EXHIBIT 99.1
Codere Online
Luxembourg, S.A. and
subsidiaries (formerly
denominated Codere
Online Business).
Unaudited Interim Condensed
Consolidated Financial Statements as of
and for the six months ended
Codere Online Luxembourg, S.A. and subsidiaries.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF JUNE 30, 2023 AND CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF DECEMBER 31, 2022
(Thousands of Euros)
| Notes | 06/30/2023 | 12/31/2022 | |||||||||
| ASSETS | |||||||||||
| A) NON-CURRENT ASSETS | |||||||||||
| Intangible assets | |||||||||||
| Property, plant and equipment | |||||||||||
| Non-current financial assets | |||||||||||
| Deferred tax asset | 9 | ||||||||||
| B) CURRENT ASSETS | |||||||||||
| Trade receivables and other current assets | 5 | ||||||||||
| Current financial assets | 4 | ||||||||||
| Cash and cash equivalents | 4 | ||||||||||
| TOTAL ASSETS (A+B) | |||||||||||
| Notes | 06/30/2023 | 12/31/2022 | |||||||||
| EQUITY AND LIABILITIES | |||||||||||
| A) EQUITY | 6 | ||||||||||
| Equity attributable to equity holders of the Parent | |||||||||||
| Equity attributable to non-controlling interest | |||||||||||
| B) NON-CURRENT LIABILITIES | |||||||||||
| Non-current financial liabilities | 7 | ||||||||||
| Deferred tax liability | 9 | ||||||||||
| C) CURRENT LIABILITIES | |||||||||||
| Borrowings | 7 | ||||||||||
| Trade payables and other current liabilities | 8 | ||||||||||
| TOTAL EQUITY AND LIABILITIES (A+B+C) | |||||||||||
The accompanying notes 1 to 14 are an integral part of the accompanying Unaudited Interim Condensed Consolidated Financial Statements
F-1
Codere Online Luxembourg, S.A. and subsidiaries.
UNAUDITED INTERIM CONDENSED CONSOLIDATED INCOME STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND UNAUDITED INTERIM CONDENSED CONSOLIDATED CARVE-OUT INCOME STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2022
(Thousands of Euros)
| Notes | 06/30/2023 | 06/30/2022 | |||||||||
| Revenue | 10 | ||||||||||
| Personnel expenses | ( |
) | ( |
) | |||||||
| Depreciation and amortization | ( |
) | ( |
) | |||||||
| Other operating expenses | ( |
) | ( |
) | |||||||
| Operating expenses | 10 | ( |
) | ( |
) | ||||||
| OPERATING INCOME/(LOSS) | ( |
) | ( |
) | |||||||
| Finance Income / (costs) | |||||||||||
| Net financial results | 10 | ||||||||||
| NET INCOME/(LOSS) BEFORE TAX | ( |
) | ( |
) | |||||||
| Income tax benefit/(expense) | 9 | ( |
) | ||||||||
| NET INCOME/(LOSS) FOR THE PERIOD | ( |
) | ( |
) | |||||||
| Attributable to equity holders of the Parent | ( |
) | ( |
) | |||||||
| Attributable to non-controlling interests | ( |
) | |||||||||
| Basic earnings per share attributable to equity holders of the parent (Euro) | 10 | ( |
) | ( |
) | ||||||
| Diluted earnings per share attributable to equity holders of the parent (Euro) | 10 | ( |
) | ( |
) | ||||||
The accompanying notes 1 to 14 are an integral part of the accompanying Unaudited Interim Condensed Consolidated Financial Statements
F-2
Codere Online Luxembourg, S.A. and subsidiaries.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND UNAUDITED INTERIM CONDENSED CONSOLIDATED CARVE-OUT STATEMENTS OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2022
(Thousands of Euros)
| 06/30/2023 | 06/30/2022 | |||||||
| Net income/(loss) for the period | ( |
) | ( |
) | ||||
| Currency translation differences | ( |
) | ( |
) | ||||
| Income tax impact | ||||||||
| Items that will not be reclassified subsequently to the income statement | ( |
) | ( |
) | ||||
| Total other comprehensive income/(loss) recognized for the period | ( |
) | ( |
) | ||||
| Total comprehensive income/(loss) recognized for the period | ( |
) | ( |
) | ||||
| Attributable to: | ||||||||
| Equity holders of the Parent | ( |
) | ( |
) | ||||
| Non-controlling interests | ( |
) | ||||||
The accompanying notes 1 to 14 are an integral part of the accompanying Unaudited Interim Condensed Consolidated Financial Statements
F-3
Codere Online Luxembourg, S.A. and subsidiaries.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND UNAUDITED INTERIM CONDENSED CONSOLIDATED CARVE-OUT STATEMENTS OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 2022
(Thousands of Euros)
| Attributable to equity holders of the Parent (Codere Online Luxembourg S.A.) | ||||||||||||||||||||||||||||||||||||
| Issued capital |
Net income / (loss) for the period | Retained earnings / (losses) | Other reserves |
Share premium |
Other comprehensive income/(loss) | Total | Non-controlling interest | Total Equity |
||||||||||||||||||||||||||||
| Balance at December 31, 2021 | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
| Net income/(loss) for the period | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
| Other comprehensive income/(loss) for the period | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
| Total comprehensive income/ (loss) for the period | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Appropriation of result | ( |
) | ||||||||||||||||||||||||||||||||||
| Share based payment (Note 6) | ||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2022 | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
| Attributable to equity holders of the Parent (Codere Online Luxembourg S.A.) | ||||||||||||||||||||||||||||||||||||
| Issued capital |
Net income / (loss) for the period | Retained earnings / (losses) | Other reserves |
Share premium |
Other comprehensive income/(loss) | Total | Non-controlling interest | Total Equity |
||||||||||||||||||||||||||||
| Balance at December 31, 2022 | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
| Net income/(loss) for the period | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
| Other comprehensive income/(loss) for the period | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
| Total comprehensive income/ (loss) for the period | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
| Appropriation of result | ( |
) | ||||||||||||||||||||||||||||||||||
| Share based-compensation (Note 6) | ||||||||||||||||||||||||||||||||||||
| Net change in Parent investment | ||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2023 | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
The accompanying notes 1 to 14 are an integral part of the accompanying Unaudited Interim Condensed Consolidated Financial Statements
F-4
Codere Online Luxembourg, S.A. and subsidiaries.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND UNAUDITED INTERIM CONDENSED CONSOLIDATED CARVE-OUT STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2022
(Thousands of Euros)
| Notes | 06/30/2023 | 06/30/2022 | |||||||||
| Net loss before tax | ( |
) | ( |
) | |||||||
| Adjustments to profit/loss: | ( |
) | ( |
) | |||||||
| Depreciation and amortization | |||||||||||
| Movements in provisions | |||||||||||
| Change in Expected credit loss | |||||||||||
| Effect of hyperinflation on results | ( |
) | ( |
) | |||||||
| Changes in fair value | ( |
) | ( |
) | |||||||
| Exchange rate impact | ( |
) | ( |
) | |||||||
| Interest (Income)/Expenses | ( |
) | ( |
) | |||||||
| Others | |||||||||||
| Deferred taxes | ( |
) | |||||||||
| Changes in working capital: | |||||||||||
| Trade receivables and other current assets | 5 | ( |
) | ( |
) | ||||||
| Trade payables and other current liabilities | 8 | ||||||||||
| Other lease payments* | ( |
) | |||||||||
| Increase/(decrease) in deferred income | |||||||||||
| Income tax paid | ( |
) | |||||||||
| Net cash provided by (used in) operating activities | ( |
) | ( |
) | |||||||
| Payment for purchases of property, plant and equipment | ( |
) | ( |
) | |||||||
| Payments for investments | |||||||||||
| Net cash used in investing activities | ( |
) | ( |
) | |||||||
| Drawdown of other borrowings | 7 | ||||||||||
| Capitalized lease payments (IFRS 16) | |||||||||||
| Interest paid | |||||||||||
| Net cash provided by (used in) financing activities | |||||||||||
| Net increase in cash and cash equivalents | ( |
) | ( |
) | |||||||
| Cash and cash equivalents at the beginning of the year | |||||||||||
| Effect of changes in exchange rates on cash and cash equivalents | ( |
) | |||||||||
| Cash and cash equivalents at the end of the year | |||||||||||
| * |
The accompanying notes 1 to 14 are an integral part of the accompanying Unaudited Interim Condensed Consolidated Financial Statements
F-5
Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
| 1. | BACKGROUND |
On June 4, 2021, Codere Online Luxembourg, S.A. (the “Company” or “Parent” and, together with its subsidiaries, “Codere Online”), was incorporated and was registered in Luxembourg as a public limited company (société anonyme) under the laws of Luxembourg with its registered office at 7, rue Robert Stumper, L-2557 Luxembourg, Grand Duchy of Luxembourg and has been registered with the Luxembourg trade and companies register (Registre de commerce et des sociétés, Luxembourg) under the number B255798.
Codere Online is comprised of the former online gambling operations of its majority shareholder Codere New Topco, S.A. and its subsidiaries (“Codere Group”) in Spain, Mexico, Colombia, Panama and Argentina focused on online gambling and other online services. Codere Group controls Codere Online through its operating Spanish Holdco, Codere Newco, S.A.U. (“CNEW”), which holds 66.2% of the ordinary shares of Parent.
Codere Group means until November 19, 2021, Codere S.A. and its subsidiaries and from November 19, 2021, Codere New Topco S.A., a limited liability company (societé anonyme) governed by the laws of the Grand Duchy of Luxembourg, and its subsidiaries, including CNEW. 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 was listed on the Madrid Stock Exchange from 2007 until its delisting in 2021 as a result of a corporate restructuring.
The perimeter of Codere Online consists of 10 operating and supporting entities (Spain, United States, Mexico, Colombia, Panama, Gibraltar, Israel, Argentina and Malta) and 2 holding companies (Spain and Luxembourg).
| Entity | Entity Type | Ownership | Location | |||
| Codere Online Luxembourg S.A. | ||||||
| Codere Online U.S. Corp. | ||||||
| Servicios de Juego Online S.A.U. | ||||||
| Codere Online S.A.U. | ||||||
| Codere Online Colombia SAS | ||||||
| Operating Management Services Panama S.A. | ||||||
| LIFO AenP | ||||||
| Codere Online Operator LTD | ||||||
| Codere Online Management Services LTD | ||||||
| Codere Online Argentina, S.A.* | ||||||
| Codere Israel Marketing Support Services LTD | ||||||
| Codere (Gibraltar) Marketing Services LTD |
| * |
F-6
Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
| 2. | BASIS OF PRESENTATION OF THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
| a) | Basis of presentation and comparison of information |
The accompanying Unaudited Interim Condensed Consolidated Financial Statements as of and for the six months ended June 30, 2023 (the “Unaudited Interim Condensed Consolidated 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 Codere Online’s last Consolidated Financial Statements up to date, emphasizing any new activities, events or circumstances that occurred during the six months ended June 30, 2023 but without duplicating the information previously published in the Consolidated Carve-out Financial Statements. Therefore, in order to properly understand the information included in the accompanying Unaudited Interim Condensed Consolidated Financial Statements, they must be read together with Codere Online’s Consolidated Carve-out Financial Statements as of December 31, 2022.
The Unaudited Interim Condensed Consolidated Financial Statements of Codere Online were prepared and approved on November, 14, 2023.
Codere Online has used the same accounting policies throughout all of the periods presented in the Unaudited Interim Condensed Consolidated Financial Statements, which are compliant with the International Financial Reporting Standards (hereinafter (“IFRS”) effective at the end of June 30, 2023.
| a.1.) | Going concern |
The Unaudited Interim Condensed Consolidated Financial Statements present positive equity of €
Since its inception, Codere Online
has incurred in recurring losses and negative cash flows from operations including net losses of €
Codere Online’s management has prepared these Interim Financial Statements assuming that Codere Online will continue as a going concern. Codere Online’s management has considered its current liquidity position, its actual operating performance, and its reasonable expectations regarding operating performance over the coming three years, which have led management to believe that Codere Online has adequate resources to continue in operational existence for the next twelve months.
Notwithstanding, Codere Online is dependent on its controlling shareholder (Codere Group) for the use of the Codere brand, certain gaming licenses and the provision of certain services. Codere Group is currently undergoing a financial restructuring process, the outcome of which is still uncertain, but potentially material for the Company’s business, results of operations and financial condition.
| a.2.) | Changes in perimeter |
The perimeter consists of 10 operating and supporting entities (Spain, United States, Mexico, Colombia, Panama, Gibraltar, Israel, Argentina and Malta) and 2 holding companies (Spain and Luxembourg) as described in Note 1 of these Unaudited Interim Condensed Consolidated Financial Statements.
Following an internal reorganization of Codere Online, Codere (Gibraltar) Marketing Services LTD operations were discontinued effective as of April 30, 2023, and we expect to liquidate this Supporting Entity on or before December 31, 2023 as detailed in the Other Information Note (Note 13).
The Malta operating entity (Codere Online Operator LTD) and the Malta supporting entity (Codere Online Management Services LTD) will be liquidated in the fourth quarter of 2023 as detailed in the Events After the Reporting Date Note (Note 14). No material impact is expected regarding the Malta operating entity liquidation.
F-7
Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
| a.3.) | Accounting estimates and judgments |
The preparation of these Unaudited Interim Condensed Consolidated 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 accounting policies used in the preparation of the accompanying Unaudited Interim Condensed Consolidated Financial Statements are the same as those applied in the Consolidated Financial Statements as of and for the year ended December 31, 2022, since none of the standards, interpretations or modifications that are applicable have had an impact on the Codere Online’s accounting policies for the six months ended June 30, 2023.
New IFRS, IFRIC and amendments to IFRS not effective as of June 30, 2023
As of the approval date of the Unaudited Interim Condensed Consolidated 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: | ||
| Amendment to IAS 1 - Classification of Liabilities as Current or Non-current. Non-current Liabilities with Covenants |
The amendments improve the information an entity provides when its right to defer settlement of a liability for at least twelve months is subject to compliance with covenants. The amendments also respond to stakeholders’ concerns about the classification of such a liability as current or non-current. |
|||
| Amendment to IFRS 16 - Lease Liability in a Sale and Leaseback | ||||
| Amendments to IAS 7 and IFRS 7 - Supplier Finance Arrangements |
Codere Online estimates that no standards, amendments and interpretations in the preceding table will have a significant impact on the Consolidated Financial Statements in the initial period of application.
F-8
Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
| 3. | 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 Codere Online, is the CEO of Codere Online. The CODM is responsible for allocating resources and assessing performance of the business. For management purposes, Codere Online’s operating segments are formed by Codere Online’s online business in Spain, Mexico, Colombia, Panama, and Argentina.
The CEO measures the performance of Codere Online’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.
Codere Online will report financial information, both internally and externally, based on the organizational structure approved by the CEO of Codere Online. Thus, the reportable segments for these Unaudited Interim Condensed Consolidated Financial Statements are formed by Codere Online’s operations in Spain, Mexico, and Colombia. Panama, Argentina and Codere Online Operator LTD (Malta) are grouped under “Other operations”. Codere Online Management Services LTD (Malta), Israel, United States, SEJO and Gibraltar are grouped and reported under “Supporting”. These entities aggregated under “Supporting” segment are not operating entities (only holding companies), but entities that provide internal support services.
The entities that have been aggregated under “Other operations” and “Supporting” have been grouped in accordance with guidance allowed under IFRS 8, Operating Segments. Based on both IFRS 8:BC30 and the diagram included in the implementation guidance accompanying IFRS 8, if two or more components of a business meet the aggregation criteria, they may be combined for external reporting purposes into a single operating segment, notwithstanding that they may individually exceed the quantitative thresholds. Additionally, the entities aggregated in the “Other operations” and “Supporting” segments all meet the following conditions: (i) aggregation is consistent with the core principle of IFRS 8, (ii) the segments have similar economic characteristics, (iii) the segments are similar in the nature of the products and services offered, (iv) the segments are similar in the nature of their production processes, (v) the segments are similar in the type or class of customer for their products and services, (vi) the segments have similar methods used to distribute their products and provide their services and (vii) the segments have a similar nature of their regulatory environment. 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 Codere Online companies not specifically included in these segments is reported under "Other Operations".
F-9
Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
The following tables break down certain of the information presented in the Unaudited Interim Condensed Consolidated Statements of Income (Loss) for the six months ended June 30, 2023 and 2022
| 06/30/2023 | Spain | Mexico | Colombia | Other Operations |
Supporting | Eliminations | Total Codere Online |
|||||||||||||||||||||
| Revenue | ( |
) | ||||||||||||||||||||||||||
| Personnel expenses | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
| Depreciation and amortization | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
| Other operating expenses | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
| Operating expenses | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
| OPERATING INCOME/(LOSS) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
| Finance income | ( |
) | ||||||||||||||||||||||||||
| Finance costs | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
| Net financial results | ( |
) | ||||||||||||||||||||||||||
| NET INCOME/(LOSS) BEFORE TAX | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
| Income tax benefit/(expense) | ( |
) | ||||||||||||||||||||||||||
| NET INCOME/(LOSS) FOR THE PERIOD | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
| Attributable to equity holders of the Parent | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
| Attributable to non-controlling interests | ( |
) | ( |
) | ||||||||||||||||||||||||
| 06/30/2022 | Spain | Mexico | Colombia | Other Operations |
Supporting | Eliminations | Total Codere Online |
|||||||||||||||||||||
| Revenue | ( |
) | ||||||||||||||||||||||||||
| Personnel expenses | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
| Depreciation and amortization | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
| Other operating expenses | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
| Operating expenses | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
| OPERATING INCOME/(LOSS) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
| Finance income | ( |
) | ||||||||||||||||||||||||||
| Finance costs | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
| Net financial results | ( |
) | ( |
) | ||||||||||||||||||||||||
| NET INCOME/(LOSS) BEFORE TAX | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
| Income tax benefit/(expense) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
| NET INCOME/(LOSS) FOR THE PERIOD | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
| Attributable to equity holders of the Parent | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
| Attributable to non-controlling interests | ||||||||||||||||||||||||||||
F-10
Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
The following tables break down certain of the information presented in the Unaudited Interim Condensed Consolidated Balance Sheets as of June 30, 2023 and in the Consolidated Balance Sheets as of December 31, 2022.
| 06/30/2023 | Spain | Mexico | Colombia | Other Operations |
Supporting | Eliminations | Total Codere Online |
|||||||||||||||||||||
| Non-current assets | ( |
) | ||||||||||||||||||||||||||
| Current assets | ( |
) | ||||||||||||||||||||||||||
| Trade receivables and other current assets | ( |
) | ||||||||||||||||||||||||||
| Current financial assets | ( |
) | ||||||||||||||||||||||||||
| Cash and cash equivalents | ( |
) | ||||||||||||||||||||||||||
| Total Assets | ( |
) | ||||||||||||||||||||||||||
| EQUITY | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
| NON-CURRENT LIABILITIES | ||||||||||||||||||||||||||||
| Borrowings | ||||||||||||||||||||||||||||
| Deferred Tax Liability | ||||||||||||||||||||||||||||
| CURRENT LIABILITIES | ( |
) | ||||||||||||||||||||||||||
| Borrowings | ( |
) | ||||||||||||||||||||||||||
| Trade payables and other current liabilities | ( |
) | ||||||||||||||||||||||||||
| Total EQUITY AND LIABILITIES | ( |
) | ||||||||||||||||||||||||||
| 12/31/2022 | Spain | Mexico | Colombia | Other Operations |
Supporting | Eliminations | Total Codere Online |
|||||||||||||||||||||
| Non-current assets | ( |
) | ||||||||||||||||||||||||||
| Current assets | ( |
) | ||||||||||||||||||||||||||
| Trade receivables and other current assets | ( |
) | ||||||||||||||||||||||||||
| Current financial assets | ( |
) | ||||||||||||||||||||||||||
| Cash and cash equivalents | ( |
) | ||||||||||||||||||||||||||
| Total Assets | ( |
) | ||||||||||||||||||||||||||
| EQUITY | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
| NON-CURRENT LIABILITIES | ||||||||||||||||||||||||||||
| CURRENT LIABILITIES | ( |
) | ||||||||||||||||||||||||||
| Lease obligations | ||||||||||||||||||||||||||||
| Provisions | ||||||||||||||||||||||||||||
| Borrowings | ( |
) | ||||||||||||||||||||||||||
| Trade payables and other current liabilities | ( |
) | ||||||||||||||||||||||||||
| Total EQUITY AND LIABILITIES | ( |
) | ||||||||||||||||||||||||||
Codere Online does not have any customers that individually account for 10% or more of its interest and income for the six months ended June 30, 2023 and 2022.
F-11
Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
| 4. | FINANCIAL ASSETS |
The breakdown of the carrying amount of the items presented under this heading at June 30, 2023 and December 31, 2022 is as follows:
| Amortized Cost | ||||||||||||
| 06/30/2023 | Debt Instruments |
Carrying Amount |
Fair Value |
|||||||||
| Current financial assets: | ||||||||||||
| Trade receivables and other current assets (Note 5) | ||||||||||||
| Current financial assets | ||||||||||||
| Of which: | ||||||||||||
| with related parties (Note 11) | ||||||||||||
| Cash and cash equivalents | ||||||||||||
| Amortized Cost | ||||||||||||
| 12/31/2022 | Debt Instruments |
Carrying Amount |
Fair |
|||||||||
| Current financial assets: | ||||||||||||
| Trade receivables and other current assets (Note 5) | ||||||||||||
| Current financial assets | ||||||||||||
| Of which: | ||||||||||||
| with related parties (Note 11) | ||||||||||||
| Cash and cash equivalents | ||||||||||||
Cash and cash equivalents include restricted cash which corresponds to cash from Spanish clients where the regulation obliges
Trade receivables and other current assets mainly include deposits made by customers through retail sport betting points of sale and terminals, owned by other entities of Codere Group, to their online wallets and amounted to
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
Current financial assets from related
parties correspond to funds advance to Codere Group, by which Codere Online has recognized a receivable (see Note 11) amounting to
The expected credit losses recognized on current financial assets as of June 30, 2023 and December 31, 2022 amounted to
F-12
Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
| 5. | TRADE RECEIVABLES AND OTHER CURRENT ASSETS |
The breakdown of the items presented under this heading at June 30,2023 and December 31, 2022 is as follows:
| 06/30/2023 | 12/31/2022 | |||||||
| Trade receivables: | ||||||||
| Other receivables from the Codere Group companies (Note 11) | ||||||||
| Impairment of trade receivables | ( |
) | ( |
) | ||||
| Other current assets: | ||||||||
| Current tax asset | ||||||||
| Prepayments | ||||||||
| Other receivables | ||||||||
| Total | ||||||||
Other receivables from the Codere Group companies mainly include balances to be paid by certain Codere Group retail companies in Latin America amounting to
The carrying amounts of Codere Online’s trade receivables and other current assets are denominated in the following currencies:
| Currency | 06/30/2023 | 12/31/2022 | ||||||
| COP | ( |
) | ||||||
| EUR | ||||||||
| MXN | ||||||||
| ILS | ||||||||
| ARS | ||||||||
| USD | ||||||||
| Total | ||||||||
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. Codere Online does not hold any collateral as security.
The movement in the allowance for impairment of accounts receivable as of June 30, 2023 and December 31, 2022 is as follows:
| Expected credit loss as of 12/31/2021 | ||||
| Additions | ||||
| Reversal | ||||
| Expected credit loss as of 06/30/2022 | ||||
| Expected credit loss as of 12/31/2022 | ||||
| Additions | ||||
| Reversal | ||||
| Expected credit loss as of 06/30/2023 |
F-13
Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
| 6. | EQUITY |
On June 4, 2021, the Company was incorporated with an initial share capital amounting to €30 thousand divided into 30 thousand ordinary shares with a nominal value of one euro each (€1), all of which are fully paid up.
As of December 31, 2022, the share capital of the Company amounted to € divided into shares as a result of the capital increases in connection with the Business Combination as described in Note 9 of the Consolidated Carve-out Financial Statements as of December 31, 2022. As of June 30, 2023, the share capital of the Company amounted to € divided into shares as a result of the capital increases carried out in the beginning of 2023 in connection with the Company’s equity based incentive plan for employees.
The movement in Other reserves as of June 30, 2023, amounted to €
F-14
Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
| 7. | BORROWINGS AND NON-CURRENT FINANCIAL LIABILITIES |
Current borrowings at amortized cost
| Amortized Cost | ||||||||||||
| 06/30/2023 | Debt Instruments | Carrying Amount |
Fair Value |
|||||||||
| Current financial liabilities | ||||||||||||
| Other borrowings | ||||||||||||
| Of which: | ||||||||||||
| with related parties (Note 11) | ||||||||||||
| Amortized Cost | ||||||||||||
| 12/31/2022 | Debt Instruments | Carrying Amount |
Fair Value |
|||||||||
| Current financial liabilities | ||||||||||||
| Other borrowings | ||||||||||||
| Of which: | ||||||||||||
| with related parties (Note 11) | ||||||||||||
Other borrowings correspond to short-term loans, mainly composed of debt with entities from the Codere Group and amounted to €
Financial liabilities associated with financing activities
The following tables present details regarding the changes in financial liabilities as of June 30, 2023 and December 31, 2022 that arise from financial activities:
06/30/2023
| Balance at 12/31/2022 |
Drawdown of related party debt |
Related party non-cash payable |
Foreign exchange movement |
Changes in fair value |
Balance at 06/30/2023 |
|||||||||||||||||||
| Loans | ||||||||||||||||||||||||
| Other borrowings | ( |
) | ||||||||||||||||||||||
| Total | ( |
) | ||||||||||||||||||||||
F-15
Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
12/31/2022
|
Balance at 12/31/2021 |
Drawdown of related party debt |
Related party non-cash payable |
Foreign exchange movement |
Changes in fair value |
Balance at 12/31/2022 |
|||||||||||||||||||
| Loans | ||||||||||||||||||||||||
| Other borrowings | ||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||
Non-current financial liabilities.
As of June 30, 2023, non-current financial liabilities included warrants accounted for as liabilities. The fair value of the warrants was derived from quoted prices (Level 1).
As of June 30, 2023, the warrant liabilities amounted to €
F-16
Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
| 8. | TRADE PAYABLES AND OTHER CURRENT LIABILITIES |
The composition of trade payables and other current liabilities as of as of June 30, 2023 and December 31, 2022 is as follows:
| 06/30/2023 | 12/31/2022 | |||||||
| Trade payables | ||||||||
| Customer online wallets | ||||||||
| Other current liabilities | ||||||||
| Accruals | ||||||||
| Total | ||||||||
| Of which: with related parties (Note 11) |
||||||||
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 Codere Online’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 June 30, 2023 and December 31, 2022 is as follows:
| 06/30/2023 | 12/31/2022 | |||||||
| Accrued salaries | ||||||||
| Current tax liabilities | ||||||||
| Others | ||||||||
| Total | ||||||||
F-17
Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
| 9. | INCOME TAX |
Each of the entities included in Codere Online file income taxes according to the tax regulations in force in each country on an individual basis or under consolidation tax regulations.
The consolidated 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 consolidated entities individually, the accounting profit is adjusted for permanent differences. At each consolidated 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 as of June 30, 2023 is as follows:
| 06/30/2023 | 06/30/2022 | |||||||
| Current income tax expense | ( |
) | ||||||
| Deferred income tax expense relating to origination and reversal of temporary differences | ( |
) | ||||||
| Income tax expense recognised in statement of profit or loss | ( |
) | ||||||
Deferred taxes
| 06/30/2023 | 06/30/2022 | |||||||
| Deferred tax asset | ||||||||
| Deferred tax liability | ||||||||
The deferred tax asset generated as of June 30, 2023 due to the recognition of the long-term incentive plan impact as described in Note 13, and the deferred tax liability mainly due to the fluctuation of the exchange rates between the euro and the other currencies.
As shown in the table below, Codere Online has generated net losses which can be offset against future profits; as of December 31, 2022, and June 30, 2023, Codere Online had not recognized the positive impact that these losses could have if they were to be utilized, but it expects to do so in the future. There is no limit on time in either country to utilize these losses against future profits.
| Entity | Previous | 2020 | 2021 | 2022 | Six months ended 06/30/2023 | Total as of 06/30/2023 | ||||||||||||||||||
| SEJO | ||||||||||||||||||||||||
| Codere Online S.A.U. (Spain) | ||||||||||||||||||||||||
| Codere Online Management Services LTD (Malta) | ||||||||||||||||||||||||
| LIFO AenP (Mexico) | ||||||||||||||||||||||||
| Codere Online Luxembourg, S.A. | ||||||||||||||||||||||||
F-18
Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
| 10. | REVENUE AND EXPENSES |
Revenues
The breakdown of Codere Online’s revenues for the six months ended June 30, 2023 and 2022 is as follows:
| 06/30/2023 | 06/30/2022 | |||||||
| Sports betting | ||||||||
| Casino wagering | ||||||||
| Total | ||||||||
No single customer contributed more than 10% of revenue for the six months ended June 30, 2023, and 2022.
Additionally, the distribution of sales by geographical market during the reporting period is as follows:
| 06/30/2023 | 06/30/2022 | |||||||
| Spain | ||||||||
| Mexico | ||||||||
| Colombia | ||||||||
| Panama | ||||||||
| Others | ||||||||
| Total | ||||||||
Personnel expenses
The heading personnel expenses of the attached Unaudited Interim Condensed Consolidated Financial Statements as of and for the six months ended June 30, 2023 and 2022 includes expenses for wages, salaries, long term incentive plans, benefits (and other similar concepts) and social security and other social contributions expenses payable by Codere Online.
| 06/30/2023 | 06/30/2022 | |||||||
| Wages, salaries and similar | ||||||||
| LTIP provision | ||||||||
| Social security contributions payable by Codere Online | ||||||||
| Total | ||||||||
Depreciation and amortization
The breakdown of depreciation and amortization in the Unaudited Interim Condensed Consolidated Financial Statements as of and for the six months ended June 30, 2023 and 2022 is as follows:
| 06/30/2023 | 06/30/2022 | |||||||
| Depreciation of property, plant and equipment | ||||||||
| Amortization of intangible assets | ||||||||
| Amortization of right-of-use assets | ||||||||
| Total | ||||||||
F-19
Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
Other operating expenses
The breakdown of other operating expenses for the six months ended June 30, 2023 and 2022 is as follows:
| 06/30/2023 | 06/30/2022 | |||||||
| Gambling taxes | ||||||||
| Leases | ||||||||
| Utilities, repairs and maintenance | ||||||||
| Professional services and other expenses | ||||||||
| Business e-Mail Compromise Incident | ||||||||
| Casino license royalties | ||||||||
| Marketing expenses | ||||||||
| Total | ||||||||
Codere Online 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.
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.
Finance income / (cost)
The breakdown of finance income for the period ended June 30, 2023 and 2022 is as follows
| 06/30/2023 | 06/30/2022 | |||||||
| Interest Income/(Expenses) | ||||||||
| Exchange rate impact | ||||||||
| Argentina Hyperinflation Impact | ||||||||
| Decrease/(Increase) in Fair Value of Public Warrants | ||||||||
| Impact of IFRS 9 on accounting for financial instruments, including impairment* | ( |
) | ||||||
| Total | ||||||||
| * |
Net financial results amounted to €
Codere Online has recorded the impact of the exchange rate and the change in fair value of the warrants as finance income amounting to €
F-20
Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
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. The effect of warrants throughout 2023 qualified as antidilutive events. In accordance with IAS 33, antidilutive potential ordinary shares are disregarded in the calculation of diluted earnings per share.
Additionally, because IFRS requires that the calculation of basic and diluted earnings per share (“EPS”) for all periods presented be adjusted retrospectively when the number of ordinary shares or potential ordinary shares outstanding increases as a result of a capitalization, bond issue, or share split, or decreases as a result of a reverse share split, EPS calculations for the reporting period and the comparative period should be based on the new number of shares. Therefore, earnings per share has been adjusted for all periods presented to reflect the number of shares issued and outstanding giving an amount of 45,121,956 for the six months ended June 30, 2023, and 2022, which corresponds to the amount of shares attributable to CNEW (66.5%) without giving effect to the capital contribution of the DD3 shareholders and the resources obtained by the Nasdaq listing.
Both basic and diluted earnings per share attributable to equity holders of Codere Online are calculated based on the following data, in each case for the six months ended June 30, 2023 and June 30, 2022.
| 06/30/2023 | 06/30/2022 | |||||||
| Net income/(loss) attributable to the equity holders of the Parent (thousand euros) | ( |
) | ( |
) | ||||
| Weight average number of shares outstanding: | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
| Basic earnings per share (euros) | ( |
) | ( |
) | ||||
| Diluted earnings per share (euros) | ( |
) | ( |
) | ||||
F-21
Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
| 11. | RELATED PARTIES |
The parties related to Codere Online include, in addition to its and Codere Group’s subsidiaries, associates and jointly controlled entities, if any, Codere Online’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. Balances and transactions between Codere Online and its subsidiaries, which are related parties of Codere Online, have been eliminated in consolidation and are not disclosed in this note. Details of transactions between Codere Online and other related parties are disclosed below.
Transactions with Codere Group and related companies
06/30/2023
| Related Companies | Relation to Codere Group | Finance costs and exchange differences |
Operating expenses |
Total Costs | |||||||||
| Codere Apuestas España S.A. | Subsidiary of Codere Group | ( |
) | ( |
) | ||||||||
| Codere Newco S.A.U. | Subsidiary of Codere Group | ( |
) | ( |
) | ||||||||
| Codere Apuestas Galicia S.L. | Subsidiary of Codere Group | ( |
) | ( |
) | ||||||||
| Codere Operadora de Apuestas S.L. | Subsidiary of Codere Group | ||||||||||||
| Other retail companies | Subsidiary of Codere Group | ( |
) | ( |
) | ||||||||
| Mexico retail companies | Subsidiary of Codere Group | ( |
) | ( |
) | ||||||||
| Retail Latam | Subsidiary of Codere Group | ( |
) | ( |
) | ||||||||
Balance at 06/30/2023
| Related companies |
Current (Note 4) |
Trade receivables (Note 5) |
Current Borrowings (Note 7) |
Trade payables and other |
|||||||||||||
| Codere Newco S.A.U. | Parent of Codere Online | ||||||||||||||||
| Codere Operadora de Apuestas S.L. | Subsidiary of Codere Group | ||||||||||||||||
| Codere Apuestas España S.L. | Subsidiary of Codere Group | ||||||||||||||||
| Other retail companies | Subsidiary of Codere Group | ||||||||||||||||
| Latam retail companies | Subsidiary of Codere Group | ||||||||||||||||
| Total | |||||||||||||||||
F-22
Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
Balance at 12/31/2022
| Related companies |
Current (Note 4) |
Trade receivables (Note 5) |
Current Borrowings (Note 7) |
Trade payables and other |
|||||||||||||
| Codere Newco S.A.U. | Parent of Codere Online | ||||||||||||||||
| Codere Operadora de Apuestas S.L. | Subsidiary of Codere Group | ||||||||||||||||
| Codere Apuestas España S.L. | Subsidiary of Codere Group | ||||||||||||||||
| Other retail companies | Subsidiary of Codere Group | ||||||||||||||||
| Other Latam retail companies | Subsidiary of Codere Group | ||||||||||||||||
| CCOL | Subsidiary of Codere Group | ||||||||||||||||
| ACOR/HIPA | Subsidiary of Codere Group | ||||||||||||||||
| Total | |||||||||||||||||
F-23
Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
| 12. | COMMITMENTS AND CONTINGENCIES |
Retail Fraud (Misappropriation of Funds)
A fraud resulting in misappropriation of funds was committed against Codere Online in Spain related to a series of fraudulent withdrawals over a four-month period, from April to July 2023, totaling €0.5 million made by an online customer from his online account at a third-party retail gaming hall located in Cádiz, Andalucía. The online customer’s account was frozen on July 25, 2023.
The Company filed a police report on August 1, 2023, and the investigation is ongoing, including with respect to recovery of the misappropriated funds.
F-24
Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
| 13. | OTHER INFORMATION |
GIBRALTAR SUPPORTING ENTITY LIQUIDATION
Following an internal reorganization of Codere Online, Codere (Gibraltar) Marketing Services LTD operations were discontinued effective April 30, 2023, and we expect to liquidate this Supporting Entity on or before December 31, 2023.
This liquidation is not expected to have a significant financial impact on the Unaudited Interim Condensed Consolidated Financial Statements.
ARGENTINA SUPPORTING ENTITY NEW CORPORATE SITUATION
On November 15, 2021, Iberargen, S.A. a subsidiary within the Codere Group, and SEJO, a subsidiary of Parent, 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 Codere Argentina, S.A. and SEJO initially retaining
On April 21, 2023, LOTBA granted an authorization to transfer the license from Iberargen, S.A. (which had been granted on March 12, 2021) to Codere Online Argentina S.A. under the code EX-2021-08223218-GCABA-LOTBA for the marketing, distribution, and sale of online games through internet gaming platforms and/or mobile applications, allowing Codere Online Argentina S.A. (following the transfer of all applicable commercial agreements, personnel and other assets) to operate in the City of Buenos Aires from May 3, 2023.
MANAGEMENT INCENTIVE PLAN
The total number of share options, restricted shares and deferred payments right to each part of the LTIP is as follow:
| Share options |
Restricted Shares |
Deferred payments right |
||||||||||
| Total Rights assigned to the beneficiaries | ||||||||||||
| Fair value of the LTIP in USD | ||||||||||||
| Weighted average price in USD | ||||||||||||
| Options granted during the period | ||||||||||||
| Options exercised during the period | ||||||||||||
| Options outstanding as of June 30, 2023 | ||||||||||||
| Exercisable as of June 30, 2023 | ||||||||||||
F-25
Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
The fair value of the equity instruments granted has been determined using a Monte Carlo simulation valuation model as of each of the Grant dates, considering the conditions determined in the LTIP Agreement, and the following assumptions:
| Forecast share price volatility (annualized) | % | |||
| Plan duration (years) | ||||
| Expected dividend yield | % | |||
| Risk-free interest rate |
Regarding the forecasted share price volatility, the annualized share price volatility has been calculated as the average historical standard deviation among the company’s selected peers, considering a
More specifically, the restricted share’s fair value has been calculated as the number of estimated vested instruments times the expected share value at the assumed restricted shares exercise date. The number of estimated vested instruments used has been the one established in each beneficiary’s invitation letter, and the expected share value has been determined according to the aforementioned Monte Carlo simulation and the valuation inputs previously detailed.
Regarding the fair value of the stock options which may be converted into the Company’s ordinary equity at a previously specified price for a determined time period, it has been obtained in a similar way, by multiplying the number of vested stock options times the expected option value as of that date. Furthermore, in order to determine the stock option value as of each of the grant dates, we have also used the expected share price evolution as determined by the Monte Carlo simulation model. Additionally, it is worth mentioning that options’ value can be divided into intrinsic value, consisting in the difference between the underlying share’s price and the option’s strike if this is a positive value for the acquirer of the option shares; and time value, which represents the possibility that the option may obtain intrinsic value in the future. Additionally, according to the valuation model’s share price expected evolution, the Company’s stock options only have time value as of each of the grant dates, due to the value of the underlying ordinary shares as of the grant dates and the strike price of $10 per share.
Finally, it must be noted that the fair value of deferred payments to be made in a future date, depends directly on a non-market condition (evolution of the Company’s EBITDA during the Sub-Plan’s life). However, it is possible to determine the number of shares to be delivered, based on the expected evolution of the Company’s EBITDA in line with its business plan, which will be revised subsequently until the payment date. To this extent, in order to establish the preliminary number of shares which will be delivered to the Sub-Plans’ beneficiaries, the main input used has been the Company’s business plan.
The incentives granted to the beneficiaries under the LTIP will be subject to a
Except in the case of a termination for gross misconduct, fraud or gross negligence, in which case the relevant beneficiary would forfeit all rights to both vested and unvested compensation under the LTIP, beneficiaries that cease to be employed by Codere Online or to provide services to Codere Online, as applicable, will retain all vested compensation up to the date of any such resignation or termination. Awards are subject to recovery by Codere Online under certain events, including as a result of a breach of the post-contractual non-compete or non-solicit or pursuant to applicable laws and regulations. Except as prohibited by applicable laws, the company may extend loans to beneficiaries to pay certain taxes due in connection with compensation under the LTIP.
The LTIP is subject to the Spanish employment law as a significant part of the compensation under the LTIP will be awarded to beneficiaries located in Spain. The components of the LTIP may be subject to special terms and conditions depending on the location of the beneficiary.
The foregoing description of the LTIP does not purport to be complete and is qualified in its entirety by reference to the full text of the LTIP Master Agreement, which has been filed as an exhibit to the annual report of Codere Online as of December 31, 2021. As of June 30, 2023, the impact of the LTIP was recorded in the Unaudited Interim Condensed Consolidated Statements of Income (Loss) as personnel expenses amounted to
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Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
| 14. | EVENTS AFTER THE REPORTING DATE |
Liquidation of Subsidiary
On October 20, 2022, the board of directors of Codere Online Luxembourg, S.A. approved the liquidation of its Malta operating entity named Codere Online Operator LTD and of its Malta supporting entity named Codere Online Management Services LTD. The liquidation is expected to be completed on or before December 31, 2023, subject to customary closing conditions. Codere Online voluntarily surrendered its B2C license effective as of October 29, 2023 as it does not currently offer (and never has offered) online casino and sports betting to customers located in Malta. Effective as of February 8, 2023, Codere Online voluntarily surrendered its B2B license which authorized the provision of B2B gaming services in Malta.
The liquidation represents a significant event for Codere Online Luxembourg, S.A. This liquidation is not expected to have any significant financial impact in the financial statements for the period in which the liquidation occurs.
Auditors
On October 23, 2023, Ernst & Young, S.L. (“EY”) notified the Audit Committee of the Board of Directors (the “Audit Committee”) of Codere Online of its decision to decline to stand for re-election or re-appointment as the Company’s independent registered public accounting firm for the purpose of auditing the Company’s financial statements for the year ending December 31, 2023. This decision stemmed from EY’s decision not to renew as the independent auditor for Codere New Topco S.A. and its consolidated subsidiaries, which includes Codere Online.
The Audit Committee of Codere Online is currently seeking to appoint a new independent registered public accounting firm to act as independent auditor for Codere Online.
There were no additional events subsequent to the closing date which could have a significant effect on Codere Online’s Unaudited Interim Condensed Consolidated Financial Statements.
F-27
Codere Online Luxembourg, S.A. and subsidiaries.
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2023 AND FOR THE SIX MONTHS ENDED JUNE 30, 2023
(Thousands of Euros)
Financial Statements of Codere Online Luxembourg, S.A. and subsidiaries as of and for the six months ended June 30, 2023
Madrid, November 14, 2023
| Oscar Iglesias | Amalia Lopez Castaño | |
| Chief Financial Officer | Chief Accounting Officer |
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