable in certain jurisdictions. Qualification and suitability determinations generally require the submission of extensive and detailed personal and financial disclosures followed by a thorough investigation. The applicant must pay all the costs of the investigation. Changes with respect to the individuals who occupy licensed positions must be reported to gaming authorities and in addition to the authority to deny an application for licensure, qualification, or a finding of suitability, gaming authorities have jurisdiction to disapprove a change in a corporate position. If any director, officer, employee or significant shareholder is found unsuitable (including due to the failure to submit required documentation) by a gaming authority, Codere Online may deem it necessary, or be required, to sever its relationship with such person.

Generally, any person who fails or refuses to apply for a finding of suitability or a license within the prescribed period after being advised that it is required by gaming authorities may be denied a license or found unsuitable, as applicable. Furthermore, Codere Online may be subject to disciplinary action or its licenses may be in peril if, after it receives notice that a person is unsuitable to be a stockholder or to have any other relationship with Codere Online or any of its subsidiaries, Codere Online: (i) pays that person any dividend or interest upon its voting securities; (ii) allows that person to exercise, directly or indirectly, any voting right conferred through securities held by that person; (iii) pays remuneration in any form to that person for services rendered or otherwise; or (iv) fails to pursue all lawful efforts to require such unsuitable person to relinquish its voting securities.

Data protection and privacy

Because Codere Online handles, collects, stores, receives, transmits and otherwise processes certain personal information of its users and employees, Codere Online is also subject to national and international laws related to the privacy and protection of such data. The collection and use of personal data is governed by privacy laws and regulations enacted in various jurisdictions in which Codere Online operates. Privacy regulations continue to evolve in each of the markets served by Codere Online. Nevertheless, Codere Online focuses its efforts and vision on constantly adapting to the different jurisdictions and regulatory environments where it operates, even though these may differ from one another.

Gambling and Gaming Regulation by Country

Spain

Codere Online operates online gaming in Spain pursuant to the following online licenses granted by the DGOJ, the Spanish gaming regulator, to CDON: (A) three (3) general licenses for a ten (10) year term which were recently extended for ten (10) additional years (until May 31, 2032): (i) Other Games License, (ii) Betting License and (iii) Contests License; and (B) six (6) singular licenses for: (i) slots (granted until July 30, 2025), (ii) roulette (recently extended until June 22, 2025), (iii) black jack (recently extended until June 22, 2025), (iv) sports betting (granted until April 28, 2025), (v) horse betting (granted until April 28, 2024), and (vi) other bets (granted until April 28, 2025) (collectively, the “CDON Licenses”).

Online gambling and other gaming activities are regulated along with other forms of gambling by the Spanish Gaming Law. Royal Decree 1614/2011, of November 14, implementing the Spanish Gaming Law, in relation to gambling licenses, permits and registers in order to facilitate access by the various operators to the activities covered by the Law also includes the procedure to obtain the authorization of reserved gambling activities. General licenses are granted after the corresponding public tender process and have a duration of ten (10) years, renewable for an identical period, unless they are specifically limited. The operation of each type of gambling included in the scope of each general license requires the granting of a specific operating license, regulated by Article 11 of the Law.

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Title IV of the Spanish Gaming Law establishes the minimum technical requirements established by the National Gambling Commission that must be met by the technical equipment in terms of sufficient authentication mechanisms to guarantee, inter alia, the following:

● Confidentiality and integrity in communications.

● The identity of the participants, in the case of gambling using telematic and interactive means, as well as the verification, in the terms established by law, that they are not included in the Register provided for in Article 22.1 .b) of this Law.

● The authenticity and calculation of the bets.

● The control of their correct operation.

● Compliance with the subjective prohibitions regulated by Article 6 of this Law.

● Access to the components of the computer system exclusively by authorized personnel or by the National Gambling Commission itself, under the conditions that it may establish.

Royal Decree 1613/2011, of November 14, implementing the Spanish Gaming Law, provides the regulation of gambling in relation to the technical requirements of gambling activities, regulating the requirements of gambling activities carried out through websites.

● In order to market and carry out gambling activities through websites within the scope of the Spanish Gaming Law, operators must create a specific website under the «.es» domain name to which all connections made from Spain or made with a Spanish user account should be directed.

● The operator must establish the systems, mechanisms or agreements that guarantee that all gambling activities carried out from Spain or using a Spanish user account are handled from the operator’s website under the «.es» domain name. In particular, the operator must guarantee that all connections made from Spain or by participants with Spanish user accounts and that were initially directed to websites under a domain other than the “.es,” domain which are owned or controlled by the operator, its parent or its subsidiaries, are redirected to the operator’s specific website under the «.es» domain.

● The operator shall notify the National Gambling Commission of the domain name and the relevant information and data on the website that it uses to carry on its activity, as well as any changes therein.

● Where it deems necessary for the protection of the public interest and of minors, the National Gambling Commission may establish that certain types of gambling be marketed and carried out from an exclusive website created for this purpose by the operator.

The Spanish Gaming Law has a decisive impact on sector legislation on advertising, protection of personal data and electronic commerce. These three disciplines include obligations related to the duties of online games, regulated by General Advertising Law 34/1988, of November 11, and Regulation (EU) 2016/679 of the European Parliament and of The Council of April 27, 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data; Organic Law 3/2018, of December 5, of Protection of Personal Data and guarantee of Digital Rights; and Law 34/2002, of July 11, on Services of the Information Society and Electronic Commerce. These measures provide, among others, that betting advertising will only be allowed between 1:00 am and 5:00 a.m. and advertisers using social networks may only broadcast adverts to their followers.

The Spanish Cabinet approved Royal Decree-Law 11/2020, of March 31, whereby urgent supplementary social and economic measures were adopted to respond to the coronavirus health crisis that led to the declaration of the state of emergency by Royal Decree 463/2020, of March 14. The new measures introduced by this Royal Decree included the updating of consumer protection measures in the context of the exceptional events caused by the COVID-19 pandemic. It was also essential to establish certain limitations within the framework of gambling regulations.

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Therefore, to avoid an increase in online gambling consumption (in particular, casino, bingo and poker games), which can lead to compulsive or even pathological consumption behaviors (especially to protect minors, young adults or people with gambling disorders at a time of greater exposure), restrictions were placed on commercial communications made by gambling operators with a nationwide reach, including entities designated for the marketing of lottery games. However, this particular measure was ultimately repealed by final provision 5.2 of Law 2/2021, of March 29.

Title VII of the Spanish Gaming Law determines the tax regime applicable to gambling activities in compliance with the provisions of the Additional Provision Twenty of Law 56/2007, of December 28, on measures to promote the information society, the applicable tax rate being:

● State-run lotteries and games: 22% on the tax base.

● Parimutuel sports betting, straight sports betting and sports betting exchange; parimutuel horse betting, straight horse betting and horse betting exchange; and other parimutuel betting, straight betting and betting exchange: 20% on the tax base.

● Raffles: 20% on the tax base, unless they are declared to be of public utility or for charity and are therefore taxed at 5% on the tax base.

● Contests and other games: 20% on the tax base.

● Random number combinations for advertising or promotional purposes: 10% on the tax base.

General State Budget Law 6/2018, of July 3, for 2018, introduced a regulatory change in terms of tax benefits by reducing by 50% the tax rates on gambling, included in the Spanish Gaming Law. The objective of this reduction is to transfer tax benefits to the Autonomous Cities of Ceuta and Melilla that are collected in other taxes for them. Since then, both Autonomous Cities have seen a reduction in the tax for online gambling operators, leaving gambling tax at 10%. To qualify for this regime, a company is required to be registered in Ceuta or Melilla and 50% of the employees have to be registered in these territories.

Mexico

Codere Online operates online gaming in Mexico pursuant to license 2768 granted to LIFO in May 1990, which was renewed for a period of 12 years under Official Letter DGJS/1018/2015, expiring on May 10, 2027, which allows for the operation of 18 retail locations in Mexico and online gaming. By virtue of Official Letter No. DGJS/234/2019, dated March 14, 2019 the Ministry of Interior authorizes Codere Online to operate online gaming through the website: www.codere.mx (the “LIFO License”).

Mexico lacks a federal provision for online gambling, and the subsector is regulated under the Federal Law on Games and Drawings, of December 31, 1947 (the “Gaming Law”). The Gaming Law establishes that the Federal Executive, through the Ministry of the Interior, is responsible for the regulation, authorization, control and oversight of gambling and betting of any kind, including draws, with the exception of the National Lottery, which is governed by its own law.

On October 23, 2013, the Regulations for the Federal Law of Games and Draws were published in the Mexican Official State Gazette, in which the main technical requirements for the gambling and gaming activities on the internet were determined, among others:

● Article 85 - The establishments shall be able to receive wagers via the internet, by telephone or electronically. For that purpose, they shall establish a system of internal control for the transactions that are made through any of these channels, including a written description of the procedures and regulations to ensure inviolability and prevent the manipulation of wager systems. Said system shall have a record of at least: (i) the number of the account and the identity of the player, and (ii) the date, time, number of transaction, wagered amount and requested selection. The mechanism for receiving wagers shall be previously approved by the Secretariat of Government.

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● Article 87 - Permit holders shall fulfill the following procedures for issuing the wager tickets: (i) for each accepted wager, a single and original ticket shall be issued, which shall be given to the player, and it must be printed out with a serial number, bar code and a different number for each ticket machine, apart from the date and time of issue, wagered amount, type of wager and selection; (ii) for the wagers made via the internet, by telephone or electronically, no ticket shall be issued but the information of such wager shall be immediately registered in the central wager system after the wager has been paid. Since these wagers are made via the internet or electronically, the participants shall have access, for consulting or printing, to a voucher of their corresponding number of folio or rights. All wagers by telephone shall be recorded in audio records, with the player’s prior consent; (iii) the ticket machines shall operate connected online, in real time, to the central wager system; (iv) when, at the moment of issuing a voucher, there appears an error in the ticket machine, the voucher shall be cancelled in an administrative way; (v) the vouchers shall only be issued in the time and places appointed or authorized in the permit, and the permit holder can issue early vouchers; and (vi) the wager vouchers shall be paid at the moment that they are requested, whether in cash or through other legally accepted means of payment.

Article 20 of the Gaming Law establishes that the Ministry of the Interior may grant permits to operate betting games and prize draws for the following types of business, without making specific reference to online transactions:

● for the opening and operation of betting exchange at racecourses, greyhound tracks and fronton courts, as well as for the installation of remote betting centers and rooms for drawing numbers or symbols, only to business entities that are duly constituted in accordance with the laws of the United Mexican States;

● for the opening and operation of betting exchange at fairs, to Mexican legal persons;

● for the opening and operation of betting exchange at temporarily established horse races or cock fights, to business entities duly constituted in accordance with the laws of the United Mexican States and natural persons; and

● for the organization of prize draws, to natural and legal persons constituted in accordance with the laws of the United Mexican States.

The latest reform of the Special Tax on Production and Services Law (the “Special Tax Law”) published by the Mexican Official State Gazette (DOF) 12/09/19 establishes that the operation of betting games and draws, regardless of the name given to them, that require permission in accordance with the provisions of the Gaming Law and its implementing Regulations, are taxed at a rate of 30%.

Article 18 of the Special Tax Law establishes that the taxable base will include the total amount of bets made by the players, minus prizes and refunds obtained by the players (refunds prior to the betting event). A 30% tax rate will be applicable on the taxable base.

According to the Special Tax Law, the resulting amount may be reduced by:

● the total taxes paid according to the Gaming Law; and

● up to 20% of the amount paid to the Mexican gaming authority in order to undertake a betting activity.

Finally, local gaming taxes may apply depending on each municipality and ranging from 6% to 15% tax rate on the gaming revenue of the company, and a 6% withholding on the prizes obtained by the player.

Colombia

Codere Online operates online gaming in Colombia pursuant to license C1470, which allows for the operation of online gaming, granted by the Colombian gaming regulator, Coljuegos, to Codere Colombia, S.A. for a term of five (5) years and which expires on November 15, 2022 (the “Colombia License”).

Decree Law 4142 of 2011, amended by Decree number 1451 of 2015, founded the Empresa Industrial y Comercial del Estado Administradora del Monopolio Rentístico de los Juegos de Suerte y Azar (“Coljuegos”), whose role is “[…] the exploitation, administration, operation and issuance of regulations of the games that are part of the state monopoly of gaming that by law are not attributed to another entity [...].”

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Pursuant to Article 38 of Law 643 of 2001, amended by Article 93 of Law 1753 of 2015, games operated over the internet are understood to be those in which betting and the payment of prizes are carried out by means that do not require the presence of the player, after they have registered on the authorized website or portal, and the mechanics of which are based on the use of a random number generator or the occurrence of real events, the results of which are not controlled by the operator of the game. Additionally, and focusing on the online gambling subsector, pursuant to the law “[…] Novelty games are considered, among others, to be pre-printed lotto, the instant lottery, the online lotto in any of its modalities, sports bets or bets at events and all games operated over the internet, or by any other form of information technology that does not require the presence of the bettor.”

Through resolution number 04 of 2016 and subsequently through resolution number 08 of 2020, Coljuegos approved gaming regulations in relation to novelty games operated over the internet. Those legal persons that are awarded a concession may operate online gaming once they execute the corresponding concession contract and following verification of compliance with the requirements under the gambling regulations and any other parameters as determined by Coljuegos. The operation of other novelty games require authorization from Coljuegos and compliance with the selection processes established in the public procurement general statute.

Article 38 of Law 643 of 2001 provides that the operator must pay an operating fee of 17% of its gross gaming revenue to Coljuegos. When the operator operates novelty games that give the player a return in accordance with the gaming regulations of 83% or more, the minimum rate for the operating rights will be 15% of the gross gaming revenue minus the prizes paid. Notwithstanding, those who operate online games will additionally pay 811 legal monthly minimum wages, which will be settled during the first 20 business days of each year operating year. 

Article 93 of Law 1753 of 2015, establishes that internet gambling operators, in addition to paying an operating fee of 17% of gross gaming revenue, must pay COP 559,147,194 (legal tender) in tax at the beginning of each operating year. In addition to this tax, Coljuegos will demand payment by the operator of the so-called “Administration Expenses,” which will be 1% of the operating fee.

Italy

Codere Online operates online gaming in Italy pursuant to Remote Gaming License no. 15411 granted to Codere Scommese S.r.l. on October 7, 2019, which expires on December 31, 2022 (the “Italy License”) and which grants Codere Scommese S.r.l. the right to operate the following online gaming activities: 

● fixed odds and ‘totalizator’ bets on sports events, including simulated ones, including those relating to horse racing, as well as on other events;

● sports and horse racing betting;

● national horse racing games;

● skill games, including card games in tournament and different modes, as well as games of chance at fixed odds;

● fixed odds bets with direct interaction between players; and

● bingo

According to Italian criminal law, gambling that is not subject to State control is illegal under Article 718 of the Italian Criminal Code, whether organized in a public establishment or a private club. Italian law distinguishes between games of luck and games where the outcome depends on the player’s skill. Sports betting, lotteries, and some other activities fall into the category of legal and regulated gambling activities.

Only the State has the right to authorize gaming and gambling activities pursuant to article 1 of the Italian Legislative Decree of April 14, 1948 no. 496. The Autonomous Administration of State Monopolies (Agenzia delle Dogane e dei Monopoli) (the “ADM”), the entity responsible for regulating gambling activities on a state level, has the power to grant gaming licenses to legal persons through tender processes provided they comply with all requirements and parameters included in the tender offer, as well as with any other applicable laws or regulations. The call for tenders for the online business in Italy was announced in March 2018.

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The main reason why the Italian government has adhered to strict rules has been the desire to avoid the possible negative effects associated with the industry. The following amendments liberalized the market in 2006:

● Legalization of interactive peer-to-peer remote betting on fixed odds (betting exchange);

● Legalization of real-money remote skill games;

● Possibility for operators based in any EU and EFTA country and even in an offshore jurisdiction, to apply for an Italian gambling license provided they comply with certain suitability requirements and re-locate their gaming servers to Italy; and

● New license tender aimed at redesigning and reorganizing the offline network of betting shops and betting corners as well as legalizing online gaming yet strictly under the scope of a remote gaming license to be granted by ADM subject to payment of a one-off license fee of €300,000.

Law No. 77 dated as of June 24, 2009 deals with measures concerning the gaming sector following the Abruzzo Decree. The most relevant provision in the tax scheme is the introduction of an unprecedented profit-based tax regime with a flat 20% rate applying to all new games listed above other than the video lotteries. This provision is of paramount importance as it paves the way to the launch of games that otherwise could have never been offered in Italy given its penalizing turnover-based tax regime which however will continue to apply to sports and horse races betting, bingo, lotteries and skill games (including online poker tournaments that will thus continue to be taxed at 3% of the total tournament buy-ins sold by the operator).

Panama

Codere Online operates online gaming in Panama pursuant to Resolution No. 921 of September 21, 2017 which authorizes HIPA to operate online sports betting by virtue of Contract No. 1 of April 16, 2018 (under which it was awarded 5 licenses for a five (5) year term, renewable for another five (5) years) and Contract No. 193 of 4 October 4, 2005 (under which it was awarded 51 licenses for a twenty (20) year term) (the “HIPA License”). In addition, ALTA was awarded a standalone online gaming license, under which ALTA is authorized to conduct online gaming operations in Panama for a twenty (20) year term starting on December 1, 2021, subject to compliance with certain requirements pursuant to the Regulation (the “ALTA License”). As described under “Certain Relationships and Related Party Transactions—Material Agreements—Panama Restructuring Agreements”, Codere Online may request the transfer of the ALTA License from ALTA to Codere Online, but such transfer is subject to the authorization from the Panama Gambling Control Board. While the ALTA License is held by ALTA, Codere Online will operate the ALTA License under the agreement that Codere Online Panama and ALTA entered into on December 1, 2021.

Law Decree No. 2 of February 10, 1998 (the “Law Decree”), is the legal framework which regulates gaming and gambling activities in Panama. The Gaming Control Board, in representation of the Panama State, assumes the operation of gambling activities and betting activities, for the exclusive benefit of the Panama State. This operation may be exercised directly or through third parties.

Hence, gambling and betting activities that take place in Panama must be authorized, regulated and supervised according to the dispositions of the Law Decree, including gaming and gambling activities and betting activities which take place abroad, by electronic means or other means of remote communication.

In 2002, The Gambling Control Board Plenary, in exercise of its legal powers, issued the regulations governing the licenses of electronic gambling activities which was recently modified by Resolution No. 11 of March 6, 2020 (the “Resolution”). The Resolution regulates the operation of gambling activities through internet and establishes the procedures and requirements to be fulfilled by all individuals and corporations interested in obtaining a license to operate online gaming platforms. This Resolution expressly excludes from the definition of gambling activities racehorses, lottery, and amateur matches in which Panamanian nationals participate.

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Under national law, and individual or corporation may be awarded a maximum of five (5) licenses. Licenses may be granted for a maximum term of twenty (20) years. This license award is always at the discretion of the Gaming Control Board. If the Gaming Control Board authorizes a concession agreement, a one-time fee of fifty thousand balboas (50,000 PAB) must be paid to the Panama State for each gaming license that is awarded, upon the ratification by the National General Controller. Furthermore, during the period established in the concession agreement, the licensee must: (i) pay to Gambling Control Board ten percent (10%) of its gross gaming revenue (to be paid monthly), (ii) grant a compliance guarantee and a prize payment guarantee, and (iii) comply with the terms and conditions of the concession agreement, the Resolution, the Law Decree and any applicable Panamanian legislation, such as:

- Law No. 27 of March 24, 2015 and the Executive Decree No. 264 of June 17, 2015, that establish a 5.5% gambling tax, which the licensee, as collector agent, should charge to each payment ticket or coupon, tokens and other documents that have a payment obligation due to gambling activities, betting activities and any other gaming and gambling activity authorized by the Panama State;

- Law No. 23 of April 27, 2015 on prevention of money laundering and the funding of terrorism and the financing of the proliferation of weapons of mass destruction. Therefore, a licensee operating gambling activities, betting activities and any other gaming activity authorized by the Panama State is also regulated and supervised by the Superintendence of Supervision and Regulation of Non-Financial Subjects; and

- Law No. 81 of March 26, on data privacy.

Before standalone online licenses, such as the ALTA License, were authorized pursuant to the Resolution, some operators, such as HIPA, were authorized to operate online sports betting pursuant to a license that allowed the licensee to operate land-based betting agencies under Resolution No. 43 of October 24, 2016 which modified the Resolution No. 77 of September 4, 1999, provided that (i) the client previously registered through land-based betting agencies, and (ii) the operator obtained prior authorization from the Gaming Control Board.

A sports betting operator must pay the Gaming Control Board the following monthly fees: (i) 2% on prizes paid, (ii) 0.25% on amounts wagered of international sport betting, and (iii) 0.5% on amounts wagered of international greyhound racings.

Argentina

In Argentina, gaming is mainly regulated at the provincial level. Each province has the exclusive power to exploit, organize, manage, operate, control, monitor, and regulate all forms of gaming, and to establish the conditions to operate in the gaming sector. The power to grant licenses and authorizations for gaming activities is vested on each province. However, gaming activities may be subject to both provincial and federal taxes.

Article 50 of the Constitution of the City of Buenos Aires, provides that the City of Buenos Aires has the exclusive right to exploit and commercialize gambling. The City of Buenos Aires cannot delegate its power to exploit online gaming to third parties. It can only grant permits to authorize private companies to distribute and commercialize online gaming. Law N°538 authorizes the Executive Power of the City of Buenos Aires to create and regulate games approved by the City of Buenos Aires Legislature.

In May 2019, the City of Buenos Aires issued resolution RESDI-2018-321-LOTBA (the “Regulation”) approving setting forth the regulatory framework applying to online gaming activities within the City of Buenos Aires. The Regulation was later approved by the City of Buenos Aires Legislature. The regulator of the gambling activity in the City of Buenos Aires is the state owned company Lotería de la Ciudad de Buenos Aires S.E. (“LOTBA”). The Regulation provides that LOTBA may grant permits to third parties for the commercialization and distribution of online gambling. Such permits may be granted for a term of up to five (5) years, renewable for another five (5) years. The holder of such permit shall pay 10% of the gross gaming revenue (“GGR”) to the City of Buenos Aires through LOTBA.

The process to award permits was launched in February 2020 following the approval of resolution RESDI 15/LOTBA/20 (subsequently amended by RESDI/71/LOTBA/20) that provides the legal requirements that must be fulfilled by the applicants in order to obtain a permit.

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In 2020, Iberargen S.A. submitted an application for a permit and complied with all the requirements requested by LOTBA. On March 12, 2021, LOTBA granted the permit to Iberargen S.A. under code DI-2021-238-GCABA-LOTBA (the “Buenos Aires License”) for a period of five (5) years and, in December 2021, authorized Iberargen, S.A. to operate in the City of Buenos Aires thereunder.

In addition, gambling in the City of Buenos Aires is subject to a tax on the gross revenue (defined as GGR minus the 10% tax payable to LOTBA) of 6.0%. Law 27.591, as amended on 2021, created a new federal tax applying to online gambling. The tax rate is 2.5% and up to 15% of the net customer deposits, depending on whether the operator is a local company having investments in the gaming sector in Argentina or not. Enforcement of Law 27.591 is subject the issuance of implementing regulations by the federal tax authorities.

Malta

Codere Online holds business-to-consumer (“B2C”) and business-to-business (“B2B”) Maltese gaming licenses, but it does not currently offer online casino and sports betting to customers located in Malta. Codere Online Operator Limited’s (“ONOL”) B2C license was issued on April 15, 2019 and is valid for a period of ten (10) years (the “B2C License”). ONOL requested a voluntary suspension of the B2C License and is in the process of requesting a definitive suspension of such license.

Codere Online Management Services Limited (“OMSE”) was issued a B2B gaming license on April 15, 2019 for a ten (10) year term (the “B2B License”). Codere Online is authorized to provide Type 1 (Casino) and Type 2 (Fixed Odds Betting) B2B gaming services via OMSE’s B2B License.

Regulation 3 of the Gaming Authorisations Regulations (Subsidiary Legislation 583.05 of the Laws of Malta), provides that “no person shall provide or carry out a gaming service or provide a critical gaming supply from Malta or to any person in Malta, or through a Maltese legal entity, except when in possession of a valid licence […]”, without prejudice to any exemptions provided in applicable law.

Regulation 3 (2) of the Gaming Authorisations Regulations provides that “no person shall offer a licensable game, whether as part of a gaming service, critical gaming supply or otherwise, unless such game is approved or otherwise recognised” by the Maltese Gaming Authority’s (“MGA”). A licensable game is “a game which is not an exempt game”. Generally, without prejudice to ad hoc exemptions as may be applicable, games which are licensable are games of chance and controlled skill games.

The authority responsible for, inter alia, the regulation, supervision and enforcement of the Gaming Act and all subsidiary legislation falling under the remit of the same is the MGA. The MGA is considered to be the primary point of contact for regulatory reporting by licensees, with the latter obliged, in terms of numerous Regulations and Directives (such as Directive 3 of 2018), to notify, seek prior approval and inform the MGA of events and changes across multiple aspects of each licensed business, including but not limited to, a change in delivery channel of a gaming service and changes to approved technical set up.

Any person in possession of a license issued by the MGA shall pay the MGA the appropriate fees in relation to the type of license awarded. As operator of the B2C License, ONOL is due to pay (a) a license fee composed of a fixed annual license fee and a variable component known as the compliance contribution and (b) gaming tax. The variable component within the compliance contribution and the calculation method has been established by the MGA in Directive 4 of 2018 – Directive on the Calculation of Compliance Contribution. The compliance contribution is a variable percentage charged on tranches of gaming revenue generated in a particular game type.

As operator of the B2B License, OMSE is due to pay a variable annual license fee. The variable annual fee for the B2B License ranges from €25,000 to €35,000, depending on the company’s annual revenue.

Gaming tax is set at 5% on gaming revenue generated from Malta based players. Accordingly, taxability is determined by whether the player is established, has his permanent address and/or usually resides in Malta. In light of ONOL’s voluntary suspension of the B2C License, ONOL’s obligation to pay the compliance contribution and gaming tax, as applicable, was suspended from the date the suspension was approved by the MGA.

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Description of Securities

We urge you to read the applicable provisions of Luxembourg law and Holdco’s articles of association carefully and in their entirety because they describe your rights as a holder of Ordinary Shares and/or Holdco Warrants.

Ordinary Shares

Share Capital

Holdco was incorporated on June 4, 2021 by Codere Newco, with an initial share capital of €30,000, represented by 30,000 Ordinary Shares with a nominal value of €1 per share (the “Incorporation”). As of the date of this prospectus, Holdco’s share capital amounts to €45,121,956, represented by 45,121,956 Ordinary Shares, with a nominal value of €1.00 per share. All issued shares are fully paid and subscribed for. The authorized capital of Holdco (excluding the issued share capital) is set at €500,000,000 divided into 500,000,000 Ordinary Shares with a nominal value of €1 each.

A shareholder in a Luxembourg société anonyme, such as Holdco, holding fully paid up shares is not liable, solely because of his, her or its shareholder status, for additional payments to such société anonyme or its creditors.

Share Issuances

Pursuant to Luxembourg law, the issuance of Ordinary Shares requires approval by the general meeting of shareholders subject to necessary quorum and majority requirements. The general meeting of shareholders has also approved an authorized capital and authorized Holdco Board to (i) carry out any increase of the share capital or equity of Holdco with or without the issuance of new Ordinary Shares, (ii) issue convertible bonds, convertible preferred equity certificates, warrants, options or other convertible instruments, exchangeable or exercisable into new Ordinary Shares (“Convertible Instruments”), and (iii) issue new Ordinary Shares further to the conversion or exercise of the Convertible Instruments up to the limit of the authorized capital. The Holdco Board is authorized to remove or limit the statutory preferential subscription right of the shareholders in case of issue against payment in cash of Ordinary Shares and Convertible Instruments up to the maximum amount of such authorized capital, for a maximum period of five years after the date of the publication of the notarial deed enacting the Incorporation in the Luxembourg official gazette (Recueil Electronique des Sociétés et Associations, “RESA”). The general meeting may amend, renew, or extend such authorized capital and such authorization to the Holdco Board to issue shares.

In addition, the general meeting of shareholders has authorized Holdco Board to make an allotment of existing or newly issued shares without consideration to (i) employees of Holdco or certain categories amongst those; (ii) employees of companies or economic interest grouping in which Holdco holds directly or indirectly at least fifty per cent (50%) of the share capital or voting rights; (iii) employees of companies or economic interest grouping in which at least fifty per cent (50%) of the share capital or voting rights is held directly or indirectly by a company which holds directly or indirectly at least fifty per cent (50%) of the share capital of Holdco; (iv) members of the corporate bodies of Holdco or of the companies or economic interest grouping listed in point (ii) to (iii) above or certain categories amongst those, for a maximum period of five years after the date of the publication of the notarial deed enacting the Incorporation in the RESA.

An Ordinary Share may be registered in the name of more than one person provided that all holders of such Ordinary Share notify Holdco in writing as to which of them is to be regarded as their representative. Holdco will deal with that representative as if it were the sole shareholder in respect of that Ordinary Share including for the purposes of voting, dividend and other payment rights. The Holdco Board may suspend the exercise of voting rights of any holder of an Ordinary Share who has not complied with his duties and obligations set out in the articles of association of Holdco, any shareholders agreement or in the relevant subscription agreement or commitment, that may be entered from time to time.

The Holdco Board will resolve on any future issuance of Ordinary Shares out of the authorized capital (capital autorisé) in accordance with the quorum and voting thresholds set forth in the articles of association of Holdco and applicable law. In any such instance, the Holdco Board will also resolve on the applicable procedures and timelines to which such issuance will be subjected. If the proposal of the Holdco Board to issue new Ordinary Shares exceeds the limits of Holdco’s authorized share capital, the Holdco Board must then convene the shareholders to an extraordinary general meeting to be held in front of a Luxembourg notary for the purpose of increasing the issued share capital. Such meeting will be subject to the quorum and majority requirements required for amending the articles of association. If the capital call proposed by the Holdco Board consists of an increase in the shareholders’ commitments, the Holdco Board must convene the shareholders to an extraordinary general meeting to be held in front of a Luxembourg notary for such purpose. Such meeting will be subject to the unanimous consent of the Holdco Shareholders.

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Preemptive Rights

Under Luxembourg law, existing Holdco Shareholders benefit from a preemptive subscription right on the issuance of Ordinary Shares for cash consideration. However, Holdco Shareholders have, in accordance with Luxembourg law, authorized the Holdco Board, for a period not exceeding five years, to suppress, waive, or limit any preemptive subscription rights of shareholders provided by law to the extent that the Holdco Board deems such suppression, waiver, or limitation advisable for any issuance or issuances of Ordinary Shares within the scope of Holdco’s authorized share capital. The general meeting of shareholders duly convened to consider an amendment to the articles of association also may, by two-thirds majority vote, limit, waive, or cancel such preemptive rights. Such Ordinary Shares may be issued above, at, or below market value, and, following a certain procedure, even below the nominal value or below the accounting par value per ordinary share. The Ordinary Shares also may be issued by way of incorporation of available reserves, including share premium.

Share Repurchases

Holdco cannot subscribe for its own ordinary shares. Holdco may, however, repurchase issued Ordinary Shares or have another person repurchase issued Ordinary Shares for its account, subject to the following conditions:

● prior authorization by a simple majority vote at an ordinary general meeting of shareholders, which authorization sets forth:

○ the terms and conditions of the proposed repurchase and in particular the maximum number of Ordinary Shares to be repurchased;

○ the duration of the period for which the authorization is given, which may not exceed five years; and

○ in the case of repurchase for consideration, the minimum and maximum consideration per share, provided that the prior authorization shall not apply in the case of Ordinary Shares acquired by either Holdco, or by a person acting in his or her own name on its behalf, for the distribution thereof to its staff or to the staff of a company with which it is in a control relationship;

● the repurchases, including Ordinary Shares previously acquired by Holdco and held by it and Ordinary Shares acquired by a person acting in his or her own name but on Holdco’s behalf, may not have the effect of reducing the net assets below the amount of the issued share capital plus the reserves (which may not be distributed by law or under the articles of association);

● only fully paid-up Ordinary Shares may be repurchased;

● the voting and dividend rights attached to the repurchased Ordinary Shares will be suspended as long as the repurchased shares are held by Holdco; and

● the acquisition offer must be made on the same terms and conditions to all the shareholders who are in the same position, except for acquisitions which were unanimously decided by a general meeting at which all the shareholders were present or represented. In addition, under Luxembourg law, listed companies may repurchase their own shares on the stock exchange without an acquisition offer having to be made to their shareholders.

The authorization for the repurchase will be valid for a period ending on the earlier of five years from the date of such shareholder authorization and the date of its renewal by a subsequent general meeting of shareholders. Pursuant to such authorization, Holdco Board is authorized to acquire and sell Ordinary Shares under the conditions set forth in article 430-15 of the 1915 Law. Such purchases and sales may be carried out for any authorized purpose or any purpose that is authorized by the laws and regulations in force.

In addition, pursuant to Luxembourg law, Holdco may directly or indirectly repurchase Ordinary Shares by resolution of the Holdco Board without the prior approval of the general meeting of shareholders if such repurchase is deemed by the Holdco Board to be necessary to prevent serious and imminent harm to Holdco, or if the acquisition of Ordinary Shares has been made with the intent of distribution to its employees and/or the employees of any entity having a controlling relationship with it (i.e., its subsidiaries or controlling shareholder, Codere Newco) or in any of the circumstances listed in article 430-16 of the 1915 Law.

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Voting Rights

Each Ordinary Share entitles the holder thereof to one vote. Neither Luxembourg law nor Holdco’s articles of association contain any restrictions as to the voting of Ordinary Shares by non-Luxembourg residents. The Holdco Board may suspend the exercise of voting rights of any shareholder who has not complied with his or her duties and obligations set out in the articles of association, any shareholders agreement or in the relevant subscription agreement or commitment. The 1915 Law distinguishes general meetings of shareholders and extraordinary general meetings of shareholders with respect to voting rights.

Meetings

Ordinary General Meeting

According to the provisions of the 1915 Law, at an ordinary general meeting, there is no quorum requirement and resolutions are adopted by a simple majority of validly cast votes.

Abstentions, blank or invalid votes are not considered as “votes.”

However, pursuant to the Holdco’s articles of association, and except where lower thresholds are mandatorily required by Luxembourg law, resolutions at an ordinary general meeting are only valid if they are passed by a majority of the votes cast, provided that at least 33 1/3% of the Ordinary Shares are present or represented.

Extraordinary General Meeting

Extraordinary resolutions are required for any of the following matters, among others: (i) an increase or decrease of the authorized or issued capital; (ii) a limitation or exclusion of preemptive rights; (iii) approval of a statutory merger or de-merger (scission); (iv) Holdco’s dissolution and liquidation; (v) any and all amendments to Holdco’s articles of association; and (vi) change of nationality. Pursuant to Holdco’s articles of association, for any resolutions to be considered at an extraordinary general meeting of shareholders, (i) the quorum shall be at least one half of Holdco’s issued share capital, and (ii) the agenda shall indicate the proposed amendments to the articles of association and, where applicable, the text of those which concern the objects or the form of Holdco. If the said quorum is not present, a second meeting may be convened, in the manner prescribed by the articles of association and by the 1915 Law, at which no quorum shall be required. Any extraordinary resolution shall be adopted at a quorate general meeting by at least a two-thirds majority of the votes validly cast on such resolution by shareholders. Abstentions, blank or invalid votes are not considered as “votes.”

Annual Shareholders Meetings

An annual general meeting of shareholders shall be held in the Grand Duchy of Luxembourg within six months of the end of the preceding financial year, except for the first annual general meeting of shareholders which may be held within 18 months from incorporation.

Holdco Warrants

Pursuant to the Warrant Amendment Agreement, DD3 assigned to Holdco all of DD3’s right, title and interest in and to the Original Warrant Agreement and Holdco assumed, and agree to pay, perform, satisfy and discharge in full, all of DD3’s liabilities and obligations under the Original Warrant Agreement arising from and after the Merger Effective Time. In connection with the consummation of the Business Combination, all DD3 Warrants were converted into Holdco Warrants.

Each Holdco Warrant will be exercisable to purchase one Ordinary Share and only whole warrants are exercisable. The exercise price of the Holdco Warrants will be $11.50 per share, subject to adjustment as described in the Warrant Agreement. A Holdco Warrant may be exercised only during the period commencing on December 30, 2021 (i.e., 30 days after the completion of the Business Combination), and terminating at 5:00 p.m., New York City time on the earlier to occur of: (i) the date that is five (5) years after the Closing Date, (ii) the liquidation of Holdco, and (iii) the redemption date as provided in Section 6.2 of the Original Warrant Agreement.

Holdco Private Warrants are identical to the Holdco Public Warrants, except that the former may be exercisable on a cashless basis at the holder’s option and will be non-redeemable so long as they are held by the initial purchasers of the Private Warrants or their permitted transferees. If such warrants are held by someone other than the initial purchasers of the Private Warrants or their permitted transferees, the related Holdco Private Warrants will be redeemable and exercisable by such holders on the same basis as Holdco Public Warrants.

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Redemptions of Holdco Public Warrants

Holdco will have the ability to redeem Holdco Public Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of the Ordinary Shares equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within a 30 trading-day period commencing at any time after the Holdco Public Warrants become exercisable and ending on the third business day prior to proper notice of such redemption provided that on the date Holdco gives notice of redemption and during the entire period thereafter until the time Holdco redeems the Holdco Public Warrants, Holdco has an effective registration statement under the Securities Act covering the Ordinary Shares issuable upon exercise of the Holdco Public Warrants and a current prospectus relating to them is available. As of the date of this prospectus, the trading price of the Ordinary Shares has not reached the $18.00 threshold. If and when the Holdco Public Warrants become redeemable by Holdco, Holdco may exercise its redemption right even if Holdco is unable to register or qualify the underlying securities for sale under all applicable state securities laws. In the event Holdco determined to redeem the Holdco Public Warrants, holders would be notified of such redemption as described in the Warrant Agreement. Specifically, Holdco would be required to fix the Redemption Date (as defined in the Warrant Agreement). Notice of redemption would be mailed by first class mail, postage prepaid, by Holdco not less than 30 days prior to the Redemption Date to the registered holders of the Holdco Public Warrants to be redeemed at their last addresses as they appear on the registration books. In addition, beneficial owners of the redeemable warrants will be notified of such redemption via Holdco’s posting of the redemption notice to DTC. If the Holdco Public Warrants are called for redemption for cash, management will have the option to require all holders that wish to exercise the warrants to do so on a “cashless basis,” as described in the Warrant Agreement.

None of the Holdco Private Warrants will be redeemable by Holdco so long as they are held by the initial purchasers of the Private Warrants or their permitted transferees.

The foregoing description of the Holdco Warrants is qualified in its entirety by reference to the full text of the Original Warrant Agreement, filed as an exhibit to the registration statement of which this prospectus forms part, and the Warrant Amendment Agreement, filed as an exhibit to the registration statement of which this prospectus forms part.

Dividends

From the annual net profits of Holdco, at least 5% shall each year be allocated to the reserve required by applicable laws (the “Legal Reserve”).

That allocation to the Legal Reserve will cease to be required as soon and as long as the Legal Reserve amounts to 10% of the amount of the share capital of Holdco. The general meeting of shareholders shall resolve how the remainder of the annual net profits, after allocation to the Legal Reserve, will be disposed of by allocating the whole or part of the remainder to a reserve or to a provision, by carrying it forward to the next following financial year or by distributing it, together with carried forward profits, distributable reserves or share premium to the shareholders, each Ordinary Share entitling to the same proportion in such distributions.

The Holdco Board may resolve that Holdco pays out an interim dividend to the shareholders, subject to the conditions of article 461-3 of the 1915 Law and Holdco’s articles of association. The Holdco Board shall set the amount and the date of payment of the interim dividend.

Any share premium, assimilated premium or other distributable reserve may be freely distributed to the shareholders subject to the provisions of the 1915 Law and Holdco’s articles of association. In case of a dividend payment, each shareholder is entitled to receive a dividend right pro rata according to his or her respective shareholding. The dividend entitlement lapses upon the expiration of a five-year prescription period from the date of the dividend distribution. The unclaimed dividends return to Holdco’s accounts.

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Beneficial Ownership of Securities

The following table sets forth information regarding the beneficial ownership of Ordinary Shares as of the date of this prospectus, by:

● each person known to beneficially own more than 5% of the issued and outstanding Ordinary Shares and the Ordinary Shares on a fully diluted basis;

● each of the current members of the Holdco Board and the senior management team; and

● all of the current members of the Holdco Board and the senior management team as a group.

The beneficial ownership of Ordinary Shares of Holdco is based on (i) 45,121,956 Ordinary Shares issued and outstanding as of the date of this prospectus and (ii) 51,556,956 Ordinary Shares on a fully diluted basis (includes 45,121,956 Ordinary Shares issued and outstanding as of the date of this prospectus and 6,435,000 Ordinary Shares that may be issued upon exercise of the Holdco Warrants).

Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within sixty (60) days. Holdco Warrants may be exercised during the period commencing on December 30, 2021 (i.e., 30 days after the completion of the Business Combination), and terminating at 5:00 p.m., New York City time on the earlier to occur of: (i) the date that is five (5) years after the Closing Date, (ii) the liquidation of Holdco, and (iii) the redemption date as provided in Section 6.2 of the Original Warrant Agreement.

Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all of our Ordinary Shares beneficially owned by them.

	Number of Ordinary Shares Beneficially Owned(1)		Percentage of Issued and Outstanding Ordinary Shares(2)			Number of Ordinary Shares Beneficially Owned(3)		Percentage of Ordinary Shares on a Fully Diluted Basis(4)
5% Holders:
Codere Newco, S.A.U.(5)		30,000,000		66.49	%		30,000,000		58.19	%
Name and Address of Beneficial Owners Directors and Senior Managers
Patrick Joseph Ramsey		—		—			—		—
Moshe Edree		—		—			—		—
Oscar Iglesias		—		—			—		—
Alejandro Rodino		—		—			—		—
Laurent Teitgen		—		—			—		—
Dr. Martin M. Werner		—		—			—		—
Daniel Valdez		—		—			—		—
Gonzalo de Osma		—		—			—		—
Aviv Sher		—		—			—		—
Alberto Telias		—		—			—		—
Yaiza Rodríguez		—		—			—		—
Erez Leket		—		—			—		—
Deborah Guivisdalsky		—		—			—		—
All Directors and Senior Managers as a Group		—		—			—		—

(1) Excludes Ordinary Shares underlying Holdco Warrants.

(2) Percentage based on 45,121,956 Ordinary Shares issued and outstanding as of the date of this prospectus.

(3) Includes Ordinary Shares underlying Holdco Warrants.

(4) Percentage based on 51,556,956 Ordinary Shares on a fully diluted basis (which includes 45,121,956 Ordinary Shares issued and outstanding as of the date of this prospectus and 6,435,000 Ordinary Shares that may be issued upon exercise of the Holdco Warrants).

(5) Consists of 30,000 Ordinary Shares issued to Codere Newco on June 4, 2021 in connection with Holdco’s incorporation and 29,970,000 Ordinary Shares issued to Codere Newco in connection with the Exchange. The address for Codere Newco is Avenida de Bruselas 26, 28108, Alcobendas, Madrid, Spain.

136

Ordinary Shares Eligible for Future Sale

As of the date of this prospectus, Holdco’s share capital amounts to €45,121,956, represented by 45,121,956 Ordinary Shares, with a nominal value of €1.00 per share. All issued shares are fully paid and subscribed for. The authorized capital of Holdco (excluding the issued share capital) is set at €500,000,000 divided into 500,000,000 Ordinary Shares with a nominal value of €1.00 each. In addition, as of the date of this prospectus, there were 6,435,000 Holdco Warrants issued and outstanding. Each Holdco Warrant will be exercisable for one Ordinary Share at $11.50 per share, subject to adjustment.

All of the Ordinary Shares and Holdco Public Warrants issued to the Public Stockholders in connection with the Business Combination are freely transferable by persons other than by Holdco’s affiliates (as such term is defined in Rule 405 of the Securities Act) without restriction or further registration under the Securities Act. The Holdco Warrants will become exercisable on December 30, 2021 (i.e., 30 days after the completion of the Business Combination), and we expect the Ordinary Shares underlying Holdco Public Warrants to be freely transferable upon such exercise (unless they are held by affiliates of Holdco). In addition, up to 7,997,500 Ordinary Shares and 37,000 Holdco Private Warrants held by the Forward Purchasers, the Subscribers, the Private Shareholders, other than the Sponsor, and their respective permitted transferees, as applicable, which have been registered pursuant to the registration statement of which this prospectus forms part, may be sold publicly consistent with the requirements described herein. Certain of these Holdco Shareholders are subject to certain lock-up arrangements. See “—Lock-up Agreements.” The 30,000 Ordinary Shares held by Codere Newco prior to the Transactions and certain other Ordinary Shares not registered for sale in this registration statement are “restricted shares” as defined in Rule 144. Restricted shares may be sold in the public market only if registered or if they qualify for an exemption from registration under Rule 144 of the Securities Act. Sales of substantial amounts of the Ordinary Shares or Holdco Public Warrants in the public market could adversely affect prevailing market prices of such securities.

Lock-up Agreements

In connection with the Business Combination, DD3, Codere Newco, Holdco, the Sponsor, the Forward Purchasers and the other parties thereto, entered into the Registration Rights and Lock-Up Agreement. Pursuant to the Registration Rights and Lock-Up Agreement, each of Codere Newco and the Sponsor agreed to not transfer any Lock-Up Securities (as defined in the Registration Rights and Lock-Up Agreement) until the earliest of: (i) the date that is one year from the Closing, (ii) the date on which the closing price of the Ordinary Shares on Nasdaq equals or exceeds $12.50 per Ordinary Share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing 150 days after the Closing or (iii) such date on which Holdco completes a liquidation, merger, share exchange or other similar transaction that results in all Holdco shareholders having the right to exchange their Ordinary Shares for cash, securities or other property, subject to certain exceptions described in Section 5.2 of the Registration Rights and Lock-Up Agreement. Further, pursuant to the Registration Rights and Lock-Up Agreement, the parties agreed that no registration shall be effected with respect to Lock-Up Securities held by Codere Newco or the Sponsor, until after the expiration of the lock-up period.

Pursuant to the Subscription Agreements, each Subscriber acknowledged and agreed that, without the prior written consent of DD3 and Holdco, during the period commencing on the Closing Date and continuing until the earlier of the ninety (90) calendar day period commencing on the date of the closing of the Business Combination and the date when the Registration Statement is declared effective by the SEC, such Subscriber, and any person or entity acting on its behalf or pursuant to any understanding with it, will not (i) sell, assign, transfer (including by operation of law), incur any liens, charges, security interests, options, claims, mortgages, pledges, proxies, voting trusts or agreements, obligations, understandings or arrangements or other restrictions on title or transfer of any nature whatsoever, dispose of or otherwise encumber, (ii) make any short sale of, grant any option for the purchase of, or (iii) enter into any hedging or similar transaction with the same economic effect as a transfer in sub-section (i) above of, any of the PIPE Shares.

Rule 144

All of the outstanding Ordinary Shares and Holdco Warrants, other than those securities issued to the Public Stockholders in connection with the Business Combination (provided that such Public Stockholders are not Holdco’s affiliates), are “restricted securities” as that term is defined in Rule 144 under the Securities Act, including any Ordinary Shares and Holdco Warrants held by Codere Newco, the Sponsor, the Forward Purchasers, the Subscribers, the Private Shareholders and their respective permitted transferees, and may be sold publicly in the United States only if they are subject to an effective registration statement under the Securities Act, such as the registration statement of which this prospectus forms part, or pursuant to an exemption from the registration requirement such as those provided by Rule 144 under the Securities Act.

137

In general, a person (or persons whose securities are aggregated) who, at the time of a sale, is not, and has not been during the three months preceding the sale, an affiliate of Holdco and has beneficially owned Holdco’s restricted securities for at least six months will be entitled to sell the restricted securities without registration under the Securities Act, subject only to the availability of current public information about Holdco. Persons who are affiliates of Holdco and have beneficially owned Holdco’s restricted securities for at least six months may sell a number of restricted securities within any three-month period that does not exceed the greater of the following:

● 1% of the then outstanding securities of such class; or

● the average weekly trading volume of the securities of such class during the four calendar weeks preceding the date on which notice of the sale is filed with the SEC.

Sales by affiliates of Holdco under Rule 144 are also subject to certain requirements relating to manner of sale, notice and the availability of current public information about Holdco.

Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies

Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:

● the issuer of the securities that was formerly a shell company has ceased to be a shell company;

● the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;

● the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials); and

● at least one year has elapsed from the time that the issuer filed Form 20-F type information with the SEC.

Registration Rights

In connection with the Business Combination, DD3, Codere Newco, Holdco, the Sponsor, the Forward Purchasers and the other parties thereto, entered into the Registration Rights and Lock-Up Agreement, which provides customary demand and piggyback registration rights. Pursuant to the Registration Rights and Lock-Up Agreement, Holdco agreed that, within 30 calendar days after the Closing Date, it will file with the SEC a registration statement to permit the public resale of certain Ordinary Shares and Holdco Warrants (including underlying securities) held by the Holders (as defined in the Registration Rights and Lock-Up Agreement), and that it will use its reasonable best efforts to have the registration statement declared effective as soon as practicable after the filing thereof, but no later than 60 calendar days following the filing deadline, provided that the effectiveness deadline will be extended to 90 calendar days after the filing deadline if the registration statement is reviewed by, and receives comments from, the SEC. Holdco is filing the registration statement of which this prospectus is part to satisfy such obligation. In addition, pursuant to the terms of the Registration Rights and Lock-Up Agreement and subject to certain requirements and customary conditions, including with regard to the number of demand rights that may be exercised, certain holders may demand at any time or from time to time, that Holdco file a registration statement on Form F-1, or any such other form of registration statement as is then available to effect a registration, or, if available, Form F-3, to register the securities of Holdco held by such holders. The Registration Rights and Lock-Up Agreement also provide the Holders with “piggy-back” registration rights, subject to certain requirements and customary conditions. Further, pursuant to the Registration Rights and Lock-Up Agreement, the parties agreed that no registration shall be effected with respect to Lock-Up Securities held by Codere Newco or the Sponsor, until after the expiration of the lock-up period.

Pursuant to the Subscription Agreements, Holdco agreed that, within 30 calendar days after the Closing, Holdco will file with the SEC the Registration Statement, and Holdco shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof; provided, however, that Holdco’s obligations to include the Ordinary Shares held by a Subscriber in the Registration Statement will be contingent upon the respective Subscriber furnishing in writing to Holdco such information regarding the Subscriber, such Ordinary Shares held by such Subscriber and the intended method of disposition of such shares as shall be reasonably requested by Holdco to effect the registration, and will execute such documents in connection with such registration as Holdco may reasonably request that are customary of a selling stockholder in similar situations. Holdco is filing the registration statement of which this prospectus is part to satisfy this obligation. Notwithstanding anything to the contrary in the Subscription Agreements, Holdco may, upon giving prompt written notice of such action to the respective Subscriber, delay the filing or initial effectiveness of, suspend use of, the Registration Statement for a period of not more than sixty (60) consecutive days or more than two times in any calendar year if the filing, initial effectiveness or continued use of the Registration Statement would, in the good faith judgment of the Holdco Board, make Holdco fail to comply with applicable disclosure requirements or would require the inclusion in such Registration Statement of (i) financial statements that are unavailable to Holdco for reasons beyond Holdco’s control, (ii) audited financial statements as of a date other than Holdco’s fiscal year end, or (iii) pro forma financial statements that are required to be included in a registration statement.

138

Selling Securityholders

The Selling Securityholders may offer and sell, from time to time, any or all of the Ordinary Shares and Holdco Warrants being offered for resale by this prospectus.

The term “Selling Securityholders” includes the shareholders listed in the table below and their permitted transferees.

The table below provides, as of the date of this prospectus, information regarding (i) the beneficial ownership of our Ordinary Shares and Holdco Warrants of each Selling Securityholder, (ii) the percentage ownership of Ordinary Shares (based on 45,121,956 Ordinary Shares issued and outstanding, which excludes Ordinary Shares underlying Holdco Warrants) and Holdco Warrants (based on 6,435,000 Holdco Warrants issued and outstanding) of each Selling Securityholder, (iii) the number of Ordinary Shares and number of Holdco Warrants that may be sold by each Selling Securityholder under this prospectus, (iv) the number of Ordinary Shares and number of Holdco Warrants that each Selling Securityholder will beneficially own and the percentage ownership after this offering (based on the assumption indicated below) and (v) the number of Ordinary Shares (including Ordinary Shares underlying Holdco Warrants) beneficially owned by each of the Selling Securityholders as a percentage of the total number of Ordinary Shares on a fully diluted basis (includes 45,121,956 Ordinary Shares issued and outstanding as of the date of this prospectus and 6,435,000 Ordinary Shares that may be issued upon exercise of the Holdco Warrants).

Because each Selling Securityholder may dispose of all, none or some portion of their securities, no estimate can be given as to the number of securities that will be beneficially owned by a Selling Securityholder upon termination of this offering. In addition, the Selling Securityholders may sell, transfer or otherwise dispose of, at any time and from time to time, the Ordinary Shares and Holdco Warrants in transactions exempt from the registration requirements of the Securities Act after the date of this prospectus. For purposes of the table below, however, we have assumed that after termination of this offering none of the securities covered by this prospectus will be beneficially owned by the Selling Securityholder and further assumed that the Selling Securityholders will not acquire beneficial ownership of any additional securities during the offering. In addition, the Selling Securityholders may have sold, transferred or otherwise disposed of, or may sell, transfer or otherwise dispose of, at any time and from time to time, our securities in transactions exempt from the registration requirements of the Securities Act after the date on which the information in the table is presented.

Selling Securityholder information for each additional Selling Securityholder, if any, will be set forth by prospectus supplement to the extent required prior to the time of any offer or sale of such Selling Securityholder’s shares pursuant to this prospectus. Any prospectus supplement may add, update, substitute, or change the information contained in this prospectus, including the identity of each Selling Securityholder and the number of Ordinary Shares and Holdco Warrants registered on its behalf. A Selling Securityholder may sell or otherwise transfer all, some or none of such shares in this offering. See “Plan of Distribution.”

Ordinary Shares

Holdco Warrants

Percentage of

Name

Number Beneficially Owned Prior to Offering(1)

Percentage Beneficially Owned Prior to Offering(1)

Number Registered for Sale Hereby(1)

Number Beneficially Owned After Offering(1)

Percentage Beneficially Owned After Offering(1)

Number Beneficially Owned Prior to Offering

Percentage Beneficially Owned Prior to Offering

Number Registered for Sale Hereby

Number Beneficially Owned After Offering

Percentage Beneficially Owned After Offering

Ordinary Shares on a Fully Diluted Basis(2)

4-Square C.V.(3)

12,500

0.03

%

12,500

–

–

–

–

–

–

–

0.02

%

Accionex SA de CV(4)

22,500

0.05

%

22,500

–

–

–

–

–

–

–

0.04

%

Agricola Los Cardos Ltda(5)

20,000

0.04

%

20,000

–

–

–

–

–

–

–

0.04

%

Albion Hall Partners LP(6)

46,875

0.10

%

46,875

–

–

–

–

–

–

–

0.09

%

Alejandro Javier Hauser Canales(7)

25,000

0.06

%

25,000

–

–

–

–

–

–

–

0.05

%

Alfonso Guillen Quevedo(8)

6,250

0.01

%

6,250

–

–

–

–

–

–

–

0.01

%

Alfredo Hasbun Hirmas(9)

5,000

0.01

%

5,000

–

–

–

–

–

–

–

0.01

%

Ana Cristina Garza Herrera(10)

37,500

0.08

%

37,500

–

–

–

–

–

–

–

0.07

%

Andres Aguilar Calvo(11)

3,750

0.01

%

3,750

–

–

–

–

–

–

–

0.01

%

Andres Enrique Garza Herrera(12)

37,500

0.08

%

37,500

–

–

–

–

–

–

–

0.07

%

Andres Urzua(13)

2,500

0.01

%

2,500

–

–

–

–

–

–

–

0.00

%

Angelo Emmanuel Garcia Arrambide(14)

6,250

0.01

%

6,250

–

–

–

–

–

–

–

0.01

%

139

	Ordinary Shares											Holdco Warrants											Percentage of
Name	Number Beneficially Owned Prior to Offering(1)		Percentage Beneficially Owned Prior to Offering(1)			Number Registered for Sale Hereby(1)		Number Beneficially Owned After Offering(1)		Percentage Beneficially Owned After Offering(1)		Number Beneficially Owned Prior to Offering		Percentage Beneficially Owned Prior to Offering			Number Registered for Sale Hereby		Number Beneficially Owned After Offering		Percentage Beneficially Owned After Offering		Ordinary Shares on a Fully Diluted Basis(2)
Aquarius Investments Limited Partnership(15)		31,250		0.07	%		31,250		–		–		–		–			–		–		–		0.06	%
Arturo Kurasz(16)		3,000		0.01	%		3,000		–		–		–		–			–		–		–		0.01	%
Asesorías e Inversiones Andrés Respaldiza(17)		10,000		0.02	%		10,000		–		–		–		–			–		–		–		0.02	%
Asesorías e Inversiones CADOFE Ltda. (18)		10,000		0.02	%		10,000		–		–		–		–			–		–		–		0.02	%
Asesorias e Inversiones Los Maitenes(19)		10,000		0.02	%		10,000		–		–		–		–			–		–		–		0.02	%
Asesorías e Inversiones Santa Laura Ltda(20)		5,000		0.01	%		5,000		–		–		–		–			–		–		–		0.01	%
Asesorías e Inversiones Tinguiririca(21)		5,000		0.01	%		5,000		–		–		–		–			–		–		–		0.01	%
Asesorías e Inversiones Zuoz Ltda.(22)		15,000		0.03	%		15,000		–		–		–		–			–		–		–		0.03	%
Banregio SA IBM FID85101378(23)		62,500		0.14	%		62,500		–		–		–		–			–		–		–		0.12	%
Baron Emerging Markets Fund(24)		2,176,630		4.82	%		2,176,630		–		–		13,259		0.21	%		13,259		–		–		4.25	%
Baron Global Advantage Fund(25)		710,132		1.57	%		710,132		–		–		4,326		0.07	%		4,326		–		–		1.39	%
Bernardo Guerra Garcia(26)		7,500		0.02	%		7,500		–		–		–		–			–		–		–		0.01	%
Bernardo Luis Guerra Trevino(27)		25,000		0.06	%		25,000		–		–		–		–			–		–		–		0.05	%
Beryl Medina Gutierrez(28)		12,500		0.03	%		12,500		–		–		–		–			–		–		–		0.02	%
Biscayne Investments LP(29)		37,500		0.08	%		37,500		–		–		–		–			–		–		–		0.07	%
Capitol Peak LP(30)		125,000		0.28	%		125,000		–		–		–		–			–		–		–		0.24	%
Chl Absolute Return FIP(31)		25,000		0.06	%		25,000		–		–		–		–			–		–		–		0.05	%
Claudia Eugenia Gonzalez Calderon(32)		87,500		0.19	%		87,500		–		–		–		–			–		–		–		0.17	%
Cristian Infante Bilbao / Carolina Elena Herrera Lopez(33)		5,000		0.01	%		5,000		–		–		–		–			–		–		–		0.01	%
DABE MT Investments, LP(34)		62,500		0.14	%		62,500		–		–		–		–			–		–		–		0.12	%
David Alberto Garza Herrera(35)		25,000		0.06	%		25,000		–		–		–		–			–		–		–		0.05	%
David Barrera Jaime(36)		6,250		0.01	%		6,250		–		–		–		–			–		–		–		0.01	%
David Villarreal Valle(37)		25,000		0.06	%		25,000		–		–		–		–			–		–		–		0.05	%
DD3 Mex II Acquisition Corp.(38)		500,000		1.11	%		500,000		–		–		–		–			–		–		–		0.97	%
Destinations International Equity Fund – Brinker Capital(39)		150,238		0.33	%		150,238		–		–		915		0.01	%		915		–		–		0.29	%
Diego Romero Guzman(40)		10,000		0.02	%		10,000		–		–		–		–			–		–		–		0.02	%
Domingo Lugardo Chavez Moreno(41)		6,250		0.01	%		6,250		–		–		–		–			–		–		–		0.01	%
Domingo Lugardo Chavez Perez(42)		3,750		0.01	%		3,750		–		–		–		–			–		–		–		0.01	%
Eduardo Humberto Elizalde Serrano(43)		25,000		0.06	%		25,000		–		–		–		–			–		–		–		0.05	%
Emory LP(44)		62,500		0.14	%		62,500		–		–		–		–			–		–		–		0.12	%
Eugenio Bautista Morales Zambrano(45)		5,000		0.01	%		5,000		–		–		–		–			–		–		–		0.01	%
Explorador Panam Horizon Fund, LP(46)		50,000		0.11	%		50,000		–		–		–		–			–		–		–		0.10	%
Federico C Medina Gutierrez(47)		12,500		0.03	%		12,500		–		–		–		–			–		–		–		0.02	%
Fernando C Larranaga Larranaga(48)		12,000		0.03	%		12,000		–		–		–		–			–		–		–		0.02	%
FO Igloo Investments LP(49)		37,500		0.08	%		37,500		–		–		–		–			–		–		–		0.07	%
Francisca Dussaillant Lehmann(50)		10,000		0.02	%		10,000		–		–		–		–			–		–		–		0.02	%
Francisco Javier Puente Garza(51)		18,750		0.04	%		18,750		–		–		–		–			–		–		–		0.04	%
Francisco Romero Salido(52)		7,500		0.02	%		7,500		–		–		–		–			–		–		–		0.01	%
German Jesus Chavez Moreno(53)		21,875		0.05	%		21,875		–		–		–		–			–		–		–		0.04	%
Gestion D’Actifs MAYCO SEC LP(54)		100,000		0.22	%		100,000		–		–		–		–			–		–		–		0.19	%
Hernan Saldivar Maldonado(55)		25,000		0.06	%		25,000		–		–		–		–			–		–		–		0.05	%
INM Y Constructora Sta Catalina Ltda. (56)		13,000		0.03	%		13,000		–		–		–		–			–		–		–		0.03	%
Inmobiliaria e Inversiones Ferkal(57)		5,000		0.01	%		5,000		–		–		–		–			–		–		–		0.01	%
Inversiones Amarena Limitada(58)		30,000		0.07	%		30,000		–		–		–		–			–		–		–		0.06	%
Inversiones Igma Limitada(59)		10,000		0.02	%		10,000		–		–		–		–			–		–		–		0.02	%
Inversiones Kalamun SPA(60)		15,000		0.03	%		15,000		–		–		–		–			–		–		–		0.03	%
Inversiones Los Sauzales Ltda (61)		115,000		0.25	%		115,000		–		–		–		–			–		–		–		0.22	%
Inversiones Mobiliarias Inmofor S.A.(62)		27,000		0.06	%		27,000		–		–		–		–			–		–		–		0.05	%
Inversiones Nebek Internacional SPA(63)		10,000		0.02	%		10,000		–		–		–		–			–		–		–		0.02	%
Inversiones San José Ltda(64)		20,000		0.04	%		20,000		–		–		–		–			–		–		–		0.04	%
Inversiones Santa Elena Ltda(65)		15,000		0.03	%		15,000		–		–		–		–			–		–		–		0.03	%
Inversiones Urbina Ltda(66)		10,000		0.02	%		10,000		–		–		–		–			–		–		–		0.02	%

140

	Ordinary Shares											Holdco Warrants											Percentage of
Name	Number Beneficially Owned Prior to Offering(1)		Percentage Beneficially Owned Prior to Offering(1)			Number Registered for Sale Hereby(1)		Number Beneficially Owned After Offering(1)		Percentage Beneficially Owned After Offering(1)		Number Beneficially Owned Prior to Offering		Percentage Beneficially Owned Prior to Offering			Number Registered for Sale Hereby		Number Beneficially Owned After Offering		Percentage Beneficially Owned After Offering		Ordinary Shares on a Fully Diluted Basis(2)
Irene Gonzalez Lezius(67)		9,000		0.02	%		9,000		–		–		–		–			–		–		–		0.02	%
Jaime Armando Garcia de Vicente(68)		1,500		0.00	%		1,500		–		–		–		–			–		–		–		0.00	%
Jesus Francisco Garza Garcia(69)		37,500		0.08	%		37,500		–		–		–		–			–		–		–		0.07	%
Jorge Adrian Zubieta y Landa Ortiz(70)		25,000		0.06	%		25,000		–		–		–		–			–		–		–		0.05	%
Jose Alejandro Benavides Cavazos(71)		65,000		0.14	%		65,000		–		–		–		–			–		–		–		0.13	%
Jose Emmanuel Mendoza Barragan(72)		12,500		0.03	%		12,500		–		–		–		–			–		–		–		0.02	%
José Miguel Barros(73)		50,000		0.11	%		50,000		–		–		–		–			–		–		–		0.10	%
Juan Andres Lans Montferrier(74)		18,750		0.04	%		18,750		–		–		–		–			–		–		–		0.04	%
Juan B Morales Zambrano(75)		3,750		0.01	%		3,750		–		–		–		–			–		–		–		0.01	%
Katya Maria Medina Gutierrez(76)		12,500		0.03	%		12,500		–		–		–		–			–		–		–		0.02	%
Larissa Medina Gutierrez(77)		12,500		0.03	%		12,500		–		–		–		–			–		–		–		0.02	%
Leonidas Anibal Vial Echeverria(78)		50,000		0.11	%		50,000		–		–		–		–			–		–		–		0.10	%
Luis Armando Montemayor Mendoza(79)		6,250		0.01	%		6,250		–		–		–		–			–		–		–		0.01	%
Lydia Maria Chavez Moreno(80)		18,750		0.04	%		18,750		–		–		–		–			–		–		–		0.04	%
Maria Eugenia Garza de la Fuente(81)		18,750		0.04	%		18,750		–		–		–		–			–		–		–		0.04	%
Maria Fernanda Garza Rangel(82)		21,250		0.05	%		21,250		–		–		–		–			–		–		–		0.04	%
Marshalls Creek Partners LP(83)		28,125		0.06	%		28,125		–		–		–		–			–		–		–		0.05	%
Martha Patricia Cantu Garcia(84)		12,500		0.03	%		12,500		–		–		–		–			–		–		–		0.02	%
MG Partners Multi-Strategy Fund LP(85)		1,353,250		3.00	%		1,353,250		–		–		18,500		0.29	%		18,500		–		–		2.66	%
Morice Elías Zablah Montes de Oca(86)		18,750		0.04	%		18,750		–		–		–		–			–		–		–		0.04	%
Mountain Point Investments LP(87)		31,250		0.07	%		31,250		–		–		–		–			–		–		–		0.06	%
Neptune Peak Limited Partnership(88)		50,000		0.11	%		50,000		–		–		–		–			–		–		–		0.10	%
Nobilis Corredor de Bolsa S.A. (89)		100,000		0.22	%		100,000		–		–		–		–			–		–		–		0.19	%
Octavio Ernesto Rodriguez Leyva(90)		25,000		0.06	%		25,000		–		–		–		–			–		–		–		0.05	%
OTG Latin America Fund(91)		30,000		0.07	%		30,000		–		–		–		–			–		–		–		0.06	%
Pablo Edwards Morel(92)		2,000		0.00	%		2,000		–		–		–		–			–		–		–		0.00	%
Pablo Trivelli Oyarzún(93)		11,000		0.02	%		11,000		–		–		–		–			–		–		–		0.02	%
PAM Enterprises C.V., L.P.(94)		37,500		0.08	%		37,500		–		–		–		–			–		–		–		0.07	%
Pedro Dussaillant Lehmann(95)		10,000		0.02	%		10,000		–		–		–		–			–		–		–		0.02	%
Real States Golden Investments INC(96)		40,000		0.09	%		40,000		–		–		–		–			–		–		–		0.08	%
Remar Investments, LP(97)		62,500		0.14	%		62,500		–		–		–		–			–		–		–		0.12	%
Rentas El Hualle Ltda(98)		5,000		0.01	%		5,000		–		–		–		–			–		–		–		0.01	%
Rentas Maria Nine Ltda(99)		25,000		0.06	%		25,000		–		–		–		–			–		–		–		0.05	%
Rentas Mobiliarias Napoleon Tres Ltda. (100)		20,000		0.04	%		20,000		–		–		–		–			–		–		–		0.04	%
Rentas Puertecillo SPA(101)		10,000		0.02	%		10,000		–		–		–		–			–		–		–		0.02	%
Rentas Seneca SpA(102)		20,000		0.04	%		20,000		–		–		–		–			–		–		–		0.04	%
Ricardo Gomez Ateca(103)		10,000		0.02	%		10,000		–		–		–		–			–		–		–		0.02	%
Rio Negro Venture Capital c/o Larrain Investment Inc.(104)		5,000		0.01	%		5,000		–		–		–		–			–		–		–		0.01	%
Roberto Jaime Coindreau(105)		18,750		0.04	%		18,750		–		–		–		–			–		–		–		0.04	%
Roberto Motta(106)		18,750		0.04	%		18,750		–		–		–		–			–		–		–		0.04	%
Rocio del Carmen Gonzalez Calderon(107)		50,000		0.11	%		50,000		–		–		–		–			–		–		–		0.10	%
Rodrigo Javier Gonzalez Calderon(108)		62,500		0.14	%		62,500		–		–		–		–			–		–		–		0.12	%
Santana S.A.(109)		200,000		0.44	%		200,000		–		–		–		–			–		–		–		0.39	%
SATIS Limited Partnership, LP(110)		37,500		0.08	%		37,500		–		–		–		–			–		–		–		0.07	%
Sebastian Bulnes(111)		20,000		0.04	%		20,000		–		–		–		–			–		–		–		0.04	%
Sergio Andres Romero Guzman(112)		10,000		0.02	%		10,000		–		–		–		–			–		–		–		0.02	%
Sergio Vinelli(113)		25,000		0.06	%		25,000		–		–		–		–			–		–		–		0.05	%
Sociedad de Asesorias e Inversiones San Jose Ltda.(114)		10,000		0.02	%		10,000		–		–		–		–			–		–		–		0.02	%
Sociedad de Inversiones Alerce Ltda. (115)		40,000		0.09	%		40,000		–		–		–		–			–		–		–		0.08	%
Soloni Limited Partnership(116)		37,500		0.08	%		37,500		–		–		–		–			–		–		–		0.07	%
South Lakes Investment Limited Partnership(117)		40,000		0.09	%		40,000		–		–		–		–			–		–		–		0.08	%

141

Ordinary Shares

Holdco Warrants

Percentage of

Name

Number Beneficially Owned Prior to Offering(1)

Percentage Beneficially Owned Prior to Offering(1)

Number Registered for Sale Hereby(1)

Number Beneficially Owned After Offering(1)

Percentage Beneficially Owned After Offering(1)

Number Beneficially Owned Prior to Offering

Percentage Beneficially Owned Prior to Offering

Number Registered for Sale Hereby

Number Beneficially Owned After Offering

Percentage Beneficially Owned After Offering

Ordinary Shares on a Fully Diluted Basis(2)

Valhala Limited Partnership(118)

25,000

0.06

%

25,000

–

–

–

–

–

–

–

0.05

%

Victor German Chavez Perez(119)

6,250

0.01

%

6,250

–

–

–

–

–

–

–

0.01

%

VIR C.V. (120)

28,750

0.06

%

28,750

–

–

–

–

–

–

–

0.06

%

VO Valor SA de CV(121)

40,000

0.09

%

40,000

–

–

–

–

–

–

–

0.08

%

WFZ Partners LP(122)

21,875

0.05

%

21,875

–

–

–

–

–

–

–

0.04

%

(1) Excludes Ordinary Shares underlying Holdco Warrants and any Ordinary Shares issued in exchange for Public Shares held or acquired from time to time by the Selling Shareholders in transactions exempt from the registration requirements of the Securities Act.

(2) Represents the number of Ordinary Shares and Ordinary Shares underlying Holdco Warrants beneficially owned by each of the Selling Securityholders as a percentage of the total number of Ordinary Shares on a fully diluted basis (includes 45,121,956 Ordinary Shares issued and outstanding as of the date of this prospectus and 6,435,000 Ordinary Shares that may be issued upon exercise of the Holdco Warrants).

(3) The address of 4-Square C.V. is Schottegatweg Oost 44, Willemstad, Curaçao.

(4) The address of Accionex SA de CV is Av. Real San Agustin 901, Lomas de San Agustín, San Pedro Garza García, Nuevo Leon, Mexico.

(5) The address of Agricola Los Cardos Ltda is Los Sauzales 2241, Lo Barnechea, Región Metropolitana, Chile.

(6) The address of Albion Hall Partners LP is 199 Bay Street, Commerce Ct W, No. 5300, Toronto, Ontario Canada, M5L 1B9.

(7) The address of Alejandro Javier Hauser Canales is Río Colorado No. 240 Int.15, Col. Del Valle, San Pedro Garza García, 66220 Mexico.

(8) The address of Alfonso Guillen Quevedo is Ejercito Nacional 29, Col. Nuevo Centro de Población, Acapulco de Juárez, Guerrero, 39860 Mexico.

(9) The address of Alfredo Hasbun Hirmas is Paseo de Alcalá 11746, Lo Barnechea, Región Metropolitana, Chile.

(10) The address of Ana Cristina Garza Herrera is Lucerna 201, San Patricio, San Pedro Garza García, Nuevo Leon, 66270 Mexico.

(11) The address of Andres Aguilar Calvo is 848 Brickell Key Dr. Unit 3702, Miami, FL 33131, United States.

(12) The address of Andres Enrique Garza Herrera is Callejon de los Arizpe 306, Centro San pedro, San Pedro Garza García, Nuevo Leon, 66230 Mexico.

(13) The address of Andres Urzua is El Bosque 0177, Piso 4, Norte, Las Condes, Región Metropolitana, Chile.

(14) The address of Angelo Emmanuel Garcia Arrambide is Pinos 359 Colonial de la Sierra, San Pedro Garza García, Nuevo León, 66286 Mexico.

(15) The address of Aquarius Investments Limited Partnership is 60 Charlotte St, Saint John, NB E2L 2H9, Canada.

(16) The address of Arturo Kurasz is Walter Muller 6011, Santiago, Chile.

(17) The address of Asesorías e Inversiones Andrés Respaldiza is Carlos Antúnez 2123, Providencia, Santiago, Chile.

(18) The address of Asesorías e Inversiones CADOFE Ltda. is El Bosque 0177, Piso 3, Norte, Las Condes, Región Metropolitana, Chile.

(19) The address of Asesorias e Inversiones Los Maitenes is Los Maitenes 34, Condominio Los Bosques, Santiago, Colina, Chile.

(20) The address of Asesorías e Inversiones Santa Laura Ltda is Otoñal Oriente 12075, Santiago, Chile.

(21) The address of Asesorías e Inversiones Tinguiririca is Ing. Alvarez Albornoz 6203, Santiago, Vitacura, Chile.

(22) The address of Asesorías e Inversiones Zuoz Ltda. is Av. El Tranque 11352, Casa 3, Santiago, Chile.

(23) The address of Banregio SA IBM FID85101378 is Pedro Ramirez Vazquez 200 int 12, Col. Valle ote, San Pedro Garza García, Nuevo León, 66269 Mexico.

(24) The address of Baron Emerging Markets Fund is 767 Fifth Avenue, 49th Fl, NY, NY 10153, United States.

(25) The address of Baron Global Advantage Fund is 767 Fifth Avenue, 49th Fl, NY, NY 10153, United States.

(26) The address of Bernardo Guerra Garcia is Av. Roberto Garza Sada 401 Dpto 2A, Valle de San Angel Sector Francés, San Pedro Garza García, Nuevo León, 66290 Mexico.

(27) The address of Bernardo Luis Guerra Trevino is Rio Missouri 203, Col. Fuentes del Valle, San Pedro Garza García, Nuevo León, 66220 Mexico.

(28) The address of Beryl Medina Gutierrez is Jacaranda 111, Olinala, San Pedro Garza García, Nuevo Leon, 66290 Mexico.

(29) The address of Biscayne Investments LP is 140 North Phillips Avenue, Suite 301, Sioux Falls, South Dakota, 57104, US.

(30) The address of Capitol Peak LP is 140 North Phillips Avenue, Suite 301, Sioux Falls, South Dakota, 57104, US.

(31) The address of Chl Absolute Return FIP is Avenida Presidente Kennedy 9070, office 1301, Santiago, Chile.

(32) The address of Claudia Eugenia Gonzalez Calderon is Cimarron #125, Col. San Agustin La Punta, San Pedro Garza Garcia, Nuevo Leon, 66270 Mexico.

(33) The address of Cristian Infante Bilbao / Carolina Elena Herrera Lopez is Raimapu 6612, Santiago, Chile.

(34) The address of DABE MT Investments, LP is 60 Charlotte St, Saint John, NB E2L 2H9, Canada.

142

(35) The address of David Alberto Garza Herrera is Callejon de los Arizpe 303, Centro San Pedro, San Pedro Garza García, Nuevo Leon, 66230 Mexico.

(36) The address of David Barrera Jaime is Cañada 123, Colonia Veredalta, San Pedro Garza García, Nuevo Leon, 66270 Mexico.

(37) The address of David Villarreal Valle is Batallón San Patricio 109 A, Col. Valle Oriente, San Pedro Garza García, Nuevo León, 66278 Mexico.

(38) The address of DD3 Mex II Acquisition Corp. is Pedregal 24, 3rd Floor, Interior 300, Colonia Molino del Rey, Del. Miguel Hidalgo, 11040 Mexico City, Mexico.

(39) The address of Destinations International Equity Fund – Brinker Capital is 767 Fifth Avenue, 49th Fl, NY, NY 10153, United States.

(40) The address of Diego Romero Guzman is Camino Otoñal N° 1033 Casa 1, Santiago, Las Condes, Chile.

(41) The address of Domingo Lugardo Chavez Moreno is Río Amazonas 132 Local 8, San Pedro Garza García, Nuevo León, 66220 Mexico.

(42) The address of Domingo Lugardo Chavez Perez is Roberto G Sada 213, Pedregal del Valle, San Pedro Garza García, Nuevo León, 66280 Mexico.

(43) The address of Eduardo Humberto Elizalde Serrano is Ave Versalles #1850, Col. Jardines de Versalles, Saltillo, CU, 25200 Mexico.

(44) The address of Emory LP is Suite 200A, Second floor, Centre of Commerce, One Bay Street, P.O. Box N 3703, Nassau, Bahamas.

(45) The address of Eugenio Bautista Morales Zambrano is Mar Egeo #407, Col San Agustin Campestre, San Pedro Garza Garcia, Nuevo Leon, 66270 Mexico.

(46) The address of Explorador Panam Horizon Fund, LP is 3511 Silverside Road, Suite 105, Wilmington, DE 19810, United States.

(47) The address of Federico C Medina Gutierrez is Monte Everest 505, Villa Montaña, San Pedro Garza García, Nuevo Leon, 66235 Mexico.

(48) The address of Fernando C Larranaga Larranaga is Yaguaron 163, Vitacura, Santiago, Chile.

(49) The address of FO Igloo Investments LP is 140 North Phillips Avenue, Suite 305, Sioux Falls, South Dakota, SD 57104, United States.

(50) The address of Francisca Dussaillant Lehmann is Las Perdices N° 537, Santiago, La Reina, Chile.

(51) The address of Francisco Javier Puente Garza is C de la Meseta #209, Col. Rincon de la Montaña, San Pedro Garza Garcia, Nuevo Leon, 66240 Mexico.

(52) The address of Francisco Romero Salido is Cimarron #125, Col. San Agustin La Punta, San Pedro Garza Garcia, Nuevo Leon, 66270 Mexico.

(53) The address of German Jesus Chavez Moreno is Cipreses 35, La Cima, San Pedro Garza García, Nuevo León, 66230 Mexico.

(54) The address of Gestion D’Actifs MAYCO SEC LP is 60 Charlotte St, Saint John, NB E2L 2H9, Canada.

(55) The address of Hernan Saldivar Maldonado is Antiguo San Agustin Poniente 01004, San Pedro Garza García, Nuevo León, 66278 Mexico.

(56) The address of INM Y Constructora Sta Catalina Ltda. is Isidora Goyenechea 3642, Las Condes, Santiago, Chile.

(57) The address of Inmobiliaria e Inversiones Ferkal is Pardo 474, Melipilla, Santiago, Chile.

(58) The address of Inversiones Amarena Limitada is Avda. El Golf 150, Piso 20, Santiago, Las Condes, Chile.

(59) The address of Inversiones Igma Limitada is Valle Central 1492, Santiago, Chile.

(60) The address of Inversiones Kalamun SPA is Candelaria Goyenechea 3868, of 36, Santiago, Chile.

(61) The address of Inversiones Los Sauzales Ltda is Los Sauzales N° 2241, Santiago, Lo Barnechea, Chile.

(62) The address of Inversiones Mobiliarias Inmofor S.A. is Isidora Goyenechea 3642, Las Condes, Santiago, Chile.

(63) The address of Inversiones Nebek Internacional SPA is Candelaria Goyenechea 3868, of 36, Santiago, Chile.

(64) The address of Inversiones San José Ltda is El Bosque 0177, Piso 4, Norte, Las Condes, Región Metropolitana, Chile.

(65) The address of Inversiones Santa Elena Ltda is La Huasa 1957, Casa G, Santiago, Chile.

(66) The address of Inversiones Urbina Ltda is Domingo Bondi 1311, Santiago, Chile.

(67) The address of Irene Gonzalez Lezius is Camino del Cerro Alto 10041, Dp 303, Santiago, Chile.

(68) The address of Jaime Armando Garcia de Vicente is Maria Olavarrieta 11738, Santiago, Chile.

(69) The address of Jesus Francisco Garza Garcia is Virgen del Carmen #12, Col. Sierra Alta 1, Monterrey, Nuevo Leon, 64989 Mexico.

(70) The address of Jorge Adrian Zubieta y Landa Ortiz is Privada Frida #50, Colonia Hacienda del Rosario, San Pedro Garza García, Nuevo Leon, Mexico.

(71) The address of Jose Alejandro Benavides Cavazos is Sayula 219, Mitras Sur, Monterrey, Nuevo León, 64020 Mexico.

(72) The address of Jose Emmanuel Mendoza Barragan is Kilimanjaro 200, Villa Montaña, San Pedro Garza García, Nuevo León, 66235 Mexico.

(73) The address of José Miguel Barros is Los Laureles 1515, Santiago, Vitacura, Chile.

(74) The address of Juan Andres Lans Montferrier is Rancho Marroquin de Abajo #2, Centro San Miguel de Allende, Los Charcos, Guanajuato, 37700 Mexico.

(75) The address of Juan B Morales Zambrano is Priv. La Parvada #1008, Col La Ventana, San Pedro Garza Garcia, Nuevo Leon, 66230 Mexico.

(76) The address of Katya Maria Medina Gutierrez is Monte Cervino 102, Villa Montaña, San Pedro Garza García, Nuevo Leon, 66235 Mexico.

(77) The address of Larissa Medina Gutierrez is Aconcagua 317, Villa Montaña, San Pedro Garza García, Nuevo Leon, 66235 Mexico,

(78) The address of Leonidas Anibal Vial Echeverria is Las Mercedes 11360, Santiago, Chile.

(79) The address of Luis Armando Montemayor Mendoza is 7a Avenida 900, Cumbres 2o sector, Monterrey, Nuevo León, 64610 Mexico.

143

(80) The address of Lydia Maria Chavez Moreno is Av. Ricardo Margain Z. 440 P32-3203, Valle del Campestre, San Pedro Garza García, Nuevo León, 66265 Mexico.

(81) The address of Maria Eugenia Garza de la Fuente is Onix 215, Pedregal del Valle, San Pedro Garza García, Nuevo Leon, 66280 Mexico.

(82) The address of Maria Fernanda Garza Rangel is Bosques de Helechos No.6, Col. Bosques de las Lomas, México, D.F., 5120 Mexico.

(83) The address of Marshalls Creek Partners LP is 199 Bay Street, Commerce Ct W, No. 5300, Toronto, Ontario Canada, M5L 1B9.

(84) The address of Martha Patricia Cantu Garcia is Calzada de los Olivos 103, Las Calzadas, San Pedro Garza García, Nuevo Leon, 66278 Mexico.

(85) The address of MG Partners Multi-Strategy Fund LP is 199 Bay Street, Commerce Ct W, No. 5300, Toronto, Ontario Canada, M5L 1B9.

(86) The address of Morice Elías Zablah Montes de Oca is Neil Armstrong #510, Col. Palo Blanco, San Pedro Garza Garcia, Nuevo Leon, 66236 Mexico.

(87) The address of Mountain Point Investments LP is 60 Charlotte St, Saint John, NB E2L 2H9, Canada.

(88) The address of Neptune Peak Limited Partnership is One Germain Street, Suite 1500, Saint John, New Brunswick, E2L4V1 Canada.

(89) The address of Nobilis Corredor de Bolsa S.A. is Rincon 477, Piso 3, Montevideo, Uruguay.

(90) The address of Octavio Ernesto Rodriguez Leyva is Florentino Arroyo 108, San Pedro Garza García, Nuevo Leon, Mexico.

(91) The address of OTG Latin America Fund is 8730 Stony Point Parkway, Suite 205, Richmond, VA, United States.

(92) The address of Pablo Edwards Morel is Rey Gustavo Adolfo 4620, Dept 123, Santiago, Chile.

(93) The address of Pablo Trivelli Oyarzún is Camino del Cerro Alto 10041, Dp 303, Santiago, Chile.

(94) The address of PAM Enterprises C.V., L.P. is Kaya Flamboyan 9, Willemstad, Curaçao.

(95) The address of Pedro Dussaillant Lehmann is Condor Sur N° 12, Santiago, Chicureo, Chile.

(96) The address of Real States Golden Investments INC is Main Street 3099 Road Town, Tortola, British Virgin Islands.

(97) The address of Remar Investments, LP is 60 Charlotte St, Saint John, NB E2L 2H9, Canada.

(98) The address of Rentas El Hualle Ltda is Los Sauzales N° 2241, Santiago, Lo Barnechea, Chile.

(99) The address of Rentas Maria Nine Ltda is Las Violetas N° 5926, Santiago, Cerrillos, Chile.

(100) The address of Rentas Mobiliarias Napoleon Tres Ltda. is Lo Fontecilla 722, Santiago, Las Condes, Chile.

(101) The address of Rentas Puertecillo SPA is Padre Roman 5000, Santiago, Vitacura, Chile.

(102) The address of Rentas Seneca SpA is Los Sauzales N° 2241, Santiago, Lo Barnechea, Chile.

(103) The address of Ricardo Gomez Ateca is Brasilia 780, Depto 1104, Santiago, Chile.

(104) The address of Rio Negro Venture Capital c/o Larrain Investment Inc. is Cerro Blanco 2141, Lo Barnechea, Santiago, Chile.

(105) The address of Roberto Jaime Coindreau is Onix 215, Pedregal del Valle, San Pedro Garza García, Nuevo Leon, 66280 Mexico.

(106) The address of Roberto Motta is Oriente 5 #111, Col. Ciudad Industrial, Celaya, Guanajuato, 38010 Mexico.

(107) The address of Rocio del Carmen Gonzalez Calderon is Comarron #100, Col. San Agustin La Punta, San Pedro Garza Garcia, Nuevo Leon, 66270 Mexico.

(108) The address of Rodrigo Javier Gonzalez Calderon is Berrendo #103, Col. San Agustin La Punta, San Pedro Garza Garcia, Nuevo Leon, 66270 Mexico.

(109) The address of Santana S.A. is OMC Chambers, Wickhams Cay 1, Road Town, Tortola, British Virgin Islands.

(110) The address of SATIS Limited Partnership, LP is Geneva Palace, 2nd Floor #333, Road Town, Tortola, VG1110, British Virgin Islands.

(111) The address of Sebastian Bulnes is El Bosque 0177, Piso 4, Norte, Las Condes, Región Metropolitana, Chile.

(112) The address of Sergio Andres Romero Guzman is Las Perdices N° 538, Santiago, La Reina, Chile.

(113) The address of Sergio Vinelli is 89 Forest Av, New Rochelle, NY 10804, United States.

(114) The address of Sociedad de Asesorias e Inversiones San Jose Ltda. is Camino de las Hermitas 3839, Santiago, Chile.

(115) The address of Sociedad de Inversiones Alerce Ltda. is Santa Sofia de Lo Cañas, Parcela 49 B, Santiago, Chile.

(116) The address of Soloni Limited Partnership is Geneva Palace, 2nd Floor #333, Road Town, Tortola, VG1110, British Virgin Islands.

(117) The address of South Lakes Investment Limited Partnership is 155 Wellington St West, Canada.

(118) The address of Valhala Limited Partnership is 140 North Phillips Avenue, Suite 301, Sioux Falls, SD 57104, United States.

(119) The address of Victor German Chavez Perez is José Santos Chocano 621, Col. Anahuac, San Nicolas de los Garza, Nuevo León, 66450 Mexico.

(120) The address of VIR C.V. is Kaya Flamboyan 9, Willemstad, Curaçao.

(121) The address of VO Valor SA de CV is Privada del Condor 200, Lomas San Agustín, San Pedro Garza García, Nuevo Leon, Mexico.

(122) The address of WFZ Partners LP is 199 Bay Street, Commerce Ct W, No. 5300, Toronto, Ontario Canada, M5L 1B9.

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Certain Relationships and Related Party Transactions

For a description of certain agreements with related parties entered into in connection with the Business Combination, see “Certain Agreements Related to the Business Combination.”

Restructuring and Exchange

In accordance with the Business Combination Agreement, the Codere Group underwent a corporate restructuring pursuant to which, subject to certain exceptions, the entities and/or businesses of the Codere Group that form the Codere Online Business were transferred to Holdco prior to the consummation of the Business Combination. This transfer was performed in two steps:

(i) Restructuring. In this first step, except as indicated below, the relevant entities and/or businesses that form the Codere Online Business that were not direct or indirect subsidiaries or businesses of SEJO as of the date of the Business Combination Agreement were transferred to SEJO. In Spain and Italy, CDON and Codere Scommese S.r.l., respectively, were transferred to, and became wholly-owned subsidiaries of, SEJO, which became in turn a subsidiary of Holdco upon consummation of the Exchange. In accordance with the Business Combination Agreement, as the planned corporate restructuring could not be consummated by October 1, 2021 with respect to Colombia, Panama and the City of Buenos Aires (Argentina), respectively, Restructuring Agreements were entered into on November 15, 2021 (except for the agreement that Codere Online Panama and ALTA entered into on December 1, 2021) between the relevant Codere Group entity holding the online license and a Codere Online entity. Such Restructuring Agreements generally govern the terms and conditions of, among other things, the assignment by the relevant Codere Group entity of assets, contracts, employees and permits, as applicable, necessary for the operation of the online gaming business by the Codere Online entity in Colombia, Panama and the City of Buenos Aires (Argentina), respectively, subject to the required authorizations. See “—Material Agreements—Restructuring Agreements.” In addition, in Mexico, Codere Online operates under an “Asociación en Participación” or “AenP” (an unincorporated joint venture) with LIFO (the entity which holds the LIFO License) as asociante, and SEJO as asociado, pursuant to which SEJO has the right to receive 99.99% of any distributed profits (see “—AenP Agreement”).

(ii) Exchange. In the second step, SEJO was transferred to Holdco.

Related-Party Loans and Liabilities

As of December 31, 2020, Codere Online was party to various participating intra-group loans which were capitalized on June 30, 2021. See “Unaudited Pro Forma Combined Financial Information— Transaction Accounting Adjustments to the unaudited Pro Forma Combined Statement of Financial Position—Codere Online Indebtedness Capitalization.” The table below provides certain summary information on the outstanding participating intra-group loans as of December 31, 2020.

Lender	Debtor	Principal Amount (in Euros)		Loan Date	Expiration Date(1)	Interest Rate
Codere España, S.L.	CDON	75,500		12/30/2011	12/30/2023	6	%
Codere España, S.L.	CDON		50,000	12/30/2014	12/30/2023	6	%
Codere España, S.L.	CDON		15,000	03/01/2015	03/01/2024	6	%
Codere España, S.L.	CDON		3,000,000	06/01/2015	05/31/2024	6	%
Codere España, S.L.	CDON		600,000	12/30/2015	12/30/2024	6	%
Codere España, S.L.	CDON		3,500,000	12/30/2016	12/30/2021	6	%
Codere España, S.L.	CDON		6,000,000	12/30/2017	12/30/2022	6	%
Codere España, S.L.	CDON		300,000	12/30/2018	12/30/2023	6	%
Codere España, S.L.	CDON		2,650,000	12/23/2019	01/16/2024	6	%
Codere Newco	SEJO		250,000	03/01/2019	03/01/2024	6	%
Codere España, S.L.	CDON		5,000,000	12/31/2019	12/31/2024	6	%
			21,440,500

(1) Codere Online capitalized all of the intra-group non-current financial liabilities included in the above table on June 30, 2021.

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In addition, Codere Online had the following intra-group current financial liabilities as of December 31, 2020. Except for the intra-group current financial liabilities from other retail companies ($746,000), all the liabilities in the table below were capitalized on June 30, 2021.

Lender	Debtor	Principal Amount (in Euros)
Codere Newco	SEJO		9,048,000
Codere Italia S.P.A	Codere Scommese S.r.l.		1,339,000
Codere España, S.L.	Codere Online S.A.U.		6,644,000
Other retail companies	Codere Online S.A.U.		746,000
Total			17,777,000

Material Agreements

Relationship and License Agreement

SEJO and Codere Newco entered into a relationship and license agreement dated June 21, 2021 (the “Relationship and License Agreement”) that became effective as of the Merger Effective Time.

Pursuant to the Relationship and License Agreement, Codere Newco granted to SEJO, subject to certain limitations and exemptions, an exclusive, sublicenseable and non-transferable license and authority to use certain trademarks (including logos and designs) listed in Schedule A to the Relationship and License Agreement (the “Licensed Marks”) in connection with the operation of Codere Online’s online gaming business in any jurisdiction in which (i) any member of the Codere Online group conducts the online casino gaming and sports betting business from time to time, (ii) the governing body of Holdco has expressly decided to expand the online casino gaming and sports betting business, or (iii) Codere Online has taken actual formal steps towards obtaining the required permits to conduct the online casino gaming and sports betting business in such jurisdiction (collectively, the “Territory,” which, as of the date of the Relationship and License Agreement, included Spain, Italy, Mexico, Brazil, United States of America, Colombia, Panama, Argentina, Malta and Israel). SEJO may sublicense the Licensed Marks to any member of the Codere Online group. In addition to the Licensed Marks, Codere Newco assigned all of its rights, title and interest in and to certain domain names to SEJO.

Use of the Licensed Marks by SEJO and its sublicensees is subject to certain restrictions aimed at protecting Codere Newco’s rights to the Licensed Marks and the Licensed Marks’ reputation and goodwill. Use of the Licensed Marks by SEJO and its sublicensees is also subject to Codere Newco’s use guidelines, including standards relative to the quality, design, identity, size, position, appearance, marking and color of the Licensed Marks, and the manner, disposition and use of the Licensed Marks and accompanying designations, on any document or other media including, without limitation, any promotional material.

Pursuant to the Relationship and License Agreement, SEJO undertakes to maintain a website for its business including a link to the homepage of Codere Newco (as identified by Codere Newco), which link shall be comparable in prominence to other links included on some homepage.

As consideration for the license granted by Codere Newco to SEJO and its sublicensees, SEJO shall pay to Codere Newco quarterly fees measured as a percentage (the “Applicable Percentage”) of all gross amounts wagered of SEJO and each sublicensee, less player wins, player bonuses, promotional bets and applicable gaming taxes (“Net Win”), taking into account applicable transfer pricing requirements at all times. As of the Merger Effective Time, the Applicable Percentage of Net Win was zero. If SEJO and Codere Newco are unable to reach an agreement on the applicable transfer pricing requirements in connection with the Applicable Percentage, the then-applicable Applicable Percentage shall remain in effect until the earlier of (i) SEJO terminates the Relationship and License Agreement or (ii) Codere Newco and SEJO reach an agreement on the Applicable Percentage or fee arrangement and provided, in each case, that SEJO shall thereafter indemnify and hold harmless Codere Newco and its subsidiaries for any tax liabilities incurred by, or imposed on, Codere Newco and its subsidiaries by a court or tax authority as a result of any failure of the Applicable Percentage to reflect the minimum applicable transfer pricing requirements.

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In addition, Codere Newco and its direct and indirect subsidiaries shall not (i) engage or invest in, operate, control, fund, assist, participate in the operation, control or funding, or render services or advice to any person (other than Codere Online) that owns or operates, any online casino gaming and sports betting business; (ii) advise, request, induce, attempt to induce or otherwise divert any customer, supplier, licensee or other business relation of any member of the Codere Online group to curtail, limit or cease doing business with any member of the Codere Online group or in any way interfere with the relationship between any such customer, supplier, joint venture partner, licensee or business relation and any member of the Codere Online group; (iii) directly or indirectly own, acquire, attempt to acquire or solicit the acquisition, or participate in the ownership, acquisition, attempt to acquire or solicitation of the acquisition, of (A) any direct or indirect interests in any online casino gaming and sports betting business (other than Codere Online) or (B) any interest in any person (other than Codere Online) with direct or indirect interests in any online casino gaming and sports betting business; (iv) interfere with any of the direct or indirect interests in the online casino gaming and sports betting business or any other business of any members of the Codere Online group; (v) license, sublicense, sell or otherwise transfer or confer rights with respect to the Licensed Marks and/or other similar or identical marks to any person (other than Codere Online) operating an online casino gaming and sports betting business; and/or (vi) in any way attempt to do any of the foregoing or assist any other person to do or attempt to do any of the foregoing. Certain permitted activities are exempted from the foregoing restrictions, including any business of regulated gambling and gaming and related services accessible exclusively through physical retail or other offline channels and certain activities that do not exceed a de minimis threshold.

However, the Relationship and License Agreement provides that Codere Newco may submit a written authorization request to the board of SEJO (which shall refer the request to the Holdco Board) regarding any of the foregoing restricted actions or activities that Codere Newco or any of its subsidiaries proposes to take in a jurisdiction that is outside the Territory. Any such actions or activities shall be deemed consented to if SEJO does not inform Codere Newco of a determination within 60 business days following receipt of Codere Newco’s request or if, after rejecting Codere Newco’s request, SEJO fails to consummate or materially undertake such actions or activities within six (6) months of Holdco Board’s determination.

The Relationship and License Agreement contains representations and warranties of Codere Newco, including in connection with Codere Newco’s valid organization; ownership, enforceability, validity and due registration of the Licensed Marks; authority to license the Licensed Marks; non-existence of actions, suits, legal proceedings or formal investigations contesting the validity of the Licensed Marks or Codere Newco’s rights under the Licensed Marks; non-violation of other agreements, laws and permits and sufficiency of the Licensed Marks and certain other intellectual property for the operation of the online casino gaming and sports betting business. The Relationship and License Agreement also contains representations and warranties of SEJO.

The Relationship and License Agreement contains indemnification provisions subject to specified limitations.

The Relationship and License Agreement shall be in effect for an indefinite term, unless terminated by either party. Either SEJO or Codere Newco may terminate the Relationship and License Agreement if the other party defaults in the performance or observance of a material term and such default continues uncured or unremedied for a period of 90 days after written notice thereof. Either SEJO or Codere Newco may also terminate the Relationship and License Agreement upon the occurrence of a change of control (described as the direct or indirect acquisition of the beneficial ownership of more than 50% of the share capital of Holdco or SEJO by a non-affiliated third party or by a group of non-affiliated third parties acting in concert) or a sale of substantially all of the assets of Codere Online on a consolidated basis to a non-affiliated third party or by a group of non-affiliated third parties acting in concert, provided that such termination shall be effective on the date which is two (2) years after the date of the written notice. For the avoidance of doubt, neither Holdco, nor Codere Newco nor one or more of Codere Newco’s future or current affiliates, successors, assigns or any entity acquiring all of the assets and/or business of Codere Newco shall be deemed to be non-affiliated parties for the purposes of the application of such change of control clauses. For the further avoidance of doubt, Codere Newco’s mere failure to control or own, directly or indirectly, a majority of the share capital of Holdco or SEJO shall not result in a change of control (unless a non-affiliated third party or a group or non-affiliated third parties acting in concern acquire in one or a series of related transactions or otherwise become the beneficial owner of more than 50% of the share capital of Holdco or SEJO). SEJO may also terminate the Relationship and License Agreement at any time, upon written notice to Codere Newco, provided that such termination shall be effective on the date which is 90 days after the date of the written notice.

On the effective date of the termination of the Relationship and License Agreement, SEJO shall, among other things, cease, and cause its sublicensees to cease, using the Licensed Marks, including in the company name. If Codere Newco terminates the Relationship and License Agreement upon the occurrence of a change of control or sale of substantially all of the assets, Codere Newco and its subsidiaries shall be subject to certain restrictions in connection with the use of the Licensed Marks in the Territory for a period of five (5) additional years after the effective date of the termination of the Relationship and License Agreement.

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The Relationship and License Agreement is governed by Spanish law.

The foregoing description of the Relationship and License Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Relationship and License Agreement, which has been filed as an exhibit to the registration statement of which this prospectus forms part.

Sponsorship and Services Agreement

SEJO and Codere Newco entered into a sponsorship and services agreement dated June 21, 2021 (the “Sponsorship and Services Agreement”) that became effective as of the Merger Effective Time.

Pursuant to the Sponsorship and Services Agreement, Codere Newco granted to SEJO, subject to certain limitations and exemptions (including Codere Newco’s right to engage in any permitted activity under the Relationship and License Agreement), an exclusive and non-transferable license and authority to use any and all marks, names, images, designations, anthems, photographs and brands set forth in, or incorporated in the future into, the RM Sponsorship Agreement, within the Territory (subject to any further geographic limitations set forth in the RM Sponsorship Agreement) in connection with the operation of Codere Online’s online business. On October 7, 2021, the RM Sponsorship Agreement was amended to, among other things: (i) extend the term of the RM Sponsorship Agreement for four (4) additional football seasons, until June 30, 2026, with either party having a right to terminate the agreement at the end of the 2022-2023 football season; (ii) amend the applicable territory to only include Mexico, South America, Central America, Puerto Rico and Dominican Republic; (iii) amend certain marketing terms; (iv) amend the economic terms, and (v) provide that Codere Newco shall continue to have a right to terminate the RM Sponsorship Agreement if any legislation is passed in the Territory which restricts marketing and advertising of online gaming and which would impact any or all marketing or advertising rights granted to Codere Newco under the RM Sponsorship Agreement. SEJO and Codere Newco also agreed to negotiate in good faith and agree on the terms and conditions of a license and authority to use any and all of Codere Newco’s other rights that are licensable under the RM Sponsorship Agreement, from time to time, by Codere Newco to SEJO within the Territory. SEJO and Codere Newco also agreed to negotiate in good faith and agree on the terms and conditions of the assignment or license of any new sponsorship rights under any sponsorship agreements entered into by Codere Newco and certain of its affiliates and subsidiaries from time to time after the Merger Effective Time (together with the foregoing rights licensed under the RM Sponsorship Agreement, the “Sponsorship Rights”). SEJO may sublicense the Sponsorship Rights to any member of the Codere Online group.

Use of the Sponsorship Rights by SEJO and its sublicensees is subject to certain restrictions (including any further restrictions set forth in the relevant sponsorship agreement) aimed at protecting Codere Newco’s rights to the Sponsorship Rights and the Sponsorship Rights’ reputation and goodwill.

Codere Newco and SEJO shall negotiate and agree in good faith on the fees payable by SEJO to Codere Newco as consideration for the license, assignment or right to use of the Sponsorship Rights from time to time, provided that Codere Newco has the right to suspend SEJO’s and any sublicensee’s use of the Sponsorship Rights until such time as Codere Newco and SEJO agree on the applicable fees.

In addition, since Merger Effective Time, Codere Newco provides, or arranges for services providers (including Codere Newco affiliates and any other third-parties) to provide, certain services to Codere Online to assist Codere Online in operating the online casino gaming and sports betting business in a manner that is consistent with the operation of the online casino gaming and sports betting business prior to the Merger Effective Time. The services include certain internal audit, communication, legal, financial management, human capital, corporate security support, platform services and corporate development services, office space and such other services of the type and nature appropriate for a publicly listed entity in connection with the online casino gaming and sports betting business, which Codere Online may reasonably request from time to time (collectively, the “Services”). The Sponsorship and Services Agreement contains covenants of Codere Newco in connection with the standard and quality of the Services.

Subject to certain terms and conditions, SEJO is entitled to amend the scope of the Services, including by discontinuing certain Services, reducing the number of Services recipients or the nature or description of the Services or otherwise, provided, however, that, SEJO may not increase the scope of the Services without Codere Newco’s prior written consent; and provided further, however, that prior to such modification, SEJO and Codere Newco shall agree in writing to any modification of the Services fees resulting from such change in scope. Discontinuation of any Services by SEJO is subject to payment to Codere Newco of any costs incurred by Codere Newco directly linked to the discontinuation of any Services, including but not limited to severance payments, third party break-up fees and third party fees related to the Services being discontinued (“Discontinuation Costs”).

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As consideration for the provision of the Services, for the period from the Merger Effective Time until December 31, 2022 (the “Reset Date”), SEJO shall pay to Codere Newco on a quarterly basis a cash amount in euro equal to 0.75% of all gross amounts wagered of SEJO together with its subsidiaries, less player wins, player bonuses, and promotional bets. Following the Reset Date, Codere Newco and SEJO shall negotiate and agree in good faith on the fee payable by SEJO for the next-succeeding calendar year as consideration for the provision of the Services during such calendar year. In the event that Codere Newco and SEJO are unable to agree on the applicable fees by the time of the Reset Date or an anniversary thereof, the then-applicable fees shall remain in effect and either Codere Newco or SEJO may terminate the Sponsorship and Services Agreement by providing written notice to the other party within three (3) months of such Reset Date (or anniversary thereof, as applicable), provided that such termination shall not be effective earlier than the date that is three (3) months after such written notice is provided by the terminating party to the other party.

The Sponsorship and Services Agreement contains representations and warranties of Codere Newco, including in connection with Codere Newco’s valid organization; enforceability and validity of the RM Sponsorship Agreement; authority to license the rights under the RM Sponsorship Agreement; non-violation of third-party rights, other agreements, laws and permits; non-existence of actions, suits, legal proceedings or formal investigations contesting the right of Codere Newco to license its rights under the RM Sponsorship Agreement or contesting the provision of the Services; sufficiency of resources, permits and title to intellectual property to perform its obligations and sufficiency of the Services identified in the Sponsorship and Services Agreement to substantially conduct the online gaming business in the ordinary course. The Sponsorship and Services Agreement also contains representations and warranties of SEJO.

The Sponsorship and Services Agreement contains indemnification provisions subject to specified limitations. Codere Newco’s aggregate liability in any fiscal year in connection with the Sponsorship Rights is capped at the aggregate amount of the fees received for the Sponsorship Rights in effect for the prior two (2) fiscal years. Codere Newco’s aggregate liability in any fiscal year in connection with the provision of the Services is capped at the aggregate amount of the fees received for the provision of the Services in effect for the prior two (2) fiscal years.

The initial term of the Sponsorship and Services Agreement is five (5) years from the Merger Effective Time, subject to one (1)-year automatic extensions unless terminated by either party by providing 90 days’ written notice prior to the expiration of the initial term or such extended term. Either SEJO or Codere Newco may terminate the Sponsorship and Services Agreement if the other party defaults in the performance or observance of a material term and such default continues uncured or unremedied for a period of 90 days after written notice thereof. Either SEJO or Codere Newco may also terminate the Sponsorship and Services Agreement upon the occurrence of a change of control (described as the direct or indirect acquisition of the beneficial ownership of more than 50% of the share capital of Holdco or SEJO by a non-affiliated third party or by a group of non-affiliated third parties acting in concert) or a sale of substantially all of the assets of Codere Online on a consolidated basis to a non-affiliated third party or by a group of non-affiliated third parties acting in concert, provided that such termination shall be effective on the date which is one (1) year after the date of the written notice. For the avoidance of doubt, neither Holdco, nor Codere Newco nor one or more of Codere Newco’s future or current affiliates, successors, assigns or any entity acquiring all of the assets and/or business of Codere Newco shall be deemed to be non-affiliated parties for the purposes of the application of such change of control clauses. For the further avoidance of doubt, Codere Newco’s mere failure to control or own, directly or indirectly, a majority of the share capital of Holdco or SEJO shall not result in a change of control (unless a non-affiliated third party or a group or non-affiliated third parties acting in concern acquire in one or a series of related transactions or otherwise become the beneficial owner of more than 50% of the share capital of Holdco or SEJO). Either SEJO or Codere Newco may also terminate the Sponsorship and Services Agreement in the event that Codere Newco and SEJO are unable to agree on the applicable fees by the time of the Reset Date or an anniversary thereof, as described above. SEJO may also terminate the Relationship and License Agreement at any time, upon written notice to Codere Newco, which termination shall be effective on the date which is 90 days after the date of the written notice and shall be subject to the payment of any Discontinuation Costs to Codere Newco.

On the effective date of the termination of the Sponsorship and Services Agreement, Codere Newco shall cease the provision of any Services and SEJO shall cease, and cause its sublicensees to cease, using the Sponsorship Rights, among other things. If Codere Newco terminates the Sponsorship and Services Agreement upon the occurrence of a change of control or sale of substantially all of the assets of Codere Online on a consolidated basis, Codere Newco shall use commercially reasonable efforts to negotiate with each of the counterparties to the then-current sponsorship agreements to allow for the continued license or assignment of the Sponsorship Rights to Codere Online, until the later of (i) two (2) years after the date of the written termination notice submitted by Codere Newco or (ii) the expiration of the initial term of the relevant sponsorship agreement.

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The Sponsorship and Services Agreement is governed by Spanish law.

The foregoing description of the Sponsorship and Services Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Sponsorship and Services Agreement, which has been filed as an exhibit to the registration statement of which this prospectus forms part.

Platform and Technology Services Agreement

Codere Newco, Codere Apuestas España S.L.U. and OMSE entered into a platform and technology services agreement effective January 1, 2021 (the “Platform and Technology Services Agreement”), for the provision of platform and technology services by Codere Newco and Codere Apuestas España S.L.U. (collectively, the “Providers”) to OMSE’s online casino and sports betting business.

The services include personnel, customer support, internal trading personnel, technical assistance and technology, IT operations, security and cybersecurity, systems, communications, equipment, software licenses, trading and other services or development projects that may be requested by Codere Online (collectively, the “Platform Services”). The parties shall agree on an annual basis the type, nature, timetable, specifications, parameters or terms and conditions of services to be provided by the Providers in the next-succeeding calendar year, provided that OMSE may, at any time, amend the scope of the Platform Services, including by discontinuing the provision of certain Platform Services, by providing prior notice to the Providers. The Platform Services shall be provided by the Providers on an exclusive basis, subject to certain limitations and exemptions.

As consideration for the Platform Services, OMSE agreed to pay to the Providers monthly fees equal to the costs of the Platform Services, plus a markup (5.02% as of January 1, 2021), if applicable, pursuant to transfer pricing requirements. The applicable fees shall be agreed by OMSE and the Providers on an annual basis. OMSE and the Providers agreed to create a steering and budget committee, comprised of representatives from the parties, to negotiate and agree on the annual fees, monitor major projects and infrastructure services, conduct risk assessments and take other decisions in connection with the Platform Services.

The parties acknowledge that the Providers own and are duly licensed to use the existing software and hardware infrastructure constituting the main interface between customers that participate in the online gaming activities and the online casino gaming and sports betting operators (the “Platform”). The Providers agree to develop and/or perform certain works to the Platform and any embedded software (including certain modifications, enhancements, adaptations, translations or other changes) as required by OMSE, its end users or other third parties. Such works shall be developed and made on a “work for hire” basis.

The Platform and Technology Services Agreement contains representations and warranties of the Providers and OMSE, including in connection with the parties’ authority to enter into the agreement; non-violation of other agreements, laws and permits; absence of required authorizations, consents or approvals and validity and legality of the agreement. The Platform and Technology Services Agreement also contains representations and warranties of the Providers in connection with the provision of the Platform Services.

The Platform and Technology Services Agreement contains indemnification provisions subject to specified limitations. The Providers’ aggregate liability in connection with the Platform and Technology Services Agreement is capped at the aggregate amount of fees paid by OMSE to the Providers in the preceding nine (9) months.

The initial term of the Platform and Technology Services Agreement is five (5) years from January 1, 2021, subject to one (1)-year automatic extensions unless terminated by either the Providers or OMSE by providing 90 days’ written notice prior to the expiration of the initial term or such extended term.

Either the Providers or OMSE may terminate the Platform and Technology Services Agreement (i) if the other party defaults in the performance or observance of a material term, or (ii) for bankruptcy reasons. OMSE may also terminate the Platform and Technology Services Agreement (i) at any time, after three (3) years from January 1, 2021, upon 90 days’ prior written notice to the Providers or (ii) if the access to and availability of certain software is below certain thresholds set forth in the SLA (as defined below), upon 30 days’ prior written notice to the Providers. The Providers may also terminate the Platform and Technology Services Agreement (i) upon the occurrence of a change of control (described as the acquisition by any person other than Holdco, Codere Newco or one or more of Codere Newco’s future or current affiliates, successors, assigns or any entity acquiring all of the assets and/or business of Codere Newco, of the beneficial ownership of more than 50% of the share capital of Holdco or OMSE), (ii) upon a sale of substantially all of the assets of Codere Online on a consolidated basis ton any person or group of related persons other than within the Codere Newco group, or (iii) if OMSE amends the scope of the Platform Services by reducing the amount of fees below 50% of the annual budget agreed between the Providers and OMSE. Termination by OMSE (other than for a default by the Providers) is subject to the payment of any Discontinuation Costs to the Providers. Termination by the Providers (other than for a default by OMSE or bankruptcy reasons) shall be effective on the date which is six (6) months after the date of the written notice.

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Finally, in connection with the provision of the Platform Services, the Providers and OMSE entered into a services and service level agreement (the “SLA”) that became effective on January 31, 2021. The SLA sets forth certain service levels, including the terms and conditions for (i) the provision of the Platform Services, (ii) correcting any defects reported by OMSE and (iii) adjusting current and future fees based on certain events.

The Platform and Technology Services Agreement is governed by Spanish law.

The foregoing description of the Platform and Technology Services Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Platform and Technology Services Agreement, which has been filed as an exhibit to the registration statement of which this prospectus forms part.

AenP Agreement

On June 21, 2021, Libros Foráneos, S.A. de C.V. (“LIFO”) and SEJO entered into an agreement, which became effective on the Merger Effective Time, in order to regulate their rights and obligations in respect of the online gaming business (for purposes of this sub-section, the “Business”) in Mexico that LIFO is authorized to conduct pursuant to the LIFO License granted by the Mexican authorities (the “AenP Agreement”). Pursuant to the AenP Agreement, SEJO and LIFO agree to make certain contributions in favor of an “Asociación en Participación” or “AenP” (an unincorporated joint venture) created by virtue of the AenP Agreement and LIFO agrees to grant SEJO a 99.99% share in the profit and losses of the Business in Mexico. The AenP shall have its own tax identification number.

SEJO expects to contribute an amount of 49,950,000 Mexican pesos and LIFO expects to contribute an amount of 50,000 Mexican pesos. In the event that operational needs of the AenP require it, SEJO shall make the necessary additional contributions to finance the expenses related to the Business in accordance with the Business’ annual budget. Third parties are allowed to join the AenP and to make contributions in favor of the AenP only if SEJO provides its prior written consent. Pursuant to the AenP Agreement, LIFO irrevocably agrees to maintain in force and operate the LIFO License and to comply with the terms and conditions imposed by them, at all times, as well as to request the LIFO License’s renewal in accordance with its terms.

Net profits or losses resulting from the operation of the Business shall be distributed in the following proportion: LIFO shall be entitled to receive 0.01% and SEJO shall be entitled to receive 99.99%. Additionally, the parties agree that losses corresponding to SEJO must not exceed the value of its contributions.

The AenP Agreement includes certain mutual indemnities among the parties and their respective affiliates and is subject to Mexican law.

In the event that, for any reason, a procedure for cancellation or revocation of the LIFO License is initiated, LIFO shall make its best efforts to have another Mexican entity within the Codere Group grant SEJO the right to operate under a permit in accordance with the terms of the AenP but pursuant to the terms of such permit.

Once effective, the AenP Agreement is expected to remain in force during the term of the LIFO License, including its renewals from time to time. SEJO shall be entitled to terminate the AenP Agreement with 15 days prior written notice. LIFO shall not be entitled to terminate the AenP Agreement without the prior written consent of SEJO. In the event that the AenP Agreement is terminated, the AenP shall be dissolved and liquidated in accordance with the terms of the AenP Agreement.

The foregoing description of the AenP Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the AenP Agreement, which has been filed as an exhibit to the registration statement of which this prospectus forms part.

Internal Affiliate Program Master Agreement

SEJO and Codere Newco entered into an internal affiliate program master agreement effective January 1, 2021 (the “Internal Affiliate Program Master Agreement”) establishing certain revenue sharing principles between the retail and the online businesses in Spain, Italy, Mexico, Argentina, Panama and Colombia (the “Omni-Channel Jurisdictions”).

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Pursuant to the Internal Affiliate Program Master Agreement, SEJO and Codere Newco agreed to cause certain of their respective subsidiaries to apply and adhere to certain corporate revenue sharing principles. In each Omni-Channel Jurisdiction, a subsidiary operating in the online channel which registers the online wagering activity of a customer that is active in both the retail and online channels, but used to be a retail-only customer (the “Retail Omni-Channel Customer”), shall pay to the retail subsidiary that operates the retail venue in which such customer was active at the time of becoming a Retail Omni-Channel Customer, 35% of the Net Win of such customer generated in any online platform operated by SEJO or its affiliates and subsidiaries from the time such customer becomes a Retail Omni-Channel Customer and until 18 months thereafter (the “Retail Participation”). Similarly, in each Omni-Channel Jurisdiction, a subsidiary operating in the retail channel which registers the retail wagering activity of a customer that is active in both the retail and online channels, but used to be an online-only customer (the “Online Omni-Channel Customer”), shall pay the online subsidiary in which said customer was active at the time of becoming an Online Omni-Channel Customer, 35% of the Net Win of such customer from the time it becomes an Online Omni-Channel Customer and until 18 months thereafter (the “Online Participation”). Additionally, the Internal Affiliate Program Master Agreement includes exceptions to the revenue sharing principles in the event the retail license and the online license are held by the same entity in an Omni-Channel Jurisdiction or in the event there is a contractual arrangement between an online and a retail subsidiary for the provision of certain operating services. Further, the Internal Affiliate Program Master Agreement sets forth a deposit fee payable by the online subsidiaries for deposits made by online customers in retail venues.

After 18 months from the time a customer becomes a Retail Omni-Channel Customer or an Online Omni-Channel Customer, as the case may, no subsidiary shall be entitled to any Retail Participation or Online Participation, as applicable, in regards to any customer upon which either a Retail Participation or Online Participation had previously applied.

The initial term of the Internal Affiliate Program Master Agreement is one (1) year from January 1, 2021, subject to one (1)-year automatic extensions unless terminated by either party by providing 30 days’ written notice prior to the expiration of the initial term or such extended term. Either SEJO or Codere Newco may terminate the Internal Affiliate Program Master Agreement in the event of a material breach by the other party and if such breach continues uncured or unremedied for a period of 15 days after written notice thereof. Either SEJO or Codere Newco may also terminate the Internal Affiliate Program Master Agreement at any time subject to 30 days’ prior notice.

The Internal Affiliate Program Master Agreement is governed by Spanish law.

The foregoing description of the Internal Affiliate Program Master Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Internal Affiliate Program Master Agreement, which has been filed as an exhibit to the registration statement of which this prospectus forms part.

Restructuring Agreements

Argentina Restructuring Agreement

On November 15, 2021, Iberargen, S.A. a subsidiary within the Codere Group, and SEJO, a subsidiary of Holdco, entered into an agreement (as amended from time to time, the “Argentina Restructuring Agreement”) pursuant to which: (i) the parties agreed to jointly incorporate a new company in Argentina, Codere Online Argentina, S.A., with Iberargen, S.A. and SEJO initially retaining 5% and 95% stakes, respectively; Iberargen, S.A. agreed to assign any economic rights related to its 5% stake to SEJO and to seek to transfer such stake to SEJO, provided such transfer is legally allowed and does not affect Codere Online Argentina, S.A.’s operations or the Buenos Aires License; (ii) Iberargen, S.A. undertook to take any required action to facilitate the approval, by LOTBA, of the transfer of the Buenos Aires License to Codere Online Argentina, S.A.; (iii) Iberargen, S.A. undertook to, upon LOTBA’s approval of such transfer (or, if applicable, the granting of a new license to Codere Online Argentina, S.A. by LOTBA) (the “Condition Precedent”), assign to Codere Online Argentina, S.A. the Buenos Aires License (if applicable) as well as any assets, contracts and employees necessary for the operation of the Argentine online gaming business by Codere Online Argentina, S.A.; (iv) Iberargen, S.A. agreed to, if LOTBA authorized it to operate in the City of Buenos Aires before the Condition Precedent is satisfied (as is currently the case), exploit the Buenos Aires License pursuant to the instructions of SEJO (or, once it is incorporated and duly registered, Codere Online Argentina, S.A.), with any resulting expenses and income being assigned to the latter; and (v) if LOTBA denies the transfer of the Buenos Aires License, and there is no reasonable likelihood that it will grant a new license to Codere Online Argentina, S.A. during the term of the Buenos Aires License, Iberargen, S.A. and Codere Online Argentina, S.A. shall enter into a Temporary Union Contract (contrato de union transitoria) and exploit the Buenos Aires License thereunder, with Codere Online Argentina, S.A. effectively retaining any distributed profits and generally managing the online gaming business.

The aforementioned agreement was amended on November 30, 2021. See “—Restructuring Agreements Amendments” below. Codere Online and the Codere Group expect to further amend the Argentina Restructuring Agreement mainly to include additional flexibility to support the incorporation and registration of Codere Online Argentina, S.A. in Argentina.

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Colombia Restructuring Agreements

On November 15, 2021, Codere Colombia S.A., a subsidiary within the Codere Group, and Codere Online Colombia S.A.S., a subsidiary of Holdco, entered into the following agreements:

● a sale and transfer agreement (as amended from time to time, the “Sale and Transfer Agreement”) that governed the terms and conditions of the assignment, from Codere Colombia S.A. to Codere Online Colombia S.A.S., of all the assets, contracts and employees necessary for the operation of the Colombian online gaming business by Codere Online Colombia S.A.S. Certain of such assets and contracts are pending assignment as of the date of this prospectus. In addition, Codere Colombia S.A. agreed to take any required action for the prompt approval, by Coljuegos, of the transfer of the Colombian License to Codere Online Colombia S.A.S.;

● a joint accounts agreement (contrato de cuentas en participacion) (as amended from time to time, the “Joint Accounts Agreement”) pursuant to which, pending the effective transfer of the Colombia License to Codere Online Colombia S.A.S. (or, if applicable, the granting of a new license to Codere Online Colombia S.A.S.), the parties agreed to jointly exploit the Colombia License, with Codere Online Colombia S.A.S. effectively retaining any distributed profits and generally managing the online gaming business; and

● a license assignment agreement (as amended from time to time, the “License Assignment Agreement” and, together with the Sale and Transfer Agreement and the Joint Accounts Agreement, the “Colombia Restructuring Agreements”) pursuant to which Codere Colombia S.A. agreed to assign the Colombian License to Codere Online Colombia S.A.S., subject to the approval of Coljuegos.

The aforementioned agreements were amended on November 30, 2021. See “—Restructuring Agreements Amendments” below.

Panama Restructuring Agreements

On November 15, 2021, HIPA, ALTA, and Codere Online Panama, entered into an agreement (as amended from time to time the “HIPA Restructuring Agreement”), pursuant to which: (i) HIPA assigned to Codere Online Panama, and Codere Online Panama accepted the assignment of HIPA’s right, title and obligations under certain employment agreements with certain HIPA employees; (ii) HIPA assigned to Codere Online Panama, and Codere Online Panama accepted the assignment of HIPA’s right, title and obligations under certain sponsorship, licensing, marketing and other services agreements; (iii) HIPA assigned to Codere Online Panama, and Codere Online Panama accepted the assignment of HIPA’s right and title to certain assets in connection with HIPA’s online gaming operations; and until the transfer of the ALTA License to Codere Online Panama is effective, Codere Online Panama agreed to provide certain operational and advisory services to HIPA in exchange for monthly payments from HIPA amounting to 99% of HIPA’s net income from gaming operations. The HIPA Restructuring Agreement was amended on November 30, 2021. See “—Restructuring Agreements Amendments” below.

In addition, on December 1, 2021, upon the commencement of the term of the ALTA License, Codere Online Panama and ALTA entered into an agreement (as amended from time to time the “ALTA Restructuring Agreement” and the HIPA Restructuring Agreement, as partially terminated and superseded by the ALTA Restructuring Agreement, the “Panama Restructuring Agreements”) whereby Codere Online Panama agreed to provide certain operational and advisory services to ALTA in exchange for periodic payments on similar terms to the HIPA Restructuring Agreement, terminating and superseding the HIPA Restructuring Agreement with respect to the services being provided by Codere Online Panama to HIPA. The agreement between Codere Online Panama and ALTA shall terminate, among other things, if Codere Online Panama requests the transfer of the ALTA License to Codere Online Panama and such transfer is authorized by the Panama Gambling Control Board.

Restructuring Agreement Amendments

On November 30, 2021, the relevant entities of the Codere Group and the Codere Online group entered into amendments to the Restructuring Agreements (except for the agreement that Codere Online Panama and ALTA entered into on December 1, 2021) which provided that any contractual indemnity obligation that the Codere Group entities may have under such agreements shall not be deemed to be duplicative with those included in the Indemnification Letter and that any losses covered by any such contractual indemnity obligation will count towards the $10,000,000 limit set forth in the Indemnification Letter.

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Certain Agreements Related to the Business Combination

This section of the prospectus describes certain agreements entered into in connection with the Business Combination, but does not purport to describe all of the terms thereof. The full text of these agreements, or forms thereof, are included as exhibits to the Business Combination Agreement attached hereto as an exhibit to the registration statement of which this prospectus forms part, and the following descriptions are qualified in their entirety by reference to the full text of such exhibits.

Business Combination Agreement

On June 21, 2021, DD3, Codere Newco, SEJO, Holdco and Merger Sub entered into the Business Combination Agreement, which contains customary representations and warranties, covenants, closing conditions, expenses provisions and other terms relating to the Merger and the other transactions contemplated thereby, as summarized below. Capitalized terms used in this section but not otherwise defined herein have the meanings given to them in the Business Combination Agreement.

Pursuant to the Business Combination Agreement, following the effectiveness of the transactions contemplated by the Exchange at the Exchange Effective Time and the Merger on the Merger Effective Time, the parties consummated the Business Combination and SEJO and DD3 became direct wholly-owned subsidiaries of Holdco. Pursuant to the Business Combination Agreement, each of the following transactions occurred in the following order:

● pursuant to the Contribution and Exchange Agreement, Codere Newco, effective on the Exchange Effective Time, contributed its SEJO Ordinary Shares constituting all the issued and outstanding share capital of SEJO to Holdco in exchange for additional Ordinary Shares, which were subscribed for by Codere Newco. As a result of the Exchange, SEJO became a wholly-owned subsidiary of Holdco and Holdco continued to be a wholly-owned subsidiary of Codere Newco at the Exchange Effective Time;

● after the Exchange and immediately prior to the Merger Effective Time, each share of DD3 Class B Common Stock automatically converted into and exchanged for one share of DD3 Class A Common Stock pursuant to the Class B Conversion;

● on the Closing Date, pursuant to the Merger, Merger Sub merged with and into DD3, with DD3 surviving such merger and becoming a direct wholly-owned subsidiary of Holdco and, in connection therewith, DD3’s corporate name changed to “Codere Online U.S. Corp.”;

● in connection with the Merger, all shares of DD3 Class A Common Stock issued and outstanding immediately prior to the Merger Effective Time, but after the Class B Conversion, were contributed to Holdco in exchange for the Merger Consideration in the form of one Ordinary Share for each share of DD3 Class A Common Stock pursuant to the Holdco Capital Increase, as set forth in the Business Combination Agreement; and

● as of the Merger Effective Time, each DD3 Warrant that was outstanding immediately prior to the Merger Effective Time no longer represented a right to acquire one share of DD3 Class A Common Stock and instead represented the right to acquire one Ordinary Share on substantially the same terms.

Codere Newco received the Exchange consideration in the form of Ordinary Shares on the Exchange Effective Time. The Ordinary Shares making up the Exchange consideration, minus any Ordinary Shares owned by Codere Newco immediately prior to the Exchange Effective Time, were issued to Codere Newco. After such issuance and as of the date of this prospectus, Codere Newco held 30,000,000 Ordinary Shares.

At the Merger Effective Time, each share of DD3 Class A Common Stock issued and outstanding immediately prior to the Merger Effective Time was exchanged for one validly issued and fully paid Ordinary Share.

Contribution and Exchange Agreement

Contemporaneously with the execution and delivery of the Business Combination Agreement, Holdco, SEJO and Codere Newco entered into the Contribution and Exchange Agreement, pursuant to which Codere Newco agreed to implement the Exchange by contributing all of the issued and outstanding SEJO Ordinary Shares in exchange for 30,000,000 Ordinary Shares (reduced by the Ordinary Shares held by Codere Newco immediately prior to the Exchange) valued at $300,000,000, on a cash-free and debt-free basis, and subject to a normalized level of working capital of Holdco, SEJO and SEJO’s subsidiaries, which valuation was confirmed in a valuation report issued at the Exchange Effective Time by a Luxembourg independent auditor (réviseur d’entreprises). The Contribution and Exchange Agreement contains customary conditions, covenants, representations and warranties.

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Subscription Agreements

The purpose of the PIPE was to raise additional capital for use in connection with the Business Combination and to assist in meeting the minimum cash requirement (which consisted of the Gross Proceeds amounting to at least $77 million) which was a condition to the consummation of the Business Combination in the Business Combination Agreement.

Contemporaneously with the execution and delivery of the Business Combination Agreement, DD3 entered into two separate Subscription Agreements with DD3 Capital and Larrain, in each case to which Holdco is also a party, pursuant to which DD3 issued and sold, in a private placement that closed immediately prior to the Closing, (i) an aggregate of 500,000 shares of DD3 Common Stock, for an aggregate purchase price of $5,000,000, at a price of $10.00 per each share of DD3 Common Stock, to DD3 Capital and its permitted transferees, and (ii) an aggregate of 1,211,000 shares of DD3 Common Stock, for an aggregate purchase price of $12,110,000, at a price of $10.00 per each share of DD3 Common Stock, to Larrain and its permitted transferees, in each case which shares of DD3 Common Stock became Ordinary Shares as a result of the Merger.

Pursuant to the Subscription Agreements, Holdco agreed that, within 30 calendar days after the Closing, Holdco will file with the SEC the Registration Statement, and Holdco shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof; provided, however, that Holdco’s obligations to include the Ordinary Shares held by a Subscriber in the Registration Statement will be contingent upon the respective Subscriber furnishing in writing to Holdco such information regarding the Subscriber, such Ordinary Shares held by such Subscriber and the intended method of disposition of such shares as shall be reasonably requested by Holdco to effect the registration, and will execute such documents in connection with such registration as Holdco may reasonably request that are customary of a selling stockholder in similar situations. Holdco is filing the registration statement of which this prospectus is part to satisfy this obligation. Notwithstanding anything to the contrary in the Subscription Agreements, Holdco may, upon giving prompt written notice of such action to the respective Subscriber, delay the filing or initial effectiveness of, suspend use of, the Registration Statement for a period of not more than sixty (60) consecutive days or more than two times in any calendar year if the filing, initial effectiveness or continued use of the Registration Statement would, in the good faith judgment of the Holdco Board, make Holdco fail to comply with applicable disclosure requirements or would require the inclusion in such Registration Statement of (i) financial statements that are unavailable to Holdco for reasons beyond Holdco’s control, (ii) audited financial statements as of a date other than Holdco’s fiscal year end, or (iii) pro forma financial statements that are required to be included in a registration statement.

Pursuant to the Subscription Agreements, each Subscriber acknowledged and agreed that, without the prior written consent of DD3 and Holdco, during the period commencing on the Closing Date and continuing until the earlier of the ninety (90) calendar day period commencing on the date of the closing of the Business Combination and the date when the Registration Statement is declared effective by the SEC, such Subscriber, and any person or entity acting on its behalf or pursuant to any understanding with it, will not (i) sell, assign, transfer (including by operation of law), incur any liens, charges, security interests, options, claims, mortgages, pledges, proxies, voting trusts or agreements, obligations, understandings or arrangements or other restrictions on title or transfer of any nature whatsoever, dispose of or otherwise encumber, (ii) make any short sale of, grant any option for the purchase of, or (iii) enter into any hedging or similar transaction with the same economic effect as a transfer in sub-section (i) above of, any of the PIPE Shares.

Forward Purchase Agreements

In connection with the Business Combination, (i) Baron elected to purchase an aggregate of 2,500,000 shares of DD3 Common Stock for an aggregate purchase price of $25,000,000, at a price of $10.00 per each share of DD3 Common Stock, pursuant to the terms of the Baron Forward Purchase Agreement, and (ii) MG elected to purchase an aggregate of 2,500,000 shares of DD3 Common Stock for an aggregate purchase price of $25,000,000, at a price of $10.00 per each share of DD3 Common Stock, pursuant to the terms of the MG Forward Purchase Agreement, in each case in a private placement that occurred immediately prior to the Closing Date.

Pursuant to the Baron FPA Amendment and the MG FPA Amendment, among other matters, (i) DD3 agreed not to enter into any agreement with any other investor or prospective investor on terms that are more favorable to such other investor or prospective investor than the terms provided to Baron or MG, as applicable, and (ii) certain closing conditions were amended in part to align with the closing conditions in the Business Combination Agreement, including that the terms of the Business Combination Agreement (as the same existed on the date of the Baron FPA Amendment and the MG FPA Amendment) shall not have been amended or modified in a manner, and no waiver thereunder shall have occurred, that would reasonably be expected to be materially adverse to the economic benefits that Baron or MG would reasonably expect to receive under their respective Forward Purchase Agreement, without Baron’s or MG’s written consent, as applicable.

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Baron Support Agreement

Contemporaneously with the execution and delivery of the Business Combination Agreement, DD3 and Baron entered into the Baron Support Agreement, pursuant to which Baron irrevocably waived its Redemption Rights with respect to the Baron IPO Shares and agreed not to (a) redeem or exercise any of its Redemption Rights with respect to, any Baron IPO Shares in connection with DD3’s special meeting of stockholders that approved the Business Combination Agreement and the transactions contemplated by the Business Combination Agreement; or (b) directly or indirectly, (i) sell, assign, transfer (including by operation of law), lien, pledge, dispose of or otherwise encumber any of the Baron IPO Shares or otherwise agree to do any of the foregoing, (ii) deposit any Baron IPO Shares into a voting trust or enter into a voting agreement or arrangement or grant any proxy or power of attorney with respect thereto that is inconsistent with the Baron Support Agreement, or (iii) enter into any contract, option or other arrangement or undertaking with respect to the direct or indirect acquisition or sale, assignment, transfer (including by operation of law) or other disposition of any Baron IPO Shares. The Baron Support Agreement and the obligations of Baron under the Baron Support Agreement automatically terminated upon the Closing of the Business Combination. The Baron Support Agreement was subject to customary conditions, covenants, representations and warranties.

Pursuant to the Business Combination Agreement, DD3 undertook not to amend, modify, waive or otherwise change any of the Baron Support Agreement, Forward Purchase Agreements and Subscription Agreements without the prior written consent of SEJO, such consent not to be unreasonably withheld, delayed or conditioned.

Registration Rights and Lock-Up Agreement

In connection with the Business Combination, DD3, Codere Newco, Holdco, the Sponsor, the Forward Purchasers and the other parties thereto, entered into the Registration Rights and Lock-Up Agreement, which provides customary demand and piggyback registration rights. Pursuant to the Registration Rights and Lock-Up Agreement, Holdco agreed that, within 30 calendar days after the Closing Date, it will file with the SEC a registration statement to permit the public resale of certain Ordinary Shares and Holdco Warrants (including underlying securities) held by the Holders (as defined in the Registration Rights and Lock-Up Agreement), and that it will use its reasonable best efforts to have the registration statement declared effective as soon as practicable after the filing thereof, but no later than 60 calendar days following the filing deadline, provided that the effectiveness deadline will be extended to 90 calendar days after the filing deadline if the registration statement is reviewed by, and receives comments from, the SEC. Holdco is filing the registration statement of which this prospectus is part to satisfy such obligation. In addition, pursuant to the terms of the Registration Rights and Lock-Up Agreement and subject to certain requirements and customary conditions, including with regard to the number of demand rights that may be exercised, certain holders may demand at any time or from time to time, that Holdco file a registration statement on Form F-1, or any such other form of registration statement as is then available to effect a registration, or, if available, Form F-3, to register the securities of Holdco held by such holders. The Registration Rights and Lock-Up Agreement also provide the Holders with “piggy-back” registration rights, subject to certain requirements and customary conditions. Further, pursuant to the Registration Rights and Lock-Up Agreement, the parties agreed that no registration shall be effected with respect to Lock-Up Securities held by Codere Newco or the Sponsor, until after the expiration of the lock-up period.

Pursuant to the Registration Rights and Lock-Up Agreement, each of Codere Newco and the Sponsor agreed to not transfer any Lock-Up Securities (as defined in the Registration Rights and Lock-Up Agreement) until the earliest of: (i) the date that is one year from the Closing, (ii) the date on which the closing price of the Ordinary Shares on Nasdaq equals or exceeds $12.50 per Ordinary Share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing 150 days after the Closing or (iii) such date on which Holdco completes a liquidation, merger, share exchange or other similar transaction that results in all Holdco shareholders having the right to exchange their Ordinary Shares for cash, securities or other property, subject to certain exceptions described in Section 5.2 of the Registration Rights and Lock-Up Agreement. Further, pursuant to the Registration Rights and Lock-Up Agreement, the parties agreed that no registration shall be effected with respect to Lock-Up Securities held by Codere Newco or the Sponsor, until after the expiration of the lock-up period.

Nomination Agreement

In connection with the Closing of the Business Combination, the Sponsor, Codere Newco and Holdco entered into a Nomination Agreement, pursuant to which Codere Newco and the Sponsor have, among others, certain director nomination rights with respect to Holdco.

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Pursuant to the Nomination Agreement, during the Sponsor Proposal Period, the Holdco Board will consist of seven (7) directors and (i) Codere Newco will have the right to propose for appointment four (4) Codere Newco Directors; (ii) the Sponsor will have the right to propose for appointment two (2) Sponsor Directors; and (iii) Codere Newco and the Sponsor will have the right to jointly propose for appointment the Industry Expert Independent Director. After the Sponsor Proposal Period, Codere Newco will have the right to propose for appointment five (5) directors, with at least two (2) of them having to qualify as independent directors (subject to independence requirements under applicable securities exchange rules that may require a greater number of independent directors). Both during and after the Sponsor Proposal Period, at least one (1) of the Codere Newco Directors shall qualify as a Luxembourg tax resident.

Codere Newco will have the right to propose for reappointment the Codere Newco Directors and the Sponsor will have the right to propose for reappointment the Sponsor Directors appointed within the Sponsor Proposal Period; provided that one (1) Sponsor Director shall not have the right to serve as director past the second annual shareholders’ meeting of Holdco after the Closing Date and the second Sponsor Director shall not have the right to serve as director past the third annual shareholders’ meeting of Holdco after the Closing Date.

Pursuant to the Nomination Agreement, the Holdco audit committee shall include at least one (1) Codere Newco Director and one (1) Sponsor Director (in either case only to the extent such director (i) qualifies as an independent director and (ii) meets the heightened independence requirements applicable to audit committees under the SEC rules and regulations and under the criteria established by the Nasdaq). Further, Codere Newco will have the right, but not the obligation, to propose for appointment one (1) non-executive, non-independent director as an observer to the audit committee to be appointed by the Holdco Board, subject to compliance with Rule 10A-3 under the Exchange Act.

Codere Newco and the Sponsor agreed to cooperate in facilitating any action or right described in or required by the Nomination Agreement, including by voting their respective Ordinary Shares. Other than reimbursement for reasonable and documented out-of-pocket expenses, only the Remunerated Directors are currently expected to be entitled to compensation as consideration for serving on the Holdco Board and/or any committees. See the section entitled “Management” for additional information.

Unless earlier terminated by the mutual agreement of Holdco, Codere Newco and the Sponsor, the Nomination Agreement shall continue in full force and effect for a period of five years from the Closing Date; provided, however, that the Nomination Agreement will automatically terminate, with respect to Codere Newco, on the date on which Codere Newco and/or its affiliates cease to beneficially own, in the aggregate, at least 30% of the issued and outstanding Ordinary Shares, and with respect to the Sponsor, after the Sponsor Proposal Period; provided, further, that Codere Newco and Holdco shall, no later than 30 days prior to the fifth anniversary of the Nomination Agreement, agree in writing to renew the Nomination Agreement, with respect to Codere Newco and Holdco, for an additional five years if Codere Newco and/or its affiliates beneficially own, in the aggregate, no less than 30% of the issued and outstanding Ordinary Shares.

Indemnification Letter

In connection with the Closing of the Business Combination, Codere Newco, Holdco and SEJO agreed to cause the Restructuring and entered into the Indemnification Letter, pursuant to which Codere Newco shall indemnify Holdco, SEJO and their respective subsidiaries (“Indemnitees”), including under the principles of transferee or successor liability but excluding any debts, losses, damages, fines, penalties, expenses and liabilities (“Liabilities”) reflected or reserved against in the Year-End Financial Statements (as defined in the Business Combination Agreement) or the Interim Financial Statement (as defined in the Business Combination Agreement), for (i) Liabilities incurred by any Indemnitee and arising under or in connection with the ownership of the assets (other than entities, assets or rights to be transferred to SEJO or its subsidiaries pursuant to the Restructuring) of, or the operation of the business (other than the online business) by, Codere Newco or any affiliate of Codere Newco (excluding Holdco, Merger Sub, SEJO and its subsidiaries) (“Non-Online Losses”); (ii) Liabilities incurred by any Indemnitee as a result of the consummation of the Restructuring, but only to the extent that such Liabilities would not have been incurred but for the Restructuring (“Restructuring Losses”); and (iii) Taxes (as defined in the Business Combination Agreement) of any Indemnitee, including Transfer Taxes (as defined in the Business Combination Agreement), incurred by any Indemnitee as a result of the consummation of the Restructuring, but only to the extent that such Taxes would not have been incurred but for the Restructuring (such Taxes in (iii), together with Non-Online Losses and Restructuring Losses, “Losses”). The obligations of Codere Newco to indemnify and hold harmless the Indemnitees against, or to contribute to, Losses pursuant to the Indemnification Letter shall remain in full force and effect until the date that is 24 months after the Closing Date. The aggregate amount of all Losses for which Codere Newco shall be liable pursuant to the Indemnification Letter, including, for the avoidance of doubt, any legal or other expenses incurred by the Indemnitees and required to be paid by Codere Newco in connection with investigating and defending any related action or claim, shall not exceed $10,000,000 in the aggregate.

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Warrant Amendment Agreement

In connection with the Closing of the Business Combination, DD3, Holdco and Continental Stock Transfer & Trust Company, as warrant agent, entered into the Warrant Amendment Agreement, pursuant to which, among others, as of the Merger Effective Time, (i) each of the issued DD3 Warrants that was outstanding immediately prior to the Merger Effective Time ceased to represent a right to acquire one share of DD3 Class A Common Stock and instead represented the right to acquire one Ordinary Share on substantially the same terms as set forth in the Original Warrant Agreement and (ii) DD3 assigned to Holdco all of DD3’s right, title and interest in and to the Original Warrant Agreement and Holdco assumed, and agreed to pay, perform, satisfy and discharge in full, all of DD3’s liabilities and obligations under the Original Warrant Agreement arising from and after the Merger Effective Time.

Expenses Reimbursement Letter

In connection with the Closing of the Business Combination, DD3, Codere Newco, Holdco and the Sponsor entered into the Expenses Reimbursement Letter, pursuant to which (i) the Sponsor agreed to reimburse Holdco, as sole shareholder of the Surviving Corporation, for the aggregate amount of SPAC Transaction Expenses (as defined in the Business Combination Agreement) payable by the Surviving Corporation in excess of the maximum SPAC Transaction Expenses (as defined in the Business Combination Agreement) required to be paid by the Surviving Corporation pursuant to Section 11.03 of the Business Combination Agreement, subject to Sections 1 and 2 of the Expenses Reimbursement Letter; and (ii) Codere Newco agreed to reimburse Holdco, as sole shareholder of SEJO and the Surviving Corporation, for the aggregate amount of Company Transaction Expenses (as defined in the Business Combination Agreement) payable by the Surviving Corporation, Holdco, SEJO or any of its subsidiaries in excess of the maximum Company Transaction Expenses (as defined in the Business Combination Agreement) required to be paid by the Surviving Corporation pursuant to Section 11.03 of the Business Combination Agreement, subject to Sections 1 and 2 of the Expenses Reimbursement Letter.

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Material U.S. Federal Income Tax Considerations

This section describes the material U.S. federal income tax consequences to the U.S. holders described below of the ownership and disposition of Ordinary Shares or Holdco Warrants (collectively, “Holdco securities”). This discussion applies only to Holdco securities held as capital assets for U.S. federal income tax purposes (generally, property held for investment) and does not discuss all aspects of U.S. federal income taxation that may be relevant to U.S. holders in light of their particular circumstances or status, including alternative minimum tax and Medicare contribution tax consequences, or to U.S. holders subject to special rules, including:

● brokers, dealers and other investors that do not hold their Holdco securities as capital assets;

● traders in securities that elect to use a mark-to-market method of accounting for their securities holdings;

● tax-exempt organizations, qualified retirement plans, individual retirement accounts or other tax deferred accounts;

● banks or other financial institutions, underwriters, insurance companies, real estate investment trusts or regulated investment companies;

● U.S. expatriates or former long-term residents of the United States;

● persons that own (directly, indirectly, or by attribution) 10% or more (by vote or value) of Holdco’s stock;

● partnerships or other pass-through entities for U.S. federal income tax purposes or beneficial owners thereof;

● persons holding Holdco securities as part of a straddle, hedging or conversion transaction, constructive sale, or other arrangement involving more than one position;

● persons required to accelerate the recognition of any item of gross income with respect to Holdco securities as a result of such income being recognized on an applicable financial statement;

● U.S. holders (as defined below) whose functional currency is not the U.S. dollar;

● U.S. holders that hold Holdco securities in connection with a trade or business conducted outside the United States; or

● persons that received Holdco securities as compensation for services.

This discussion is based on the Code, its legislative history, existing and proposed Treasury regulations promulgated under the Code (the “Treasury Regulations”), published rulings by the IRS and court decisions, all as of the date hereof. These laws are subject to change, possibly on a retroactive basis. This discussion is necessarily general and does not address all aspects of U.S. federal income taxation, including the effect of the U.S. federal alternative minimum tax, or U.S. federal estate and gift tax, or any state, local or non-U.S. tax laws to a U.S. holder of Holdco securities.

For purposes of this discussion, a U.S. holder means a beneficial owner of Holdco securities that is, for U.S. federal income tax purposes:

● an individual who is a citizen or resident of the United States;

● a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

● an estate whose income is subject to U.S. federal income tax regardless of its source; or

● a trust if (1) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S. persons are authorized to control all substantial decisions of the trust; or (2) the trust has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.

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ALL PROSPECTIVE INVESTORS SHOULD CONSULT WITH THEIR TAX ADVISORS REGARDING THE TAX CONSEQUENCES OF THE OWNERSHIP AND DISPOSITION OF HOLDCO SECURITIES, INCLUDING THE EFFECTS OF U.S. FEDERAL, STATE, AND LOCAL AND NON-U.S. TAX LAWS.

U.S. Federal Income Tax Treatment of Holdco

As described in “Risk Factors—Risks Relating to U.S. Taxes—The Internal Revenue Service may not agree that Holdco should be treated as a non-U.S. corporation for U.S. federal income tax purposes,” Holdco believes that it should not be treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Code, and the remainder of this discussion so assumes.

Ownership of Ordinary Shares and Holdco Warrants

Distributions on Ordinary Shares

The following discussion is subject to the discussion in “—Passive Foreign Investment Company Rules” below.

The gross amount of any distribution on Ordinary Shares that is made out of Holdco’s current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) generally will be taxable to a U.S. holder as ordinary dividend income on the date such distribution is actually or constructively received. Any such dividends will not be eligible for the dividends received deduction allowed to corporations in respect of dividends received from U.S. corporations. To the extent that the amount of the distribution exceeds Holdco’s current and accumulated earnings and profits (as determined under U.S. federal income tax principles), such excess amount will be treated first as a non-taxable return of capital to the extent of the U.S. holder’s tax basis in its Ordinary Shares, and thereafter as capital gain recognized on a sale or exchange. However, because Holdco does not maintain calculations of its earnings and profits in accordance with U.S. federal income tax principles, U.S. holders should expect that any distribution by Holdco with respect to the Ordinary Shares will be reported to them as dividend income.

Subject to applicable limitations, dividends received by non-corporate U.S. holders (including individuals) from a “qualified foreign corporation” may be eligible for reduced rates of taxation, provided that certain holding period requirements and other conditions are satisfied. For these purposes, a non-U.S. corporation will be treated as a qualified foreign corporation if it is eligible for the benefits of a comprehensive income tax treaty with the United States that meets certain requirements. There can be no assurance that Holdco will be eligible for benefits of an applicable comprehensive income tax treaty with the United States. A non-U.S. corporation is also treated as a qualified foreign corporation with respect to dividends it pays on shares that are readily tradable on an established securities market in the United States. U.S. Treasury guidance indicates that shares listed on Nasdaq will be considered readily tradable on an established securities market in the United States. Holdco will not be a qualified foreign corporation for purposes of these rules if it is a passive foreign investment company for its taxable year in which it pays a dividend or for the preceding taxable year. See “—Passive Foreign Investment Company Rules.”

Subject to certain conditions and limitations, non-refundable withholding taxes (at a rate not in excess of any applicable tax treaty rate), if any, on dividends paid by Holdco may be treated as foreign taxes eligible for credit against a U.S. holder’s U.S. federal income tax liability under the U.S. foreign tax credit rules. For purposes of calculating the U.S. foreign tax credit, dividends paid on the Ordinary Shares will generally be treated as income from sources outside the United States and will generally constitute passive category income. The rules governing the U.S. foreign tax credit are complex. U.S. holders should consult their tax advisors regarding the availability of the U.S. foreign tax credit under particular circumstances. In lieu of claiming a foreign tax credit, a U.S. holder may elect to deduct foreign taxes (including Luxembourg taxes) in computing its taxable income, subject to applicable limitations. An election to deduct foreign taxes instead of claiming foreign tax credits applies to all foreign taxes paid or accrued in the taxable year.

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Sale, Exchange, Redemption or Other Taxable Disposition of Ordinary Shares or Holdco Warrants

The following discussion is subject to the discussion in “—Passive Foreign Investment Company Rules” below.

A U.S. holder generally will recognize gain or loss on any sale, exchange or other taxable disposition of Ordinary Shares or Holdco Warrants (including a redemption of Holdco Warrants) in an amount equal to the difference between (i) the amount realized on the disposition and (ii) such U.S. holder’s adjusted tax basis in such shares or warrants. Any gain or loss recognized by a U.S. holder on a taxable disposition of Ordinary Shares or Holdco Warrants generally will be capital gain or loss and will be long-term capital gain or loss if the holder’s holding period in such shares and/or warrants exceeds one year at the time of the disposition. Preferential tax rates may apply to long-term capital gains of non-corporate U.S. holders (including individuals). The deductibility of capital losses is subject to limitations. Any gain or loss recognized by a U.S. holder on the sale or exchange of Ordinary Shares or Holdco Warrants generally will be treated as U.S. source gain or loss.

Exercise or Lapse of a Holdco Warrant

Except as discussed below with respect to the cashless exercise of a Holdco Warrant, a U.S. holder generally will not recognize gain or loss upon the acquisition of an Ordinary Share on the exercise of a Holdco Warrant for cash. A U.S. holder’s tax basis in the Ordinary Shares received upon exercise of Holdco Warrants generally should be an amount equal to the sum of the U.S. holder’s tax basis in the Holdco Warrants and the exercise price. The U.S. holder’s holding period for an Ordinary Share received upon exercise of the Holdco Warrant will begin on the date following the date of exercise (or possibly the date of exercise) of the Holdco Warrant and will not include the period during which the U.S. holder held the Holdco Warrant. If a Holdco Warrant is allowed to lapse unexercised, a U.S. holder generally will recognize a capital loss equal to such holder’s tax basis in the Holdco Warrant.

The tax consequences of a cashless exercise of a Holdco Warrant are not clear under current tax law. A cashless exercise may be tax-deferred, either because the exercise is not a gain realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either tax-deferred situation, a U.S. holder’s basis in the Ordinary Shares received would equal the U.S. holder’s basis in the Holdco Warrants exercised therefor. If the cashless exercise is treated as not being a gain realization event, a U.S. holder’s holding period in the Ordinary Shares will commence on the date following the date of exercise (or possibly the date of exercise) of the Holdco Warrants. If the cashless exercise is treated as a recapitalization, the holding period of the Ordinary Shares will include the holding period of the Holdco Warrants exercised therefor.

It is also possible that a cashless exercise of a Holdco Warrant could be treated in part as a taxable exchange in which gain or loss will be recognized. In such event, a U.S. holder will recognize gain or loss with respect to the portion of the exercised Holdco Warrants treated as surrendered to pay the exercise price of the Holdco Warrants (the “surrendered warrants”). The U.S. holder will recognize capital gain or loss with respect to the surrendered warrants in an amount generally equal to the difference between (i) the total exercise price for the total number of warrants to be exercised and (ii) the U.S. holder’s adjusted basis in the warrants deemed surrendered. In this case, a U.S. holder’s tax basis in the Ordinary Shares received will equal the U.S. holder’s tax basis in the Holdco Warrants exercised plus (or minus) the gain (or loss) recognized with respect to the surrendered warrants. A U.S. holder’s holding period for the Ordinary Shares will commence on the date following the date of exercise (or possibly the date of exercise) of the Holdco Warrants.

Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise of warrants, there can be no assurance which, if any, of the alternative tax consequences and holding periods described above will be adopted by the IRS or a court of law. Accordingly, U.S. holders should consult their tax advisors regarding the tax consequences of a cashless exercise of Holdco Warrants.

Possible Constructive Distributions

The terms of each Holdco Warrant provide for an adjustment to the number of Ordinary Shares for which the Holdco Warrant may be exercised or to the exercise price of the Holdco Warrant in certain events, as discussed in the section of this prospectus captioned “Description of Holdco Securities.” An adjustment which has the effect of preventing dilution generally is not taxable. A U.S. holder of a Holdco Warrant will, however, be treated as receiving a constructive distribution from Holdco if, for example, the adjustment increases the holder’s proportionate interest in Holdco’s assets or earnings and profits (e.g., through an increase in the number of Ordinary Shares that will be obtained upon exercise of such warrant) as a result of a distribution of cash to the holders of the Ordinary Shares which is taxable to the U.S. holders of such shares as described under “—Distributions on Ordinary Shares” above. Such constructive distribution will be subject to tax as described under that section in the same manner as if the U.S. holder of such warrant received a cash distribution from Holdco equal to the fair market value of such increased interest.

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Passive Foreign Investment Company Rules

Generally. The treatment of U.S. holders could be materially different from that described above if Holdco is treated as a passive foreign investment company (a “PFIC”) for U.S. federal income tax purposes for any taxable year. A PFIC is any foreign corporation with respect to which either: (i) 75% or more of the gross income for a taxable year constitutes passive income for purposes of the PFIC rules, or (ii) 50% or more of such foreign corporation’s assets in any taxable year (generally based on the quarterly average of the value of its assets during such year) is attributable to assets that produce passive income or are held for the production of passive income. Passive income generally includes dividends, interest, certain royalties and rents, annuities, net gains from the sale or exchange of property producing such income and net foreign currency gains. Cash is generally a passive asset. Goodwill is an active asset to the extent attributable to activities that produce active income. The determination of whether a foreign corporation is a PFIC is based upon the composition of such foreign corporation’s income and assets (including, among others, its proportionate share of the income and assets of any other corporation in which it owns, directly or indirectly, 25% (by value) of the stock), and the nature of such foreign corporation’s activities. A separate determination must be made after the close of each taxable year as to whether a foreign corporation was a PFIC for that year.

Based on the composition of Holdco’s income and assets and the estimated value of its assets, including goodwill (which is based in part on the current price of the Ordinary Shares), Holdco does not expect to be a PFIC for its 2021 taxable year. However, Holdco’s PFIC status for any taxable year can be determined only after the end of that year and will depend on the composition of Holdco’s income and assets and the value of its assets from time to time (which may be determined, in large part, by reference to the market price of Ordinary Shares, which has declined since the Merger). Because the value of Holdco’s goodwill may be determined in large part by reference to its market capitalization from time to time, and because Holdco holds significant amounts of cash and cash equivalents, there is a risk that Holdco will be a PFIC for any taxable year if its market capitalization declines. Accordingly, there can be no assurance that Holdco will not be a PFIC for any taxable year.

The Code provides that, to the extent provided in Treasury regulations, if any person has an option to acquire shares of a PFIC, the shares will be considered as owned by that person. Under proposed Treasury regulations that have a retroactive effective date, an option to acquire shares of a PFIC is generally treated as ownership of those PFIC shares. The remainder of this discussion assumes that the PFIC rules will apply to Holdco Warrants if Holdco were a PFIC. However, U.S. holders should consult their tax advisers regarding the application of the PFIC rules to Holdco Warrants prior to the finalization of the proposed Treasury regulations.

If Holdco is a PFIC for any taxable year and any subsidiary or other entity in which Holdco owns equity interests is also a PFIC (any such entity, a “lower-tier PFIC”), a U.S. holder will be deemed to own a proportionate amount (by value) of the shares of each such lower-tier PFIC and will be subject to U.S. federal income tax according to the excess distribution rules described below on (i) certain distributions by any lower-tier PFIC and (ii) dispositions of shares of any lower-tier PFIC, in each case, as if the U.S. holder held such shares directly, even though the U.S. holder will not receive any proceeds of those distributions or dispositions.

If Holdco is or becomes a PFIC during any taxable year in which a U.S. holder holds Ordinary Shares (or under the proposed regulations, Holdco Warrants), the U.S. holder will generally be subject to the excess distribution regime (which is the default regime), unless (in the case of Ordinary Shares) a mark-to-market election is made as described further below. Dividends paid by a PFIC are not eligible for the lower rates of taxation applicable to qualified dividend income (“QDI”) under any of the foregoing regimes.

Excess Distribution Regime. If a U.S. holder does not make a mark-to-market election, as described below, the U.S. holder will be subject to the default “excess distribution regime” under the PFIC rules with respect to (i) any gain realized on a sale or other disposition (including in certain cases, a pledge) of Ordinary Shares (or under the proposed regulations, Holdco Warrants), and (ii) any “excess distribution” received on the Ordinary Shares (generally, the excess of distributions received in a taxable year over 125% of the average of the annual distributions on Ordinary Shares received during the preceding three taxable years or the U.S. holder’s holding period, whichever is shorter). Generally, under this excess distribution regime:

● the gain or excess distribution will be allocated ratably over the period during which the U.S. holder held the Ordinary Shares (or Holdco Warrants);

● the amount allocated to the current taxable year and to any taxable year during the U.S. holder’s holding period before the first day of the first taxable year in which Holdco became a PFIC will be treated as ordinary income; and

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● the amount allocated to other prior taxable years not described in the preceding bullet will be subject to the highest tax rate in effect for that taxable year for individuals or corporations, as applicable, and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

The tax liability for amounts allocated to years prior to the year of disposition or excess distribution will be payable generally without regard to offsets from deductions, losses and expenses. In addition, gains (but not losses) realized on the sale of a U.S. holder’s securities cannot be treated as capital gains, even if the U.S. holder holds the securities as capital assets.

If Holdco is treated as a PFIC for any taxable year during a U.S. holder’s holding period it will, with respect to such U.S. holder, continue to be a PFIC for subsequent taxable years, regardless of whether it satisfies either of the income or asset test in these subject to certain exceptions (such as upon making a “deemed sale” election).

Mark-to-Market Regime. Alternatively, a U.S. holder of shares of a PFIC may make an election to mark-to-market the shares on an annual basis if the shares are marketable. PFIC shares generally are marketable if they are “regularly traded” on a national securities exchange such as the Nasdaq. There can be no assurance that Ordinary Shares will be regularly traded for purposes of these rules. Pursuant to the mark-to-market election, for each taxable year in which Holdco is a PFIC a U.S. holder will include as ordinary income the excess, if any, of the fair market value of such stock over its adjusted basis at the end of the taxable year. A U.S. holder will treat as ordinary loss any excess of the adjusted basis of the stock over its fair market value at the end of the year, but only to the extent of the net amount previously included in income as a result of the election in prior years. A U.S. holder’s adjusted tax basis in the PFIC shares will be increased to reflect any amounts included in income, and decreased to reflect any amounts deducted, as a result of a mark-to-market election. Any gain recognized on a disposition of Ordinary Shares in a taxable year in which Holdco is a PFIC will be treated as ordinary income and any loss will be treated as ordinary loss (but only to the extent of the net amount of income previously included as a result of a mark-to-market election, with any excess treated as a capital loss). A mark-to-market election applies for the taxable year in which it is made and for each subsequent taxable year, unless the PFIC shares cease to be marketable or the IRS consents to the revocation of the election. U.S. holders should be aware that there is also no provision in the Code, Treasury Regulations or other published authority that specifically provides that a mark-to-market election with respect to the stock of a publicly-traded holding company (such as Holdco) effectively exempts stock of any lower-tier PFICs from the negative tax consequences arising from the excess distribution regime described above. U.S. Holders should consult their tax advisers to determine whether the mark-to-market tax election will be available if Holdco is a PFIC for any taxable year, and the consequences resulting from such election. U.S. holders of Holdco Warrants will not be able to make a mark-to-market election with respect to their warrants.

Holdco does not intend to provide information necessary for U.S. holders to make qualified electing fund elections which, if available, would result in tax treatment different from the general tax treatment for PFICs described above.

PFIC Reporting Requirements. A U.S. holder that owns (or is deemed to own) shares in a PFIC during any taxable year of the U.S. holder generally is required to file an IRS Form 8621 with such U.S. holder’s U.S. federal income tax return and provide such other information as the IRS may require. Failure to file IRS Form 8621 for each applicable taxable year may result in substantial penalties and result in the U.S. holder’s taxable years being open to audit by the IRS until such forms are properly filed.

Information Reporting and Backup Withholding

Information reporting requirements may apply to dividends received or deemed received with respect to Holdco securities, and the proceeds received on the disposition of Holdco securities effected within the United States (and, in certain cases, outside the United States), in each case other than in the case of U.S. holders that are exempt recipients (such as corporations). Backup withholding may apply to such amounts if the U.S. holder fails to provide an accurate taxpayer identification number (generally on an IRS Form W-9) or is otherwise subject to backup withholding. U.S. holders should consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.

Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against the U.S. holder’s U.S. federal income tax liability, and a holder may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for a refund with the IRS and furnishing any required information.

Certain U.S. holders who are individuals (or certain specified entities) may be required to report information relating to their ownership of Holdco securities, or non-U.S. accounts through which the Holdco securities are held. U.S. holders should consult their own tax advisers regarding their reporting obligations with respect to Holdco securities.

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Material Luxembourg Income Tax Considerations

The following is a general description of certain Luxembourg tax considerations relating to Holdco and the Holdco Shareholders and the holders of Holdco Warrants. It does not purport to be a complete analysis of all tax considerations in relation to the Ordinary Shares and Holdco Warrants. Prospective purchasers should consult their own tax advisers as to which countries’ tax laws could be relevant to acquiring, holding and disposing of the securities and the consequences of such actions under the tax laws of those countries. This overview is based upon the law as in effect on the date of this document and is subject to any change in law that may take effect after such date, even with retroactive effect.

The discussion below is intended as a basic overview of certain tax consequences in relation to Holdco and the purchase, ownership and disposition of Ordinary Shares and Holdco Warrants under Luxembourg law. Persons who are in any doubt as to their tax position should consult a professional tax adviser.

Taxation of Holdco

Holdco is subject to Luxembourg tax on its worldwide profits at the current combined ordinary rate of 24.94% for Luxembourg City, including the 17% corporate income tax, a 6.75% municipal business tax and a solidarity surcharge (together the “Income Tax”).

In principle, dividends and capital gains realized by Holdco are fully subject to Income Tax in Luxembourg. However, provided the conditions of the Luxembourg participation exemption regime are met, dividends or capital gains realized by Holdco upon the disposal of shares are not taxable in Luxembourg.

Luxembourg net wealth tax (“NWT”) will be due annually by Holdco at the rate of 0.5% on its total net asset value below or equal to €500 million. The tranche above €500 million will be taxed at a rate of 0.05%.

Shareholdings qualifying for the Luxembourg participation exemption regime are excluded from the NWT basis provided that, the relevant entity holds a direct shareholding in a qualifying subsidiary representing at least 10% of the qualifying subsidiary’s share capital or having an acquisition cost (including both share capital and share premium) of at least €1.2 million; there is no minimum holding period requirement.

Companies for which the sum of fixed financial assets (i.e., financial assets notably including shares and loans, transferable securities and cash) exceeds 90% of their total balance sheet and €350,000 are liable to a minimum annual NWT of €4,815. Other companies are liable to a minimum progressive tax (in an amount up to €32,100), depending on the total assets on their balance sheet.

Withholding taxation

Any dividend distributed by Holdco to its shareholders will in principle be subject to a 15% withholding tax unless an exemption or a treaty reduction applies.

Luxembourg taxation of the holders

Luxembourg tax residence of the holders

Holders will not be deemed to be resident, domiciled or carrying on business in Luxembourg solely by reason of holding, execution, performance, delivery, exchange and/or enforcement of the Ordinary Shares and Holdco Warrants.

Taxation of Luxembourg non-residents

Holders who are non-residents of Luxembourg and who do not have a permanent establishment, a permanent representative, or a fixed place of business in Luxembourg with which the holding of the Ordinary Shares and Holdco Warrants is connected, are not liable to any Luxembourg income tax, whether they receive payments upon redemption or repurchase of the Ordinary Shares and Holdco Warrants, or realize capital gains on the sale of any Ordinary Shares and Holdco Warrants, unless they sell a participation of more than 10% in Holdco within six months of its acquisition.

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Taxation of Luxembourg residents

Holders who are Luxembourg resident companies (société de capitaux) or foreign entities which have a permanent establishment or a permanent representative in Luxembourg with which the holding of the Ordinary Shares and Holdco Warrants is connected, must include in their taxable income any income (including dividend) and the difference between the sale or redemption price and the lower of the cost or book value of the Ordinary Shares and Holdco Warrants sold or redeemed.

Luxembourg resident corporate holders who are family wealth management companies subject to the law of May 11, 2007, undertakings for collective investment subject to the law of December 17, 2010, to the law of February 13, 2007, or to the law of July 23, 2016 on reserved alternative investment funds (provided it is not foreseen in the incorporation documents that (i) the exclusive object is the investment in risk capital and that (ii) article 48 of the aforementioned law of July 23, 2016 applies) are tax exempt entities in Luxembourg, and are thus not subject to any Luxembourg tax (i.e., corporate income tax, municipal business tax and net wealth tax), other than the annual subscription tax calculated on their (paid up) share capital (and share premium) or net asset value.

Net Wealth Tax

Luxembourg net wealth tax will not be levied on the Ordinary Shares and Holdco Warrants held by a corporate holder, unless: (i) such holder is a Luxembourg resident other than a holder governed by: (a) the laws of December 17, 2010 and February 13, 2007 on undertakings for collective investment; (b) the law of March 22, 2004 on securitization; (c) the law of June 15, 2004 on the investment company in risk capital; (d) the law of May 11, 2007 on family estate management companies; or (e) the law of July 23, 2016 on reserved alternative investment funds or (ii) such Ordinary Shares and Holdco Warrants are attributable to an enterprise or part thereof which is carried on by a non-resident company in Luxembourg through a permanent establishment.

Luxembourg net wealth tax is levied at a 0.5% rate up to €500 million taxable base and at a 0.05% rate on the taxable base in excess of €500 million. Securitization vehicles, investment companies in risk capital (Société d’investissement en capital à risque (SICAR)), a regulated structure designed for private equity and venture capital investments (organized as tax opaque companies), and reserved alternative investment funds subject to the law of July 23, 2016 (provided it is foreseen in the incorporation documents that (i) the exclusive object is the investment in risk capital and that (ii) article 48 of the aforementioned law of July 23, 2016 applies), are subject to net wealth tax up to the amount of the minimum net wealth tax.

The minimum net wealth tax is levied on companies having their statutory seat or central administration in Luxembourg. For entities for which the sum of fixed financial assets, receivables against related companies, transferable securities and cash at bank exceeds 90% of their total gross assets and €350,000, the minimum net wealth tax is currently set at €4,815. For all other companies having their statutory seat or central administration in Luxembourg which do not fall within the scope of the €4,815 minimum net wealth tax, the minimum net wealth tax ranges from €535 to €32,100, depending on the company’s total gross assets.

Other Taxes

No stamp, value, issue, registration, transfer or similar taxes or duties will be payable in Luxembourg by Noteholders in connection with the issue of the Ordinary Shares and Holdco Warrants, nor will any of these taxes be payable as a consequence of a subsequent transfer, exchange or redemption of the Ordinary Shares and Holdco Warrants, unless the documents relating to the Ordinary Shares and Holdco Warrants are (i) voluntarily registered in Luxembourg or (ii) appended to a document that requires obligatory registration in Luxembourg.

There is no Luxembourg value added tax payable in respect of payments in consideration for the issuance of the Ordinary Shares and Holdco Warrants or in respect of the payment under the Ordinary Shares and Holdco Warrants or the transfer of the Ordinary Shares and Holdco Warrants. Luxembourg value added tax may, however, be payable in respect of fees charged for certain services rendered to the Holdco if, for Luxembourg value added tax purposes, such services are rendered or are deemed to be rendered in Luxembourg and an exemption from Luxembourg value added tax does not apply with respect to such services.

No Luxembourg inheritance tax is levied on the transfer of the Ordinary Shares and Holdco Warrants upon the death of a holder in cases where the deceased was not a resident of Luxembourg for inheritance tax purposes. Where a holder is a resident of Luxembourg for tax purposes at the time of his death, the Ordinary Shares and Holdco Warrants are included in his taxable estate for inheritance tax assessment purposes. No Luxembourg gift tax will be levied on the transfer of the Ordinary Shares and Holdco Warrants.

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Plan of Distribution

The Selling Securityholders, which as used herein include donees, pledgees, transferees or other successors-in-interest selling Holdco Warrants, Ordinary Shares or interests therein received after the date of this prospectus from a Selling Securityholder as a gift, pledge, partnership distribution or other transfer (subject to any applicable terms of the Registration Rights and Lock-Up Agreement or relevant Subscription Agreements, as the case may be, including the terms of the registration rights and lock-up restrictions (if any) set forth therein), may, from time to time, sell, transfer or otherwise dispose of any or all of their Holdco Warrants, Ordinary Shares or interests therein on any stock exchange, market or trading facility on which the Holdco Warrants or Ordinary Shares are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.

The Selling Securityholders may use any one or more of the following methods when disposing of Holdco Warrants, Ordinary Shares or interests therein:

● ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

● block trades in which the broker-dealer will attempt to sell the securities as agent, but may position and resell a portion of the block as principal to facilitate the transaction;

● purchases by a broker-dealer as principal and resale by the broker-dealer for their account;

● an exchange distribution in accordance with the rules of the applicable exchange;

● privately negotiated transactions;

● short sales effected after the date the registration statement of which this prospectus is a part is declared effective by the SEC;

● through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

● broker-dealers may agree with the Selling Securityholders to sell a specified number of such securities at a stipulated price per security;

● a combination of any such methods of sale; and

● any other method permitted by applicable law.

The Selling Securityholders may, from time to time, pledge or grant a security interest in some or all of the Holdco Warrants or Ordinary Shares owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the Holdco Warrants or Ordinary Shares, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of Selling Securityholders to include the pledgee, transferee or other successors in interest as Selling Securityholders under this prospectus. The Selling Securityholders also may transfer the Holdco Warrants or Ordinary Shares in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

In connection with the sale of Holdco Warrants, Ordinary Shares or interests therein, the Selling Securityholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the Holdco Warrants or Ordinary Shares in the course of hedging the positions they assume. The Selling Securityholders may also sell Holdco Warrants or Ordinary Shares short and deliver these securities to close out their short positions, or loan or pledge the Holdco Warrants or Ordinary Shares to broker-dealers that in turn may sell these securities. The Selling Securityholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of Holdco Warrants or Ordinary Shares offered by this prospectus, which Holdco Warrants or Ordinary Shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

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Each of the Selling Securityholders reserves the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of Holdco Warrants or Ordinary Shares to be made directly or through agents. We will not receive any of the proceeds from this offering. Upon any exercise of the Holdco Warrants by payment of cash, however, we will receive the exercise price of the Holdco Warrants.

The Selling Securityholders and any underwriters, broker-dealers or agents that participate in the sale of the Ordinary Shares or interests therein may be “underwriters” within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of the shares may be underwriting discounts and commissions under the Securities Act. Selling Securityholders who are “underwriters” within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities Act.

In addition, a Selling Securityholder that is an entity may elect to make a pro rata in-kind distribution of securities to its members, partners or stockholders pursuant to the registration statement of which this prospectus is a part by delivering a prospectus with a plan of distribution. Such members, partners or stockholders would thereby receive freely tradeable securities pursuant to the distribution through a registration statement.

To the extent required, the Holdco Warrants or Ordinary Shares to be sold, the names of the Selling Securityholders, the respective purchase prices and public offering prices, the names of any agents, dealer or underwriter, any applicable commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement that includes this prospectus.

In order to comply with the securities laws of some states, if applicable, the Holdco Warrants or Ordinary Shares may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition, in some states the Holdco Warrants or Ordinary Shares may not be sold unless they have been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.

The anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of Holdco Warrants or Ordinary Shares in the market and to the activities of the Selling Securityholders and their affiliates. In addition, upon their request and to the extent applicable, we will make copies of this prospectus (as it may be supplemented or amended from time to time) available to the Selling Securityholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The Selling Securityholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.

Pursuant to the the Registration Rights and Lock-Up Agreement, we have agreed to indemnify certain of the Selling Securityholders against liabilities, including liabilities under the Securities Act and state securities laws, relating to the registration of the Holdco Warrants or Ordinary Shares offered by this prospectus.

We have agreed with the Selling Securityholders to keep the registration statement of which this prospectus constitutes a part effective until the earlier to occur of certain events, including when all of the securities covered by this prospectus have been disposed of pursuant to and in accordance with the registration statement.

167

Legal Matters

The validity of the Ordinary Shares offered by this prospectus has been passed upon by Clifford Chance. The validity of the Holdco Warrants offered by this prospectus has been passed upon by Davis Polk & Wardwell LLP.

Experts

The audited combined carve-out financial statements of Codere Online as of December 31, 2020 and 2019 and January 1, 2019 and for the years ended December 31, 2020 and 2019, appearing herein and in the registration statement have been audited by Ernst & Young, S.L., independent registered public accounting firm, as set forth in their report thereon (which contains an explanatory paragraph describing conditions that raise substantial doubt about Codere Online’s ability to continue as a going concern as described in Note 3(m) of the Annual Combined Carve-out Financial Statements) appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

The audited financial statements of Holdco as of June 30, 2021 appearing herein and in the registration statement have been audited by Ernst & Young, S.L., independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

The financial statements of Codere Online U.S. Corp. (f/k/a DD3 Acquisition Corp. II) as of September 30, 2021 and for the period from September 30, 2020 (inception) through September 30, 2021 included in this prospectus and in the registration statement have been audited by Marcum LLP, an independent registered public accounting firm, as stated in their report thereon and included in this prospectus, in reliance upon such report and upon the authority of such firm as experts in accounting and auditing.

Where You Can Find More Information

We have filed a registration statement on Form F-1, including exhibits, under the Securities Act of 1933, as amended, with respect to the Ordinary Shares and Holdco Warrants offered by this prospectus. This prospectus does not contain all of the information included in the registration statement. For further information pertaining to us and our securities, you should refer to the registration statement and our exhibits.

In addition, we submit reports on Form 6-K and, starting in respect of the year ended December 31, 2021, annual reports on Form 20-F, as well as other information with the SEC. Our SEC filings are available to the public on a website maintained by the SEC located at www.sec.gov. We also maintain a website at https://www.codereonline.com. Through our website, we make available, free of charge, the SEC filings. The information contained on, or that may be accessed through, our website is not part of, and is not incorporated into, this prospectus.

168

Index to Financial Information

	Page
CODERE ONLINE U.S. CORP. (FORMERLY DD3 ACQUISITION CORP. II)
Audited Financial Statements
Report of Independent Registered Public Accounting Firm	F-2
Balance Sheet as of September 30, 2021	F-3
Statement of Operations for the period from September 30, 2020 (inception) through September 30, 2021	F-4
Statement of Changes in Stockholders’ Equity for the period from September 30, 2020 (inception) through September 30, 2021	F-5
Statement of Cash Flows for the period from September 30, 2020 (inception) through September 30, 2021	F-6
Notes to Financial Statements	F-7
CODERE ONLINE BUSINESS
Unaudited Interim Combined Carve-out Condensed Financial Statements
Interim Combined Carve-out Condensed Statement of Financial Position as of June 30, 2021 and December 31, 2020	F-22
Interim Combined Carve-out Condensed Income Statements for the six-month periods ended June 30, 2021 and 2020	F-23
Interim Combined Carve-out Condensed Statements of Comprehensive Income for the six-month periods ended June 30, 2021 and 2020	F-24
Interim Combined Carve-out Condensed Statement of Changes in Equity for the six-month period ended June 30, 2021	F-25
Interim Combined Carve-out Condensed Statements of Cash Flows for the six-month periods ended June 30, 2021 and 2020	F-26
Notes to the Interim Combined Carve-out Condensed Financial Statements	F-27
Audited Annual Combined Carve-out Financial Statements
Report of Independent Registered Public Accounting Firm	F-45
Combined Carve-out Statements of Financial Position as of December 31, 2020, 2019 and January 1, 2019	F-46
Combined Carve-out Income Statements for the years ended December 31, 2020 and 2019	F-47
Combined Carve-out Statements of Comprehensive Income for the years ended December 31, 2020 and 2019	F-48
Combined Carve-out Statements of Changes in Equity for the years ended December 31, 2020 and 2019	F-49
Combined Carve-out Statements of Cash Flows for the years ended December 31, 2020 and 2019	F-50
Notes to the Audited Annual Combined Carve-out Financial Statements	F-51
HOLDCO
Audited Financial Statements
Report of Independent Registered Public Accounting Firm	F-88
Balance Sheet as of June 30, 2021	F-89
Notes to the Audited Financial Statements	F-90

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of

Codere Online U.S. Corp. (f/k/a DD3 Acquisition Corp. II)

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Codere Online U.S. Corp. (f/k/a DD3 Acquisition Corp. II) (the “Company”) as of September 30, 2021, the related statements of operations, changes in stockholders’ equity and cash flows for the period from September 30, 2020 (inception) through September 30, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2021, and the results of its operations and its cash flows for the period from September 30, 2020 (inception) through September 30, 2021, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. 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 audit 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 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 audit 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 Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the 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 financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provide a reasonable basis for our opinion.

/s/ Marcum llp

Marcum llp

We have served as the Company’s auditor since 2020.

Boston, MA
February 16, 2022

F-2

CODERE ONLINE U.S. CORP. (f/k/a DD3 ACQUISITION CORP. II)

BALANCE SHEET

SEPTEMBER 30, 2021

ASSETS
Current assets
Cash	$	268,360
Prepaid expenses		121,450
Total Current Assets		389,810
Cash and marketable securities held in Trust Account		125,056,567
Total Assets	$	125,446,377
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accrued expenses	$	1,152,917
Total Current Liabilities		1,152,917
Warrant Liability		223,850
Total Liabilities		1,376,767
Commitments and contingencies
Class A common stock subject to possible redemption, 12,500,000 shares at redemption value		125,000,000
Stockholders’ Deficit
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		—
Class A common stock, $0.0001 par value; 100,000,000 shares authorized; 370,000 issued and outstanding (excluding 12,500,000 shares subject to possible redemption)		37
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 3,125,000 shares issued and outstanding (1)		312
Additional paid-in capital		—
Accumulated deficit		(930,739	)
Total Stockholders’ Deficit		(930,390	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	125,446,377

(1) On December 7, 2020, the Company effected a stock dividend of 287,500 shares with respect to the Class B common stock. All share and per-share amounts have been retroactively restated to reflect the stock dividend (see Note 6).

F-3

CODERE ONLINE U.S. CORP. (f/k/a DD3 ACQUISITION CORP. II)

STATEMENT OF OPERATIONS

FOR THE PERIOD FROM SEPTEMBER 30, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2021

Formation and operating costs	$	1,521,995
Loss from operations		(1,521,995	)
Other income (expense):
Change in fair value of warrant liability		(114,700	)
Interest income on marketable securities held in Trust Account		50,181
Unrealized gain on marketable securities held in Trust Account		6,386
Other expense, net		(58,133	)
Net loss	$	(1,580,128	)
Basic and diluted weighted average shares outstanding, Class A common stock subject to redemption		10,102,740
Basic and diluted net loss per share, Class A common stock subject to redemption	$	(0.12	)
Basic and diluted weighted average shares outstanding, Non-redeemable common stock		3,261,712
Basic and diluted net loss per share, Non-redeemable common stock	$	(0.12	)

F-4

CODERE ONLINE U.S. CORP. (f/k/a DD3 ACQUISITION CORP. II)

STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE PERIOD FROM SEPTEMBER 30, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2021 

	Class A Common Stock														Additional						Total
	Subject to Possible Redemption				Class A Common Stock				Class B Common Stock						Paid-in			Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Equity (Deficit)
Balance – September 30, 2020		—	$	—		—	$	—		—		$	—		$	—		$	—		$	—
Issuance of Class B common stock to Sponsor(1)		—		—		—		—		3,162,500			316			24,684			—			25,000
Sale of 12,500,000 Units		12,500,000		120,757,490		—		—		—			—			—			—			—
Deemed capital contribution from issuance of private placement units		—		—		370,000		37		—			—			3,699,963			—			3,700,000
Warrant liability		—		—		—		—		—			—			(109,150	)		—			(109,150	)
Forfeiture of Founder Shares		—		—		—		—		(37,500	)		(4	)		4			—			—
Accretion of Class A common stock subject to possible redemption		—		4,242,510		—		—		—			—			(3,615,501	)		649,389			(2,966,112	)
Net loss		—		—		—		—		—			—			—			(1,580,128	)		(1,580,128	)
Balance – September 30, 2021		12,500,000	$	125,000,000		370,000	$	37		3,125,000		$	312		$	—		$	(930,739	)	$	(930,390	)

(1) On December 7, 2020, the Company effected a stock dividend of 287,500 shares with respect to the Class B common stock (see Note 6).

F-5

CODERE ONLINE U.S. CORP. (f/k/a DD3 ACQUISITION CORP. II)

STATEMENT OF CASH FLOWS

FOR THE PERIOD FROM SEPTEMBER 30, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2021

Cash Flows from Operating Activities:
Net loss	$	(1,580,128	)
Adjustments to reconcile net loss to net cash used in operating activities:
Interest earned on marketable securities held in Trust Account		(50,181	)
Unrealized gain on marketable securities held in Trust Account		(6,386	)
Change in change in fair value of warrant liability		114,700
Offering cost allocable to warrant liability		396
Changes in operating assets and liabilities:
Prepaid expenses		(121,450	)
Accrued expenses		1,112,917
Net cash used in operating activities		(530,132	)
Cash Flows from Investing Activities:
Investment of cash in Trust Account		(125,000,000	)
Net cash used in investing activities		(125,000,000	)
Cash Flows from Financing Activities:
Proceeds from issuance of Class B common stock to the Sponsor		25,000
Proceeds from sale of Units, net of underwriting discounts paid		122,500,000
Proceeds from sale of Private Units		3,700,000
Proceeds from promissory note – related party		155,747
Repayment of promissory note – related party		(155,747	)
Payments of offering costs		(426,508	)
Net cash provided by financing activities		125,798,492
Net Change in Cash		268,360
Cash – Beginning		—
Cash – Ending	$	268,360
Non-Cash Investing and Financing Activities:
Initial classification of Class A common stock subject to possible redemption	$	125,000,000

F-6

CODERE ONLINE U.S. CORP. (f/k/a DD3 ACQUISITION CORP. II)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Codere Online U.S. Corp. (f/k/a DD3 Acquisition Corp. II) (the “Company”) was incorporated in Delaware on September 30, 2020. The Company was formed for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities (a “Business Combination”).

As of September 30, 2021, the Company had not commenced any operations. All activity through September 30, 2021 relates to the Company’s formation, the initial public offering (the “Initial Public Offering”), which is described below, and identifying a target for a Business Combination. We do not expect to generate any operating revenues. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.

The registration statements for the Company’s Initial Public Offering were declared effective on December 7, 2020. On December 10, 2020, the Company consummated the Initial Public Offering of 12,500,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), which includes the partial exercise by the underwriters of their over-allotment option in the amount of 1,500,000 Units, at $10.00 per Unit, generating gross proceeds of $125,000,000, which is described in Note 4.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of an aggregate of 370,000 units (each, a “Private Unit” and, collectively, the “Private Units”) at a price of $10.00 per Private Unit in a private placement to DD3 Sponsor Group, LLC (the “Sponsor”) and the Forward Purchase Investors (as defined in Note 5), generating gross proceeds of $3,700,000, which is described in Note 5.

Transaction costs amounted to $2,966,508, consisting of $2,500,000 of underwriting fees and $466,508 of other offering costs.

Following the closing of the Initial Public Offering on December 10, 2020, an amount of $125,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Units was placed in a trust account (the “Trust Account”), located in the United States and invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account, as described below.

The Company’s management had broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of Private Units, although substantially all of the net proceeds were intended to be applied generally toward consummating a Business Combination. The Company was required to complete a Business Combination with one or more target businesses that together had an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding taxes payable on interest earned on the Trust Account) at the time of the agreement to enter into a Business Combination. The Company would only complete a Business Combination if the post-transaction company owned or acquired 50% or more of the outstanding voting securities of the target or otherwise acquired a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.

The Company was required to provide its public stockholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination, either (i) in connection with a stockholder meeting called to approve such Business Combination or (ii) by means of a tender offer. The public stockholders were entitled to redeem their shares for a pro rata portion of the amount held in the Trust Account, calculated as of two business days prior to the completion of a Business Combination, including any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations. There would be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. As a result, shares of common stock are recorded at their redemption amount and classified as temporary equity, in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity” (“ASC 480”).

The Company would only proceed with a Business Combination if the Company had net tangible assets of at least $5,000,001 either immediately prior to or upon such consummation of a Business Combination and, if the Company sought stockholder approval, a majority of the shares voted were voted in favor of the Business Combination. If a stockholder vote was not required by law and the Company did not decide to hold a stockholder vote for business or other reasons, the Company would, pursuant to its Amended and Restated Certificate of Incorporation in effect prior to Closing of the Codere Business Combination (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction was required by law, or the Company decided to obtain stockholder approval for business or other reasons, the Company would offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company sought stockholder approval in connection with a Business Combination, the Company’s Sponsor, initial stockholders, officers and directors agreed to vote their Founder Shares (as defined in Note 5), Private Shares (as defined in Note 4) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public stockholder could elect to convert their Public Shares irrespective of whether they vote for or against the proposed transaction or do not vote at all.

F-7

If the Company sought stockholder approval of a Business Combination and it did not conduct conversions pursuant to the tender offer rules, the Amended and Restated Certificate of Incorporation provided that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), would be restricted from converting its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company.

The Company’s Sponsor, initial stockholders, officers and directors agreed (a) to waive their conversion rights with respect to any Founder Shares, Private Shares and Public Shares held by them in connection with the completion of a Business Combination or any amendment to the Amended and Restated Certificate of Incorporation prior thereto and (b) not to propose an amendment to the Amended and Restated Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligations with respect to conversion rights as described in the Company’s final prospectus for its Initial Public Offering or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination activity, unless the Company provided the public stockholders with the opportunity to convert their Public Shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding Public Shares.

The Company had until December 10, 2022 to complete a Business Combination (the “Combination Period”). If the Company was unable to complete a Business Combination within the Combination Period, the Company would have (i) ceased all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeemed the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations, divided by the number of then outstanding Public Shares, which redemption would have completely extinguished public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolved and liquidated, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There would be no conversion rights or liquidating distributions with respect to the Company’s warrants, which would expire worthless if the Company failed to complete a Business Combination within the Combination Period.

The Company’s Sponsor, initial stockholders, officers and directors agreed to waive their liquidation rights with respect to the Founder Shares if the Company had failed to complete a Business Combination within the Combination Period. However, if the Company’s Sponsor, initial stockholders, officers or directors acquired Public Shares in or after the Initial Public Offering, such Public Shares would have been entitled to liquidating distributions from the Trust Account if the Company failed to complete a Business Combination within the Combination Period. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution would have been less than the Initial Public Offering price per Unit ($10.00).

In order to protect the amounts held in the Trust Account, the Sponsor agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company discussed entering into a transaction agreement, reduced the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay the Company’s taxes. This liability would not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver was deemed to be unenforceable against a third party, the Sponsor would not be responsible to the extent of any liability for such third-party claims. The Company would seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company did business, executed agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

Business Combination

On June 21, 2021, we entered into the Business Combination Agreement with Codere Newco, S.A.U., a corporation (sociedad anónima unipersonal) registered and incorporated under the laws of Spain (“Codere Newco”), Servicios de Juego Online S.A.U., a corporation (sociedad anónima unipersonal) registered and incorporated under the laws of Spain (“SEJO”), Codere Online Luxembourg, S.A., a limited liability company (société anonyme) governed by the laws of the Grand Duchy of Luxembourg (“Holdco”) and Codere Online U.S. Corp., a Delaware corporation (“Merger Sub”) (the “Business Combination Agreement”), which provided for the business combination that resulted, among other things, in the Company and SEJO becoming wholly-owned subsidiaries of Holdco (the “Codere Business Combination”). In connection with the Codere Business Combination, Holdco filed a registration statement on Form F-4 (File No. 333-258759) (as subsequently amended, the “Form F-4”) with the U.S. Securities and Exchange Commission (the “SEC”) on August 12, 2021 that included a proxy statement with respect to our special meeting of stockholders which was held on November 18, 2021 to approve the Business Combination Agreement, among other matters, as well as a prospectus of Holdco with respect to the issuance of Holdco securities in the Codere Business Combination.

F-8

Pursuant to the Business Combination Agreement, following the effectiveness of (i) the contribution and exchange, effective at 10:00 a.m. New York time on November 29, 2021 (the “Exchange Effective Time”), by Codere Newco of its ordinary shares of SEJO, all with a nominal value of €1.00 per share, (the “SEJO Ordinary Shares”) to Holdco in exchange for additional ordinary shares of Holdco, with a nominal value of €1.00 per share (the “Holdco Ordinary Shares”), which were subscribed for by Codere Newco (the “Exchange”), as contemplated by and pursuant to the Contribution and Exchange Agreement, dated as of June 21, 2021, by and between Holdco, SEJO and Codere Newco (the “Contribution and Exchange Agreement”) and (ii) the merger of Merger Sub with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of Holdco (the “Merger”) at 12:01 a.m. New York time on November 30, 2021 (the “Merger Effective Time”), the parties consummated the Codere Business Combination and SEJO and the Company became direct wholly-owned subsidiaries of Holdco. Pursuant to the Business Combination Agreement, each of the following transactions occurred in the following order:

● pursuant to the Contribution and Exchange Agreement, Codere Newco, effective on the Exchange Effective Time, contributed its SEJO Ordinary Shares constituting all the issued and outstanding share capital of SEJO to Holdco in exchange for additional Holdco Ordinary Shares, which were subscribed for by Codere Newco. As a result of the Exchange, SEJO became a wholly-owned subsidiary of Holdco and Holdco continued to be a wholly-owned subsidiary of Codere Newco at the Exchange Effective Time;

● after the Exchange and immediately prior to the Merger Effective Time, each share of the Company’s Class B common stock automatically converted into and exchanged for one share of the Company’s Class A common stock (the “Class B Conversion”);

● on the Closing date, pursuant to the Merger, Merger Sub merged with and into the Company, with the Company surviving such merger and becoming a direct wholly-owned subsidiary of Holdco and, in connection therewith, the Company’s corporate name changed to “Codere Online U.S. Corp.”;

● in connection with the Merger, all shares of the Company’s Class A common stock issued and outstanding immediately prior to the Merger Effective Time, but after the Class B Conversion, were contributed to Holdco in exchange for the Merger Consideration (as defined in the Business Combination Agreement) in the form of one Holdco Ordinary Share for each share of the Company’s Class A common stock pursuant to the share capital increase of Holdco by way of the issuance of one Holdco Ordinary Share in consideration of each share of the Company’s Class A common stock issued and outstanding immediately prior to the Merger Effective Time (which for the avoidance of doubt did not include shares of the Company’s Class A common stock as to which redemption rights were exercised) (the “Holdco Capital Increase”), as set forth in the Business Combination Agreement; and

● as of the Merger Effective Time, each warrant of the Company that was outstanding immediately prior to the Merger Effective Time no longer represented a right to acquire one share of the Company’s DD3 Class A common stock and instead represented the right to acquire one Holdco Ordinary Share on substantially the same terms.

Codere Newco held 30,000,000 Holdco Ordinary Shares upon consummation of the Exchange.

At the Merger Effective Time, each share of the Company’s Class A common stock issued and outstanding immediately prior to the Merger Effective Time was exchanged for one validly issued and fully paid Holdco Ordinary Share. 

The terms of the Business Combination Agreement and other related ancillary agreements entered into in connection with the closing of the Codere Business Combination (the “Closing”) are summarized in more detail in our Current Report on Form 8-K filed with the SEC on June 22, 2021 and in the Form F-4.

Liquidity and Management’s Plans

As of September 30, 2021, the Company had approximately $268,360 in cash and a working capital deficit of $583,674. The Company’s liquidity needs through September 30, 2021 and prior to the consummation of the Initial Public Offering were satisfied through the proceeds of $25,000 from the Sponsor to purchase Founders Shares, and loan proceeds from the Sponsor of up to $300,000 under the promissory note (Note 5). The Company borrowed and repaid $105,747 as of the date of the Initial Public Offering. Subsequent to the consummation of the Initial Public Offering, the Company’s liquidity had been satisfied through the net proceeds from the consummation of the Initial Public Offering and the Private Placement held outside of the Trust Account.

Management was of the belief that the funds which the Company had available at September 30, 2021 were insufficient to sustain operations for a period of at least one (1) year from the issuance date of this financial statement. Accordingly, substantial doubt about the Company’s ability to continue as a going concern existed.

On June 21, 2021, the Company entered into the Business Combination Agreement and subsequently on November 30, 2021, the Codere Business Combination closed, which provided the Company access to additional capital that is sufficient to sustain operations and meet obligations as they become due within one year. As such, substantial doubt has been alleviated.

Risks and Uncertainties

Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

F-9

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of the condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2021.

F-10

Marketable Securities Held in Trust Account

At September 30, 2021, substantially all of the assets held in the Trust Account were held in U.S. Treasury Bills.

Class A Common Stock Subject to Possible Redemption

The Company accounted for its Class A common stock subject to possible redemption in accordance with the guidance in ASC 480. Shares of Class A common stock subject to mandatory redemption were classified as a liability instrument and were measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) was classified as temporary equity. At all other times, common stock was classified as stockholders’ equity. The Company’s Class A common stock featured certain redemption rights that were considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at September 30, 2021, Class A common stock subject to possible redemption was presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet.

Warrant Liabilities

The Company accounted for the Private Warrants (as defined below) in accordance with the guidance contained in ASC 815-40, under which the Private Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Under ASC 815-40, the Company’s Private Warrants were not indexed to the Company’s common stock in the manner contemplated by ASC 815-40 because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. Accordingly, the Company classified the Private Warrants as liabilities at their fair value and adjusted the Private Warrants to fair value at each reporting period. These liabilities were subject to re-measurement at each balance sheet date until exercised, and any change in fair value was recognized in the statement of operations. The Private Warrants were valued using a modified Black Scholes model.

Offering Costs

The Company accounted for offering costs in accordance with the guidance contained in ASC 340, Other assets and deferred costs and Staff Accounting Bulletin Topic 5A, Miscellaneous Accounting – Expenses of the Offering. Under the guidance, costs consisting of legal, accounting and other expenses that were incurred directly in relation to the Initial Public Offering were deferred and charged to stockholders’ equity upon consummation of the Initial Public Offering. Offering costs also included underwriting discounts and fees that were due upon consummation of the Initial Public Offering, although these costs were not deferred as they were not incurred until the date of the Initial Public Offering. The Company incurred $2,966,508 related to the issuance of Class A common stock which was charged to stockholders’ equity, consisting of $2,500,000 of underwriting fees and $466,508 of other offering costs.

Income Taxes

The Company followed the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes” (“ASC 740”). Deferred tax assets and liabilities were recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities were measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates was recognized in income in the period that included the enactment date. Valuation allowances were established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions 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. The Company recognized accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. 

F-11

The Company may be subject to potential examination by federal, state and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal, state and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

Net Loss Per Common Share

Net loss per share was computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Shares of common stock subject to possible redemption at September 30, 2021, which were not redeemable and were not redeemable at fair value, were excluded from the calculation of basic net loss per common share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company had not considered the effect of the warrants sold in the Initial Public Offering and the private placement to purchase an aggregate of 370,000 Units in the calculation of diluted loss per share, since the exercise of the warrants was contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. As a result, diluted net loss per common share was the same as basic net loss per common share for the periods presented. 

The Company’s statement of operations included a presentation of net earnings (loss) per share of common stock subject to possible redemption and allocated the net income (loss) into the two classes of stock in calculating net earnings (loss) per common share, basic and diluted. For Class A redeemable common stock, net earnings (loss) per common share was calculated by dividing the net loss by the weighted average number of Class A common stock subject to possible redemption outstanding since original issuance. For Class B non-redeemable common stock, neat earnings (loss) per share was calculated by dividing the net loss by the weighted average number of Class B nonredeemable common stock outstanding for the period. Class B non-redeemable common stock included the Founder Shares as these shares do not have any redemption features and do not participate in the income earned on the Trust Account.

The following table reflects the calculation of basic and diluted net loss per common share (in dollars, except per share amounts):

	For the Period from September 30, 2020 (Inception) Through September 30, 2021
Class A common stock subject to possible redemption
Numerator: Earnings attributable to Class A common stock subject to possible redemption
Net loss	$	(1,194,483	)
Net loss attributable to Class A common stock subject to possible redemption	$	(1,194,483	)
Denominator: Weighted average Class A common stock subject to possible redemption
Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption		10,102,740
Basic and diluted net loss per share, Class A common stock subject to possible redemption	$	(0.12	)
Non-Redeemable Class B common stock
Numerator: Net loss minus net earnings
Net loss	$	(385,644	)
Non-redeemable net loss	$	(385,644	)
Denominator: Weighted average non-redeemable Class B common stock
Basic and diluted weighted average shares outstanding, non-redeemable Class B common stock		3,261,712
Basic and diluted net loss per share, non-redeemable Class B common stock	$	(0.12	)

F-12

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consisted of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company had not experienced losses on this account.

Fair Value Measurements

Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

● Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement” (“ASC 820”), approximated the carrying amounts represented in the condensed balance sheet, primarily due to their short-term nature.

Recent Accounting Standards

In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. We have not yet assessed the impact, if any, that ASU 2020-06 would have on our financial position, results of operations or cash flows.

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed financial statements.

F-13

NOTE 3. INITIAL PUBLIC OFFERING

Pursuant to the Initial Public Offering, the Company sold 12,500,000 Units, which includes a partial exercise by the underwriters of their over-allotment option in the amount of 1,500,000 Units, at a price of $10.00 per Unit. Each Unit consists of one share of Class A common stock and one-half of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 8).

NOTE 4. PRIVATE PLACEMENT

Simultaneously with the closing of the Initial Public Offering, the Sponsor and the Forward Purchase Investors purchased an aggregate of 370,000 Private Units at a price of $10.00 per Private Unit, for an aggregate purchase price of $3,700,000, in a private placement. The Sponsor purchased an aggregate of 296,000 Private Units and Forward Purchase Investors purchased an aggregate of 74,000 Private Units. Each Private Unit consists of one share of Class A common stock (“Private Share”) and one-half of one redeemable warrant (“Private Warrant”). Each whole Private Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 8). A portion of the proceeds from the Private Units were added to the proceeds from the Initial Public Offering held in the Trust Account. The Private Units are identical to the Units sold in the Initial Public Offering, except as described in Note 8. If the Company does not complete a Business Combination within the Combination Period, the proceeds of the sale of the Private Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and underlying securities will be worthless.

Certain funds affiliated with Baron Capital Group, Inc., which are members of the Sponsor, and MG Partners Multi-Strategy Fund LP (collectively, the “Forward Purchase Investors”) entered into contingent forward purchase agreements with the Company as described in Note 6. Contemporaneously with the execution and delivery of the Business Combination Agreement, the Company entered into two separate Subscription Agreements with DD3 Capital Partners S.A. de C.V. (“DD3 Capital”) and Larrain Investment Inc. (“Larrain”) (the “Subscription Agreements”) as described in Note 6.

NOTE 5. RELATED PARTY TRANSACTIONS

Founder Shares

On October 13, 2020, the Sponsor purchased 2,875,000 shares (the “Founder Shares”) of the Company’s Class B common stock for an aggregate price of $25,000. On December 7, 2020, the Company effected a stock dividend of 287,500 shares with respect to the Class B common stock, resulting in an aggregate of 3,162,500 Founder Shares issued and outstanding. All share and per-share amounts have been retroactively restated to reflect the stock dividend effectuated on December 7, 2020. The Founder Shares included an aggregate of up to 412,500 shares subject to forfeiture to the extent that the underwriters’ over-allotment option was not exercised in full or in part, so that the initial stockholders would own, on an as-converted basis, 20.0% of the Company’s issued and outstanding shares after the Initial Public Offering (excluding the Private Shares). As a result of the underwriters’ election to partially exercise their over-allotment option, a total of 37,500 Founder Shares were forfeited, resulting in an aggregate of 3,125,000 Founder Shares issued and outstanding.

The Company’s Sponsor, initial stockholders, officers and directors agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier of one year after the date of the consummation of a Business Combination and the date on which the closing price of the Class A common stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within a 30-trading day period commencing 150 days after a Business Combination, or earlier if, subsequent to a Business Combination, the Company completes a liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.

F-14

Due from Sponsor

As of December 10, 2020, the Company advanced the Sponsor an aggregate of $25,000, which is included in prepaid expenses in the accompanying condensed balance sheet. The outstanding balance of the $25,000 due was repaid on January 11, 2021.

Administrative Services Agreement

The Company entered into an agreement, commencing on December 7, 2020 through the earlier of the Company’s consummation of a Business Combination and its liquidation, to pay the Sponsor a total of up to $10,000 per month for office space, utilities and administrative support. For the period from September 30, 2020 (inception) through September 30, 2021, the Company incurred $100,000, respectively, in fees for these services, of which $80,000 is included in accrued expenses in the accompanying condensed balance sheet at September 30, 2021.

Promissory Note — Related Party

On October 13, 2020, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company could borrow up to an aggregate principal amount of $150,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) March 31, 2021 or (ii) the consummation of the Initial Public Offering. The outstanding balance under the Promissory Note of $105,747 was repaid at the closing of the Initial Public Offering on December 10, 2020.

NOTE 6. COMMITMENTS AND CONTINGENCIES

Registration Rights Agreement

The holders of the Founder Shares, as well as certain holders of the Private Units (and all underlying securities), were entitled to certain registration rights pursuant to a registration rights agreement, dated as of December 7, 2020, among the Company and such holders. Such agreement was terminated and superseded by the Registration Rights and Lock-Up Agreement which the Company, Codere Newco, Holdco, the Sponsor, the Forward Purchase Investors and the other parties thereto entered into at Closing (the “Registration Rights and Lock-Up Agreement”), which provides customary demand and piggyback registration rights. Pursuant to the Registration Rights and Lock-Up Agreement, Holdco agreed that, within 30 calendar days after the Closing date, it will file with the SEC a registration statement to permit the public resale of certain Holdco Ordinary Shares and Holdco warrants (including underlying securities) held by the Holders (as defined in the Registration Rights and Lock-Up Agreement), and that it will use its reasonable best efforts to have the registration statement declared effective as soon as practicable after the filing thereof, but no later than 60 calendar days following the filing deadline, provided that the effectiveness deadline will be extended to 90 calendar days after the filing deadline if the registration statement is reviewed by, and receives comments from, the SEC.

Underwriting Agreement

The underwriters were paid a cash underwriting discount of $0.20 per Unit, or $2,500,000 in the aggregate, payable upon the closing of the Initial Public Offering.

Business Combination Marketing Agreement

The Company engaged the underwriters as an advisor in connection with a Business Combination to assist the Company in holding meetings with its shareholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with a Business Combination, provide financial advisory services to assist the Company in the Company’s efforts to obtain any stockholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company will pay the underwriters a cash fee for such services upon the consummation of a Business Combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds of Initial Public Offering (exclusive of any applicable finders’ fees which might become payable).

F-15

Forward Purchase Agreements

In connection with the Codere Business Combination, (i) Baron Global Advantage Fund, Baron Emerging Markets Fund and Destinations International Equity Fund, certain funds affiliated with Baron Capital Group, Inc. (collectively, “Baron”) elected to purchase an aggregate of 2,500,000 shares of the Company’s Class A common stock for an aggregate purchase price of $25,000,000, at a price of $10.00 per each share of the Company’s Class A common stock, pursuant to the terms of the Forward Purchase Agreement, dated as of November 17, 2020, by and between the Company and Baron, as amended on June 21, 2021 (the “Baron Forward Purchase Agreement”), and (ii) MG Partners Multi-Strategy Fund LP (“MG”) elected to purchase an aggregate of 2,500,000 shares of the Company’s Class A common stock for an aggregate purchase price of $25,000,000, at a price of $10.00 per each share of the Company’s Class A common stock, pursuant to the terms of the Forward Purchase Agreement, dated as of November 19, 2020, by and between DD3 and MG, as amended on June 21, 2021 (the “MG Forward Purchase Agreement”), in each case in a private placement that occurred immediately prior to the Merger.

Subscription Agreements

Contemporaneously with the execution and delivery of the Business Combination Agreement, the Company entered into two separate Subscription Agreements with DD3 Capital and Larrain, in each case to which Holdco is also a party, pursuant to which the Company issued and sold, in a private placement that closed immediately prior to the Merger, (i) an aggregate of 500,000 shares of the Company’s Class A common stock, for an aggregate purchase price of $5,000,000, at a price of $10.00 per each share of the Company’s Class A common stock, to DD3 Capital and its permitted transferees, and (ii) an aggregate of 1,224,000 shares of the Company’s Class A common stock, for an aggregate purchase price of $12,240,000, at a price of $10.00 per each share of the Company’s Class A common stock, to Larrain and its permitted transferees. Holdco also granted certain registration rights to DD3 Capital, Larrain and their permitted transferees under the Subscription Agreements.

Warrant Amendment Agreement

In connection with the Closing of the Codere Business Combination, the Company, Holdco and Continental Stock Transfer & Trust Company, as warrant agent, entered into an agreement at Closing (the “Warrant Amendment Agreement”) to amend the warrant agreement, dated as of December 7, 2020, by and between the Company and Continental, as warrant agent, governing the Public Warrants and Private Warrants entered into by the Company, Holdco and Continental, as warrant agent (the “Original Warrant Agreement”), pursuant to which, among others, as of the Merger Effective Time, (i) each of the issued Public Warrants and Private Warrants that was outstanding immediately prior to the Merger Effective Time ceased to represent a right to acquire one share of the Company’s Class A common stock and instead represented the right to acquire one Holdco Ordinary Share on substantially the same terms as set forth in the Original Warrant Agreement and (ii) the Company assigned to Holdco all of the Company’s right, title and interest in and to the Original Warrant Agreement and Holdco assumed, and agreed to pay, perform, satisfy and discharge in full, all of the Company’s liabilities and obligations under the Original Warrant Agreement arising from and after the Merger Effective Time.

Baron Support Agreement

Contemporaneously with the execution and delivery of the Business Combination Agreement, the Company entered into the Investor Support Agreement with Baron (the “Baron Support Agreement”), pursuant to which Baron irrevocably waived its redemption rights with respect to 996,069 public shares acquired by Baron in the Company’s Initial Public Offering (the “Baron IPO Shares”) and agreed not to (a) redeem, or exercise any of its redemption rights with respect to, any Baron IPO Shares in connection with the Company’s special meeting of stockholders to approve the Business Combination Agreement and the Codere Business Combination and (b) to certain transfer restrictions with respect to the Baron IPO Shares. The Baron Support Agreement and the obligations of Baron under the Baron Support Agreement automatically terminated upon the Closing of the Codere Business Combination. The Baron Support Agreement was subject to customary conditions, covenants, representations and warranties.

Pursuant to the Business Combination Agreement, the Company undertook not to amend, modify, waive or otherwise change any of the Baron Support Agreement, Forward Purchase Agreements and Subscription Agreements without the prior written consent of SEJO, such consent not to be unreasonably withheld, delayed or conditioned.

F-16

NOTE 7. STOCKHOLDERS’ EQUITY

Preferred Stock — At September 30, 2021, the Company was authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designations, voting and other rights and preferences as may have been determined from time to time by the Company’s board of directors. At September 30, 2021, there were no shares of preferred stock issued or outstanding.

Class A Common Stock — At September 30, 2021, the Company was authorized to issue up to 100,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of Class A common stock were entitled to one vote for each share. At September 30, 2021, there were 12,870,000 shares of Class A common stock issued and outstanding, including 12,500,000 shares of Class A common stock subject to possible redemption. 

Class B Common Stock — At September 30, 2021, the Company was authorized to issue up to 10,000,000 shares of Class B common stock with a par value of $0.0001 per share. Holders of Class B common stock were entitled to one vote for each share. At September 30, 2021, there were 3,125,000 shares of Class B common stock issued and outstanding. 

At September 30, 2021, only holders of Class B common stock had the right to vote on the election of directors prior to a Business Combination. Holders of Class A common stock and Class B common stock would vote together as a single class on all other matters submitted to a vote of stockholders, except as required by law. 

After the Exchange and immediately prior to the Merger Effective Time, each share of the Company’s Class B common stock automatically converted into and exchanged for one share of the Company’s Class A common stock (the Class B Conversion).

At February 16, 2022, the Company is authorized to issue up to 1,000 shares of common stock with a par value of $0.01 per share. At February 16, 2022, there were 100 shares of common stock issued and outstanding.

NOTE 8. WARRANTS

In connection with the Closing of the Codere Business Combination, the Company, Holdco and Continental Stock Transfer & Trust Company, as warrant agent, entered into the Warrant Amendment Agreement, pursuant to which, among others, as of the Merger Effective Time, (i) each of the issued Public Warrants and Private Warrants that was outstanding immediately prior to the Merger Effective Time ceased to represent a right to acquire one share of the Company’s Class A common stock and instead represented the right to acquire one Holdco Ordinary Share on substantially the same terms as set forth in the Original Warrant Agreement and (ii) the Company assigned to Holdco all of the Company’s right, title and interest in and to the Original Warrant Agreement and Holdco assumed, and agreed to pay, perform, satisfy and discharge in full, all of the Company’s liabilities and obligations under the Original Warrant Agreement arising from and after the Merger Effective Time.

The Holdco public warrants became exercisable as of December 30, 2021. The Holdco public warrants will expire five years after the consummation of the Codere Business Combination or earlier upon redemption or liquidation. 

Under the terms of the Original Warrant Agreement, Public Warrants were only exercisable for a whole number of shares. No fractional shares were issuable upon exercise of the Public Warrants. The Company could redeem the Public Warrants (excluding the Private Warrants): 

● in whole and not in part; 

● at a price of $0.01 per warrant; 

● at any time after the warrants become exercisable;

● upon not less than 30 days’ prior written notice of redemption to each warrant holder;

F-17

● if, and only if, the reported last sale price of the shares of Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day commencing at any time after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and

● if, and only if, there is a current registration statement in effect with respect to the shares of Class A common stock underlying the warrants.

If and when the warrants became redeemable by the Company, the Company may have exercised its redemption right even if it were unable to register or qualify the underlying securities for sale under all applicable state securities laws. 

Under the terms of the Original Warrant Agreement, if the Company called the Public Warrants for redemption, management would have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the Original Warrant Agreement. The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may have been adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants would not have been adjusted for issuances of Class A common stock at a price below its exercise price. Additionally, in no event would the Company have been required to net cash settle the warrants. If the Company had been unable to complete a Business Combination within the Combination Period and the Company liquidated the funds held in the Trust Account, holders of warrants would not have received any of such funds with respect to their warrants, nor will they have received any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants could have expired worthless. 

In addition, under the terms of the Original Warrant Agreement, if (x) the Company issued additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to have been determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor, initial stockholders or their affiliates, without taking into account any Founder Shares held by the Sponsor, initial stockholders or their affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represented more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Class A common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummated its initial Business Combination (such price, the “Market Value”) was below $9.20 per share, then the exercise price of the warrants would have been adjusted (to the nearest cent) to be equal to 115% of the greater of (i) the Market Value or (ii) the Newly Issued Price, and the $18.00 per share redemption trigger price of the warrants would have been adjusted (to the nearest cent) to be equal to 180% of the greater of (i) the Market Value or (ii) the Newly Issued Price.

The Private Warrants were identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Warrants and the shares of Class A common stock that were issuable upon the exercise of the Private Warrants would not have been transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants would have been exercisable on a cashless basis and would be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants were held by someone other than the initial purchasers or their permitted transferees, the Private Warrants would be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

NOTE 9. FAIR VALUE MEASUREMENTS 

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. 

F-18

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Level 1:	Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2:	Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
Level 3:	Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability.

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Description	Level	September 30, 2021
Assets:
Marketable securities held in Trust Account	1	$	125,056,567
Liabilities:
Warrant Liability – Private Warrants	3	$	223,850

The Private Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the accompanying condensed balance sheet. The Private Warrants are measured at fair value at inception and on a recurring basis, with changes in fair value presented in the condensed statement of operations.

The Private Warrants were valued using a modified Black Scholes model, which is considered to be a Level 3 fair value measurement. The modified Black Scholes model’s primary unobservable input utilized in determining the fair value is the expected volatility of the common stock. The expected volatility as of the valuation dates was implied from the Company’s own Public Warrant pricing.

The following table presents the quantitative information regarding Level 3 fair value measurements of the warrant liability as of September 30, 2021:

Risk-free interest rate		0.98	%
Effective expiration date		12/07/2026
Dividend yield		0.00	%
Expected volatility		18.25	%
Exercise price	$	11.50
Unit Price	$	1.22

F-19

The following table presents the changes in the fair value of Private Warrants:

Fair value as of September 30, 2020 (inception)	$	—
Change in fair value		223,850
Fair value as of September 30, 2021	$	223,850

There were no transfers in or out of Level 3 from other levels in the fair value hierarchy during the period from September 30, 2020 (inception) through September 30, 2021.

NOTE 10. INCOME TAX 

The Company’s net deferred tax assets at September 30, 2021 is as follows:

	September 30,
	2021
Startup/organization expenses	$	256,543
Unrealized gains on marketable securities		(1,341	)
Net operating loss		52,538
Total deferred tax assets		307,740
Valuation allowance		(307,740	)
Deferred tax assets	$	—

The income tax provision for the year ended September 30, 2021 consists of the following:

	September 30,
	2021
Current expense (benefit)
Federal	$	—
State		—
Deferred expense (benefit)
Federal		(307,740	)
State		—
Change in Valuation Allowance		307,740
Income tax provision	$	—

As of September 30, 2021, the Company had a federal net operating loss carryover of $250,181 available to offset future taxable income. The federal net operating loss will be carryforward indefinitely while any state net operating loss will carryforward a maximum of 20 years.

In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax assets, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the year ended September 30, 2021, the change in the valuation allowance was $307,740.

F-20

A reconciliation of the federal income tax rate to the Company’s effective tax rate at September 30, 2021 is as follows:

	September 30,
	2021
Statutory federal income tax rate		21.00	%
State taxes, net of federal tax benefit		0.00	%
Change in fair value of warrant liabilities		(1.52	)%
Valuation allowance		(19.48	)%
Income tax provision		0.00	%

The Company’s effective tax rates for the periods presented differ from the expected (statutory) rates due to changes in fair value in warrants and the recording of full valuation allowances on deferred tax assets.

The Company files income tax returns in the U.S. federal jurisdiction and is subject to examination by the various taxing authorities. The Company’s tax returns for the year ended September 30, 2021 remain open and subject to examination. The Company considers Delaware to be a significant state tax jurisdiction.

NOTE 11. SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements, other than those identified below.

As described above, on November 30, 2021, the Codere Business Combination was completed pursuant to the terms of the Business Combination Agreement, which among other things provided for the Merger. In connection with the consummation of the Codere Business Combination, “DD3 Acquisition Corp. II” was renamed “Codere Online U.S. Corp.” Also in connection with the consummation of the Codere Business Combination, the Company became a direct, wholly-owned subsidiary of Holdco.

On November 30, 2021, the Nasdaq Stock Market LLC filed a Form 25 (Notification of Removal from Listing) with the SEC relating to the delisting of our units, warrants and Class A common stock. As a result, the Company’s units, warrants and Class A common stock were delisted on the Nasdaq. On December 14, 2021, the Company filed a Form 15 certifying the deregistration of its units, warrants and Class A common stock under Section 12(g) of the Exchange Act and suspension of its duty to file reports under Sections 13 and 15(d) of the Exchange Act. The Company’s reporting obligations under Section 15(d) of the Exchange Act have been suspended.

On January 27, 2022, the Company filed amended 10-Q/A Quarterly Reports for the periods ending December 31, 2020, March 31, 2021 and June 30, 2021 to restate the financial statements to correct accounting errors related to the classification Private Placement Warrants and shares subject to possible redemption.

F-21

Codere Online Business

INTERIM COMBINED CARVE-OUT CONDENSED STATEMENTS OF
FINANCIAL POSITION AS OF JUNE 30, 2021 AND DECEMBER 31, 2020

(Thousands of Euros)

	Notes	06/30/2021		12/31/2020
		(Unaudited)		(Audited)
ASSETS
A) NON-CURRENT ASSETS			898		1,244
Intangible assets			782		1,128
Property, plant and equipment			113		107
Right-of-use assets			3		9
B) CURRENT ASSETS			11,087		17,304
Trade receivables and other current assets	5		1,173		1,646
Current financial assets	4		3,330		4,757
Cash and cash equivalents	4		6,584		10,901
TOTAL ASSETS (A+B)			11,985		18,548

	Notes	06/30/2021			12/31/2020
		(Unaudited)			(Audited)
EQUITY AND LIABILITIES
A) EQUITY	6		(7,955	)		(39,925	)
Equity attributable to equity holders of the Parent			(8,080	)		(40,017	)
Equity attributable to non-controlling interest			125			92
B) NON-CURRENT LIABILITIES			—			21,441
Borrowings	7		—			21,441
C) CURRENT LIABILITIES			19,940			37,032
Lease obligations			3			9
Provisions			49			15
Borrowings	7		1,139			17,777
Trade payables and other current liabilities	8		18,749			19,231
TOTAL EQUITY AND LIABILITIES (A+B+C)			11,985			18,548

The accompanying notes 1 to 13 are an integral part of the accompanying Interim Combined Carve-out Condensed Financial Statements.

F-22

Codere Online Business

INTERIM COMBINED CARVE-OUT CONDENSED INCOME STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND JUNE 30, 2020

(Thousands of Euros)

	Notes	06/30/2021			06/30/2020
		(Unaudited)			(Unaudited)
Revenue	10		39,944			29,975
Personnel expenses			(2,985	)		(2,611	)
Depreciation and amortization			(377	)		(543	)
Other operating expenses			(49,695	)		(32,610	)
Operating expenses	10		(53,057	)		(35,764	)
OPERATING INCOME/(LOSS)			(13,113	)		(5,789	)
Finance costs			68			(245	)
Net financial results			68			(245	)
NET INCOME/(LOSS) BEFORE TAX			(13,045	)		(6,034	)
Income tax benefit/(expense)	9		(222	)		(743	)
NET INCOME/(LOSS) FOR THE PERIOD			(13,267	)		(6,777	)
Attributable to equity holders of the Parent			(13,300	)		(6,773	)
Attributable to non-controlling interests			33			(4	)
Basic earnings per share attributable to equity holders of the parent (Euro)	10		(221.67	)		(112.89	)
Diluted earnings per share attributable to equity holders of the parent (Euro)	10		(221.67	)		(112.89	)

The accompanying notes 1 to 13 are an integral part of the accompanying Interim Combined Carve-out Condensed Financial Statements.

F-23

Codere Online Business

COMBINED CARVE-OUT STATEMENTS OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020

(Thousands of Euros)

	06/30/2021			06/30/2020
	(Unaudited)			(Unaudited)
Net income/(loss) for the period		(13,267	)		(6,777	)
Currency translation differences		115			1,419
Income tax impact		—			—
Items that will not be reclassified subsequently to the income statement		115			1,419
Total other comprehensive income/(loss) recognized in the year		115			1,419
Total comprehensive income/(loss) recognized in the year		(13,152	)		(5,358	)
Attributable to:
Equity holders of the Parent		(13,027	)		(5,450	)
Non-controlling interests		(125	)		92

The accompanying notes 1 to 13 are an integral part of the accompanying Interim Combined Carve-out Condensed Financial Statements.

F-24

Codere Online Business

COMBINED CARVE-OUT STATEMENTS OF CHANGES IN EQUITY
AS OF JUNE 30, 2021, DECEMBER 31, 2020 AND JUNE 30, 2020

(Thousands of Euros)

	Attributable to equity holders of the Parent
	Issued capital		Net income/ (loss) for the period			Retained earnings/ (losses)			Net Parent investment			Other comprehensive income/(loss)			Total			Non- controlling interest			Total Equity
Balance at December 31, 2019 (Audited)		60		—			(17,696	)		(13,634	)		(160	)		(31,430	)		97			(31,333	)
Net income/(loss) for the period		—		(6,773	)		—			—			—			(6,773	)		(4	)		(6,777	)
Other comprehensive income/(loss) for the period		—		—			—			—			1,419			1,419			—			1,419
Total comprehensive income/ (loss) for the period		60		(6,773	)		(17,696	)		(13,634	)		1,259			(36,784	)		93			(36,691	)
Appropriation of result		—		6,773			(6,773	)		—			—			—			—			—
Net change in Parent investment		—		—			—			1,512						1,512						1,512
Balance at June 30, 2020 (Unaudited)		60		—			(24,469	)		(12,122	)		1,259			(35,272	)		93			(35,179	)

	Attributable to equity holders of the Parent
	Issued capital		Net income/ (loss) for the period			Retained earnings/ (losses)			Net Parent investment			Other comprehensive income/(loss)		Total			Non- controlling interest		Total Equity
Balance at December 31, 2020 (Audited)		60		—			(33,970	)		(7,056	)		949		(40,017	)		92		(39,925	)
Net income/(loss) for the period		—		(13,300	)		—			—			—		(13,300	)		33		(13,267	)
Other comprehensive income/(loss) for the period		—		—			—			—			115		115			—		115
Total comprehensive income/ (loss) for the period		60		(13,300	)		(33,970	)		(7,056	)		1,064		(53,202	)		125		(53,077	)
Appropriation of result		—		13,300			(13,300	)		—			—		—			—		—
Net change in Parent investment (Note 6)		—		—			—			45,122			—		45,122			—		45,122
Balance at June 30, 2021 (Unaudited)		60		—			(47,270	)		38,066			1,064		(8,080	)		125		(7,955	)

The accompanying notes 1 to 13 are an integral part of the accompanying Interim Combined Carve-out Condensed Financial Statements.

F-25

Codere Online Business

COMBINED CARVE-OUT STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020

(Thousands of Euros)

	Notes	06/30/2021			06/30/2020
		(Unaudited)			(Unaudited)
Net income/(loss) before tax			(13,045	)		(6,034	)
Net financial results			(68	)		245
Operating income/(loss)			(13,113	)		(5,789	)
Non-cash expenses:			321			235
Depreciation and amortization	10		377			543
Movements in provisions			34			(132	)
Expected credit loss			(90	)		(176	)
Changes in working capital:			8,331			4,553
Trade receivables and other current assets	5		5,032			4,625
Trade payables and other current liabilities	8		3,299			(72	)
Income tax paid			(63	)		(4	)
Net cash provided by (used in) operating activities			(4,524	)		(1,005	)
Payment for purchases of property, plant and equipment			(31	)		(52	)
Payments for investments			—			(329	)
Net cash used in investing activities			(31	)		(381	)
Drawdown of other borrowings	7		450			—
Capitalized lease payments (IFRS 16)			(6	)		323
Other lease payments *			(223	)		(223	)
Net cash provided by (used in) financing activities			221			100
Net increase in cash and cash equivalents			(4,334	)		(1,286	)
Cash and cash equivalents at the beginning of the year			10,901			8,018
Effect of changes in exchange rates on cash and cash equivalents			17			207
Cash and cash equivalents at the end of the year			6,584			6,939

* Includes short-term lease payments, payments for leases of low-value assets and variable lease payments.

The accompanying notes 1 to 13 are an integral part of the accompanying Interim Combined Carve-out Condensed Financial Statements.

F-26

Codere Online Business

NOTES TO THE INTERIM COMBINED CARVE-OUT CONDENSED
FINANCIAL STATEMENTS AS OF JUNE 30, 2021 AND DECEMBER 31, 2020 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2021

(Thousands of Euros)

1. BACKGROUND

Codere Online Business (the “Group”) is comprised of the integrated online gambling operations of Codere S.A. and its subsidiaries (“Codere Group”) located in Spain, Luxembourg, Mexico, Colombia, Panama, Italy, Gibraltar, Israel and Malta focused on online gambling and other online services.

Codere Group is a leading international gaming operator that operates slot machines, bingo seats and sports betting terminals in Latin America (Argentina, Colombia, Mexico, Panama and Uruguay), Spain and Italy, across various gaming venues, including gaming halls, arcades, bars, sports betting shops and horse racetracks.

Codere Group’s headquarters are located at Avenida de Bruselas 26, in Alcobendas (Madrid, Spain).

Codere Group has been listed on the Madrid Stock Exchange since October 19, 2007.

The accompanying Interim Combined Carve-out Condensed Financial Statements of the Group have been prepared in connection with the proposed inclusion in a proxy statement/prospectus of Codere Online Luxembourg S.A., registered in Luxembourg as a public limited company (société anonyme) since June 4, 2021 under the laws of Luxembourg with its registered office at 7, rue Robert Stumper, L-2557 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg trade and companies register (Registre de commerce et des sociétés, Luxembourg) under the number B255798 (“Codere Online Luxembourg”), and represent the nine entities and/or businesses described herein that the Codere Group intends to transfer to Codere Online Luxembourg, in connection with a proposed business combination involving (i) the transfer of Servicios de Juego Online S.A. (“SEJO”) to Holdco, in exchange for additional ordinary shares of Holdco to be subscribed for by Codere Newco; (ii) the conversion of each share of DD3 Acquisition Corp. II (“DD3”) Class B common stock into one share of DD3 Class A common stock; (iii) Codere Online U.S. Corp’s merger with and into DD3, with DD3 surviving such merger and becoming a direct wholly-owned subsidiary of Holdco and, in connection therewith, DD3’s corporate name will change to “Codere Online U.S. Corp.”; (iv) the contribution of all shares of DD3 Class A Common Stock issued and outstanding immediately prior to the merger to Holdco in exchange for one Holdco Ordinary Share for each share of DD3 Class A Common Stock pursuant to a share capital increase of Holdco; and (v) the conversion of each DD3 warrant that is outstanding immediately prior to the merger, which will no longer represent a right to acquire one share of DD3 Class A Common Stock and will instead represent the right to acquire one Holdco Ordinary Share on substantially the same terms (collectively, the “Business Combination”). At the end of the process of Business Combination, all these entities will be 100% ownership to the Group except Panama and Mexico, with 75% and 99,99% ownership, respectively.

This transfer will be performed in two steps: (1) the transfer prior to the effectiveness of such proxy statement/prospectus of the relevant entities and businesses that were not direct or indirect subsidiaries or businesses of Servicios de Juego Online, S.A.U. (“SEJO”) to SEJO and (2) the transfer of SEJO to Codere Online Luxembourg in connection with the consummation of the Business Combination.

Spain and Italy were the only two jurisdictions in which existing operating entities, Codere Online, S.A.U. and Codere Scommesse S.r.l., respectively, were going to be transferred to SEJO and as of June 27, 2021, the management of Codere Online, S.A.U. has approved the transfer of the 100% of the equity of Codere Online, S.A.U. to SEJO. The transfer of the 100% of the equity of Codere Scommesse S.r.l. is still in process. In Panama, Colombia and Argentina, new entities have been or will be incorporated with SEJO as sole or majority shareholder. The licenses pursuant to which the Group currently operates in these jurisdictions (in the case of Panama and Colombia) or is expected to begin operating in the near future (in the case of Argentina) will be transferred, together with the existing businesses, to SEJO. In Mexico, the online business will be transferred to SEJO through the consummation of an Asociación en Participación (an unincorporated joint venture which has its own tax identification number) between Libros Foráneos, S.A. de C.V. (the entity which holds the license under which the Group currently operates in this jurisdiction) as asociante, and SEJO as asociado, pursuant to which SEJO will have the right to receive 99,99% of any distributed profits.

F-27

Codere Online Business

NOTES TO THE INTERIM COMBINED CARVE-OUT CONDENSED
FINANCIAL STATEMENTS AS OF JUNE 30, 2021 AND DECEMBER 31, 2020 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2021

(Thousands of Euros)

1. BACKGROUND (cont.)

In the context of the transfers detailed above, the Group does not expect that the standalone online gaming license of Alta Cordillera S.A., a Panamian subsidiary within the Codere Group, will have been transferred to the Group prior to the effectiveness of the prospectus, therefore, an agreement will be entered into among SEJO and Hípica de Panama, S.A. with the same economic effect and benefits to Codere Online Panama S.A. until such a time as the license can be transferred.

In the case of Colombia, the transfer of Codere Colombia S.A. (gaming license allowing for both retails and online betting) to Codere Online Colombia S.A. is dependent on the administrative approval of Coljuegos (the online gambling regulator in Colombia). However, the management of the Group does not expect any delay in obtaining such approval prior to the effectiveness of the prospectus in 2021.

It is important to mention that as a result of the carve-out of the online activity in those legal entities in which online and retail business were coexisting, there were some intercompany balances generated. These balances which represented after carve-out a debt to the retail subsidiary have been forgiven due to the pre-merger actions agreed in the BCA, therefore they have been adjusted to the equity on the remaining subsidiary.

The perimeter of the Group consists of 9 operating and supporting entities (Spain, Mexico, Colombia, Panama, Italy, Gibraltar, Israel and Malta) and 2 holding companies (Spain and Luxembourg).

Entity	Entity Type	Ownership	Location
Codere Online Luxembourg S.A.	Holding Company	100%	Luxembourg
Servicios de Juego Online S.A.	Holding Company	100%	Spain
Codere Online S.A.	Operating Entity	100%	Spain
Codere Colombia S.A. (online business)	Operating Entity	100%	Colombia
Hípica de Panama, S.A. (online business)	Operating Entity	75%	Panama
Libros Foráneos S.A. de CV (online business)	Operating Entity	99.99%	Mexico
Codere Scommese S.R.L.	Operating Entity	100%	Italy
Codere Online Operator LTD	Operating Entity	100%	Malta
Codere Online Management Services LTD	Supporting Entity	100%	Malta
Codere Israel Marketing Support Services LTD	Supporting Entity	100%	Israel
Codere (Gibraltar) Marketing Services LTD	Supporting Entity	100%	Gibraltar

2. BASIS OF PRESENTATION OF THE INTERIM COMBINED CARVE-OUT FINANCIAL CONDENSED STATEMENTS

a) Basis of presentation and comparison of information

The accompanying Interim Combined Carve-out Condensed Financial Statements as of June 30, 2021 and for the six months ended June 30, 2021 and 2020 (the “Interim Combined Carve-out Condensed Financial Statements”), were prepared according to International Accounting Standard 34 (“IAS 34”), “Interim Financial Reporting”. According to IAS 34, interim financial reporting is intended to bring the contents of the Group’s last Combined Carve-out Financial Statements up to date, emphasizing any new activities, events or circumstances that occurred during the six months ended June 30, 2021 but without duplicating the information previously published in the Combined Carve-out Financial Statements. Therefore, in order to properly understand the information included in the accompanying Interim Combined Carve-out Condensed Financial Statements, they must be read together with the Group’s Combined Carve-out Financial Statements.

The Interim Combined Carve-out Condensed Financial Statements of the Group were prepared and approved on October 8, 2021.

F-28

Codere Online Business

NOTES TO THE INTERIM COMBINED CARVE-OUT CONDENSED
FINANCIAL STATEMENTS AS OF JUNE 30, 2021 AND DECEMBER 31, 2020 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2021

(Thousands of Euros)

2. BASIS OF PRESENTATION OF THE INTERIM COMBINED CARVE-OUT FINANCIAL CONDENSED STATEMENTS (cont.)

As explained in Note 1 of the Combined Carve-out Financial Statements, the Group will complete a merger transaction that ultimately results in obtaining control over the combined entities. Since all entities were under the common control and management of Codere Group both before and after the transfer, the transfer was treated as a reorganization of entities under common control, which is outside of the scope of IFRS 3 (Business Combinations).

The Group has used the same accounting policies throughout all of the periods presented in the Interim Combined Carve-out Condensed Financial Statements, which are compliant with IFRS effective at the end of June 30, 2021.

a.1.) Going concern

The Interim Combined Carve-out Condensed Financial Statements present negative equity of 7.8 million euros as of June 30, 2021 and 39.9 million euros as of December 31, 2020. This negative equity comes from negative results generated in previous years, due to the investment made in the project since its origin.

Additionally, the Group had negative working capital amounting to 19.7 million euros at the end of 2020 and 8.7 million euros at the end of June 2021.

The Group has limited operating history and the business has funded its operations primarily through short-term debts with the Codere Group. Since its inception, the Group has incurred recurring losses and negative cash flows from operations including net losses of €13.3 million for the first half of 2021 and €16.3 million for the year 2020. At the end of the reporting period as of June 30, 2021, the Group expects to continue to generate operating losses through 2023. As of June 30 2021, the Group had €6.6 million in cash, of which €2.8 million was restricted. Securing the financing of development activities and operations represents an ongoing challenge for the Group. As of August 31, 2021, the Group had cash and cash equivalents of €6.7 million, of which €3.2 million was restricted.

It is important to mention that in the first half of 2021 the Group reduced their debt through a conversion into equity of 43.4 million euros. The debt conversion into equity at June 30, 2021, and approved on the same date, was formalized between Codere España S.A. and the Group for 28.1 million euros, Codere Newco and Codere Online Management Services for 4.4 million euros, Codere Newco and Servicios de Juego Online S.A. for 9.5 million euros and Codere Scommesse S.r.l. and Corede Italy S.A.U. for 1.4 million euros.

Based on the business plan, the Group depends on additional financing for additional development activities and operations. Management plans to finance these investments and costs with the contemplated US public listing via a merger with a Special Purpose Acquisition Company (“SPAC”) transaction expected to be completed in the last quarter of 2021. The timely realization of the transaction is crucial for the Group’s ability to continue as a going concern.

Codere Group has entered into a business combination agreement (the “BCA”) relating to a transaction involving the disposal of a minority interest in Codere Group’s online business. Codere Group will contribute the Group to a newly created Luxembourg holding company, Codere Online Luxembourg S.A., which in turn through a merger will acquire DD3 Acquisition Corp II, a listed company (“SPAC”), a transaction which is expected to be completed in the fourth quarter of 2021. The terms of the transaction are set forth in the BCA, approved by the board of directors of Codere, S.A.

Four institutional investors have committed to make a private investment in the amount of $67 million U.S. dollars to be closed immediately prior to the online transaction and one of them has additionally committed to not redeem the $10 million U.S. dollars in SPAC shares it holds resulting in minimum proceeds from the transaction of $77 million U.S. dollars (approximately 65.0 million euros).

F-29

Codere Online Business

NOTES TO THE INTERIM COMBINED CARVE-OUT CONDENSED
FINANCIAL STATEMENTS AS OF JUNE 30, 2021 AND DECEMBER 31, 2020 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2021

(Thousands of Euros)

2. BASIS OF PRESENTATION OF THE INTERIM COMBINED CARVE-OUT FINANCIAL CONDENSED STATEMENTS (cont.)

The SPAC investors will have the option to redeem their existing cash investment in the SPAC of $115 million U.S. dollars held in a trust account, resulting in proceeds of between $77 million U.S. dollars and $192 million U.S. dollars depending on redemptions and before expenses.

Members of a majority group of Codere Group’s bondholders (the Ad Hoc Committee) consented in advance of the formal consent solicitation to vote in favor of the transaction. Codere Group confirmed on July 6, 2021, that the consent solicitation procedures have been completed and the approvals and amendments to the applicable corporate debt documents have been approved.

In its going concern assessment, the Group’s management has developed a business plan until 2027, taking into account the completion of the transaction. This plan envisages that operating negative cash flows are expected during the first few years, although it is important to mention that this trend reverts to positive cash flows in 2024, which is when cash breakeven is expected to be reached.

In case that the planned transaction does not reach the required level of financing, Codere Online Business would need to seek additional funding from the Codere Group or other means or delay expenses. Management has developed a business plan assuming the SPAC transaction does not take place and marketing initial expenses and other investments are delayed. Under this business plan, positive cash flows are expected in 2022 although of course in this case revenue growth is harmed due to the decrease on investment. There is no certainty that the Group will be successful in obtaining such additional funding, if needed or that the business plan will be achieved.

Based on its recurring losses from operations since inception, expectation of continuing operating losses through 2023 and the need to raise additional capital to finance its future operations, the Group has concluded that there is substantial doubt about its ability to continue as a going concern. The Interim Combined Carve-out Condensed Financial Statements do not include any adjustments that might result from the outcome of this uncertainty. Accordingly, the Interim Combined Carve-out Interim Condensed Financial Statements have been prepared on a basis that assumes the Group will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

a.2.) Changes in perimeter

The accompanying Interim Combined Carve-out Condensed Financial Statements include Codere Online Luxembourg S.A. which was registered in Luxembourg as of June 4, 2021 and has been included as a sister entity of SEJO in the perimeter of Codere Online Business as of June 30, 2021, and it will become the head company of the Group.

a.3.) Accounting estimates and judgments

The preparation of these Interim Combined Carve-out Condensed Financial Statements requires that management make some judgments, estimates and assumptions that affect the application of accounting policies and the balances of assets, liabilities, income and expenses. The estimates and related assumptions are based on historical experience and other factors that are understood as reasonable under the circumstances.

b) Accounting policies

The accompanying Interim Combined Carve-out Condensed Financial Statements were prepared using Codere Group’s historical basis in the assets and include all revenues, expenses, assets and liabilities attributed to the Group. In addition, other operating expenses include certain general and administrative services provided by Codere Group. The Group believes that by including these costs, the combined carve-out income statements include a reasonable estimate of actual costs incurred to operate the business. However, such expenses may not be indicative of the actual level of expense that would have been incurred by the Group if it had operated as an independent, publicly-traded company during the precedent periods or of the costs expected to be incurred in the future. In the opinion of management, the intercompany eliminations and adjustments necessary for a fair presentation of the Interim Combined Carve-out Condensed Financial Statements in accordance with IFRS as issued by IASB have been made.

F-30

Codere Online Business

NOTES TO THE INTERIM COMBINED CARVE-OUT CONDENSED
FINANCIAL STATEMENTS AS OF JUNE 30, 2021 AND DECEMBER 31, 2020 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2021

(Thousands of Euros)

2. BASIS OF PRESENTATION OF THE INTERIM COMBINED CARVE-OUT FINANCIAL CONDENSED STATEMENTS (cont.)

The accounting policies used in the preparation of the accompanying Interim Combined Carve-out Condensed Financial Statements are the same as those applied in the Combined Carve-out Financial Statements, since none of the standards, interpretations or modifications that are applicable have had an impact on the Group’s accounting policies for the six months ended June 30, 2021.

New IFRS, IFRIC and amendments to IFRS not effective as of June 30, 2021

As of the approval date of the Interim Combined Carve-out Condensed Financial Statements, the following standards, amendments and interpretations had been published by the IASB, but their application was not mandatory:

Standards, amendments and interpretations	Description	Mandatory application for financial years starting on or after:
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 – Benchmark Interest Rate Reform – Stage 2	Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 related to the ongoing benchmark reform (Phase 2).	1 June 2021
Amendment to IFRS 4 – Deferred Application of IFRS 9	Deferred application of IFRS 9 to 2023	1 June 2021
Amendment to IFRS 3 – Reference to the Conceptual Framework	IFRS 3 is updated to align the definitions of assets and liabilities in a business combination with those in the Conceptual Framework.	1 January 2022
Amendment to IAS 16 – Proceeds Before Intended Use	The amendment prohibits deducting any proceeds from the sale of items produced while the company is preparing an asset for its intended use from the cost of an item of property, plant and equipment.	1 January 2022
Amendment to IAS 37 – Onerous Contracts – Cost of Fulfilling a Contract	The amendment explains that the direct cost of fulfilling a contract includes the incremental costs of fulfilling that contract and an allocation of other costs directly related to the performance of the contract.	1 January 2022

F-31

Codere Online Business

NOTES TO THE INTERIM COMBINED CARVE-OUT CONDENSED
FINANCIAL STATEMENTS AS OF JUNE 30, 2021 AND DECEMBER 31, 2020 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2021

(Thousands of Euros)

2. BASIS OF PRESENTATION OF THE INTERIM COMBINED CARVE-OUT FINANCIAL CONDENSED STATEMENTS (cont.)

Standards, amendments and interpretations	Description	Mandatory application for financial years starting on or after:
Annual Improvements to IFRS 2018 – 2020.	Minor Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41	1 January 2022
Amendments to IAS 1– Presentation of Financial Statements	Clarifications regarding the presentation of liabilities as current and non-current.	1 January 2023
IFRS 17 – Insurance contracts (includes amendment published on 25 June 2020)	Replaces IFRS 4 and clarifies the principles of registration, measurement, presentation and disclosure of insurance contracts in order to ensure that the entity provides relevant and reliable information that allows the users of the information to determine the effects of the contracts on their financial statements.	1 January 2023
Amendment of IAS 8 – Accounting policies, changes accounting estimates and errors: Definition of accounting estimates	The amendment will help to differentiate between changes in accounting estimates and changes in accounting policies	1 January 2023
Amendments to IAS 1 – Presentation of Financial Statements. Disclosure of accounting policies	The amendment will help improve disclosures on accounting policies to provide more useful information to investors and other primary users of financial statements.	1 January 2023

With regard to IFRS 9, IAS 39 and IFRS 7, IFRS 4 and IFRS 16, the IASB continues to develop guidance and amendments to address the various accounting considerations that may arise when the various Interbank Offered Rates (“IBORs”) are amended or replaced by others. In this second phase, certain practical solutions, clarifications and exceptions are proposed in order for undertakings to better reflect financial assets, financial liabilities and lease liabilities on their financial statements as a result of the IBOR reform.

The Group estimates that no standards, amendments and interpretations in the preceding table will have a significant impact on the combined carve-out financial statements in the initial period of application.

F-32

Codere Online Business

NOTES TO THE INTERIM COMBINED CARVE-OUT CONDENSED
FINANCIAL STATEMENTS AS OF JUNE 30, 2021 AND DECEMBER 31, 2020 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2021

(Thousands of Euros)

3. SEGMENT INFORMATION

The following tables break down certain of the information presented in the Interim Combined Carve-out Condensed Income Statements for the six months ended June 30, 2021 and 2020 by the Group’s operating segments (amounts expressed in thousands of euros) Gibraltar and Luxembourg holding company have been grouped and reported under “Supporting”.

06/30/2021	Spain			Mexico			Colombia			Other Operations			Supporting			Eliminations			Total Group
Revenue		25,641			11,549			2,048			483			19,019			(18,796	)		39,944
Personnel expenses		(155	)		(3	)		(52	)		(91	)		(2,684	)		—			(2,985	)
Depreciation and amortization		(93	)		(2	)		(1	)		(50	)		(231	)		—			(377	)
Other operating expenses		(27,543	)		(16,391	)		(3,750	)		(674	)		(20,116	)		18,779			(49,695	)
Operating expenses		(27,791	)		(16,396	)		(3,803	)		(815	)		(23,031	)		18,779			(53,057	)
OPERATING INCOME/(LOSS)		(2,150	)		(4,847	)		(1,755	)		(332	)		(4,012	)		(17	)		(13,113	)
Finance income		(2	)		192			3			3			188			(251	)		133
Finance costs		—			(9	)		(3	)		(39	)		(255	)		241			(65	)
Net financial results		(2	)		183			—			(36	)		(67	)		(10	)		68
NET INCOME/(LOSS) BEFORE TAX		(2,152	)		(4,664	)		(1,755	)		(368	)		(4,079	)		(27	)		(13,045	)
Income tax benefit/(expense)		181			—			—			—			(403	)		—			(222	)
NET INCOME/(LOSS) FOR THE PERIOD		(1,971	)		(4,664	)		(1,755	)		(368	)		(4,482	)		(27	)		(13,267	)
Attributable to equity holders of the Parent		(1,971	)		(4,664	)		(1,755	)		(401	)		(4,482	)		(27	)		(13,300	)
Attributable to non-controlling interests		—			—			—			33			—			—			33

06/30/2020	Spain			Mexico			Colombia			Other Operations			Supporting			Eliminations			Total Group
Revenue		21,512			6,940			870			118			13,991			(13,456	)		29,975
Personnel expenses		(129	)		(9	)		(57	)		(85	)		(2,331	)		—			(2,611	)
Depreciation and amortization		(287	)		(1	)		—			—			(255	)		—			(543	)
Other operating expenses		(18,857	)		(10,299	)		(1,265	)		(181	)		(15,435	)		13,427			(32,610	)
Operating expenses		(19,273	)		(10,309	)		(1,322	)		(266	)		(18,021	)		13,427			(35,764	)
OPERATING INCOME/(LOSS)		2,239			(3,369	)		(452	)		(148	)		(4,030	)		(29	)		(5,789	)
Finance income		—			17			—			—			285			(255	)		47
Finance costs		(4	)		(1	)		—			(55	)		(328	)		96			(292	)
Net financial results		(4	)		16			—			(55	)		(43	)		(159	)		(245	)
NET INCOME/(LOSS) BEFORE TAX		2,235			(3,353	)		(452	)		(203	)		(4,073	)		(188	)		(6,034	)
Income tax benefit/(expense)		(559	)		—			—			62			(245	)		(1	)		(743	)
NET INCOME/(LOSS) FOR THE PERIOD		1,676			(3,353	)		(452	)		(141	)		(4,318	)		(189	)		(6,777	)
Attributable to equity holders of the Parent		1,676			(3,353	)		(452	)		(137	)		(4,318	)		(189	)		(6,773	)
Attributable to non-controlling interests		—			—			—			(4	)		—			—			(4	)

F-33

Codere Online Business

NOTES TO THE INTERIM COMBINED CARVE-OUT CONDENSED
FINANCIAL STATEMENTS AS OF JUNE 30, 2021 AND DECEMBER 31, 2020 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2021

(Thousands of Euros)

3. SEGMENT INFORMATION (cont.)

The following tables break down certain of the information presented in the Interim Combined Carve-out Condensed Statements of Financial Position as of June 30, 2021 and December 31, 2020 by the Group’s operating segments (amounts expressed in thousands of euros) Gibraltar and Luxembourg holding company have been grouped and reported under “Supporting”.

06/30/2021	Spain		Mexico			Colombia			Other Operations			Supporting			Eliminations			Total Group
Non-current assets		124		14			6			148			9,044			(8,438	)		898
Current assets		23,140		1,834			951			587			25,627			(41,052	)		11,087
Trade receivables and other current assets		16,786		—			1			59			24,108			(39,781	)		1,173
Current financial assets		2,089		975			330			198			1,039			(1,301	)		3,330
Cash and cash equivalents		4,265		859			620			330			480			30			6,584
Total Assets		23,264		1,848			957			735			34,671			(49,490	)		11,985
EQUITY		11,063		(9,160	)		(2,345	)		614			(5,903	)		(2,223	)		(7,955	)
CURRENT LIABILITIES		12,201		11,008			3,302			121			40,574			(47,267	)		19,940
Lease obligations		3		—			—			—			—			—			3
Provisions		—		—			—			—			49			—			49
Borrowings		3,912		—			—			(36	)		24,996			(27,733	)		1,139
Trade payables and other current liabilities		8,286		11,008			3,302			157			15,529			(19,534	)		18,749
Total EQUITY AND LIABILITIES		23,264		1,848			957			735			34,671			(49,490	)		11,985

12/31/2020	Spain			Mexico			Colombia			Other Operations			Supporting			Eliminations			Total Group
Non-current assets		213			3			6			197			9,159			(8,334	)		1,244
Current assets		21,734			5,047			1,186			651			14,891			(26,205	)		17,304
Trade receivables and other current assets		13,605			—			—			486			12,885			(25,330	)		1,646
Current financial assets		3,020			1,025			408			129			1,050			(875	)		4,757
Cash and cash equivalents		5,109			4,022			778			36			956			—			10,901
Total Assets		21,947			5,050			1,192			848			24,050			(34,539	)		18,548
EQUITY		(15,232	)		(5,462	)		(1,001	)		(1,164	)		(16,823	)		(243	)		(39,925	)
NON-CURRENT LIABILITIES		21,191			—			—			—			250			—			21,441
CURRENT LIABILITIES		15,988			10,512			2,193			2,012			40,623			(34,296	)		37,032
Lease obligations		9			—			—			—			—			—			9
Provisions		—			—			—			—			15			—			15
Borrowings		7,391			—			—			1,238			31,286			(22,138	)		17,777
Trade payables and other current liabilities		8,588			10,512			2,193			774			9,322			(12,158	)		19,231
Total EQUITY AND LIABILITIES		21,947			5,050			1,192			848			24,050			(34,539	)		18,548

The Group does not have any customers that individually account for 10% or more of its interest and income for the six months ended June 30, 2021 and 2020.

F-34

Codere Online Business

NOTES TO THE INTERIM COMBINED CARVE-OUT CONDENSED
FINANCIAL STATEMENTS AS OF JUNE 30, 2021 AND DECEMBER 31, 2020 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2021

(Thousands of Euros)

4. FINANCIAL ASSETS

The breakdown of the carrying amount of the items presented under this heading at June 30, 2021 and December 31, 2020 is as follows:

06/30/2021	Amortized Cost Debt Instruments		Carrying Amount		Fair Value
Current financial assets:		11,087		11,087		11,087
Trade receivables and other current assets (Note 5)		1,173		1,173		1,173
Current financial assets		3,330		3,330		3,330
Of which:
with related parties (Note 11)		15		15		15
Cash and cash equivalents		6,584		6,584		6,584

12/31/2020	Amortized Cost Debt Instruments		Carrying Amount		Fair Value
Current financial assets:		17,304		17,304		17,304
Trade receivables and other current assets (Note 5)		1,646		1,646		1,646
Current financial assets		4,757		4,757		4,757
Of which:
with related parties (Note 11)		—		—		—
Cash and cash equivalents		10,901		10,901		10,901

Cash and cash equivalents include restricted cash which corresponds to cash from Spanish clients where the regulation obliges the Company to maintain 1 euro as restricted cash for each euro the customer has in the virtual wallet. As of June 30, 2021 and December 31, 2020, it amounted to 2,886 and 2,647 thousand euros, respectively.

Trade receivables and other current assets mainly include deposits made by customers through retail sport betting terminals, owned by other entities of Codere Group, to their online wallets and amounted to 357 and 498 thousand euros as of June 30, 2021 and December 31, 2020, respectively.

Current financial assets mainly correspond to deposits made by customers through payment service providers to their online wallets. Most of the current financial assets correspond to the online wallets and amounted to 3,327 and 4,412 thousand euros as of June 30, 2021 and December 31, 2020, respectively. These deposits are normally settled and appear in the online account between one to fifteen days after the transaction, depending on each payment service provider and are recognized as current financial assets.

Current financial assets from related parties correspond to the tax returns from Codere Group (specifically from Codere Newco), by which the Group has recognized a receivable (see Note 11) amounting to 15 and 0 thousand euros as of June 30, 2021 and December 31, 2020, respectively. These receivables are normally recognized as current financial assets.

The expected credit losses recognized on current financial assets as of June 30, 2021 and December 31, 2020 amounted to 55 and 49 thousand euros, respectively.

F-35

Codere Online Business

NOTES TO THE INTERIM COMBINED CARVE-OUT CONDENSED
FINANCIAL STATEMENTS AS OF JUNE 30, 2021 AND DECEMBER 31, 2020 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2021

(Thousands of Euros)

5. TRADE RECEIVABLES AND OTHER CURRENT ASSETS

The breakdown of the items presented under this heading at June 30,2021 and December 31, 2020 is as follows:

	06/30/2021			12/31/2020
Trade receivables:
Other receivables from the Codere Group companies (Note 11)		360			936
Impairment of trade receivables		(6	)		(101	)
Other current assets:
Current tax asset (VAT)		171			319
Prepayments		532			254
Other receivables		116			238
Total		1,173			1,646

The movement in the allowance for impairment of accounts receivable as of June 30, 2021 and December 31, 2020 is as follows:

Expected credit loss as of 12/31/2019	30
Additions	71
Reversal	—
Expected credit loss as of 12/31/2020	101
Additions	—
Reversal	(95	)
Expected credit loss as of 06/30/2021	6

6. EQUITY

Although the Group is not an existing legal entity and legal share capital does not exist for the accompanying Interim Combined Carve-out Condensed Financial Statements, the Group is presenting separately in Equity the legal share capital of SEJO, the Group holding company, with the historical investment in Codere Online Management Services Ltd., Codere Online Operator, Ltd., Codere Israel Marketing Support Services, Ltd. and Codere (Gibraltar) Marketing Services Ltd. This subgroup was historically exempt from consolidation because it was consolidated in the financial statements of Codere.S.A.

Retained earnings represents the historical results of SEJO and its subsidiaries together with the combined result of the periods presented.

The net change in Parent investment as of June 30, 2021 and December 31,2020 amounted to 45,122 thousand euros and 6,578 thousand euros, respectively. It is comprised of the following indebtedness conversion into equity:

● Codere España S.A. and the Group for 28.1 million euros (27.8 million euros correspond to the borrowings — Note 7 and 0.3 million euros correspond to the trade payables — Note 8).

● Codere Newco and Servicios de Juego Online S.A. for 9.5 million euros (9.3 million euros correspond to the borrowings — Note 7 and 0.2 million euros correspond to the trade payables — Note 8).

● Codere Scommesse S.r.l. and Corede Italy S.A.U. for 1.4 million euros (Note 7).

● Codere Newco and Servicios de Juego Online S.A. for 4.4 million euros (Note 8).

● Latam companies for 1.7 million euros. (Note 8).

F-36

Codere Online Business

NOTES TO THE INTERIM COMBINED CARVE-OUT CONDENSED
FINANCIAL STATEMENTS AS OF JUNE 30, 2021 AND DECEMBER 31, 2020 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2021

(Thousands of Euros)

6. EQUITY (cont.)

There was no impact to the Interim Combined Carve-out Condensed Income Statement for the six months ended June 30, 2021 since there was no difference between the carrying amount and the fair value.

Equity attributable to non-controlling interest as of June 30, 2021 and December 31, 2020 amounted to 125 and 92 thousand euros, respectively, which represents 25% of minority shareholders interest in the historical online business activity the Group has carried out through Hipica de Panama S.A.

Net Parent investment represents the Codere Group’s net investment in the entities included in the accompanying Interim Combined Carve-out Condensed Financial Statements.

7. BORROWINGS

The breakdown of the residual maturity contractual undiscounted cash flows of the financial liabilities of the Group as of June 30, 2021 and December 31, 2020 is as follows:

	Current		Non-current
June 30, 2021	2022		2023		2024		2025		2026		Subsequent years		Non-current		Total
Other borrowings		1,139		—		—		—		—		—		—		1,139
Of which:
to related parties (Note 11)		1,139		—		—		—		—		—		—		1,139
Total		1,139		—		—		—		—		—		—		1,139

	Current		Non-current
December 31, 2020	2021		2022		2023		2024		2025		Subsequent years		Non-current		Total
Loans		—		6,000		426		11,515		3,500		—		21,441		21,441
Other borrowings		17,777		—		—		—		—		—		—		17,777
Of which:
to related parties (Note 11)		17,777		6,000		426		11,515		3,500		—		21,441		39,218
Total		17,777		6,000		426		11,515		3,500		—		21,441		39,218

Financial liabilities associated with financing activities

The following tables present details regarding the changes in financial liabilities as of June 30, 2021 and December 31, 2020 that arise from financial activities:

06/30/2021	Balance at 12/31/2020		Drawdown of related party debt		Related party non- cash receivable		Related party non- cash settlement			Foreign exchange movement		Changes in fair value		Balance at 06/30/2021
Loans		21,441		—		—		(21,441	)		—		—		—
Other borrowings		17,777		450		—		(17,088	)		—		—		1,139
Total		39,218		450		—		(38,529	)		—		—		1,139

F-37

Codere Online Business

NOTES TO THE INTERIM COMBINED CARVE-OUT CONDENSED
FINANCIAL STATEMENTS AS OF JUNE 30, 2021 AND DECEMBER 31, 2020 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2021

(Thousands of Euros)

7. BORROWINGS (cont.)

12/31/2020	Balance at 12/31/2019		Drawdown of related party debt		Related party non- cash receivable		Related party non- cash settlement			Foreign exchange movement		Changes in fair value		Balance at 12/31/2020
Loans		21,441		—		—		—			—		—		21,441
Other borrowings		30,236		245		—		(12,704	)		—		—		17,777
Total		51,677		245		—		(12,704	)		—		—		39,218

As described in Note 6, the debt conversion into equity at June 30, 2021 through borrowings amounted to 38.5 million euros.

Other borrowings correspond to short-term loans, mainly composed of debt with entities from the Codere Group and amounted to 1,139 and 17,777 thousand euros as of June 30, 2021 and December 31, 2020, respectively.

8. TRADE PAYABLES AND OTHER CURRENT LIABILITIES

The composition of trade payables and other current liabilities as of as of June 30, 2021 and December 31, 2020 is as follows:

	06/30/2021		12/31/2020
Trade payables		12,303		13,017
Customer online wallets		3,951		4,103
Other current liabilities		2,387		2,014
Accruals		108		97
Total		18,749		19,231
Of which:
with related parties (Note 11)		2,978		1,479

The customer online wallets are the net difference between funds deposited by customers, plus winning wagers, less losing wagers and less customers withdrawals.

The details of other current liabilities as of June 30, 2021 and December 31, 2020 is as follows:

	06/30/2021		12/31/2020
Accrued salaries		312		232
Current tax liabilities		1,678		1,510
Others		397		272
Total		2,387		2,014

As described in Note 6, the debt conversion into equity at June 30, 2021 through trade payables and other current liabilities amounted to 4.9 million euros. The most significant was one affecting the trade payables from Codere Online Management Services LTD amounting to 4.4 million euros.

F-38

Codere Online Business

NOTES TO THE INTERIM COMBINED CARVE-OUT CONDENSED
FINANCIAL STATEMENTS AS OF JUNE 30, 2021 AND DECEMBER 31, 2020 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2021

(Thousands of Euros)

9. INCOME TAX

Reconciliation of book net income/(loss) before taxes to taxable income

The reconciliation between book net income/(loss) before tax and the income tax benefit/(expense) from continuing operations at June 30, 2021 is as follows:

	06/30/2021
Accounting net income/(loss) before tax		(13,045	)
At Codere Online statutory income tax rate (25%)		(3,261	)
Permanent differences		4,666
Effect of different rates in different jurisdictions		(1,825	)
Offsetting tax income		198
Income tax benefit/(expense)		(222	)
Effective tax rate		(1.70	%)
Of which —		—
Current tax expense		(222	)
Deferred tax benefit/(expense)		—
Total income tax benefit/(expense)		(222	)

10. REVENUE AND EXPENSES

Revenues

The breakdown of the Group’s revenues for the six months ended June 30, 2021 and 2020 is as follows:

	06/30/2021		06/30/2020
Online sports betting		23,470		16,573
Online casino wagering		16,474		13,402
Total		39,944		29,975

No one customer contributed more than 10% of revenue for the six months ended June 30, 2021 and 2020.

Additionally, the distribution of sales by geographical market during the reporting period is as follows:

	06/30/2021		06/30/2020
Spain		25,641		21,513
Mexico		11,549		6,939
Colombia		2,048		460
Others		706		1,063
Total		39,944		29,975

F-39

Codere Online Business

NOTES TO THE INTERIM COMBINED CARVE-OUT CONDENSED
FINANCIAL STATEMENTS AS OF JUNE 30, 2021 AND DECEMBER 31, 2020 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2021

(Thousands of Euros)

10. REVENUE AND EXPENSES (cont.)

Personnel expenses

The heading personnel expenses of the attached Interim Combined Carve-out Condensed Income Statements for the six months ended June 30, 2021 and 2020 includes expenses for wages, salaries, benefits (and other similar concepts) and social security and other social contributions expenses payable by the Group.

	06/30/2021		06/30/2020
Wages, salaries and similar		2,546		2,215
Social security contributions payable by the Group		439		396
Total		2,985		2,611

Depreciation and amortization

The breakdown of depreciation and amortization in the Interim Combined Carve-out Condensed Income Statements for the six months ended June 30, 2021 and 2020 is as follows:

	06/30/2021		06/30/2020
Depreciation of property, plant and equipment		25		19
Amortization of intangible assets		346		493
Amortization of right-of-use assets		6		31
Total		377		543

Other operating expenses

The breakdown of other operating expenses for the six months ended June 30, 2021 and 2020 is as follows:

	06/30/2021		06/30/2020
Gambling taxes		4,437		3,530
Leases		287		258
Utilities, repairs and maintenance		410		525
Professional services and other expenses		19,426		10,874
Casino license royalties		1,977		1,785
Marketing expenses		23,158		15,638
Total		49,695		32,610

The Group recognizes lease payments as an operating expense on a straight-line basis over the term of the lease for the short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value. The Group has also recognized the cost of doing business (costs that were incurred by the Codere Group, which were considered to be common expenses, and therefore, an allocation of these common expenses was performed in order to reflect the portion of these expenses related to the Group) within leases, which amounted to 64 thousand euros for the six months ended June 30, 2021 (64 thousand euros as of June 30, 2020).

Professional services and other expenses mainly include: (i) streaming services contracted to external parties offered to our customers as a complement to our sports betting offer, (ii) the payment processing which allow our customers to deposit and withdraw using platforms and (iii) also some of our most popular sports odds are obtained through external providers. Additionally, certain other expenses, such as those relating to marketing and customer relationship management (CRM) tools, are included in this detail.

F-40

Codere Online Business

NOTES TO THE INTERIM COMBINED CARVE-OUT CONDENSED
FINANCIAL STATEMENTS AS OF JUNE 30, 2021 AND DECEMBER 31, 2020 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2021

(Thousands of Euros)

10. REVENUE AND EXPENSES (cont.)

Earnings per share

Basic earnings per share amounts are calculated by dividing (a) the net income/(loss) for the period attributable to equity holders of the Parent by (b) the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share amounts are calculated by dividing the net income/(loss) for the period attributable to ordinary equity holders of the Parent by the weighted average number of ordinary shares plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares, if any.

Both basic and diluted earnings per share attributable to equity holders are calculated based on the following data, in each case for the six months ended June 30, 2021 and 2020:

	06/30/2021			06/30/2020
Net income/(loss) attributable to the equity holders of the Parent (thousand euros)		(13,300	)		(6,773	)
Weighted average number of shares outstanding		60,000			60,000
Adjusted number of shares		—			—
Basic earnings per share (euros)		(221.67	)		(112.89	)
Diluted earnings per share (euros)		(221.67	)		(112.89	)

11. RELATED PARTIES

Details of transactions between the Group and other related parties are disclosed below.

Balance at 06/30/2021	Related companies	Current financial assets (Note 4)		Trade receivables (Note 5)		Borrowings (Note 7)		Trade payables and other current liabilities (Note 8)
Codere Italia S.P.A.	Subsidiary of Codere Group		—		—		4		—
King Bingo S.R.L.	Subsidiary of Codere Group		—		3		—		3
Codere Apuestas España S.A.	Subsidiary of Codere Group		—		—		—		1,525
Codere Newco S.A.U.	Subsidiary of Codere Group		15		33		350		838
Other retail companies	Subsidiary of Codere Group		—		324		785		612
			15		360		1,139		2,978

Balance at 12/31/2020	Related companies	Trade receivables (Note 5)		Borrowings (Note 7)		Borrowings (Note 7)		Trade payables and other current liabilities (Note 8)
Codere Apuestas Galicia S.L.	Subsidiary of Codere Group		463		—		—		—
Codere Italia S.P.A.	Subsidiary of Codere Group		435		—		1,339		101
King Bingo S.R.L.	Subsidiary of Codere Group		2		—		—		—
Codere España S.A.	Subsidiary of Codere Group		—		21,191		6,644		281
Codere Newco S.A.U.	Subsidiary of Codere Group		—		250		9,048		152
Other retail companies	Subsidiary of Codere Group		36		—		746		945
			936		21,441		17,777		1,479

F-41

Codere Online Business

NOTES TO THE INTERIM COMBINED CARVE-OUT CONDENSED
FINANCIAL STATEMENTS AS OF JUNE 30, 2021 AND DECEMBER 31, 2020 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2021

(Thousands of Euros)

11. RELATED PARTIES (cont.)

At June 30, 2021, the Group signed to an agreement to reduce debt through conversion into equity amounting to 45.1 million euros as described in Note 6. The indebtedness conversion into equity process is comprised of the following:

● Codere España S.A. and the Group for 28.1 million euros (27.8 million euros correspond to the borrowings — Note 7 and 0.3 million euros correspond to the trade payables — Note 8).

● Codere Newco and Servicios de Juego Online S.A. for 9.5 million euros (9.3 million euros correspond to the borrowings — Note 7 and 0.2 million euros correspond to the trade payables — Note 8).

● Codere Scommesse S.r.l. and Corede Italy S.A.U. for 1.4 million euros (Note 7).

● Codere Newco and Servicios de Juego Online S.A. for 4.4 million euros (Note 8).

● Latam companies for 1.7 million euros. (Note 8).

The intercompany indebtedness is subject to the “cash free debt free” clause of the business combination. Accordingly, upon the Business Combination consummation (see note 1) any outstanding indebtedness will be forgiven by the counterparty (Codere Group) and hence will be converted into equity.

Managing Director Services Agreement

Mr. Edree, who is expected to serve as the Managing Director of Holdco at the moment of the closing of the Business Combination, provides services to Codere Online Business as an independent contractor pursuant to a services agreement entered into by Mr. Edree, Novelly Investments Limited, a British Virgin Islands company majority-owned by him (“Novelly”), and Codere Online Business’s subsidiary, OMSE, with an effective date as of October 9, 2018 (as amended on November 30, 2020, the “Edree Services Agreement”). Under the Edree Services Agreement, Mr. Edree and Novelly agreed to provide, on an exclusive dedication basis (subject to their right to continue to manage certain identified holdings), certain services through December 31, 2025 in exchange for a fixed annual fee payable by OMSE to Novelly of €250,000, plus a variable annual fee payable to Novelly of up to €125,000, depending on the fulfillment of certain objectives each year. A success fee is also payable by OMSE calculated as 8% of the incremental value (as defined in the Edree Services Agreement) that is created at Codere Online, subject to a cap of €10 million, due to the services provided by Novelly. The success fee vests at a rate of 20% per year for two years (and 12% thereafter) and will be fully vested on the seventh anniversary of the effective date, or earlier upon the consummation of a company sale event (as defined therein). The Edree Services Agreement includes a non-compete provision during the term of the agreement and for 18 months thereafter. Such provision excludes any services provided by Mr. Edree and Novelly to the companies set forth on a schedule to such agreement.

We expect that, prior to the date of the closing of the Business Combination, Mr. Edree will enter into an amendment to the Edree Services Agreement and/or a new agreement with OMSE or another Codere Online entity which may, among other matters, amend the scope of the services he will provide to Codere Online as Managing Director and/or provide for his employment as our Chief Executive Officer, amend his compensation terms and provide that Codere Newco will assume any payment obligations for any success fee vested up to the date of the closing of the Business Combination under the Edree Services Agreement.

F-42

Codere Online Business

NOTES TO THE INTERIM COMBINED CARVE-OUT CONDENSED
FINANCIAL STATEMENTS AS OF JUNE 30, 2021 AND DECEMBER 31, 2020 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2021

(Thousands of Euros)

12. OTHER INFORMATION

COVID-19

On March 11, 2020, the World Health Organization upgraded the public health emergency caused by the outbreak of the coronavirus (COVID-19) to an international pandemic. The rapid evolution of events, on a national and international scale, led to an unprecedented health crisis, which will have a direct impact on the social and macroeconomic environment and on the evolution of business. To address this situation, each of the countries in which the Group operates has established preventive health measures to mitigate the risk of contagion.

Regarding the online operations, the lack of sporting events from March 2020 to mid-June 2020 led to a decrease in online sports betting revenues in all business units, which were only partially offset by an increase in online casino wagering revenues.

As a result of the above, the Group’s Directors have implemented a contingency plan in order to maintain its liquidity position and support the business continuity. Among many others, the main measures being implemented are as follows:

● Cross-promotions with the intention of switching betting customers to casino in order to diversify risk in the face of a potential cancellation of sports events.

● Reducing marketing activities.

● Optimization of marketing channels in search of efficiency in the generation of new customers.

● Reduction and monitoring of all expenses, eliminating non-essential ones.

● Intensive cash management to invest what is available without generating additional financing.

13. EVENTS AFTER THE REPORTING DATE

From June 30, 2021 and as of October 4, 2021, the segregation of the online business has been completed in the following jurisdictions in accordance with the planned corporate restructuring: Spain, Italy and Mexico. In both Spain and Italy, SEJO is sole shareholder of Codere Online, S.A.U. and Codere Scommesse, S.r.l., respectively. The “Asociación en Participación” or “AenP” (an unincorporated joint venture) between LIFO (the entity which holds the LIFO License, the license under which Codere Online Business currently operates in Mexico) as asociante, and SEJO as asociado, pursuant to which SEJO will have the right to receive 99.99% of any distributed profits, has been constituted and will become effective on Closing, as per the terms of the AenP agreement.

As the planned corporate restructuring could not be consummated by October 1, 2021 with respect to the entities that are located in Colombia, Panama and the City of Buenos Aires (Argentina), respectively, Restructuring Agreements are expected to be entered into prior to November 15 between the relevant Codere Group entity holding the online license and the Codere Online entity in Colombia, Panama and the City of Buenos Aires (Argentina), respectively. In Colombia (Codere Online Colombia, S.A.S.), and in Panama (Codere Online Panama, S.A.), the entities to which Codere Online expects that the licenses pursuant to which Codere Online Business currently operates (in the case of Colombia) or is expected to begin operating in the near future (in the case of the City of Buenos Aires, Argentina), will be transferred, together with the existing businesses, to SEJO, have been incorporated. In Argentina, Codere Online is still in the process of incorporating the entity, with SEJO as majority shareholder, to which the Buenos Aires License will be transferred. Holdco does not expect that the ALTA License granted to Alta Cordillera S.A., a subsidiary of the Codere Group in Panama (“ALTA”), will be transferred to Codere

F-43

Codere Online Business

NOTES TO THE INTERIM COMBINED CARVE-OUT CONDENSED
FINANCIAL STATEMENTS AS OF JUNE 30, 2021 AND DECEMBER 31, 2020 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2021

(Thousands of Euros)

13. EVENTS AFTER THE REPORTING DATE (cont.)

Online Panama until after ALTA is authorized to operate under the ALTA License, which Holdco does not expect to occur before December 1, 2021. Therefore, the Panama Restructuring Agreement is expected to be entered into among Codere Online Panama and HIPA, to govern the terms and conditions of, among other things, the assignment from HIPA to Codere Online Panama of all assets, contracts, employees and permits necessary for the operation of HIPA’s online gaming business by Codere Online Panama until the ALTA License is transferred to Codere Online Panama, subject to the required authorization from the Panama Gaming Control Board.

F-44

Report of Independent Registered Public Accounting Firm

To the Management Board and Sole Shareholders of
Servicios de Juego Online S.A.U.

Opinion on the Combined Carve-out Financial Statements

We have audited the accompanying Combined Carve-out statement of financial position of Codere Online Business (the “Group”) as of December 31, 2020, December 31, 2019, and January 1, 2019, and the related Combined Carve-out income statements, Combined Carve-out statements of comprehensive income, Combined Carve-out statements of changes in equity and Combined Carve-out statements of cash flows for each of the two years in the period ended December 31, 2020 and 2019, and the related notes (collectively referred to as the “Combined Carve-out financial statements”). In our opinion, the Combined Carve-out financial statements present fairly, in all material respects, the financial position of the Group at December 31, 2020, December 31, 2019 and January 1, 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020 and 2019, in conformity with International Financial Reporting Standards issued by the International Accounting Standards Board.

The Group’s Ability to Continue as Going Concern

The accompanying Combined Carve-out financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 m) to the Combined Carve-out financial statements, the Company has incurred recurring losses from operations since its inception and expects to continue to generate operating losses which raises substantial doubt about its ability to continue as going concern. Management’s plans in regard to these matters are described in Note 3 m). The Combined Carve-out financial statement statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These Combined Carve-out financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion on the Group’s Combined Carve-out 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 Group 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 Combined Carve-out financial statements are free of material misstatement, whether due to error or fraud. The Group 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 Group’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 Combined Carve-out 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 Combined Carve-out 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 Combined Carve-out financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young, S.L.

We have served as the Group’s auditor since 2016

Madrid, Spain
August 12, 2021

F-45

CODERE ONLINE BUSINESS

COMBINED CARVE-OUT STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019

(Thousands of Euros)

	Notes	12/31/2020		12/31/2019		01/01/2019
ASSETS
A) NON-CURRENT ASSETS			1,244		2,103		3,021
Intangible assets	5		1,128		2,011		2,977
Property, plant and equipment	6		107		92		44
Right-of-use assets			9		—		—
B) CURRENT ASSETS			17,304		42,124		33,053
Trade receivables and other current assets	8		1,646		29,732		27,782
Current financial assets	7		4,757		4,374		2,641
Cash and cash equivalents	7		10,901		8,018		2,630
TOTAL ASSETS (A+B)			18,548		44,227		36,074

	Notes	12/31/2020			12/31/2019			01/01/2019
EQUITY AND LIABILITIES
A) EQUITY	9		(39,925	)		(31,333	)		(19,350	)
Equity attributable to equity holders of the Parent			(40,017	)		(31,429	)		(19,349	)
Equity attributable to non-controlling interest			92			96			(1	)
B) NON-CURRENT LIABILITIES			21,441			21,441			13,541
Borrowings	11		21,441			21,441			13,541
C) CURRENT LIABILITIES			37,032			54,119			41,883
Lease obligations			9			—			—
Provisions	10		15			132			19
Borrowings	11		17,777			30,236			26,050
Trade payables and other current liabilities	12		19,231			23,751			15,814
TOTAL EQUITY AND LIABILITIES (A+B+C)			18,548			44,227			36,074

The accompanying notes 1 to 18 are an integral part of these combined carve-out financial statements.

F-46

CODERE ONLINE BUSINESS

COMBINED CARVE-OUT INCOME STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

	Notes	2020			2019
Revenue	14		70,497			61,583
Personnel expenses			(5,157	)		(5,102	)
Depreciation and amortization			(932	)		(1,193	)
Other operating expenses			(78,657	)		(71,165	)
Operating expenses	14		(84,746	)		(77,460	)
OPERATING INCOME/(LOSS)			(14,249	)		(15,877	)
Finance costs			(520	)		(269	)
Net financial results			(520	)		(269	)
NET INCOME/(LOSS) BEFORE TAX			(14,769	)		(16,146	)
Income tax benefit/(expense)	13		(1,510	)		53
NET INCOME/(LOSS) FOR THE YEAR			(16,279	)		(16,093	)
Attributable to equity holders of the Parent			(16,274	)		(16,191	)
Attributable to non-controlling interests			(5	)		98
Basic earnings per share attributable to equity holders of the parent (Euro)	14		(271.2	)		(269.9	)
Diluted earnings per share attributable to equity holders of the parent (Euro)	14		(271.2	)		(269.9	)

The accompanying notes 1 to 18 are an integral part of these combined carve-out financial statements.

F-47

CODERE ONLINE BUSINESS

COMBINED CARVE-OUT STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

	2020			2019
Net income/(loss) for the year		(16,279	)		(16,093	)
Currency translation differences		1,109			(160	)
Income tax impact		—			—
Items that will not be reclassified subsequently to the income statement		1,109			(160	)
Total other comprehensive income/(loss) recognized in the year		1,109			(160	)
Total comprehensive income/(loss) recognized in the year		(15,170	)		(16,253	)
Attributable to:
Equity holders of the Parent		(15,262	)		(16,350	)
Non-controlling interests		92			97

The accompanying notes 1 to 18 are an integral part of these combined carve-out financial statements.

F-48

CODERE ONLINE BUSINESS

COMBINED CARVE-OUT STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

	Attributable to equity holders of the Parent
	Issued capital		Net income/(loss) for the year			Retained earnings/(losses)			Net Parent investment			Other comprehensive income/(loss)			Total			Non-controlling interest			Total Equity
Balance at January 1, 2019		60		—			(1,505	)		(17,904	)		—			(19,349	)		(1	)		(19,350	)
Net income/(loss) for the year		—		(16,191	)		—			—			—			(16,191	)		98			(16,093	)
Other comprehensive income/(loss) for the year		—		—			—			—			(160	)		(160	)		—			(160	)
Total comprehensive income/(loss) for the year		60		(16,191	)		(1,505	)		(17,904	)		(160	)		(35,700	)		97			(35,603	)
Appropriation of result		—		16,191			(16,191	)		—			—						—			—
Net change in Parent investment		—		—			—			4,270			—			4,270			—			4,270
Balance at December 31, 2019		60		—			(17,696	)		(13,634	)		(160	)		(31,430	)		97			(31,333	)
Net income/(loss) for the year		—		(16,274	)		—			—			—			(16,274	)		(5	)		(16,279	)
Other comprehensive income/(loss) for the year		—		—			—			—			1,109			1,109			—			1,109
Total comprehensive income/ (loss) for the year		60		(16,274	)		(17,696	)		(13,634	)		949			(46,595	)		92			(46,503	)
Appropriation of result		—		16,274			(16,274	)		—			—			—			—			—
Net change in Parent investment		—		—			—			6,578			—			6,578			—			6,578
Balance at December 31, 2020		60		—			(33,970	)		(7,056	)		949			(40,017	)		92			(39,925	)

The accompanying notes 1 to 18 are an integral part of these combined carve-out financial statements.

F-49

CODERE ONLINE BUSINESS

COMBINED CARVE-OUT STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

	2020			2019
Net income/(loss) before tax		(14,769	)		(16,146	)
Net financial results		520			269
Operating income/(loss)		(14,249	)		(15,877	)
Non-cash expenses:		924			1,403
Depreciation and amortization (Note 14)		931			1,194
Movements in provisions		(117	)		112
Expected credit loss		110			97
Changes in working capital:		17,542			13,555
Trade receivables and other current assets (Note 8)		3,676			(3,781	)
Trade payables and other current liabilities (Note 12)		13,866			17,336
Income tax paid		(361	)		(323	)
Net cash provided by (used in) operating activities		3,856			(1,242	)
Payment for purchases of property, plant and equipment (Note 6)		(55	)		(75	)
Payments for investments		(17	)		(200	)
Net cash used in investing activities		(72	)		(275	)
Drawdown of other borrowings (Note 11)		245			7,163
Capitalized lease payments (IFRS 16)		9			—
Other lease payments*		(429	)		(349	)
Net cash provided by (used in) financing activities		(175	)		6,814
Net increase in cash and cash equivalents		3,609			5,297
Cash and cash equivalents at the beginning of the year		8,018			2,630
Effect of changes in exchange rates on cash and cash equivalents		(726	)		91
Cash and cash equivalents at the end of the year		10,901			8,018

* Include the short-term lease payments, payments for leases of low-value assets and variable lease payments.

The accompanying notes 1 to 18 are an integral part of these combined carve-out financial statements.

F-50

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

1. BACKGROUND

Codere Online Business (the “Group”) is comprised of the integrated online gambling operations of Codere S.A. and its subsidiaries (“Codere Group”) located in Spain, Mexico, Colombia, Panama, Italy, Gibraltar, Israel and Malta focused on online gambling and other online services.

Codere Group is a leading international gaming operator that operates slot machines, bingo seats and sports betting terminals in Latin America (Argentina, Colombia, Mexico, Panama and Uruguay), Spain and Italy, across various gaming venues, including gaming halls, arcades, bars, sports betting shops and horse racetracks.

Codere Group’s headquarters are located at Avenida de Bruselas 26, in Alcobendas (Madrid, Spain).

Codere Group has been listed on the Madrid Stock Exchange since October 19, 2007.

The accompanying combined carve-out financial statements of the Group have been prepared in connection with the proposed inclusion in a proxy statement/prospectus of Codere Online Luxembourg S.A., registered in Luxembourg as a public limited company (société anonyme) since June 4, 2021 under the laws of Luxembourg with its registered office at 7, rue Robert Stumper, L-2557 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg trade and companies register (Registre de commerce et des sociétés, Luxembourg) under the number B255798 (“Codere Online Luxembourg”), and represent the nine entities and/or businesses described herein that the Codere Group intends to transfer to Codere Online Luxembourg, in connection with a proposed business combination involving (i) the transfer of Servicios de Juego Online S.A. (“SEJO”) to Holdco, in exchange for additional ordinary shares of Holdco to be subscribed for by Codere Newco; (ii) the conversion of each share of DD3 Acquisition Corp. II (“DD3”) Class B common stock into one share of DD3 Class A common stock; (iii) Codere Online U.S. Corp’s merger with and into DD3, with DD3 surviving such merger and becoming a direct wholly-owned subsidiary of Holdco and, in connection therewith, DD3’s corporate name will change to “Codere Online U.S. Corp.”; (iv) the contribution of all shares of DD3 Class A Common Stock issued and outstanding immediately prior to the merger to Holdco in exchange for one Holdco Ordinary Share for each share of DD3 Class A Common Stock pursuant to a share capital increase of Holdco; and (v) the conversion of each DD3 warrant that is outstanding immediately prior to the merger, which will no longer represent a right to acquire one share of DD3 Class A Common Stock and will instead represent the right to acquire one Holdco Ordinary Share on substantially the same terms (collectively, the “Business Combination”). At the end of the process of Business Combination, all these entities will be 100% ownership to the Group except Panama and Mexico, with 75% and 99,99% ownership, respectively.

This transfer will be performed in two steps: (1) the transfer prior to the effectiveness of such proxy statement/prospectus of the relevant entities and businesses that were not direct or indirect subsidiaries or businesses of Servicios de Juego Online, S.A.U. (“SEJO”) to SEJO and (2) the transfer of SEJO to Codere Online Luxembourg in connection with the consummation of the Business Combination.

Spain and Italy are the only two jurisdictions in which existing operating entities, Codere Online, S.A.U. and Codere Scommesse S.r.l., respectively, will be transferred to SEJO. In Panama, Colombia and Argentina, new entities have been or will be incorporated with SEJO as sole or majority shareholder. The licenses pursuant to which the Group currently operates in these jurisdictions (in the case of Panama and Colombia) or is expected to begin operating in the near future (in the case of Argentina) will be transferred, together with the existing businesses, to SEJO. In México, the online business will be transferred to SEJO though the consummation of an Asociación en Participación (an unincorporated joint venture which has its own tax identification number) between Libros Foráneos, S.A. de C.V. (the entity which holds the license under which the Group currently operates in this jurisdiction) as asociante, and SEJO as asociado, pursuant to which SEJO will have the right to receive 99,99% of any distributed profits.

F-51

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

1. BACKGROUND (cont.)

In the context of the transfers detailed above, the Group does not expect that the standalone online gaming license of Alta Cordillera S.A., a Panamian subsidiary within the Codere Group, will have been transferred to the Group prior to the effectiveness of the prospectus, therefore, an agreement will be entered into among SEJO and Hípica de Panama, S.A. with the same economic effect and benefits to Codere Online Panama S.A. until such a time as the license can be transferred.

In the case of Colombia, the transfer of Codere Colombia S.A. (gaming license allowing for both retails and online betting) to Codere Online Colombia S.A. is dependent on the administrative approval of Coljuegos (the online gambling regulator in Colombia). However, the management of the Group does not expect any delay in obtaining such approval prior to the effectiveness of the prospectus in 2021.

It is important to mention that as a result of the carve-out of the online activity in those legal entities in which online and retail business were coexisting, there were some intercompany balances generated. These balances which represented after carve-out a debt to the retail subsidiary have been forgiven due to the pre-merger actions agreed in the BCA, therefore they have been adjusted to the equity on the remaining subsidiary.

The entities and businesses consist of 9 entities (Spain, Mexico, Colombia, Panama, Italy, Gibraltar, Israel and Malta).

Entity	Entity Type	Ownership	Location
Servicios de Juego Online S.A.	Holding Company	100%	Spain
Codere Online S.A.	Operating Entity	100%	Spain
Codere Colombia S.A. (online business)	Operating Entity	100%	Colombia
Hípica de Panama, S.A. (online business)	Operating Entity	75%	Panama
Libros Foráneos S.A. de CV (online business)	Operating Entity	99.99%	Mexico
Codere Scommese S.R.L.	Operating Entity	100%	Italy
Codere Online Operator LTD	Operating Entity	100%	Malta
Codere Online Management Services LTD	Supporting Entity	100%	Malta
Codere Israel Marketing Support Services LTD	Supporting Entity	100%	Israel
Codere (Gibraltar) Marketing Services LTD	Supporting Entity	100%	Gibraltar

2. BASIS OF PRESENTATION OF THE COMBINED CARVE-OUT FINANCIAL STATEMENTS

The Group was not in place for the periods presented. Rather, it is a combination of entities and businesses currently owned by Codere Group and that have been under common control of Codere Group during the periods presented. Management has prepared these combined carve-out financial statements only for the purpose of including them as historical financial information of the Group in a public prospectus.

The accompanying combined carve-out financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

The combined carve-out financial statements were approved by the management on August 12, 2021.

The transition to IFRS is accounted for in accordance with IFRS 1 (First-time Adoption of International Financial Reporting Standards), using January 1, 2019 as the transition date. Codere prepares consolidated financial statements that are publicly available and comply with IFRS as issued by the European Union (“IFRS-EU”). Therefore, in preparing the Group’s combined carve-out opening statement of financial position as of January 1, 2019, the Group elected to measure its assets and liabilities on its combined carve-out financial statements at the carrying amounts that were included in Codere Group’s consolidated financial statements, based on Codere Group’s date of transition to IFRS (which occurred on January 1, 2004), excluding the effects of the business combination in which Codere Group acquired its subsidiaries and those adjustments made for consolidation procedures.

F-52

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

2. BASIS OF PRESENTATION OF THE COMBINED CARVE-OUT FINANCIAL STATEMENTS (cont.)

The accompanying combined carve-out financial statements are the first set of financial statements the Group has issued. This is the first time the financial statements of the Group have been prepared and is also the first time this entity has issued financial statements prepared in accordance with IFRS. Consequently, IFRS 1 disclosures have not been presented since the entities that comprise the Group have historically presented standalone financial information in accordance with its own local GAAPs and there is no historical combined carve-out information.

As explained in Note 1, in 2021 the Group will complete a merger transaction that ultimately results in obtaining control over the combined entities. Since all entities were under the common control and management of Codere Group both before and after the transfer, the transfer was treated as a reorganization of entities under common control, which is outside of the scope of IFRS 3 (Business Combinations).

Accordingly, the Group has made an accounting policy choice to present business combinations under common control using the “predecessor accounting method”, thereby measuring the assets and liabilities of the incorporated businesses using existing carrying values that were included in the consolidated financial statements of Codere Group prepared under IFRS-EU. Any difference between the consideration given and the aggregate book value of the assets and liabilities of the acquired entities as of the date of the transaction will be reflected as an adjustment to equity.

Also, for comparative purposes, the Group has elected a retrospective presentation method to present 2019 comparative figures as if the merger of the entities under common control, described above, had taken place at the beginning of the earliest comparative period presented.

The Group has used the same accounting policies in its opening statement of combined carve-out financial position and throughout all of the periods presented, which are compliant with IFRS effective at the end of December 31, 2020. Note 3 includes a detailed description of the most significant accounting policies used consistently to prepare these combined carve-out financial statements.

3. ACCOUNTING POLICIES

As stated in Note 2, the Group’s combined carve-out financial statements have been prepared in accordance with IFRS as issued by the IASB and pursuant to the interpretations issued by the Interpretation Committee of the IASB (“IFRIC”).

The following is a description of the most significant accounting policies used in preparing the accompanying combined carve-out financial statements:

a) Basis of combination

The combined carve-out financial statements were prepared using Codere Group’s historical basis in the assets and include all revenues, expenses, assets and liabilities attributed to the Group. In addition, other operating expenses include certain general and administrative services provided by Codere Group. The Group believes that by including these costs, the combined carve-out income statements include a reasonable estimate of actual costs incurred to operate the business. However, such expenses may not be indicative of the actual level of expense that would have been incurred by the Group if it had operated as an independent, publicly-traded company during the precedent periods or of the costs expected to be incurred in the future. In the opinion of management, the intercompany eliminations and adjustments necessary for a fair presentation of the combined carve-out financial statements in accordance with IFRS as issued by IASB have been made.

F-53

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

3. ACCOUNTING POLICIES (cont.)

b) Functional and presentation currency

The functional currency of all entities comprising the Group is the currency of the countries in which they operate. The presentation currency of the Group is the Euro and therefore, all balances and transactions denominated in currencies other than the Euro are deemed to be denominated in a foreign currency. Amounts are presented in these combined carve-out financial statements are in thousands of euros, unless otherwise stated.

c) Intangible assets

Intangible assets are carried at acquisition or production cost, less any accumulated amortization and impairment losses, if any. These assets are tested for impairment when events or circumstances arise that may indicate that their book value may not be recoverable.

Intangible assets can have (i) an indefinite useful life when, based on an analysis of all the relevant factors, it is concluded that there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows for the combined entities or (ii) a finite useful life, in all other cases.

Intangible assets with indefinite useful lives are not amortized. However, at the end of each reporting period or whenever there is any indication of impairment, management reviews the remaining useful lives of the assets in order to determine whether they continue to be indefinite and, if this is not the case, to take the appropriate steps to amortize the asset.

Intangible assets with definite useful lives are amortized on a straight-line basis according to the following:

● Licenses for computer programs acquired from third parties are capitalized based on the costs incurred to acquire them and to prepare each specific program for use. These costs are amortized over their estimated useful lives.

	Years of estimated useful life
Concession arrangement	10
Software	4

d) Property, plant and equipment (“PP&E”)

Property, plant and equipment is carried at cost less any accumulated depreciation and impairment in value, if any.

Cost includes, among others, direct labor costs incurred in the installation and the relevant allocable portion of the indirect costs.

The Group depreciates its property, plant and equipment from the time they can be placed in service, amortizing the cost of the assets on a straight-line basis over the assets’ estimated useful lives, which are calculated in accordance with technical studies that are revised periodically in light of technological advances and the rate of dismantling, as follows:

	Years of estimated useful life
Machinery and equipment	3 – 10 years
Other fixtures, fittings and tools	3 – 15 years

F-54

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

3. ACCOUNTING POLICIES (cont.)

e) Impairment of non-current assets

Non-current assets are assessed at each reporting date for indicators of impairment if there are certain events or changes indicating the possibility that the carrying amount may not be fully recoverable. Whenever such indicators arise, or in the case of assets which are subject to an annual impairment test, the recoverable amount is estimated. An asset’s recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future post-tax cash flows derived from the use of the asset or its cash generating unit, as applicable, are discounted to the asset’s present value using a post-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset, whenever the result obtained is the same that would be obtained by discounting pre-tax cash flows at a pre-tax discount rate.

f) Financial instruments

Financial assets and financial liabilities are recognized when an entity within the Group becomes a party to the contractual provisions of a financial instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through net income or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through net income or loss are recognized immediately in the combined carve-out income statement.

Financial assets

Financial assets are classified into three main categories: amortized cost, fair value through net income or loss and fair value through OCI, depending on the business model and the characteristics of the contractual cash flows.

Loans, accounts receivable and financial assets that the Group expressly intends and is able to hold to maturity are subsequently measured at amortized cost less any related impairment losses.

Loans and accounts receivable maturing within no more than 12 months from the reporting date are classified as current items and those maturing within more than 12 months are classified as non-current items.

Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on investments in debt instruments which are measured at amortized cost. The amount of expected credit losses is updated on each reporting date to reflect changes in credit risk since the initial recognition of the financial instrument.

The Group recognizes lifetime Expected Credit Losses (“ECL”) for receivables, applying the simplified approach established by the IFRS 9 standard. As the Group’s historical credit loss experience between Groups entities is nil, the expected credit loss is estimated based on external risk parameters, publicly available, such as the probability of default (PD) of Codere Group and a loss given at default (LGD) of 100%.

F-55

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

3. ACCOUNTING POLICIES (cont.)

Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.

With respect to the derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received (and which will be received in the future) and the cumulative gain or loss that had been recognized in the combined carve-out statement of comprehensive income and accumulated in equity is recognized in the combined carve-out income statement.

Financial liabilities

Financial liabilities are subsequently measured at amortized cost using the effective interest method.

The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the exact rate that discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Derecognition of financial liabilities

The Group derecognizes financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or expire. The difference between the carrying amount of the derecognized financial liability and the consideration paid and payable is recognized in the combined carve-out income statement.

g) Cash and cash equivalents

Cash and cash equivalents comprise cash in hand and at banks, demand deposits and other short-term highly liquid investments with maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. These items are stated, based on their nature, at historical cost, amortized cost or fair value, which does not differ significantly from realizable value.

h) Revenue

Revenue from contracts with customers is recognized when service is provided to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those services. The Group has generally concluded that it is the principal in its revenue arrangements because it typically controls the services before providing them to the customer.

Online gambling

The Group generates its revenues from online gambling (online casino and sports betting). The Group recognizes revenue from online gambling at a point in time when each wager has been made. It is recorded as gambling revenue in the accompanying combined carve-out income statement, with liabilities recognized and measured as the aggregate net difference between funds deposited by customers plus winning wagers less losing wagers and less customers withdrawals. We report all the wins as revenue and our provider’s share is reported in other operating expenses.

F-56

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

3. ACCOUNTING POLICIES (cont.)

Balances related to revenue

A liability is recognized as an obligation to provide the gambling service to a customer for which the Group has received consideration from the customer, at which time a contract liability is recognized under trade payables and other current liabilities. For example, online sports betting involves a player placing a wager on a particular outcome of a sporting event at some fixed odds.

i) Gambling and Gaming Regulation by Country

Spain

Online gambling and other gaming activities are regulated along with other forms of gambling by Law 13/2011, of May 27, which regulates, at the State level, all organization, operation and development of gambling activities that are carried out through electronic, computer, telematic and interactive means.

Royal Decree 1614/2011, of November 14, implementing Law 13/2011, in relation to gambling licenses, permits and registers in order to facilitate access by the various operators to the activities covered by the Law also includes the procedure to obtain the authorization of reserved gambling activities. General licenses are granted after the corresponding public tender process and have a duration of ten (10) years, renewable for an identical period, unless they are specifically limited. The operation of each type of gambling included in the scope of each general license requires the granting of a specific operating license, regulated by Article 11 of the Law.

Codere Online S.A. (“CDON”) has been awarded (A) three (3) general state licenses for a ten (10) year term that will expire on June 1, 2022: (i) Other Games License; (ii) Contests License; and (iii) Betting License, and (B) six (6) single state licenses: (i) slots (granted until July 30, 2025); (ii) roulette (granted until June 22, 2022); (iii) black jack (granted until June 22, 2022); (iv) sports betting (granted until April 28, 2025); (v) horse betting (granted until April 28, 2024); and (vi) other bets (granted until April 28, 2025).

Title IV of Law 13/2011 establishes the minimum technical requirements established by the National Gambling Commission that must be met by the technical equipment in terms of sufficient authentication mechanisms to guarantee, inter alia, the following:

● Confidentiality and integrity in communications.

● The identity of the participants, in the case of gambling using telematic and interactive means, as well as the verification, in the terms established by law, that they are not included in the Register provided for in Article 22.1 .b) of this Law.

● The authenticity and calculation of the bets.

● The control of their correct operation.

● Compliance with the subjective prohibitions regulated by Article 6 of this Law.

● Access to the components of the computer system exclusively by authorized personnel or by the National Gambling Commission itself, under the conditions that it may establish.

F-57

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

3. ACCOUNTING POLICIES (cont.)

Law 13/2011, of May 27, regulating gambling activities, has a decisive impact on sector legislation on advertising, protection of personal data and electronic commerce. These three disciplines include obligations related to the duties of online games, regulated by General Advertising Law 34/1988, of November 11; Regulation (EU) 2016/679 of the European Parliament and of The Council of April 27, 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data; Organic Law 3/2018, of December 5, of Protection of Personal Data and guarantee of Digital Rights; and Law 34/2002, of July 11, on Services of the Information Society and Electronic Commerce. These measures provide, among others, that betting advertising will only be allowed between 1:00 am and 5:00 a.m. and advertisers using social networks may only broadcast adverts to their followers.

Title VII of Law 13/2011, of May 27, determines the tax regime applicable to gambling activities in compliance with the provisions of the Additional Provision Twenty of Law 56/2007, of December 28, on measures to promote the information society, the applicable tax rate being:

● State run lotteries and games: 22% on the tax base

● Parimutuel sports betting, straight sports betting and sports betting exchange; parimutuel horse betting, straight horse betting and horse betting exchange; and other parimutuel betting, straight betting and betting exchange: 20% on the tax base

● Raffles: 20% on the tax base, unless they are declared to be of public utility or for charity and are therefore taxed at 5% on the tax base.

● Contests and other games: 20% on the tax base

● Random number combinations for advertising or promotional purposes: 10% on the tax base

General State Budget Law 6/2018, of July 3, for 2018, introduced a regulatory change in terms of tax benefits by reducing by 50% the tax rates on gambling, included in Law 13/2011, of May 27, regulating gambling. The objective of this reduction is to transfer tax benefits to the Autonomous Cities of Ceuta and Melilla that are collected in other taxes for them. Since then, both Autonomous Cities have seen a reduction in the tax for online gambling operators, leaving gambling tax at 10%. To qualify for this regime, a company is required to be registered in Ceuta or Melilla and 50% of the human resources have to be registered in these territories.

Mexico

Mexico lacks a federal provision for online gambling, and the subsector is regulated under the Federal Law on Games and Drawings, of December 31, 1947 (the “Gaming Law”). The Gaming Law establishes that the Federal Executive, through the Ministry of the Interior, is responsible for the regulation, authorization, control and oversight of gambling and betting of any kind, including draws, with the exception of the National Lottery, which is governed by its own law.

On October 23, 2013, the Regulations for the Federal Law of Games and Draws were published in the Mexican Official State Gazette, in which the main technical requirements for the gambling and gaming activities on the internet were determined.

The latest reform of the Special Tax on Production and Services Law (the “ Special Tax Law”) published by the Mexican Official State Gazette (DOF) 12/09/19 establishes that the operation of betting games and draws, regardless of the name given to them, that require permission in accordance with the provisions of the Gaming Law and its implementing Regulations, are taxed at a rate of 30%.

F-58

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

3. ACCOUNTING POLICIES (cont.)

According to the Special Tax Law, the resulting amount may be reduced by:

● the total taxes paid according to the Gaming Law; and

● up to 20% of the amount paid to the Mexican gaming authority in order to undertake a betting activity.

Finally, local gaming taxes may apply depending on each municipality and ranging from 6% to 15% tax rate on the gaming revenue of the company, and a 6% withholding on the prizes obtained by the player.

Colombia

Decree Law 4142 of 2011, amended by Decree number 1451 of 2015, founded the Empresa Industrial y Comercial del Estado Administradora del Monopolio Rentístico de los Juegos de Suerte y Azar (“Coljuegos”), whose role is “[…] the exploitation, administration, operation and issuance of regulations of the games that are part of the state monopoly of gaming that by law are not attributed to another entity [...].”

Through resolution number 04 of 2016 and subsequently through resolution number 08 of 2020, Coljuegos approved gaming regulations in relation to novelty games operated over the internet. Those legal persons that are awarded a concession, may operate online gaming once they execute the corresponding concession contract and following verification of compliance with the requirements under the gambling regulations and any other parameters as determined by Coljuegos. The operation of other novelty games require authorization from Coljuegos and compliance with the selection processes established in the public procurement general statute.

Codere Online currently operates online gaming in Colombia pursuant to license C1470 granted by Coljuegos to Codere Colombia, S.A. for a term of 5 years and which will expire on November 15, 2022.

Article 38 of Law 643 of 2001 provides that the operator must pay an operating fee of 17% of its gross gaming revenue to Coljuegos. When the operator operates novelty games that give the player a return in accordance with the gaming regulations of 83% or more, the minimum rate for the operating rights will be 15% of the gross gaming revenue minus the prizes paid. Notwithstanding, those who operate online games will additionally pay 811 legal monthly minimum wages, which will be settled during the first 20 business days of each year operating year.

Article 93 of Law 1753 of 2015, establishes that internet gambling operators, in addition to paying an operating fee of 17% of gross gaming revenue, must pay COP 559,147,194 (legal tender) in tax at the beginning of each operating year. In addition to this tax, Coljuegos will demand payment by the operator of the so-called “Administration Expenses,” which will be 1% of the operating fee.

Italy

According to Italian criminal law, gambling that is not subject to State control is illegal under Article 718 of the Italian Criminal Code, whether organized in a public establishment or a private club. Italian law distinguishes between games of luck and games where the outcome depends on the player’s skill. Sports betting, lotteries, and some other activities fall into the category of legal and regulated gambling activities.

Only the State has the right to authorize gaming and gambling activities pursuant to article 1 of the Italian Legislative Decree of April 14, 1948 no. 496. The Autonomous Administration of State Monopolies (Agenzia delle Dogane e dei Monopoli) (the “ADM”), the entity responsible for regulating gambling activities on a state level, has the power to grant gaming licenses to legal persons through tender processes provided they comply with all requirements and parameters included in the tender offer, as well as with any other applicable laws or regulations.

F-59

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

3. ACCOUNTING POLICIES (cont.)

The main reason why the Italian government has adhered to strict rules has been the desire to avoid the possible negative effects associated with the industry.

The call for tenders for the online business in Italy was announced in March 2018. Codere Online currently operates online gaming in Italy pursuant to Remote Gaming License no. 15411 (the “Concession”) granted to Codere Scommesse S.r.l. on October 7, 2019, which will expire in December 2022.

The Concession, grants Codere Scommesse S.r.l. the right to operate via the internet the following gaming activities:

● fixed odds and ‘totalizator’ bets on sports events, including simulated ones, including those relating to horse racing, as well as on other events;

● sports and horse racing betting;

● national horse racing games;

● skill games, including card games in tournament and different modes, as well as games of chance at fixed odds;

● fixed odds bets with direct interaction between players; and

● bingo

Law No. 77 dated as of June 24, 2009 deals with measures concerning the gaming sector following the Abruzzo Decree. The most relevant provision in the tax scheme is the introduction of an unprecedented profit-based tax regime with a flat 20% rate applying to all new games listed above other than the video lotteries. This provision is of paramount importance as it paves the way to the launch of games that otherwise could have never been offered in Italy given its penalizing turnover-based tax regime which however will continue to apply to sports and horse races betting, bingo, lotteries and skill games (including online poker tournaments that will thus continue to be taxed at 3% of the total tournament buy-ins sold by the operator).

Panama

Law Decree No. 2 of February 10, 1998 (the “Law Decree”), is the legal framework which regulates gaming and gambling activities in Panama. The Gaming Control Board, in representation of the State, assumes the operation of gambling activities and betting activities, for the exclusive benefit of the State. This operation may be exercised directly or through third parties.

Hence, gambling and betting activities that take place in Panama must be authorized, regulated, and supervised according to the dispositions of Law Decree, including gaming and gambling activities and betting activities which take place abroad, by electronic means or other means of remote communication.

Before standalone online licenses were authorized pursuant to the Resolution, some operators were authorized to operate online sports betting pursuant to a license that allowed the licensee to operate land-based betting agencies under Resolution No. 43 of October 24, 2016 which modified the Resolution No. 77 of September 4, 1999, provided that (i) the client previously registered through a land-based betting agencies, and (ii) the operator obtaining prior authorization from the Gaming Control Board.

F-60

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

3. ACCOUNTING POLICIES (cont.)

HIPA was authorized by the Resolution No. 921 of September 21, 2017 to operate online sports betting. HIPA operates online sports betting through Contract No. 1 of April 16, 2018 (under which it was awarded 5 licenses for a five (5) year term, renewable for another five (5) years) and No. 193 of 4 October 4, 2005 (under which it was awarded 51 licenses for a twenty (20) year term).

A sports betting operator must pay the Gaming Control Board the following monthly fees: (i) 2% on prizes paid, (ii) 0.25% on amounts wagered of international sport betting, and (iii) 0.5% on amounts wagered of international greyhound racings.

Currently, ALTA has been authorized to start operating online gaming for twenty (20) year term starting on December 1, 2021, subject to compliance with certain requirements, under the ALTA License awarded pursuant to the Regulation. ALTA is in process of executing a concession agreement awarded by the State which allows ALTA to start operations, subject to compliance with the relevant requirements, as of December 1, 2021 (Resolution No. 23 of May 12, 2021 granted by Gambling Control Board Plenary).

Malta

Codere Online does not currently offer online casino and sports betting to customers located in Malta.

This type of activity is generally perceived as a business-to-consumer type of activity whereby a business makes its gaming services available to end users accessing a particular platform and/or device to play a game for real money gaming. In this regard, Codere Online Management Services LTD (“OMSE”), via its MGA license number MGA/B2C/613/2018 (the “B2B License”) is authorized to provide a gaming service to end customers (i.e. players) with respect to Type 1 (Casino) and Type 2 (Fixed Odds Betting) games.

Codere Online Operator Ltd.’s license was duly issued on April 15, 2019 and is valid for a period of ten (10) years (the “B2C License”). However, Codere Online Operator Ltd.’s license has been voluntarily suspended in terms of Regulation 27 of the Gaming Authorizations Regulations until November 30, 2021. The company may re-activate the license at any time, subject to MGA prior approval of the same.

OMSE’s B2B License was duly issued on April 15, 2019 and is valid for a period of ten (10) yeas. It is an active license.

Any person in possession of a license issued by the MGA shall pay the MGA the appropriate fees in relation to the type of license that one possesses. As operator of the B2C License, Codere Online Operator Ltd. is due to pay (a) a license fee composed of a fixed annual license fee and a variable component known as the compliance contribution and (b) gaming tax. As operator of the B2B License, OMSE is due to pay a variable annual license fee.

j) Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax, if any.

Current tax

The tax currently payable is based on taxable income for the year. Taxable income differs from income before tax as reported in the combined carve-out income statement because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group’s current tax is calculated using rates applicable for the tax period that have been enacted or substantively enacted by the end of the reporting period.

F-61

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

3. ACCOUNTING POLICIES (cont.)

k) Non-current and current assets and liabilities

Presentation in the combined carve-out statement of financial position differentiates between current and non-current assets and liabilities. Assets and liabilities are regarded as current if they mature within one year or within the normal business cycle of the Group or are held-for-sale. Non-current assets and liabilities include all other types of assets and liabilities.

l) Critical judgments and use of estimates

Below is a discussion regarding the key assumptions made by the Group in preparing its estimates concerning future performance and other relevant sources of uncertainty at the reporting date that could have a significant impact on the combined carve-out financial statements within the next financial year.

As described in Note 1, the Group is required to prepare and present an opening IFRS statement of financial position at the date of transition to IFRS (January 1, 2019). Considering that Codere, S.A. has been historically presenting its financial information under IFRS-EU, the Group will not have to present a reconciliation to previous GAAP in its opening statement of financial position.

Measurement of assets and liabilities

The measurement of assets and liabilities was based on the carrying amounts that would be included in the Codere S.A.’s consolidated financial statements, based on Codere, S.A.’s date of transition to IFRS, if no adjustments were made for consolidation procedures and for the effects of the business combination in which the parent acquired the subsidiary. Thus, any goodwill recorded at Codere S.A. related to the reorganization of any of the companies/business was not pushed down to any of the entities in the Group perimeter. For the purposes of preparing the combined carve-out financial statements, 100% of the individual balance sheets and income statements of seven entities, including SEJO, were transferred to the online perimeter. For the remaining three entities that are included in the online perimeter, the individual income statement and balance sheet accounts were reviewed by management to determine which accounts related solely to the online business and therefore transferred to the online perimeter. These balances were easily identifiable, as the accounting system separately tracked transactions related to the retail and online businesses; therefore, management was able to identify those accounts which were solely related to the online business.

Cost of doing business

During the years presented in these combined carve-out financial statements, there were certain costs that were incurred by the Codere Group, which were considered to be common expenses. Therefore, an allocation of these common expenses was performed in order to reflect the portion of these expenses related to the Group in the combined carve-out financial statements. These common expenses included general corporate expenses, such as, management, audit fees, legal expenses, systems and communication, and office rental expenses. The general corporate expenses that were allocated to the online business were allocated based on the actual expenses related to time spent supporting the entities included in the online perimeter. Office rental expenses were allocated on a per square meter basis used by the entities included in the combined carve-out financial statements of the Group.

F-62

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

3. ACCOUNTING POLICIES (cont.)

Novelly Incentive plan

● There is a management services contract with our Managing Director (along with Novelly, legal entity controlled by our Managing Director) that includes 3 tranches of compensations: Fixed and Variable annual payments (the latter depending on the results of the year and a 5-year incentive plan based on the valuation of the online business according to the value created. The first two are accrued and paid on a current basis, and for the third one, there is no provision at December 31, 2020 as the target was not reached at that date. The annual bonus accrual made by the Group for this contract amounted to 125 thousand euros and 113 thousand euros as of December 31, 2020 and 2019, respectively.

m) Going concern

The combined carve-out financial statements present negative equity of 39.9 million euros as of December 31, 2020, 31.3 million euros as of December 31, 2019 and 19.4 million euros as of January 1, 2019. This negative equity comes from negative results generated in previous years, due to the investment made in the project since its origin.

Additionally, the Group had negative working capital amounting to 12.0 million euros at the end of 2019 and 19.7 million euros at the end of 2020, mainly generated by short-term debts with the Codere Group, for the financing received for the expansion of the online business line.

The Group has limited operating history and the business has funded its operations primarily through short-term debts with the Codere Group. Since its inception, the Group has incurred recurring losses and negative cash flows from operations including net losses of €16.3 million for the year 2020 and €16.1 million for the year 2019. At the end of the reporting period as of December 31, 2020 the Group expects to continue to generate operating losses through 2023. As of December 31, 2020, the Group had €10.9 million in cash, of which €2.6 million was restricted. Securing the financing of development activities and operations represents an ongoing challenge for the Group. As of March 31, 2021, the Group had cash and cash equivalents of €6.7 million, of which €3.1 million was restricted.

In the first half of 2021, the companies included in the combined carve-out financial statements reduced their debt through capitalizations of 42.0 million euros. The debt capitalized at June 30, 2021, and approved on the same date, was formalized between Codere España S.A. and the Group for 28.1 million euros, Codere Newco and Codere Online Management Services for 4.4 million euros and Codere Newco and Servicios de Juego Online S.A. for 9.5 million euros. See Note 18.

Based on the business plan, the Group depends on additional financing for additional development activities and operations. Management plans to finance these investments and costs with contemplated US public listing via a merger with a Special Purpose Acquisition Company (“SPAC”) transaction expected to be completed in the last quarter of 2021. The timely realization of the transaction is crucial for the Group’s ability to continue as a going concern.

Codere Group has entered into a business combination agreement (the “BCA”) relating to a transaction involving the disposal of a minority interest in Codere Group’s online business. Codere Group will contribute the Group to a newly created Luxembourg holding company, Codere Online Luxembourg S.A., which in turn through a merger will acquire DD3 Acquisition Corp II, a listed company (“SPAC”), a transaction which is expected to be completed in the fourth quarter of 2021. The terms of the transaction are set forth in the BCA, approved by the board of directors of Codere, S.A.

F-63

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

3. ACCOUNTING POLICIES (cont.)

Four institutional investors have committed to make a private investment in the amount of $67 million U.S. dollars to be closed immediately prior to the online transaction and one of them has additionally committed to not redeem the $10 million U.S. dollars in SPAC shares it holds resulting in minimum proceeds from the transaction of $77 million U.S. dollars (approximately 65.0 million euros).

The SPAC investors will have the option to redeem their existing cash investment in the SPAC of 115 million U.S. dollars held in a trust account, resulting in proceeds of between $77 million U.S. dollars and $192 million U.S. dollars depending on redemptions and before expenses.

Members of a majority group of Codere Group’s bondholders (the Ad Hoc Committee) consented in advance of the formal consent solicitation to vote in favor of the transaction. Codere Group confirmed on July 6, 2021, that the consent solicitation procedures have been completed and the approvals and amendments to the applicable corporate debt documents have been approved.

In its going concern assessment, the Group’s management has developed a business plan until 2027, taking into account the completion of the transaction. This plan envisages that operating negative cash flows are expected during the first few years, although it is important to mention that this trend reverts to positive cash flows in 2024, which is when cash breakeven is expected to be reached.

In case that the planned transaction does not reach the required level of financing, Codere Online would need to seek additional funding from the Codere Group or other means or delay expenses. Management has developed a business plan assuming the SPAC transaction does not take place and marketing initial expenses and other investments are delayed. Under this business plan, positive cash flows are expected in 2022 although of course in this case revenue growth is harmed due to the decrease on investment. There is no certainty that the Group will be successful in obtaining such additional funding, if needed or that the business plan will be achieved.

Based on its recurring losses from operations since inception, expectation of continuing operating losses through 2023 and the need to raise additional capital to finance its future operations, the Group has concluded that there is substantial doubt about its ability to continue as a going concern. The combined carve-out financial statements do not include any adjustments that might result from the outcome of this uncertainty. Accordingly, the combined carve-out financial statements have been prepared on a basis that assumes the Group will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

n) New IFRS and interpretations of the IFRS Interpretations Committee (“IFRIC”)

The Group has used the same accounting policies in its opening IFRS combined carve-out statement of financial position and through all of the periods presented in these combined carve-out financial statements.

As of December 31, 2020, the following standards, amendments and interpretations have been published by the IASB, but their application is not yet mandatory for the Group, and the Group has not elected to early adopt the policies once allowed to do so.

F-64

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

3. ACCOUNTING POLICIES (cont.)

Standards and Amendments		Mandatory application: annual periods beginning on or after
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 – Benchmark Interest Rate Reform – Stage 2	Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 related to the ongoing benchmark reform (Phase 2).	1 June 2021
Amendment to IFRS 4 – Deferred Application of IFRS 9	Deferred application of IFRS 9 to 2023	1 June 2021
Amendment to IFRS 3 – Reference to the Conceptual Framework	IFRS 3 is updated to align the definitions of assets and liabilities in a business combination with those in the Conceptual Framework.	1 January 2022
Amendment to IAS 16 – Proceeds Before Intended Use	The amendment prohibits deducting any proceeds from the sale of items produced while the company is preparing an asset for its intended use from the cost of an item of property, plant and equipment.	1 January 2022
Amendment to IAS 37 – Onerous Contracts – Cost of Fulfilling a Contract	The amendment explains that the direct cost of fulfilling a contract includes the incremental costs of fulfilling that contract and an allocation of other costs directly related to the performance of the contract.	1 January 2022
Annual Improvements to IFRS 2018 – 2020	Minor Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41	1 January 2022
Amendments to IAS 1 – Presentation of Financial Statements	Clarifications regarding the presentation of liabilities as current and non-current.	1 January 2023
IFRS 17 – Insurance Contracts	Replaces IFRS 4 and clarifies the principles of registration, measurement, presentation and disclosure of insurance contracts in order to ensure that the entity provides relevant and reliable information that allows the users of the information to determine the effects of the contracts on their financial statements.	1 January 2023
Amendments to IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates	The amendments will make it easier to distinguish between changes in accounting estimates and changes in accounting policies	1 January 2023
Amendments to IAS 1– Presentation of Financial Statements. Disclosure of accounting policies	The amendments will help improve disclosures on accounting policies to provide more useful information to investors and other primary users of financial statements.	1 January 2023

With regard to IFRS 9, IAS 39 and IFRS 7, IFRS 4 and IFRS 16, the IASB continues to develop guidance and amendments to address the various accounting considerations that may arise when the various Interbank Offered

F-65

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

3. ACCOUNTING POLICIES (cont.)

Rates (“IBORs”) are amended or replaced by others. In this second phase, certain practical solutions, clarifications and exceptions are proposed in order for undertakings to better reflect financial assets, financial liabilities and lease liabilities on their financial statements as a result of the IBOR reform.

The Group estimates that no standards, amendments and interpretations in the preceding table will have a significant impact on the combined carve-out financial statements in the initial period of application.

4. SEGMENT INFORMATION

Under IFRS 8 (Segment Information), operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (“CODM”) which, in the case of the Group, is the Managing Director of the Group. The CODM is responsible for allocating resources and assessing performance of the business. For management purposes, the Group’s operating segments are formed by the Group’s online business in Spain, Mexico, Colombia, Panama, Italy, Malta, Israel and Gibraltar.

The Managing Director measures the performance of the Group’s business by its revenue and EBITDA, which is calculated as net income/(loss), after adding back income tax benefit/(expense), interest expense, depreciation and amortization.

The Group will report financial information, both internally and externally, based on the organizational structure pending to be approved by the Managing Director of the Group. Thus, the reportable segments for the 2020 and 2019 combined carve-out financial statements are formed by the Group’s operations in Spain, Mexico and Colombia. Panama, Italy and Codere Online Operator LTD (Malta) are grouped under “Other operations”. Codere Online Management Services LTD (Malta), Israel, SEJO and Gibraltar have been grouped and reported under “Supporting”. The segments referred to above include the information related to the online business provided in each country. Inter-segment transactions are carried out on an arm’s length basis and are included in the “Eliminations” column. Information relating to other Group companies not specifically included in these segments is reported under “Other Operations”.

The following tables break down certain of the information presented in the income statement for the years ended December 31, 2020 and 2019 by the Group’s operating segments (amounts expressed in thousands of euros).

12/31/2020	Spain			Mexico			Colombia			Other Operations			Supporting			Eliminations			Total Group
Revenue		48,279			18,422			2,355			329			31,046			(29,934	)		70,497
Personnel expenses		(275	)		(18	)		(108	)		(174	)		(4,582	)		—			(5,157	)
Depreciation and amortization		(470	)		(1	)		(2	)		(3	)		(456	)		—			(932	)
Other operating expenses		(43,230	)		(26,277	)		(3,497	)		(289	)		(35,298	)		29,934			(78,657	)
Operating expenses		(43,975	)		(26,296	)		(3,607	)		(466	)		(40,336	)		29,934			(84,746	)
OPERATING INCOME/(LOSS)		4,304			(7,874	)		(1,252	)		(137	)		(9,290	)		—			(14,249	)
Finance income		—			—			—			—			602			(434	)		168
Finance costs		(332	)		7			—			(101	)		(696	)		434			(688	)
Net financial results		(332	)		7			—			(101	)		(94	)		—			(520	)
NET INCOME/(LOSS) BEFORE TAX		3,972			(7,867	)		(1,252	)		(238	)		(9,384	)		—			(14,769	)
Income tax benefit/(expense)		(1,077	)		—			—			118			(551	)		—			(1,510	)
NET INCOME/(LOSS) FOR THE YEAR		2,895			(7,867	)		(1,252	)		(120	)		(9,935	)		—			(16,279	)
Attributable to equity holders of the Parent		2,895			(7,867	)		(1,252	)		(115	)		(9,935	)		—			(16,274	)
Attributable to non-controlling interests		—			—			—			(5	)		—			—			(5	)

F-66

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

4. SEGMENT INFORMATION (cont.)

12/31/2019	Spain			Mexico			Colombia			Other Operations			Supporting			Eliminations			Total Group
Revenue		44,058			15,222			1,505			731			27,743			(27,676	)		61,583
Personnel expenses		(234	)		(6	)		(79	)		—			(4,783	)		—			(5,102	)
Depreciation and amortization		(746	)		(1	)		—			—			(446	)		—			(1,193	)
Other operating expenses		(44,125	)		(21,754	)		(3,909	)		(550	)		(28,503	)		27,676			(71,165	)
Operating expenses		(45,105	)		(21,761	)		(3,988	)		(550	)		(33,732	)		27,676			(77,460	)
OPERATING INCOME/(LOSS)		(1,047	)		(6,539	)		(2,483	)		181			(5,989	)		—			(15,877	)
Finance income		—			—			—			—			232			(232	)		—
Finance costs		(3	)		—			—			(126	)		(372	)		232			(269	)
Net financial results		(3	)		—			—			(126	)		(140	)		—			(269	)
NET INCOME/(LOSS) BEFORE TAX		(1,050	)		(6,539	)		(2,483	)		55			(6,129	)		—			(16,146	)
Income tax benefit/(expense)		400			—			—			38			(385	)		—			53
NET INCOME/(LOSS) FOR THE YEAR		(650	)		(6,539	)		(2,483	)		93			(6,514	)		—			(16,093	)
Attributable to equity holders of the Parent		(650	)		(6,539	)		(2,483	)		(5	)		(6,514	)		—			(16,191	)
Attributable to non-controlling interests		—			—			—			98			—			—			98

The following tables break down certain of the information presented in the combined carve-out statements of financial position as of December 31, 2020, 2019 and January 1, 2019 by the Group’s operating segments (amounts expressed in thousands of euros).

12/31/2020	Spain			Mexico			Colombia			Other Operations			Supporting			Eliminations			Total Group
Non-current assets		213			3			6			197			9,159			(8,334	)		1,244
Current assets		21,734			5,047			1,186			651			14,891			(26,205	)		17,304
Trade receivables and other current assets		13,605			—			—			486			12,885			(25,330	)		1,646
Current financial assets		3,020			1,025			408			129			1,050			(875	)		4,757
Cash and cash equivalents		5,109			4,022			778			36			956			—			10,901
Total Assets		21,947			5,050			1,192			848			24,050			(34,539	)		18,548
EQUITY		(15,232	)		(5,462	)		(1,001	)		(1,164	)		(16,823	)		(243	)		(39,925	)
NON-CURRENT LIABILITIES		21,191			—			—			—			250			—			21,441
CURRENT LIABILITIES		15,988			10,512			2,193			2,012			40,623			(34,296	)		37,032
Lease obligations		9			—			—			—			—			—			9
Provisions		—			—			—			—			15			—			15
Borrowings		7,391			—			—			1,238			31,286			(22,138	)		17,777
Trade payables and other current liabilities		8,588			10,512			2,193			774			9,322			(12,158	)		19,231
Total EQUITY AND LIABILITIES		21,947			5,050			1,192			848			24,050			(34,539	)		18,548

F-67

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

4. SEGMENT INFORMATION (cont.)

12/31/2019	Spain			Mexico			Colombia			Other Operations			Supporting			Eliminations			Total Group
Non-current assets		659			2			—			200			9,001			(7,759	)		2,103
Current assets		37,862			1,690			21			360			14,808			(12,617	)		42,124
Trade receivables and other current assets		29,312			—			—			288			12,408			(12,276	)		29,732
Current financial assets		4,143			—			—			72			500			(341	)		4,374
Cash and cash equivalents		4,407			1,690			21			—			1,900			—			8,018
Total Assets		38,521			1,692			21			560			23,809			(20,376	)		44,227
EQUITY		(18,163	)		(4,000	)		(1,181	)		(1,039	)		(6,708	)		(242	)		(31,333	)
NON-CURRENT LIABILITIES		21,191			—			—			—			250			—			21,441
CURRENT LIABILITIES		35,493			5,692			1,202			1,599			30,267			(20,134	)		54,119
Lease obligations		—			—			—			—			—			—			—
Provisions		37			—			—			—			95			—			132
Borrowings		19,993			—			—			1,488			17,307			(8,552	)		30,236
Trade payables and other current liabilities		15,463			5,692			1,202			111			12,865			(11,582	)		23,751
Total EQUITY AND LIABILITIES		38,521			1,692			21			560			23,809			(20,376	)		44,227

01/01/2019	Spain			Mexico			Colombia			Other Operations			Supporting			Eliminations			Total Group
Non-current assets		1,396			—			—			100			2,515			(990	)		3,021
Current assets		31,280			—			—			285			6,568			(5,080	)		33,053
Trade receivables and other current assets		26,957			—			—			285			5,219			(4,679	)		27,782
Current financial assets		2,273			—			—			—			769			(401	)		2,641
Cash and cash equivalents		2,050			—			—			—			580			—			2,630
Total Assets		32,676			—			—			385			9,083			(6,070	)		36,074
EQUITY		(16,230	)		(683	)		(56	)		(988	)		(1,109	)		(284	)		(19,350	)
NON-CURRENT LIABILITIES		13,541			—			—			—			901			(901	)		13,541
CURRENT LIABILITIES		35,365			683			56			1,373			9,291			(4,885	)		41,883
Lease obligations		—			—			—			—			—			—			—
Provisions		—			—			—			—			19			—			19
Borrowings		22,940			—			—			1,308			2,652			(850	)		26,050
Trade payables and other current liabilities		12,425			683			56			65			6,620			(4,035	)		15,814
Total EQUITY AND LIABILITIES		32,676			—			—			385			9,083			(6,070	)		36,074

The Group does not have any customers that individually account for 10% or more of its interest and income for the years ended December 31, 2020 and 2019.

F-68

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

5. INTANGIBLE ASSETS

The table below reconciles the carrying amounts of “Intangible assets” at the beginning and end of the reporting periods:

Cost	Balance at 12/31/2019			Additions			Derecognitions		Balance at 12/31/2020
Service concession arrangement		200			—			—		200
Software		4,392			—			—		4,392
Total		4,592			—			—		4,592
Accumulated amortization (Note 14)
Service concession arrangement		—			(3	)		—		(3	)
Software		(2,581	)		(880	)		—		(3,461	)
Total		(2,581	)		(883	)		—		(3,464	)
Carrying amount		2,011			(883	)		—		1,128

Cost	Balance at 01/01/2019			Additions			Derecognitions		Balance at 12/31/2019
Service concession arrangement		—			200			—		200
Software		4,392			—			—		4,392
Total		4,392			200			—		4,592
Accumulated amortization (Note 14)
Service concession arrangement		—			—			—		—
Software		(1,415	)		(1,166	)		—		(2,581	)
Total		(1,415	)		(1,166	)		—		(2,581	)
Carrying amount		2,977			(966	)		—		2,011

The Group acquired in 2019 a service concession arrangement for its online business in Italy under a contract which grants it rights to economic benefits for the initial term period of 10 years. The contract provides that the concession may be renewed at the end of the initial term for up to an additional 10-years. The additional contract costs that would be incurred upon renewal is dependent upon the term and the base price in the tender notice.

The gross cost, accumulated amortization and impairment losses of intangible assets as of December 31, 2020, 2019 and January 1, 2019 are as follows:

Balance as of 12/31/2020

	Useful life (in years)	Accumulated amortization	Gross cost		Accumulated amortization			Impairment losses		Intangible assets
Service concession arrangement				200		(3	)		—		197
Of which:
with definite useful life	10	Straight line		200		(3	)		—		197
Software	4	Straight line		4,392		(3,461	)		—		931
Total intangible assets				4,592		(3,464	)		—		1,128

F-69

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

5. INTANGIBLE ASSETS (cont.)

Balance as of 12/31/2019

	Useful life (in years)	Accumulated amortization	Gross cost		Accumulated amortization			Impairment losses		Intangible assets
Service concession arrangement				200		—			—		200
Of which:
with definite useful life	10	Straight line		200		—			—		200
Software	4	Straight line		4,392		(2,581	)		—		1,811
Total intangible assets				4,592		(2,581	)		—		2,011

Balance as of 01/01/2019

	Useful life (in years)	Accumulated amortization	Gross cost		Accumulated amortization			Impairment losses		Intangible assets
Service concession arrangement				—		—			—		—
Of which:
with definite useful life	10	Straight line		—		—			—		—
Software	4	Straight line		4,392		(1,415	)		—		2,977
Total intangible assets				4,392		(1,415	)		—		2,977

6. PROPERTY, PLANT AND EQUIPMENT

The reconciliation of the carrying amounts of the items comprising “Property, plant and equipment” at the beginning and end of the reporting period:

Cost	Balance at 12/31/2019			Additions			Derecognitions			Balance at 12/31/2020
Machinery and equipment		113			55			(1	)		167
Other fixtures, fittings and tools		10			—			—			10
Total		123			55			(1	)		177
Accumulated depreciation (Note 14)
Machinery and equipment		(30	)		(39	)		1			(68	)
Other fixtures, fittings and tools		(1	)		(1	)		—			(2	)
Total		(31	)		(40	)		1			(70	)
Carrying amount		92			15			—			107

F-70

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

6. PROPERTY, PLANT AND EQUIPMENT (cont.)

Cost	Balance at 01/01/2019			Additions			Derecognitions		Balance at 12/31/2019
Machinery and equipment		48			65			—		113
Other fixtures, fittings and tools		—			10			—		10
Total		48			75			—		123
Accumulated depreciation (Note 14)
Machinery and equipment		(4	)		(26	)		—		(30	)
Other fixtures, fittings and tools		—			(1	)		—		(1	)
Total		(4	)		(27	)		—		(31	)
Carrying amount		44			48			—		92

7. FINANCIAL ASSETS

The breakdown of the carrying amount of the items presented under this heading at December 31, 2020, 2019 and January 1, 2019 is as follows:

	Amortized Cost
12/31/2020	Debt Instruments		Carrying Amount		Fair Value
Current financial assets:		17,304		17,304		17,304
Trade receivables and other current assets (Note 8)		1,646		1,646		1,646
Current financial assets		4,757		4,757		4,757
Of which:
with related parties (Note 15)		—		—		—
Cash and cash equivalents		10,901		10,901		10,901

	Amortized Cost
12/31/2019	Debt Instruments		Carrying Amount		Fair Value
Current financial assets:		42,124		42,124		42,124
Trade receivables and other current assets (Note 8)		29,732		29,732		29,732
Current financial assets		4,374		4,374		4,374
Of which:
with related parties (Note 15)		1,695		1,695		1,695
Cash and cash equivalents		8,018		8,018		8,018

	Amortized Cost
01/01/2019	Debt Instruments		Carrying Amount		Fair Value
Current financial assets:		33,053		33,053		33,053
Trade receivables and other current assets (Note 8)		27,782		27,782		27,782
Current financial assets		2,641		2,641		2,641
Of which:
with related parties (Note 15)		1,295		1,295		1,295
Cash and cash equivalents		2,630		2,630		2,630

F-71

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

7. FINANCIAL ASSETS (cont.)

Cash and cash equivalents include restricted cash corresponds to cash from Spanish clients where the regulation obliges the Company to maintain 1 euro as restricted cash for each euro the customer has in the virtual wallet. As of December 31, 2020, 2019 and January 1, 2019 it amounted to 2,647, 2,524 and 2,105 thousand euros, respectively.

Trade receivables and other current assets mainly include deposits made by customers through retail sport betting terminal, owned by other entities of Codere Group, to its online wallets amounted to 498, 28,999 and 26,560 thousand euros as of December 31, 2020, 2019 and January 1, 2019, respectively. The majority of them corresponds to current accounts with related parties Codere Apuestas S.A.U. amounted to 0, 26,365 and 25,408 thousand euros as of December 31, 2020, 2019 and January 1, 2019, respectively.

Current financial assets mainly correspond to deposits made by customers through payment service providers to its online wallets. The majority of them correspond to the online wallets and amounted to 4,412, 2,527 and 1,078 thousand euros as of December 31, 2020, 2019 and January 1, 2019, respectively. These deposits are normally settled and appear in the online account between one to fifteen days after the transaction, depending on each payment service provider and are recognized as current financial assets.

Current financial assets from related parties correspond to the tax returns from Codere Group (specifically from Codere España S.A.), by which the Group has recognized a receivable (see Note 15) amounting to 0, 1,695 and 1,295 thousand euros as of December 31, 2020, 2019 and January 1, 2019, respectively. These receivables are normally recognized as current financial assets.

The expected credit losses recognized on current financial assets as of December 31, 2020, 2019 and January 1, 2019 amounted to 49, 67 and 101 thousand euros, respectively.

8. TRADE RECEIVABLES AND OTHER CURRENT ASSETS

The breakdown of the items presented under this heading at December 31, 2020, 2019 and January 1, 2019 is as follows:

	12/31/2020			12/31/2019			01/01/2019
Trade receivables:
Other receivables from the Codere Group companies (Note 15)		936			29,216			26,738
Impairment of trade receivables		(101	)		(30	)		(53	)
Other current assets:
Current tax asset (VAT)		319			117			8
Prepayments		254			231			808
Other receivables		238			198			281
Total		1,646			29,732			27,782

At December 31, 2020, the Group signed to an agreement to settle some of its debts with Codere Group companies. This agreement resulted in the Group netting certain historical trade receivable, trade payable and other borrowings balances. The most significant was one affecting the trade receivable balance from Codere Apuestas S.A.U. amounting to €25.4 million.

F-72

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

8. TRADE RECEIVABLES AND OTHER CURRENT ASSETS (cont.)

The carrying amounts of the Group’s trade receivables and other current assets are denominated in the following currencies:

Currency	12/31/2020		12/31/2019		01/01/2019
EUR		1,584		29,622		27,763
GIP		3		3		—
ILS		59		107		19
Total		1,646		29,732		27,782

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group does not hold any collateral as security.

The movement in the allowance for impairment of accounts receivable as of December 31, 2020, 2019 and January 1,2019 is as follows:

Expected credit loss as of 01/01/2019	53
Additions	—
Reversal	(23	)
Expected credit loss as of 12/31/2019	30
Additions	71
Reversal	—
Expected credit loss as of 12/31/2020	101

9. EQUITY

Although the Group is not an existing legal entity and legal share capital does not exist for these combined carve-out financial statements as of December 31, 2020, 2019 and January 1, 2019, the Group is presenting separately in Equity the legal share capital of SEJO, the Group holding company, with the historical investment in Codere Online Management Services Ltd., Codere Online Operator, Ltd., Codere Israel Marketing Support Services, Ltd. and Codere (Gibraltar) Marketing Services Ltd. This subgroup was historically exempt from consolidation because it was consolidated in the financial statements of Codere.S.A.

Retained earnings represents the historical results of SEJO and its subsidiaries together with the combined result of the periods presented.

The net change in Parent investment for 2019 and 2020 of 4,270 thousand euros and 6,578 thousand euros, respectively, corresponds to the pre-merger actions agreed in the Business Combination Agreement (“BCA”). For further details, see Note 1 in these combined carve-out financial statements.

Equity attributable to non-controlling interest as of December 31, 2020, 2019 and January 1, 2019 amounted to 92 thousand euros, 96 thousand euros and 1 thousand euros, respectively, which represents 25% of minority shareholders interest in the historical online business activity the group has carried out through Hipica de Panama S.A.

Net Parent investment represents the Codere Group’s net investment in the entities included in these combined carve-out financial statements.

F-73

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

10. PROVISIONS

The breakdown of the items at December 31, 2020, 2019 and January 1, 2019 is as follows:

	12/31/2020		12/31/2019		01/01/2019
Other provisions		15		132		19
Total		15		132		19

11. BORROWINGS

The breakdown of the residual maturity contractual undiscounted cash flows of the financial liabilities of the Group as of December 31, 2020, 2019 and January 1, 2019, is as follows:

			Non-current
December 31, 2020	Current 2021		2022		2023		2024		2025		Subsequent years		Non-current		Total
Loans		—		6,000		426		11,515		3,500		—		21,441		21,441
Other borrowings		17,777		—		—		—		—		—		—		17,777
Of which:
to related parties (Note 15)		17,777		6,000		426		11,515		3,500		—		21,441		39,218
Total		17,777		6,000		426		11,515		3,500		—		21,441		39,218

			Non-current
December 31, 2019	Current 2020		2021		2022		2023		2024		Subsequent years		Non-current		Total
Loans		—		—		6,000		426		11,515		—		21,441		21,441
Other borrowings		30,236		—		—		—		—		—		—		30,236
Of which:
to related parties (Note 15)		29,971		—		6,000		426		11,515		—		21,441		51,412
Total		30,236		—		6,000		426		11,515		—		21,441		51,677

			Non-current
January 1, 2019	Current 2019		2020		2021		2022		2023		Subsequent years		Non-current		Total
Loans		—		—		—		6,000		426		7,115		13,541		13,541
Other borrowings		26,050		—		—		—		—		—		—		26,050
Of which:
to related parties (Note 15)		26,048		—		—		6,000		426		7,115		13,541		39,589
Total		26,050		—		—		6,000		426		7,115		13,541		39,591

F-74

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

11. BORROWINGS (cont.)

The breakdown of the loans by entities as of December 31, 2020, 2019 and January 1, 2019, is as follows:

Lender	Debtor	Loan date	Expire date	Principal amount (in thousand euros)		Interest rate
Codere España, S.A	Codere Online S.A.U.	12/30/2011	12/30/2023		75.50		6	%
Codere España, S.A	Codere Online S.A.U.	12/30/2014	12/30/2023		50.00		6	%
Codere España, S.A	Codere Online S.A.U.	03/01/2015	03/01/2024		15.00		6	%
Codere España, S.A	Codere Online S.A.U.	06/01/2015	05/31/2024		3,000.00		6	%
Codere España, S.A	Codere Online S.A.U.	12/30/2015	12/30/2024		600.00		6	%
Codere España, S.A	Codere Online S.A.U.	12/30/2016	12/30/2021		3,500.00		6	%
Codere España, S.A	Codere Online S.A.U.	12/30/2017	12/30/2022		6,000.00		6	%
Codere España, S.A	Codere Online S.A.U.	12/30/2018	12/30/2023		300.00		6	%
Codere España, S.A	Codere Online S.A.U.	01/23/2019	01/16/2024		2,650.00		6	%
Codere Newco, S.A.U	SEJO	03/01/2019	03/01/2024		250.00		6	%
Codere España, S.A	Codere Online S.A.U.	12/31/2019	12/31/2024		5,000.00		6	%
Total					21,441

As of December 31, 2020, 2019 and January 1, 2019 all the borrowings were denominated in Euros.

Financial liabilities associated with financing activities

The following charts present details regarding the changes in financial liabilities in 2020 and 2019 that arise from financial activities:

2020

	Balance at 12/31/2019		Drawdown of related party debt		Related party non-cash receivable		Related party settlement			Foreign exchange movement		Changes in fair value		Balance at 12/31/2020
Loans		21,441		—		—		—			—		—		21,441
Other borrowings		30,236		245		—		(12,704	)		—		—		17,777
Total		51,677		245		—		(12,704	)		—		—		39,218

2019

	Balance at 01/01/2019		Drawdown of related party debt		Related party non-cash receivable		Related party settlement			Foreign exchange movement		Changes in fair value		Balance at 12/31/2019
Loans		13,541		—		7,900		—			—		—		21,441
Other borrowings		26,050		7,163		—		(2,977	)		—		—		30,236
Total		39,591		7,163		7,900		(2,977	)		—		—		51,677

Loans mainly correspond to debt with Codere España S.A. amounted to 21,191 thousand euros as of December 31, 2020 and 2019 and 13,541 as of January 1, 2019, which Codere S.A. has approved to convert into equity as described in Note 3.m.

F-75

CODERE ONLINE BUSINESS 

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

11. BORROWINGS (cont.)

Other borrowings correspond to short-term loans, mainly composed of debt with entities from the Codere Group, and amounted to 17,777, 29,971 and 26,048 thousand euros as of December 31, 2020, 2019 and January 1, 2019, respectively.

At December 31, 2020, the Group signed to an agreement to settle some of its debts with Codere Group companies. This agreement resulted in the Group netting certain historical trade receivable, trade payable and other borrowings balances As a result of such, there was a reduction in other borrowings amounting to 12.7 million euros in 2020.

Interest bearing-debt

The interest rate on outstanding loans was 6% of generated profit as of December 31, 2020, 2019 and January 1, 2019. The Group recognizes interest on these loans exclusively with positive net income as it is only due in such case. During 2020, the Group recognized 292 thousand euros of interest over these loans (9 thousand euros in 2019). The borrowings from related parties are made on terms equivalent to those that prevail in arm’s length transactions.

12. TRADE PAYABLES AND OTHER CURRENT LIABILITIES

The composition of trade payables and other current liabilities as of December 31, 2020, 2019 and January 1, 2019 is as follows:

	12/31/2020		12/31/2019		01/01/2019
Trade payables		13,017		18,517		11,652
Customer online wallets		4,103		3,684		2,735
Other current liabilities		2,014		1,463		1,410
Accruals		97		87		17
Total		19,231		23,751		15,814
Of which:
with related parties (Note 15)		1,479		12,983		6,581

The customer online wallets are the net difference between funds deposited by customers, plus winning wagers, less losing wagers and less customers withdrawals.

Accruals include the Group’s commitments to its staff under the labor legislation prevailing in each market as well as the labor contingencies recognized in each reporting period.

The details of other current liabilities as of December 31, 2020, 2019 and January 1, 2019 is as follows:

	12/31/2020		12/31/2019		01/01/2019
Accrued salaries		232		238		341
Current gaming tax liabilities		1,510		—		1,069
Others		272		1,225		—
Total		2,014		1,463		1,410

F-76

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

13. INCOME TAX MATTERS

Each of the entities included in the Group file income taxes according to the tax regulations in force in each country on an individual basis or under consolidation tax regulations.

The combined carve-out income tax has been calculated as an aggregation of income tax expenses of each individual company. In order to calculate the taxable income of the combined entities individually, the accounting profit is adjusted for permanent differences. At each combined carve-out income statement date, a current tax asset or liability is recorded, representing income taxes currently refundable or payable.

Income tax payable is the result of applying the applicable tax rate in force to each tax-paying entity, in accordance with the tax laws in force in the country in which the entity is registered.

Reconciliation of book net income/(loss) before taxes to taxable income

The reconciliation between book net income/(loss) before tax and the income tax benefit/(expense) from continuing operations for the fiscal years ended December 31, 2020 and 2019 is as follows:

	2020			2019
Accounting net income/(loss) before tax		(14,769	)		(16,147	)
At Codere Online statutory income tax rate (25%)		3,692			4,037
Tax effect of previously unrecognized tax losses and permanent differences		(8,415	)		(7,409	)
Effect of different rates in different jurisdictions		3,094			2,987
Adjustment of prior year taxes		118			437
Income tax benefit/(expense)		(1,510	)		53
Effective tax rate		(10.23	%)		0.33	%
Of which -
Current tax expense		(1,510	)		53
Deferred tax benefit/(expense)		—			—
Total income tax benefit/(expense)		(1,510	)		53

As shown in the table below, the Group has generated net losses which can offset against future profits; however, as of December 31, 2020 and 2019, the Group did not recognize these considering it is not expected that these are utilized within a foreseeable future. There is no limit on time in either country to utilize these losses against future profits.

Entity	Previous		2018		2019		2020		Total
Codere Online S.A.U. (Spain)		2,643		2,538		785		—		5,966
Codere Online Management Services LTD (Malta)		—		—		5,971		9,592		15,563

It is important to mention that Codere Online S.A.U. belongs to a tax consolidation group in Spain. Therefore, although it had had positive net income in 2020, this result is offset with the losses coming from the other companies of the tax consolidation group.

Additionally, that 1.2 million euros out of the 1.5 million euros of the current tax expense shown in the table above comes from the consolidation group hence a related party debt is accrued. This can be found in borrowings in Note 11 and in related parties in Note 15 of these combined carve-out financial statements.

F-77

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

14. REVENUE AND EXPENSES

Revenues

The breakdown of the Group’s revenues is as follows:

	2020		2019
Online sports betting		39,719		42,678
Online casino wagering		30,778		18,905
Total		70,497		61,583

No one customer contributed more than 10% of revenue for the years ended December 31, 2020 and 2019.

Additionally, the distribution of sales by geographical market during the reporting period is as follows:

	2020		2019
Spain		48,279		44,058
Mexico		18,422		15,222
Colombia		2,355		1,489
Others		1,441		814
Total		70,497		61,583

Personnel expenses

The heading personnel expenses of the attached combined carve-out income statements for the 2020 and 2019 period includes expenses for wages, salaries, benefits (and other similar concepts) and social security and other social contributions expenses payable by the Group.

	2020		2019
Wages, salaries and similar		4,483		4,308
Social security contributions payable by the Group		280		417
Other social contributions		394		377
Total		5,157		5,102

Depreciation and amortization

The breakdown of depreciation and amortization in the combined carve-out income statements for the years ended December 31, 2020 and 2019 is as follows:

	2020		2019
Depreciation of property, plant and equipment (Note 6)		40		27
Amortization of intangible assets (Note 5)		883		1,166
Amortization of right-of-use assets		9		—
Total		932		1,193

F-78

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

14. REVENUE AND EXPENSES (cont.)

Other operating expenses

The breakdown of other operating expenses for the years ended December 31, 2020 and 2019 is as follows:

	2020		2019
Gambling taxes		8,867		7,402
Leases		575		488
Utilities, repairs and maintenance		1,258		285
Professional services and other expenses		28,639		26,320
Casino license royalties		4,255		2,241
Marketing expenses		35,063		34,429
Total		78,657		71,165

The Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease for the short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value. The Group has also recognized cost of doing business (costs that were incurred by the Codere Group, which were considered to be common expenses. Therefore, an allocation of these common expenses was performed in order to reflect the portion of these expenses related to the Group) within leases amounted to 127 thousand euros in 2020 (127 thousand euros in 2019) and professional services and other expenses mainly correspond to management and administrative expenses amounted to 517 thousand in 2019.

Professional services and other expenses in 2020 mainly include: (i) streaming services contracted to external parties offered to our customers as complement to our sports betting offer, (ii) the payment processing which allow our customers to deposit and withdraw using platforms and (iii) also some of our most popular sports odds are obtained through external providers. Additionally, certain other expenses, such as those relating to marketing and customer relationship management (CRM) tools, are included in this detail.

Earnings per share

Basic earnings per share amounts are calculated by dividing (a) the net income/(loss) for the year attributable to equity holders of the Parent by (b) the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net income/(loss) for the year attributable to ordinary equity holders of the Parent by the weighted average number of ordinary shares plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares, if any.

Both basic and diluted earnings per share attributable to equity holders of SEJO are calculated based on the following data, in each case as of December 31, 2020 and 2019:

	12/31/2020			12/31/2019
Net income/(loss) attributable to the equity holders of the Parent (thousand euros)		(16,274	)		(16,191	)
Weighted average number of shares outstanding		60,000			60,000
Adjusted number of shares		—			—
Basic earnings per share (euros)		(271.2	)		(269.9	)
Diluted earnings per share (euros)		(271.2	)		(269.9	)

F-79

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

15. RELATED PARTIES

The parties related to the Group include, in addition to its and Codere Group’s subsidiaries, associates and jointly controlled entities, if any, the Group’s key management personnel, as well as all individuals who are related to them by a family relationship, and the entities over which key management personnel may exercise significant influence or control. As described in Note 3, there is a management service contract with the Managing Director and Novelly, which had no significant impact at December 31, 2020. Balances and transactions between the Group and its subsidiaries, which are related parties of the Group, have been eliminated on combination and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.

Transactions with Codere S.A. and related companies

2020

	Related companies	Finance costs and exchange differences			Operating expenses			Total Costs
Codere España S.A.	Subsidiary of Codere Group		(281	)		—			(281	)
Codere Newco S.A.U.	Subsidiary of Codere Group		(12	)		(3,220	)		(3,232	)
Codere Apuestas España S.L.	Subsidiary of Codere Group		—			(7,066	)		(7,066	)
Codere Apuestas Galicia S.L.	Subsidiary of Codere Group		—			(1,287	)		(1,287	)
Codere Operadora de Apuestas S.L.	Subsidiary of Codere Group		—			(919	)		(919	)
Codere Apuestas S.A.U.	Subsidiary of Codere Group		—			(79	)		(79	)
Codere Italia S.P.A.	Subsidiary of Codere Group		(101	)		(918	)		(1,019	)
Administradora Mexicana del Hipódromo	Subsidiary of Codere Group		—			(4,164	)		(4,164	)
Other retail companies	Subsidiary of Codere Group		—			(534	)		(534	)

Balance at 12/31/2020

	Related companies	Trade receivables (Note 8)		Non-current financial liabilities (Note 11)		Current financial liabilities (Note 11)		Trade payables and other current liabilities (Note 12)
Codere Apuestas Galicia S.L.	Subsidiary of Codere Group		463		—		—		—
Codere Italia S.P.A.	Subsidiary of Codere Group		435		—		1,339		101
King Bingo S.R.L.	Subsidiary of Codere Group		2		—		—		—
Codere España S.A.	Subsidiary of Codere Group		—		21,191		6,644		281
Codere Newco S.A.U.	Subsidiary of Codere Group		—		250		9,048		152
Administradora Mexicana del Hipódromo	Subsidiary of Codere Group		—		—		—		—
Other retail companies	Subsidiary of Codere Group		36		—		746		945
Other latam retail companies	Subsidiary of Codere Group		—		—		—		—
			936		21,441		17,777		1,479

F-80

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

15. RELATED PARTIES (cont.)

2019

	Related companies	Finance costs and exchange differences			Operating expenses			Total Costs
Codere Newco S.A.U.	Subsidiary of Codere Group		(9	)		(589	)		(598	)
Codere Apuestas España S.L.	Subsidiary of Codere Group		—			(6,956	)		(6,956	)
Codere Apuestas Galicia S.L.	Subsidiary of Codere Group		—			(1,374	)		(1,374	)
Codere Apuestas S.A.U.	Subsidiary of Codere Group		—			(1,235	)		(1,235	)
Codere Italia S.P.A.	Subsidiary of Codere Group		(127	)		—			(127	)
Administradora Mexicana del Hipódromo	Subsidiary of Codere Group		—			(3,467	)		(3,467	)
Other retail companies	Subsidiary of Codere Group		(57	)		(287	)		(344	)

Balance at 12/31/2019

	Related companies	Current financial assets (Note 7)		Trade receivables (Note 8)		Non-current financial liabilities (Note 11)		Current financial liabilities (Note 11)		Trade payables and other current liabilities (Note 12)
Codere España S.A.	Subsidiary of Codere Group		1,695		—		21,191		9,718		—
Codere Newco S.A.U.	Subsidiary of Codere Group		—		—		250		8,713		1,127
Codere S.A.	Parent of Codere Group		—		—		—		41		—
Codere Apuestas España S.L.	Subsidiary of Codere Group		—		—		—		632		7,823
Codere Apuestas Galicia S.L.	Subsidiary of Codere Group		—		2,524		—		—		2,228
Operiberica S.A.	Subsidiary of Codere Group		—		—		—		7,324		—
Codere Apuestas S.A.U.	Subsidiary of Codere Group		—		26,365		—		28		1,628
Administradora Mexicana del Hipódromo	Subsidiary of Codere Group		—		—		—		—		—
Codere Italia S.P.A.	Subsidiary of Codere Group		—		216		—		1,487		—
Other retail companies	Subsidiary of Codere Group		—		110		—		2,028		177
Other latam retail companies	Subsidiary of Codere Group		—		—		—		—		—
			1,695		29,215		21,441		29,971		12,983

F-81

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

15. RELATED PARTIES (cont.)

Balance at 01/01/2019

	Related companies	Current financial assets (Note 7)		Trade receivables (Note 8)		Non-current financial liabilities (Note 11)		Current financial liabilities (Note 11)		Trade payables and other current liabilities (Note 12)
Codere España S.A.	Subsidiary of Codere Group		1,295		—		13,541		—		—
Codere Newco S.A.U.	Subsidiary of Codere Group		—		—		—		1,801		1,086
Codere S.A.	Parent of Codere Group		—		—		—		—		—
Codere Apuestas España S.L.	Subsidiary of Codere Group		—		—		—		623		3,275
Jpvmatic 2005 S.L. Unipersonal	Subsidiary of Codere Group		—		—		—		16,946		361
Operiberica S.A.	Subsidiary of Codere Group		—		—		—		3,998		—
Codere Apuestas S.A.U.	Subsidiary of Codere Group		—		25,408		—		—		834
Codere Apuestas Galicia S.L.	Subsidiary of Codere Group		—		803		—		—		854
Codere Italia S.P.A.	Subsidiary of Codere Group		—		178		—		1,307		—
Other retail companies	Subsidiary of Codere Group		—		349		—		1,373		171
			1,295		26,738		13,541		26,048		6,581

Transactions with key management personnel

There is a management services contract called Novelly with key management personnel that includes 3 tranches of compensations: fixed and variable annual payments depending on the results of the year and a 5-year incentive plan based on the valuation of the online business according to its incremental results and the cash investments. The first two are accrued and paid on a current basis, and for the third one, there is no provision at December 31, 2020 as the target was not reached at that date. The annual variable bonus provisions made by the Group for the Novelly contract amounted to 125 thousand euros and 113 thousand euros as of December 31, 2020 and 2019, respectively. The expense incurred of Novelly for both tranches are recorded as professional service expenses and amounted to 276 thousand euros for the year ended December 31, 2020 (277 thousand euros in 2019).

16. RISK MANAGEMENT POLICIES

● Key Group Risk

The key risks to which the Group is exposed mainly to risks related to the gambling sector. The gambling industry is closely regulated (those regulations extend to the gambling business itself and the gambling formats and channels permitted; management of the risks associated with gambling; gambling advertising; data protection; anti-money laundering; and anti-fraud, among others). Gambling operators are required to fulfil a number of technical and compliance-related obligations in order to operate under licenses that need to be renewed at certain intervals and/or are subject to ongoing oversight. The failure to comply with any of these regulations or requirements or the inability to renew our gambling licenses could have an adverse impact on our business. In addition, new regulations in the future could imply additional restrictions on already-regulated activities that could reduce our ability to offer products and services to our customers.

The industry is also exposed to the formulation of new and interpretation of existing gambling tax regulations in every market. Any increase in the gambling tax burden or changes in tax calculation methodologies could affect the viability of our business. The gambling industry is often in the spotlight and the public perception of what we do can also have an adverse impact on our performance. Moreover, regulatory changes in the various markets could pave the way for the entry of new competitors or new gambling formats that could have an adverse impact on our business. Lastly, the Group is and will remain exposed to inspections and/ lawsuits related with the above-mentioned tax regulations and compliance rules.

F-82

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

16. RISK MANAGEMENT POLICIES (cont.)

Elsewhere, the markets in which the Group does business expose it to political, macroeconomic and monetary risks that affect its international operations. The market conditions and social-economic variables in each of our markets affect our customers’ purchasing power and, by extension, our business performance. The Group is also affected by political and monetary risks (including exposure to currency devaluations and changes in company law in our operating markets).

The Group is exposed to risks deriving from its growth and financing strategies. Indeed, its indebtedness could curtail management of the business, whereas conditions in the capital markets or the undertaking of unprofitable investments could affect the Group’s performance. Moreover, financial market circumstances and the Group’s financial situation could affect the ability to secure the guarantees or sureties needed to operate most of the gambling licenses it manages in its various business markets.

In addition, the Group is exposed to the risk that its customers’ tastes and preferences could change, as well as the risk that technology could lead to alternative leisure pursuits options. It also faces risks deriving from supplier or competitor concentration in certain formats or products and the ability or inability of the former to create safe gambling products that are attractive to customers and comply with prevailing legislation in one or more markets. Lastly, the impact of technology developments on how the business and product are managed (digitalization and interconnection) implies risks with respect to the integrity of our IT systems and platforms which the Group needs to manage proactively in order to avoid potential contingencies. The Group’s financial systems currently rely significantly on human intervention. The Group is making an effort to reduce the level of human intervention in the related processes.

The Group is exposed to various financial market risks as a result of its ordinary business activities. The main market risks affecting the Group are the following:

● Liquidity risk: The Group is exposed to liquidity risk if a mismatch arises between its financing needs (including operating and financial expense and investments) and its sources of financings (including revenues, divestments and credit lines from financial institutions and financial instruments from related parties (including capital contributions)).

● Exchange rate risk:The Group is exposed to exchange rate risk because its functional currency is the euros, and the value of financial assets denominated in a currency that is different from the Group’s functional currency is subject to variations resulting from fluctuations in exchange rates.

● Credit risk: The Group is exposed to the possibility of a counterparty to an agreement not complying with its contractual obligations, thus negatively affecting results of operations of the Group.

Liquidity risk

The Group’s general financial policy consists in managing the liquidity to ensure that the funds required for future obligations are available through cash from operations and, at times, financings from related parties or third parties.

F-83

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

16. RISK MANAGEMENT POLICIES (cont.)

Exchange rate risk

Exchange rate risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities (when revenue or expense is denominated in a foreign currency).

The Group actively manages exchange rate risks through internal policies to control the exposure of balances to foreign currency in order to minimize the risks associated with exchange rate variations and optimizing the Group’s financial cost. In this way, it attempts to protect its solvency and financial results.

The following table includes the outstanding current asset and current liability balances in foreign currencies as of December 31, 2020, 2019 and January 1, 2019 in thousands of euros:

12/31/2020

	Current assets		Current liabilities
ILS		351		292
COP		1,187		743
MXN		5,047		2,925
Total		6,585		3,960

12/31/2019

	Current assets		Current liabilities
ILS		276		270
COP		21		612
GBP		7		235
MXN		1,690		1,585
Total		1,994		2,701

01/01/2019

	Current assets		Current liabilities
ILS		380		474
MXN		—		683
Total		380		1,157

The balances exposure to the exchange rate risk from Panama are not significant.

F-84

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

16. RISK MANAGEMENT POLICIES (cont.)

Sensitivity analysis

Thousands of euros			Sensitivity -10%					Sensitivity +10%
Currency	Exchange rate 12/31/2020		Income statement			Equity		Income statement		Equity
COP/EUR		4,212.0		(44	)		—		44		—
MXN/EUR		24.5		(212	)		—		212		—
ILS/EUR		3.9		(6	)		—		6		—

Thousands of euros			Sensitivity -10%					Sensitivity +10%
Currency	Exchange rate 12/31/2019		Income statement			Equity		Income statement			Equity
COP/EUR		3,681.5		59			—		(59	)		—
MXN/EUR		21.2		(11	)		—		11			—
GBP/EUR		0.8		21			—		(21	)		—
ILS/EUR		3.9		(1	)		—		1			—

Thousands of euros			Sensitivity -10%				Sensitivity +10%
Currency	Exchange rate 01/01/2019		Income statement		Equity		Income statement			Equity
MXN/EUR		22.5		68		—		(68	)		—
ILS/EUR		4.3		9		—		(9	)		—

Credit risk

The Group’s main financial assets exposed to the credit risk are trade receivables, current financial assets and other current assets.

Impairment provisions are determined on the basis of lifetime expected credit losses, including those expected at the individual level, using reasonable and supportable forward-looking information, based on the best information available at the date of authorizing the financial statements for issue. They are re-estimated at every reporting date on an individual basis, using the following criteria:

● The age of the debt.

● The existence of financial difficulties, including bankruptcy proceedings.

● An analysis of the debtor’s ability to repay the loan.

As described in Note 3, the Group’s historical credit loss experience between Groups entities is nil. The expected credit loss is estimated based on external risk parameters, publicly available, such as the probability of default (PD) of Codere Group and a loss given at default (LGD) of 100%.

F-85

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

17. OTHER INFORMATION

COVID-19

On March 11, 2020, the World Health Organization upgraded the public health emergency caused by the outbreak of the coronavirus (COVID-19) to an international pandemic. The rapid evolution of events, on a national and international scale, led to an unprecedented health crisis, which will have a direct impact on the social and macroeconomic environment and on the evolution of business. To address this situation, each of the countries in which the Group operates has established preventive health measures to mitigate the risk of contagion.

Regarding the online operations, the lack of sporting events from March 2020 to mid-June 2020 led to a decrease in online sports betting revenues in all business units, which were only partially offset by an increase in online casino wagering revenues.

This situation has led to significant reduction on the investment hence in the growth of the online business caused by lack of expected liquidity both in the online division but mainly in the corporation which was the provider of the investment funding for the business unit due to the closing of the physical business. Because of this slow down on the investment and growth, and understanding there is a time-to-market opportunity in some of the countries in which we are operating, such as Mexico, we decided to look for external resources such as the transaction agreement entered into subsequent to year-end (see Note 3 m).

As a result of the above, the Group’s Directors have implemented a contingency plan in order to maintain its liquidity position and support the business continuity. Among many others, the main measures being implemented are as follows:

● Cross-promotions with the intention of switching betting customers to casino in order to diversify risk in the face of a potential cancellation of sports events.

● Reducing marketing activities.

● Optimization of marketing channels in search of efficiency in the generation of new customers.

● Reduction and monitoring of all expenses, eliminating non-essential ones.

● Intensive cash management to invest what is available without generating additional financing.

18. EVENTS AFTER THE REPORTING DATE

On June 21, 2021, Codere Online Luxembourg, S.A. and its consolidated subsidiaries have entered into a definitive transaction agreement with DD3, a publicly traded special purpose acquisition company, that will result in the Group becoming a public company. The new company, which will be led by the Group’s Managing Director, Moshe Edree, will continue to be managed by its highly experienced management team, including COO, Aviv Sher, and current CFO, Gonzalo De Osma Bucero. Martin Werner, Founding Partner of DD3 Capital Partners, will join the Group’s Board of Directors.

Also, on June 30, 2021, the parent of the Group, Codere, S.A., approved the conversion of debt into equity amounting to 42 million euros and will take place in July 2021 as described in Note 3.m) that will substantially contribute to the improvement of the equity of the Group.

F-86

CODERE ONLINE BUSINESS

NOTES TO THE COMBINED CARVE-OUT FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020, 2019 AND JANUARY 1, 2019 AND
FOR THE PERIODS ENDED DECEMBER 31, 2020 AND 2019

(Thousands of Euros)

18. EVENTS AFTER THE REPORTING DATE (cont.)

Additionally, during the first part of 2021, the Group formalized an intercompany relationship with Codere Group through four contracts, which will frame and guide the business relationship between the entities. As described in the Note 1 to these combined carve-out financial statements, we are reorganizing the group to create an independent group of companies in order to ease the transaction. This way not only are all of the companies regrouping under Servicios de Juego Online, S.A.U. (“SEJO”), but also new subsidiaries in Latin America are being created.

Further, it is relevant to mention that new marketing restrictions were put in place in Spain beginning in May of 2021; however, we expect to manage and take advantage of the traditional media investment restriction such as TV, Radio, etc. due to the vast management experience in digital media.

F-87

Report of Independent Registered Public Accounting Firm

To the Management Board and Sole Shareholder of
Codere Online Luxembourg, S.A.

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Codere Online Luxembourg, S.A. (the “Company”) as of June 30, 2021, and the related notes (collectively referred to as the “Financial Statement”). In our opinion, the Financial statement present fairly, in all material respects, the financial position of the Company at June 30, 2021, in conformity with International Financial Reporting Standards issued by the International Accounting Standards Board.

Basis for Opinion

The Financial Statement is the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s Financial Statement based on our audit. 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 audit 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 Financial Statement is 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 audit 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 Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the Financial Statement, 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 Financial Statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Financial Statement. We believe that our audit provides a reasonable basis for our opinion.

/s/ Ernst & Young, S.L.

We have served as the Group’s auditor since 2021

Madrid, Spain
October 8, 2021

F-88

Codere Online Luxembourg S.A.

Balance sheet as at June 30, 2021

(In thousands of euros)

	Notes	30/06/2021
ASSETS
CURRENT ASSETS			30
Cash and cash equivalents	3		30

	Notes	30/06/2021
EQUITY
Share capital	4		30
Equity attributable to owners of the Company			30

The accompanying notes 1 to 6 are an integral part of this financial statement.

F-89

CODERE ONLINE LUXEMBOURG S.A.

NOTES TO THE FINANCIAL STATEMENT AS OF June 30, 2021

(Thousands of Euros)

1. BACKGROUND

Codere Online Luxembourg S.A. (the “Company” or “Codere Online”), a company organized under the laws of Luxembourg, the sole shareholder of the Company is CODERE NEWCO S.A.U., a Spanish public limited liability company (Sociedad Anónima Unipersonal), having its registered office at 26, Avenida de Bruselas, 28108 Alcobendas, Madrid, Spain and registered with the trade registry of Madrid under the reference Volume 34399, page 192, section 8, Sheet M-618.784 (the “Sole Shareholder”). The Company has been registered in Luxembourg as a public limited company (société anonyme) since June 4, 2021 under the laws of Luxembourg, having its registered office at 7, rue Robert Stumper, L-2557 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg trade and companies register (Registre de commerce et des sociétés, Luxembourg) under the number B255798. The Company was created in connection with a proposed business combination with DD3 Acquisition Corp. II (“DD3”). The business combination involve (i) the transfer of Servicios de Juego Online S.A. (“SEJO”) to the Company, in exchange for additional ordinary shares of the Company to be subscribed for by Codere Newco; (ii) the conversion of each share of DD3 Acquisition Corp. II (“DD3”) Class B common stock into one share of DD3 Class A common stock; (iii) Codere Online U.S. Corp’s merger with and into DD3, with DD3 surviving such merger and becoming a direct wholly-owned subsidiary of the Company and, in connection therewith, DD3’s corporate name will change to “Codere Online U.S. Corp.”; (iv) the contribution of all shares of DD3 Class A Common Stock issued and outstanding immediately prior to the merger to the Company in exchange for one Company Ordinary Share for each share of DD3 Class A Common Stock pursuant to a share capital increase of the Company; and (v) the conversion of each DD3 warrant that is outstanding immediately prior to the merger, which will no longer represent a right to acquire one share of DD3 Class A Common Stock and will instead represent the right to acquire one Company Ordinary Share on substantially the same terms (collectively, the “Business Combination”).

The objects of the Company are:

● to act as an investment holding company and to co-ordinate the business of any corporate bodies and to acquire securities and any other asset;

● to acquire, undertake and carry on the business, property and/or liabilities;

● to invest and deal with the Company’s money

● to acquire an interest in, amalgamate, merge, consolidate with and enter into partnership or any arrangement for the sharing of profits, union of interests, co-operation, joint venture, reciprocal concession;

● to enter into any guarantee or contract of indemnity or suretyship, and to provide security for the performance of the obligations of and/or the payment of any money by any person;

● to deal with all or any part of the property and rights of the Company.

The Company has not engaged in any business or trading activities since its incorporation.

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statement of the Company as at June 30, 2021 was authorized for issue in accordance with a resolution of Directors on October 8,2021.

Basis of accounting

The financial statement has been prepared in accordance with International Financial Reporting Standards (“IFRS”) by the International Accounting Standards Board (“IASB”) and pursuant to the interpretations issued by the Interpretation Committee of the IASB (“IFRIC”).The income statement, statements of comprehensive income, statements of changes in equity and statements of cash flows as required under IFRS have not been presented because the Company did not present any activity as of June 30, 2021.

F-90

CODERE ONLINE LUXEMBOURG S.A.

NOTES TO THE FINANCIAL STATEMENT AS OF June 30, 2021

(Thousands of Euros)

2. SIGNIFICANT ACCOUNTING POLICIES (cont.)

The financial statement has been prepared on a historical cost basis, in thousands of euros.

This financial statement represents the Company’s first IFRS financial statement. Accordingly, the Company has prepared this financial statement in compliance with IFRS applicable for periods ending on or after June 30, 2021. No comparative information has been prepared as this financial statement is the first the Company has prepared due to its incorporation on June 4, 2021.

New IFRS and interpretations of the IFRS Interpretations Committee (“IFRIC”)

As of June 30, 2021, the following standards, amendments and interpretations have been published by the IASB, but their application is not yet mandatory for the Company, and the Company has not elected to early adopt the policies once allowed to do so.

Standards and Amendments		Mandatory application: annual periods beginning on or after
Amendment to IFRS 3 – Reference to the Conceptual Framework	IFRS 3 is updated to align the definitions of assets and liabilities in a business combination with those in the Conceptual Framework.	1 January 2022
Amendment to IAS 16 – Proceeds Before Intended Use	The amendment prohibits deducting any proceeds from the sale of items produced while the company is preparing an asset for its intended use from the cost of an item of property, plant and equipment.	1 January 2022
Amendment to IAS 37 – Onerous Contracts – Cost of Fulfilling a Contract	The amendment explains that the direct cost of fulfilling a contract includes the incremental costs of fulfilling that contract and an allocation of other costs directly related to the performance of the contract.	1 January 2022
Annual Improvements to IFRS 2018–2020.	Minor Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41	1 January 2022
Amendments to IAS 1- Presentation of Financial Statements	Clarifications regarding the presentation of liabilities as current and non-current.	1 January 2023
IFRS 17 – Insurance Contracts	Replaces IFRS 4 and clarifies the principles of registration, measurement, presentation and disclosure of insurance contracts in order to ensure that the entity provides relevant and reliable information that allows the users of the information to determine the effects of the contracts on their financial statements.	1 January 2023
Amendments to IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates	The amendments will make it easier to distinguish between changes in accounting estimates and changes in accounting policies	1 January 2023
Amendments to IAS 1- Presentation of Financial Statements. Disclosure of accounting policies	The amendments will help improve disclosures on accounting policies to provide more useful information to investors and other primary users of financial statements.	1 January 2023

The Company estimates that no standards, amendments and interpretations in the preceding table will have a significant impact on the financial statement in the initial period of application.

F-91

CODERE ONLINE LUXEMBOURG S.A.

NOTES TO THE FINANCIAL STATEMENT AS OF June 30, 2021

(Thousands of Euros)

3. CASH AND CASH EQUIVALENTS

Cash and cash equivalents are comprised of the contribution from the sole shareholder in euros, accounted for at amortized cost.

4. EQUITY

As at June 4, 2021, the subscribed share capital of the Company is thirty thousand euros (€30,000) divided into thirty thousand (30,000) shares with a nominal value of one euro each (€1), all of which are fully paid up.

The amounts and movements of share capital for the period ended June 30, 2021 are as follows:

	Balance as of June 4, 2021	Issue of share capital		Distribution of results	Results for the period	Balance as of June 30, 2021
Share capital			30,000				30,000

5. RELATED PARTIES

Related party transactions in the period are limited to the subscription of shares of the Company by the sole shareholder as described in Note 4.

6. EVENTS AFTER THE REPORTING DATE

Thera are not events after the reporting date. Before December 31, 2021, the Business Combination described in Note 1 is expected to be consummated and consequently, among other matters, the transfers described in Note 1 will be completed.

F-92

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 6. Indemnification of Directors and Officers.

Article 441-8 of the 1915 Law provides that the directors shall not incur any personal obligation by reason of the commitments of the company.

Article 441-9 of the 1915 Law provides that the directors, the members of the management committee and the managing executive officer shall be liable to the company in accordance with general law for the execution of the mandate given to them and for any misconduct in the management of the company’s affairs. The directors and members of the management committee shall be jointly and severally liable towards either the company or any third parties for damages resulting from the violation of the 1915 Law or the company’s articles of association. The directors and members of the management committee shall be discharged from such liability in the case of a violation to which they were not a party provided no misconduct is attributable to them and they have reported such violation, as regards members of the board of directors, to the first general meeting and, as regards members of the management committee, during the first meeting of the board of directors after they had acquired knowledge thereof.

Holdco’s articles of association provide that directors of Holdco are not held personally liable for the indebtedness or other obligations of Holdco. As agents of Holdco, they are responsible for the performance of their duties. Subject to the exceptions and limitations listed in Holdco’s articles of association and mandatory provisions of law, every person who is, or has been, a director or senior manager of Holdco (and his or her heirs, executors and administrators) shall be indemnified by Holdco to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by such person in connection with any claim, action, suit or proceeding which he becomes involved as a party or otherwise by virtue of his or her being or having been a director or senior manager of Holdco, or, at the request of Holdco, of any other company of which Holdco is a shareholder or creditor and by which he is not entitled to be indemnified, and against amounts paid or incurred by him or her in the settlement thereof. The words “claim,” “action,” “suit” or “proceeding” shall apply to all claims, actions, suits or proceedings (civil, criminal or otherwise including appeals) actual or threatened and the words “liability” and “expenses” shall include without limitation attorneys’ fees, costs, judgments, amounts paid in settlement and other liabilities. However, no indemnification shall be provided to any director, senior manager or shareholder of Holdco (i) against any liability by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office (ii) with respect to any matter as to which he or she shall have been finally adjudicated to have acted in bad faith and not in the interest of Holdco or (iii) in the event of a settlement, unless the settlement has been approved by a court of competent jurisdiction or by the Holdco Board.

Holdco’s articles of association provide that the right of indemnification provided by the articles of association shall be severable, shall not affect any other rights to which any director or senior manager may now or hereafter be entitled, shall continue as to a person who has ceased to be such director or senior manager and shall inure to the benefit of the heirs, executors and administrators of such a person. Nothing contained in such articles of association shall affect or limit any rights to indemnification to which corporate personnel, including directors and senior manager, may be entitled by contract or otherwise under law. Holdco shall specifically be entitled to provide contractual indemnification to and may purchase and maintain insurance for any corporate personnel, including directors and senior managers of Holdco, as Holdco may decide upon from time to time.

Item 7. Recent Sales of Unregistered Securities.

None.

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Item 8. Exhibits and Financial Statements.

(a) Exhibits

Exhibit Number	Description
2.1#	Business Combination Agreement, dated as of June 21, 2021, by and among DD3 Acquisition Corp. II, Codere Newco, S.A.U., Servicios de Juego Online S.A.U., Codere Online Luxembourg, S.A. and Codere Online U.S. Corp. (incorporated by reference to Exhibit 2.1 to Codere Online Luxembourg, S.A.’s Form F-4, File No. 333-258759, filed with the SEC on August 12, 2021).
3.1*	Consolidated Articles of Association of Codere Online Luxembourg, S.A., dated as of November 30, 2021.
4.1	Specimen Ordinary Share Certificate of Codere Online Luxembourg, S.A. (incorporated by reference to Exhibit 4.1 to Codere Online Luxembourg, S.A.’s Form F-4, File No. 333-258759, filed with the SEC on August 12, 2021).
4.2	Warrant Agreement, dated December 7, 2020, by and between DD3 Acquisition Corp. II, and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.1 to DD3 Acquisition Corp. II’s Form 8-K (File No. 001-39767), filed with the SEC on December 11, 2020).
4.3	Form of Assignment, Assumption and Amendment Agreement by and among DD3 Acquisition Corp. II, Codere Online Luxembourg, S.A. and Continental Stock Transfer & Trust Company, with respect to the Warrant Agreement dated as of December 7, 2020 (incorporated by reference to Exhibit F of Exhibit 2.1 to DD3 Acquisition Corp. II’s Form 8-K (File No. 001-39767), filed with the SEC on June 22, 2021).
4.4	Form of Warrant Certificate of Codere Online Luxembourg, S.A. (incorporated by reference to Exhibit A to Exhibit F of Exhibit 2.1 to DD3 Acquisition Corp. II’s Form 8-K (File No. 001-39767), filed with the SEC on June 22, 2021).
5.1*	Legal Opinion of Clifford Chance.
5.2*	Legal Opinion of Davis Polk & Wardwell LLP.
10.1	Contribution and Exchange Agreement, dated as of June 21, 2021, by and among Codere Online Luxembourg, S.A., Servicios de Juego Online, S.A.U. and Codere Newco, S.A.U. (incorporated by reference to Exhibit 10.2 to DD3 Acquisition Corp. II’s Form 8-K (File No. 001-39767), filed with the SEC on June 22, 2021).
10.2	Investor Support Agreement, dated as of June 21, 2021, by and among DD3 Acquisition Corp. II, Baron Global Advantage Fund, Baron Emerging Markets Fund and Destinations International Equity Fund (incorporated by reference to Exhibit 10.1 to DD3 Acquisition Corp. II’s Form 8-K (File No. 001-39767), filed with the SEC on June 22, 2021).
10.3	Form of Subscription Agreement (incorporated by reference to Exhibit 10.3 to DD3 Acquisition Corp. II’s Form 8-K (File No. 001-39767), filed with the SEC on June 22, 2021).
10.4	Forward Purchase Agreement, dated as of November 17, 2020, by and among DD3 Acquisition Corp. II, Baron Global Advantage Fund, Baron Emerging Markets Fund and Destinations International Equity Fund (incorporated by reference to Exhibit 10.5 to DD3 Acquisition Corp. II’s Registration Statement on Form S-1 (File No. 333-250212), filed with the SEC on November 19, 2020).
10.5	Forward Purchase Agreement, dated as of November 19, 2020, by and between DD3 Acquisition Corp. II and MG Partners Multi-Strategy Fund LP (incorporated by reference to Exhibit 10.12 to DD3 Acquisition Corp. II’s Registration Statement on Form S-1 (File No. 333-250212), filed with the SEC on November 19, 2020).

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10.6	Amendment No. 1 to Forward Purchase Agreement, dated as of June 21, 2021, by and among DD3 Acquisition Corp. II, Baron Global Advantage Fund, Baron Emerging Markets Fund and Destinations International Equity Fund (incorporated by reference to Exhibit 10.6 to DD3 Acquisition Corp. II’s Form 8-K (File No. 001-39767), filed with the SEC on June 22, 2021).
10.7	Amendment No. 1 to Forward Purchase Agreement, dated as of June 21, 2021, by and between DD3 Acquisition Corp. II and MG Partners Multi-Strategy Fund LP (incorporated by reference to Exhibit 10.7 to DD3 Acquisition Corp. II’s Form 8-K (File No. 001-39767), filed with the SEC on June 22, 2021).
10.8	Form of Registration Rights and Lock-Up Agreement, by and among Codere Online Luxembourg, S.A., DD3 Sponsor Group, LLC, MG Partners Multi-Strategy Fund LP, Baron Global Advantage Fund, Baron Emerging Markets Fund, Destinations International Equity Fund, Codere Newco, S.A.U. and DD3 Acquisition Corp. II (incorporated by reference to Exhibit A of Exhibit 2.1 to DD3 Acquisition Corp. II’s Form 8-K (File No. 001-39767), filed with the SEC on June 22, 2021).
10.9	Form of Nomination Agreement, by and among Codere Online Luxembourg, S.A., DD3 Sponsor Group, LLC and Codere Newco, S.A.U. (incorporated by reference to Exhibit B of Exhibit 2.1 to DD3 Acquisition Corp. II’s Form 8-K (File No. 001-39767), filed with the SEC on June 22, 2021).
10.10	Form of Indemnification Letter, by and among DD3 Acquisition Corp. II, Codere Newco, S.A.U., Servicios de Juego Online, S.A.U., Codere Online Luxembourg, S.A. and Codere Online U.S. Corp. (incorporated by reference to Exhibit C of Exhibit 2.1 to DD3 Acquisition Corp. II’s Form 8-K (File No. 001-39767), filed with the SEC on June 22, 2021).
10.11	Form of Redemption Agreement for Codere Ordinary Shares by and between Codere Online Luxembourg, S.A. and Codere Newco, S.A.U. (incorporated by reference to Exhibit G of Exhibit 2.1 to DD3 Acquisition Corp. II’s Form 8-K (File No. 001-39767), filed with the SEC on June 22, 2021).
10.12	Form of Expenses Reimbursement Letter by and among DD3 Acquisition Corp. II, Codere Newco, S.A.U., Servicios de Juego Online, S.A.U., Codere Online Luxembourg, S.A. and Codere Online U.S. Corp. (incorporated by reference to Exhibit H of Exhibit 2.1 to DD3 Acquisition Corp. II’s Form 8-K (File No. 001-39767), filed with the SEC on June 22, 2021).
10.13	Relationship and License Agreement, dated June 21, 2021, by and between Servicios de Juego Online S.A.U and Codere Newco, S.A.U. (incorporated by reference to Exhibit 10.13 to Codere Online Luxembourg, S.A.’s Form F-4, File No. 333-258759, filed with the SEC on October 8, 2021).
10.14#	Sponsorship and Services Agreement, dated June 21, 2021, by and between Servicios de Juego Online S.A.U. and Codere Newco, S.A.U. (incorporated by reference to Exhibit 10.14 to Codere Online Luxembourg, S.A.’s Form F-4, File No. 333-258759, filed with the SEC on October 8, 2021).
10.15	Platform and Technology Services Agreement, dated January 1, 2021, by and among Codere Newco, S.A.U., Codere Apuestas España, S.L.U. and Codere Online Management Services LTD (incorporated by reference to Exhibit 10.15 to Codere Online Luxembourg, S.A.’s Form F-4, File No. 333-258759, filed with the SEC on October 8, 2021).
10.16	English translation of agreement, dated June 21, 2021, by and between Libros Foráneos, S.A. de C.V. and Servicios de Juego Online S.A.U. with respect to the online gaming business in Mexico (incorporated by reference to Exhibit 10.16 to Codere Online Luxembourg, S.A.’s Form F-4, File No. 333-258759, filed with the SEC on October 8, 2021).
10.17	Internal Affiliate Program Master Agreement, dated March 12, 2021, by and between Servicios de Juego Online S.A.U. and Codere Newco, S.A.U. (incorporated by reference to Exhibit 10.17 to Codere Online Luxembourg, S.A.’s Form F-4, File No. 333-258759, filed with the SEC on October 8, 2021).

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10.18#	Services Agreement, dated October 9, 2018, as amended on November 30, 2020, between Moshe Edree, Novelly Investments Limited and Codere Online Management Services Ltd (incorporated by reference to Exhibit 10.18 to Codere Online Luxembourg, S.A.’s Form F-4, File No. 333-258759, filed with the SEC on October 8, 2021).
10.19*	Addendum Two to Services Agreement, dated December 31, 2021, between Moshe Edree, Novelly Investments Limited, Codere Online Management Services Ltd and Codere Newco S.A.U.
10.20	Letter Agreement, dated December 7, 2020, by and among DD3 Acquisition Corp. II, DD3 Sponsor Group, LLC, MG Partners Multi-Strategy Fund LP and each of the officers, directors and initial stockholders of DD3 Acquisition Corp. II (incorporated by reference to Exhibit 10.1 to DD3 Acquisition Corp. II’s Form 8-K (File No. 001-39767), filed with the SEC on December 11, 2020).
10.21	Investment Management Trust Agreement, dated December 7, 2020, by and between DD3 Acquisition Corp. II and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 10.2 to DD3 Acquisition Corp. II’s Form 8-K (File No. 001-39767), filed with the SEC on December 11, 2020).
10.22	Stock Escrow Agreement, dated December 7, 2020, by and among DD3 Acquisition Corp. II, Continental Stock Transfer & Trust Company and certain securityholders (incorporated by reference to Exhibit 10.4 to DD3 Acquisition Corp. II’s Form 8-K (File No. 001-39767), filed with the SEC on December 11, 2020).
21.1*	List of Subsidiaries of Codere Online Luxembourg, S.A.
23.1*	Consent of Ernst & Young, S.L.
23.2*	Consent of Marcum LLP
23.3*	Consent of Clifford Chance (included in Exhibit 5.1).
23.4*	Consent of Davis Polk & Wardwell LLP (included in Exhibit 5.1).
24.1*	Power of Attorney (included on signature page to the initial filing of the Registration Statement).
107*	Filing Fee Table.

*	Filed herewith.
#	Certain schedules, annexes and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K, but will be furnished supplementally to the SEC upon request.

(b) Financial Statement Schedules

Schedules have been omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or notes thereto.

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Item 9. Undertakings.

A. Holdco hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, as amended, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A of Form 20-F at the start of any delayed offering or throughout a continuous offering.

(5) That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(6) That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

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(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

B. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Grand Duchy of Luxembourg on February 23, 2022.

Codere Online Luxembourg, S.A.
By:	/s/ Moshe Edree
	Name:	Moshe Edree
	Title:	Chief Executive Officer
By:	/s/ Oscar Iglesias
	Name:	Oscar Iglesias
	Title:	Chief Financial Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each of the undersigned constitutes and appoints each of Moshe Edree, Oscar Iglesias and Yaiza Rodríguez, any two acting jointly, as his or her true and lawful attorneys-in-fact and agents, with full and several power of substitution and resubstitution, for such person and in his or her name, place and stead, in any and all capacities, to sign this Registration Statement on Form F-1, or other appropriate form, and all amendments thereto, including post-effective amendments, of Codere Online Luxembourg, S.A., and to file the same, with all exhibits thereto, and other document in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, any two acting jointly, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming that all such attorneys-in-fact and agents or any two of them acting jointly, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
By: /s/ Moshe Edree	Director and Chief Executive	February 23, 2022
Moshe Edree	Officer
By: /s/ Oscar Iglesias	Director and Chief Financial	February 23, 2022
Oscar Iglesias	Officer
By: /s/ Gonzalo de Osma	Chief Accounting	February 23, 2022
Gonzalo de Osma	Officer
By: /s/ Patrick Joseph Ramsey	Director and Chairman of the	February 23, 2022
Patrick Joseph Ramsey	Holdco Board
By: /s/ Alejandro Rodino	Director	February 23, 2022
Alejandro Rodino
By: /s/ Laurent Teitgen	Director	February 23, 2022
Laurent Teitgen
By: /s/ Dr. Martin M. Werner	Director	February 23, 2022
Dr. Martin M. Werner
By: /s/ Daniel Valdez	Director	February 23, 2022
Daniel Valdez

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AUTHORIZED REPRESENTATIVE

Pursuant to the requirements of the Securities Act of 1933, as amended, the undersigned, the duly authorized representative in the United States of Codere Online Luxembourg, S.A. has signed this prospectus in the City of New York, State of New York, on the 23^rd day of February, 2022.

By:	/s/ Karen Spain
	Name:	Karen Spain
	Title:	Assistant Secretary
	(CT Corporation System)

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