Newgioco Group, Inc. XBRL

Summary of Significant Accounting Policies

2.	Accounting Policies and Estimates

a)

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).

All amounts referred to in the notes to the consolidated financial statements are in United States Dollars ($) unless stated otherwise.

b)

Principles of consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries, all of which are wholly-owned. All significant inter-company transactions are eliminated upon consolidation.

Certain items in the prior periods were reclassified to conform to the current period presentation.

All amounts referred to in the Notes to the consolidated financial statements are in United States Dollars ($) unless stated otherwise.

c)

Foreign operations

The Company translated the assets and liabilities of its foreign subsidiaries into US Dollars at the exchange rate in effect at year end and the results of operations and cash flows at the average rate throughout the year. The translation adjustments are recorded directly as a separate component of stockholders’ equity, while transaction gains (losses) are included in net income (loss).

All revenues were generated in Euro during the years presented.

Gains and losses from foreign currency transactions are recognized in current operations.

d)

Business Combinations

The Company allocates the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired users, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

e)

Use of Estimates

The preparation of consolidated 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 dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. These estimates and assumptions include valuing equity securities issued in share-based payment arrangements, determining the fair value of assets acquired, allocation of purchase price, impairment of long-lived assets, the collectability of receivables, leasing arrangements, convertible debentures, contingencies and the value of deferred taxes and related valuation allowances. Certain estimates, including evaluating the collectability of receivables and advances, could be affected by external conditions, including those unique to the Company’s industry and general economic conditions. It is possible that these external factors could have an effect on the Company’s estimates that could cause actual results to differ from the Company’s estimates. The Company re-evaluates all of its accounting estimates at least quarterly based on these conditions and records adjustments when necessary.

f)

Loss Contingencies

The Company may be subject to claims, suits, government investigations, and other proceedings involving competition and antitrust, intellectual property, privacy, indirect taxes, labor and employment, commercial disputes, content generated by our users, goods and services offered by advertisers or publishers using the Company’s website platforms, and other matters. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages. The Company records a liability when it believes that it is both probable that a loss has been incurred, and the amount can be reasonably estimated. If the Company determines that a loss is possible, and a range of the loss can be reasonably estimated, it discloses the range of the possible loss in the Notes to the Consolidated Financial Statements.

The Company evaluates, on a regular basis, developments in its legal matters that could affect the amount of liability that has been previously accrued, and the matters and related ranges of possible losses disclosed and makes adjustments and changes to our disclosures as appropriate. Significant judgment is required to determine both likelihood of there being and the estimated amount of a loss related to such matters. Until the final resolution of such matters, there may be an exposure to loss in excess of the amount recorded, and such amounts could be material. Should any of the Company’s estimates and assumptions change or prove to have been incorrect, it could have a material impact on its business, consolidated financial position, results of operations, or cash flows.

To date, none of these types of litigation matters, most of which are typically covered by insurance, has had a material impact on the Company’s operations or financial condition. The Company has insured and continues to insure against most of these types of claims.

g)

Fair Value Measurements

ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy which requires classification based on observable and unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

The carrying value of the Company's accounts receivables, gaming accounts receivable, lines of credit - bank, accounts payable, gaming accounts payable and bank loans payable approximate fair value because of the short-term maturity of these financial instruments.

h)

Derivative Financial Instruments

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described.

The conversion feature of our convertible debt was assessed in terms of ASC480 and the Company determined that the beneficial conversion feature was classified as equity and did not give rise to a derivative liability.

i)

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with maturities of three months or less at the time acquired to be cash equivalents. The Company had no cash equivalents as of December 31, 2019 and 2018, respectively.

The Company primarily places cash balances in the USA with high-credit quality financial institutions located in the United States which are insured by the Federal Deposit Insurance Corporation up to a limit of $250,000 per institution, in Canada which are insured by the Canadian Deposit Insurance Corporation up to a limit of CDN$100,000 per institution, in Italy which is insured by the Italian deposit guarantee fund Fondo Interbancario di Tutela dei Depositi (FITD) up to a limit of €100,000 per institution, and in Germany which is a member of the Deposit Protection Fund of the Association of German Banks (Einlagensicherungsfonds des Bundesverbandes deutscher Banken) up to a limit of €100,000 per institution.

j)

Gaming Accounts Receivable

Gaming accounts receivable represent gaming deposits made by customers to their online gaming accounts either directly by credit card, bank wire, e-wallet or other accepted method through one of our websites or indirectly by cash collected at the cashier of a betting shop but not yet credited to the Company’s bank accounts and subject to normal trade collection terms without discounts. The Company periodically evaluates the collectability of its gaming accounts receivable and considers the need to record or adjust an allowance for doubtful accounts based upon historical collection experience and specific customer information. Actual amounts could vary from the recorded estimates. The Company does not require collateral to support customer receivables. The Company recorded a bad debt expense of $163,942 and $0 for the years ended December 31, 2019 and 2018, respectively. All balances previously recorded as allowance for doubtful accounts were written off as uncollectible.

k)

Gaming Accounts Payable

Gaming accounts payable represent customer balances, including winnings and deposits, that are held as credits in online gaming accounts and have not as of yet been used or withdrawn by the customers. Customers can request payment of winnings from the Company at any time and the payment to customers can be made through bank wire, credit card, or cash disbursement from one of our locations. Online gaming account credit balances are non-interest bearing.

l)

Long-Lived Assets

The Company evaluates the carrying value of its long-lived assets for impairment by comparing the expected undiscounted future cash flows of the assets to the net book value of the assets when events or circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. If the expected undiscounted future cash flows are less than the net book value of the assets, the excess of the net book value over the estimated fair value will be charged to earnings.

Fair value is based upon discounted cash flows of the assets at a rate deemed reasonable for the type of asset and prevailing market conditions, appraisals, and, if appropriate, current estimated net sales proceeds from pending offers.’’

m)

Property, Plant and Equipment

Plant and equipment is stated at acquisition cost less accumulated depreciation and adjustments for impairment losses. Expenditures are capitalized only when they increase the future economic benefits embodied in an item of plant and equipment. All other expenditures are recognized as expenses in the statement of operations as incurred.

Depreciation is charged on a straight-line basis over the estimated remaining useful lives of the individual assets. Amortization commences from the time an asset is put into operation. The range of the estimated useful lives is as follows:

Description		Useful Life (in years)

Leasehold improvements		Life of the underlying lease
Computer and office equipment		3 to5
Furniture and fittings		7 to 10
Computer Software		3 to 5
Vehicles		4 to 5

n)

Intangible Assets

Intangible assets are stated at acquisition cost less accumulated amortization, if applicable, less any adjustments for impairment losses.

Amortization is charged on a straight-line basis over the estimated remaining useful lives of the individual intangibles. Where intangibles are deemed to be impaired the Company recognizes an impairment loss measured as the difference between the estimated fair value of the intangible and its book value.

The range of the estimated useful lives is as follows:

Description		Useful Life (in years)

Betting Platform Software		15
Ulisse Bookmaker License		Indefinite
Multigioco and Rifa ADM Licenses		1.5 - 7
Location contracts		5 - 7
Customer relationships		10 - 15
Trademarks/Tradenames		14
Websites		5

The Ulisse Bookmaker has no expiration date and is therefore not amortized.

o)

Goodwill

The Company allocates the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired users, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

The Company annually assesses whether the carrying value of its goodwill exceeds its fair value and, if necessary, records an impairment loss equal to any such excess. Each interim reporting period, the Company assesses whether events or circumstances have occurred which indicate that the carrying amount of goodwill exceeds its fair value. If the carrying amount of the goodwill exceeds its fair value, an asset impairment charge will be recognized in an amount equal to that excess.

In terms of ASC 350, the Company skipped the requirement to perform a qualitative assessment and performed a quantitative assessment on its goodwill and other intangible assets as of December 31, 2019, concluding that no impairment was considered necessary.

p)

Income Taxes

The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity's financial statements or tax returns. Deferred tax assets and liabilities are 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 is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions for any of the reporting periods presented.

In Italy, tax years beginning 2015 forward, are open and subject to examination, while in Austria companies are open and subject to inspection for five years and ten years for inspection of serious infractions. In the United States and Canada, tax years beginning 2015 forward, are subject to examination. The Company is not currently under examination and it has not been notified of a pending examination.

q)

Revenue Recognition

The Company recognizes revenue when control of its products and services is transferred to its customers in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those products and services. Revenues from sports-betting, casino, cash and skill games, slots, bingo and horse race wagers represent the gross pay-ins (also referred to as turnover) from customers less gaming taxes and payouts to customers. Revenues are recorded when the game is closed which is representative of the point in time at which the Company has satisfied its performance obligation. In addition, the Company receives commissions from the sale of scratch tickets and other lottery games. Commissions are recorded when the ticket for scratch off tickets and lottery tickets are sold.

Revenues from the Betting Platform include software licensing fees, training, installation, and product support services. The Company does not sell its proprietary software. Revenue is recognized when transfer of control to the customer has been made and the Company’s performance obligation has been fulfilled. License fees are calculated as a percentage of each licensee’s level of activity and are contingent upon the licensee’s usage. The license fees are recognized on an accrual basis as earned.

r)

Stock-Based Compensation

The Company records its compensation expense associated with stock options and other forms of equity compensation based on their fair value at the date of grant using the Black-Scholes option pricing model. Stock-based compensation includes amortization related to stock option awards based on the estimated grant date fair value. Stock-based compensation expense related to stock options is recognized ratably over the vesting period of the option. In addition, the Company records expense related to Restricted Stock Units (“RSU’s”) granted based on the fair value of those awards on the grant date. The fair value related to the RSUs is amortized to expense over the vesting term of those awards. Forfeitures of stock options and RSUs are recognized as they occur.

Stock-based compensation expense for a stock-based award with a performance condition is recognized when the achievement of such performance condition is determined to be probable. If the outcome of such performance condition is not determined to be probable or is not met, no compensation expense is recognized and any previously recognized compensation expense is reversed.

s)

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, including foreign currency translation adjustments.

t)

Earnings Per Share

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 260, “Earnings Per Share” provides for calculation of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income (loss) available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflects the dilutive impact on the number of shares outstanding should they be exercised. Securities that have the potential to dilute shareholder's interests include unexercised stock options and warrants as well as unconverted debentures.

On December 12, 2019, the Company effected an 1 for 8 reverse stock split, all references made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the reverse stock split.

u)

Related Parties

Parties are considered to be related to the Company if the parties directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions are recorded at fair value of the goods or services exchanged.

v)

Adoption of Accounting Standards

In February 2016, the Financial Accounting Standards Board (“FSAB”) issued Accounting Standards Update (“ASU”), No. 2016-02, Leases (Topic 842) (ASC 842)

The amendments in this update establishes a comprehensive new lease accounting model. The new standard: (a) clarifies the definition of a lease; (b) requires a dual approach to lease classification similar to current lease classifications; and (c) causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease-term of more than twelve months. The new standard is effective for fiscal years and interim periods beginning after December 15, 2018, with early adoption permitted. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, including a number of optional practical expedients that entities may elect to apply. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, an update which provides another transition method, the prospective transition method, which allows entities to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company adopted the new standard on January 1, 2019 using the prospective transition method.

The Company has identified all material leases and reviewed the leases to determine the impact of ASC 842 on its consolidated financial statements. The Company has elected to apply all of the practical expedients to all leases, which include not reassessing (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases, and (3) initial direct costs for any existing leases. The adoption of the new standard resulted in; (i) the recording of a right-of-use asset of $646,138 and an operating lease liability of $617,352 on the consolidated balance sheet with effect from January 1, 2019 utilizing implicit borrowing rates where available and incremental borrowing rates where rates were not readily available. The right of use asset and operating lease liability are subsequently amortized. No cumulative effect adjustment to opening retained earnings was made as the amounts are immaterial.

w)

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): “Measurement of Credit Losses on Financial Instruments,” which replaces the incurred loss methodology with an expected credit loss methodology that is referred to as the current expected credit loss (CECL) methodology. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The amendments in this update are required to be applied using the modified retrospective method with an adjustment to accumulated deficit and are effective for the Company beginning with fiscal year 2020, including interim periods. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. An entity with trade receivables will be required to use historical loss information, current conditions, and reasonable and supportable forecasts to determine expected lifetime credit losses. Pooling of assets with similar risk characteristics is also required.

The Company adopted ASU 2016-13 on January 1, 2020 on a modified retrospective basis, and is currently evaluating the impact of adoption of the amendments in these updates, which are not expected to have a material impact on the Company’s financial position, results of operations, and related disclosures.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), the Amendments in this update reduce the complexity in accounting for income taxes by removing certain exceptions to accounting for income taxes and deferred taxes and simplifying the accounting treatment of franchise taxes, a step up in the tax basis of goodwill as part of business combinations, the allocation of current and deferred tax to a legal entity not subject to tax in its own financial statements, reflecting changes in tax laws or rates in the annual effective rate in interim periods that include the enactment date and minor codification improvements.

This ASU is effective for fiscal years and interim periods beginning after December 15, 2020.

The effects of this ASU on the Company’s financial statements is not considered to be material.

The FASB issued several updates during the period, none of these standards are either applicable to the Company or require adoption at a future date and none are expected to have a material impact on the consolidated financial statements upon adoption.

x)

Reporting by segment

The Company has two operating segments from which it derives revenue. These segments are:

(i)

provider of certified betting Platform software services to leisure betting establishments in Italy and 11 other countries and;

(ii)

the operating of web based as well as land based leisure betting establishments situated throughout Italy.

y)

Comparatives

Certain items in the prior year were reclassified to conform to the current period presentation. These reclassifications had no impact on net loss or comprehensive loss.

Acquisition of subsidiariess

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Acquisition of subsidiaries

3.

Acquisition of subsidiaries

Ulisse GmbH (“Ulisse”) Acquisition

On June 30, 2016, the Company entered into a Share Exchange Agreement (“Ulisse SPA”), which closed on July 1, 2016, with the shareholders of Ulisse organized under the laws of Austria. Ulisse operates a network of approximately 170 land-based agency locations. Pursuant to the agreement, the Company issued 416,400 shares of common stock in consideration for 100% of the issued and outstanding shares of Ulisse.

Pursuant to the Ulisse SPA, the purchase price was subject to an adjustment equal to two times earnings before income taxes calculated on a pro rata basis from the closing date upon completion of the license tender auction held by the Italian gaming regulator, Agenzia delle Dogane e dei Monopoli (“ADM”). The sellers were also permitted to exercise the option to resell to the Company 50% of the shares of common stock (or 208,200 shares) issued in consideration for the purchase price at a fixed price of $4.00 per share (the “Ulisse Put Option”).

On May 31, 2018, the Company and Ulisse mutually agreed to exercise the Ulisse Put Option in lieu of completion of the ADM license tender auction. The Company repurchased and retired the shares issued in June 2016 with a purchase price adjustment to 10 million Euros (approximately $11.7 million). The purchase price adjustment was paid half in cash of €5 million (approximately $5.85 million) and the Company issued 591,950 shares of common stock to the sellers on May 31, 2018 to settle the balance of the purchase price adjustment at a closing price of $9.44 per share on May 31, 2018

Multigioco Acquisition

On May 31, 2018, the Company and Multigioco mutually agreed to exercise the option to repurchase the shares issued to the shareholders of Multigioco at the closing of the acquisition of Multigioco on August 15, 2014 (“Multigioco Put Option”). The Company repurchased and retired the balance of 255,000 shares issued to the Multigioco sellers in exchange for €510,000 (approximately $595,000).

Virtual Generation Limited (“VG”) Acquisition

On January 30, 2019, the Company entered into a Share Exchange Agreement (“VG SPA”), with the shareholders of Virtual Generation (“VG”) organized under the laws of Republic of Malta (the “Sellers”) and acquired all of the issued and outstanding ordinary shares of VG., together with all the ordinary shares of Naos Holding Limited, a company organized under the laws of Republic of Malta (“Naos”) that owned 3,999 of the 4,000 issued and outstanding ordinary shares of VG. VG owns and has developed a virtual gaming software platform.

Pursuant to the Purchase Agreement, on the Closing Date, the Company agreed to pay the Sellers the previously agreed to consideration of €4,000,000 ($4,576,352) in consideration for all the ordinary shares of VG and Naos, on the Closing Date as follows:

(i)

a cash payment of €108,000;

(ii)

the issuance of shares of the Company’s common stock valued at €89,000; and

(iii)

the delivery of a non-interest bearing promissory note of €3,803,000, providing for the payment of:

(a) an aggregate of €2,392,000 in cash in 23 equal and consecutive monthly instalments of €104,000 with the first such payment due and payable on the date that was one month after the Closing Date; and

(b) an aggregate of €1,411,000 in shares of the Company’s common stock in 17 equal and consecutive monthly instalments of €83,000 as determined by the average of the closing prices of such shares on the last 10 trading days immediately preceding the determination date of each monthly issuance, which issuances commenced on March 1, 2019.

The €3,803,000 promissory note was originally recorded as a liability owing to related parties of €1,521,200 (Note 15) and to third parties of €2,281,800 (Note 12).

Pursuant to the terms of the Purchase Agreement that the Company entered into with VG, the Company agreed to pay the sellers of VG an earnout payment in shares of our common stock equal to an aggregate amount of €500,000 (approximately $561,500), if the amounts of bets made by users of the VG platform grew by more than 5% for the year ended December 31, 2019 compared to the year ended December 31, 2018, based on the 18,449,380 tickets sold in 2019 the VG Sellers have qualified for the earnout payment. The earnout payment was considered remote at the time of entering into the transaction and was not recorded as a component of deferred purchase consideration, accordingly it has been expensed through the statement of operations for the year ended December 31, 2019.

Virtual Generation Limited (“VG”) Acquisition (continued)

In terms of the agreement, the purchase price was allocated to the fair market value of tangible and intangible assets acquired and liabilities assumed, as follows:

	Amount
Purchase consideration, net of discount of $382,778	$	4,193,375

Fair value of assets acquired
Cash		47,268
Current assets		178,181
Property, Plant and Equipment		41,473
Betting Platform		4,004,594
		4,271,516
Less: liabilities assumed		(78,141	)
Less: Imputed Deferred taxation on identifiable intangible acquired (Betting platform)		(1,401,608	)

Total identifiable assets less liabilities assumed		2,791,767
Goodwill arising on acquisition		1,401,608
Total purchase consideration	$	4,193,375

The Betting Platform value was determined by management, based on prior experience, and is being amortized over a period of 15 years, the expected useful life.

Restricted Cash

12 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

Restricted Cash

4.

Restricted Cash

Restricted cash consists of the following:

·

cash held in a segregated bank account at Intesa Sanpaolo Bank S.p.A. (“Intesa Sanpaolo Bank”) as collateral against a bank loan with Intesa Sanpaolo Bank for Multigioco as well as Wirecard Bank as a security deposit for Ulisse betting operations.

·

The Company maintains a $1,000,000 deposit at Metropolitan Commercial bank held as security against a $1,000,000 line of credit. See Note 10.

Plant and Equipment

12 Months Ended

Dec. 31, 2019

Plant and Equipment

5.

Plant and equipment

	December 31, 2019							December 31, 2018
	Cost		Accumulated depreciation			Net book value		Net book value

Leasehold improvements	$	47,291	$	(14,886	)	$	32,405	$	8,038
Computer and office equipment		835,793		(522,969	)		312,824		258,448
Fixtures and fittings		135,869		(78,271	)		57,598		62,795
Vehicles		98,115		(25,589	)		72,526		88,262
Computer software		125,831		(80,459	)		45,372		58,504
	$	1,242,899	$	(722,174	)	$	520,725	$	476,047

The aggregate depreciation charge to operations was $283,497 and $228,715 for the years ended December 31, 2019 and 2018, respectively. The depreciation policies followed by the Company are described in Note 2.

Leases

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Leases

6.

Leases

Adoption of ASC Topic 842, “Leases”

On January 1, 2019, the Company adopted Topic 842 using the modified retrospective method applied to leases that were in place as of January 1, 2019. Results for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under Topic 840. The Company’s portfolio of leases contains both finance and operating leases that relate to real estate agreements, vehicles and office equipment agreements.

Practical Expedients and Elections

The Company elected the package of practical expedients permitted under the transition guidance, which allowed the Company to carryforward its historical lease classification, the Company’s assessment on whether a contract is or contains a lease, and its initial direct costs for any leases that exist prior to adoption of the new standard. The Company also elected to combine lease and non-lease components on the office equipment leases and elected the short-term lease recognition exemption for all leases that qualify.

Discount Rate

To determine the present value of minimum future lease payments for leases at January 1, 2019, the Company was required to use the rate implicit in the lease unless the rate is not determinable then a rate of interest that it would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment (the “incremental borrowing rate” or “IBR”).

Operating leases

Property and vehicle leases

The Company determined the rate implicit in the lease or an IBR where that rate was not determinable. The Company used country specific rates based on the country the assets are located in.

·

Property leases

The Company determined that rates ranging from 2.12% to 4.5% were a appropriate discount rates to apply to its real-estate operating leases.

The Company entered into new real estate operating leases during the current period and determined an appropriate discount rate to apply to its operating leases was 2.12%.

·

Vehicle leases

The Company determined that appropriate discount rates to apply to its vehicle operating leases ranged from 5.1% to 6.7%.

Finance leases

Computer and office equipment leases

The Company has financed several items of computer and office equipment through vendor financing. The discount rates for finance leases ranged from 2.5% to 4.2%.

Right of use assets

Upon adoption of ASC 842, effective January 1, 2019, the Company recorded a right of use asset for operating leases of $646,138.

Right of use assets are included in the consolidated balance sheet are as follows:

	December 31, 2019

Non-Current assets
Right-of-use assets - operating leases, net of amortization	$	792,078
Right-of-use assets – finance leases, net of amortization (included in plant and equipment)	$	37,091

Lease costs consists of the following:

	Year ended December 31, 2019

Finance lease cost:	$	13,292
Amortization of right-of-use assets		11,890
Interest expense on lease liabilities		1,402

Operating lease cost		210,881

Total lease cost	$	224,173

Other lease information:

	Year ended December 31, 2019



Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases	$	(1,252	)
Operating cash flows from operating leases		(210,881	)
Financing cash flows from finance leases		(11,371	)

Right-of-use assets obtained in exchange for new finance leases		14,989
Right-of-use assets disposed of under operating leases prior to lease maturity		(81,263	)
Right-of -use assets obtained in exchange for new operating leases	$	442,281

Weighted average remaining lease term – finance leases		3.46 years
Weighted average remaining lease term – operating leases		3.74 years

Weighted average discount rate – finance leases		3.52	%
Weighted average discount rate – operating leases		3.42	%

Maturity of Leases

Finance lease liability

The amount of future minimum lease payments under finance leases are as follows:

	Amount

2020	$	13,611
2021		10,413
2022		8,431
2023		6,560
2024		802
Total undiscounted minimum future lease payments		39,967
Imputed interest		(2,466	)
Total finance lease liability	$	37,501

Disclosed as:
Current portion	$	12,476
Non-Current portion		25,025
	$	37,501

Operating lease liability

The amount of future minimum lease payments under operating leases are as follows:

	Amount

2020	$	222,497
2021		214,693
2022		180,470
2023		150,570
2024 and beyond		28,741
Total undiscounted minimum future lease payments		796,971
Imputed interest		(47,358	)

Total operating lease liability	$	749,613

Disclosed as:
Current portion	$	200,866
Non-Current portion		548,747
	$	749,613

Intangible Assets

12 Months Ended

Dec. 31, 2019

Intangible Assets

7.

Intangible Assets

Intangible assets consist of the following:

	December 31, 2019							December 31, 2018
	Cost		Accumulated depreciation			Net book value		Net book value

Betting platform software	$	5,689,965	$	(637,320	)	$	5,052,645	$	1,405,134
Licenses		10,694,227		(764,732	)		9,929,495		10,037,980
Location contracts		1,000,000		(768,688	)		231,312		374,169
Customer relationships		870,927		(301,227	)		569,700		630,161
Trademarks		116,175		(42,300	)		73,875		75,583
Websites		40,000		(40,000	)		—		4,953
	$	18,411,294	$	(2,554,267	)	$	15,857,027	$	12,527,980

The Company evaluates intangible assets for impairment on an annual basis during the last month of each year and at an interim date if indications of impairment exist. Intangible asset impairment is determined by comparing the fair value of the asset to its carrying amount with an impairment being recognized only when the fair value is less than carrying value and the impairment is deemed to be permanent in nature.

The Company recorded $771,665 and $468,551 in amortization expense for finite-lived assets for the years ended December 31, 2019 and 2018, respectively.

Licenses obtained by the Company in the acquisitions of Multigioco and Rifa include a Gioco a Distanza (“GAD”) online license as well as a Bersani and Monti land-based licenses issued by the Italian gaming regulator to Multigioco and Rifa, respectively, as well as an Austrian Bookmaker License through the acquisition of Ulisse.

The Company believes that the carrying amounts of its intangible assets are recoverable. However, if adverse events were to occur or circumstances were to change indicating that the carrying amount of such assets may not be fully recoverable, the assets would be reviewed for impairment and the assets may be impaired.

Goodwill

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

8.

Goodwill

	December 31, 2019			December 31, 2018

Opening balance	$	262,552		$	260,318
Acquisition of Virtual Generation		1,401,608			—
Impairment charge		—			—
Foreign exchange movements		(775	)		2,234
Closing balance	$	1,663,385		$	262,552

Goodwill represents the excess purchase price paid over the fair value of assets acquired, including any other identifiable intangible assets.

On January 30, 2019, the Company acquired Virtual Generation Limited, as disclosed in Note 3 above. The goodwill on acquisition arose as the Proceeds paid on acquisition exceeded the fair value of the identifiable assets less assumed liabilities and imputed deferred tax liabilities on identifiable intangible assets by $1,401,608.

The Company evaluates goodwill for impairment on an annual basis during the last month of each year and at an interim date if indications of impairment exist. Goodwill impairment is determined by comparing the fair value of the asset to its carrying amount with an impairment being recognized only when the fair value is less than carrying value and the impairment is deemed to be permanent in nature.

Marketable Securities

12 Months Ended

Dec. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Marketable Securities

9.	Marketable Securities

Investments in marketable securities consists of 2,500,000 shares of Zoompass Holdings (“Zoompass”) and is accounted for at fair value, with changes recognized in earnings.

On December 31, 2019, the shares of Zoompass were last quoted at $0.071 per share on the OTC market, resulting in an unrealized loss recorded to earnings related to these securities of $97,500 and $75,000 for the years ended December 31, 2019, and 2018 respectively.

Line of Credit-Bank

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Line of Credit-Bank

10.

Line of Credit - Bank

The Company maintains a $1,000,000 secured revolving line of credit from Metropolitan Commercial Bank in New York, which bears a fixed rate of interest of 3.00% on the outstanding balance with an interest only monthly minimum payment, no maturity or due date and is secured by a $1,000,000 security deposit, see Note 4.

Convertible Debentures

12 Months Ended

Dec. 31, 2019

Convertible Debentures

11.

Convertible Debentures

On February 26, 2018, the Company issued debenture units to certain accredited investors (the “February 2018 Private Placement”). Each debenture unit was comprised of (i) a debenture in the principal amount of CDN $1,000 bearing interest at a rate of 10% per annum, with a maturity date of two years from the date of issuance, (ii) warrants to purchase up to 31.25 shares of the Company’s common stock at an exercise price equal to the lesser of $5.00 or 125% of the proposed initial Canadian public offering price per warrant, expiring on February 25, 2020, and (iii) 20 shares of restricted common stock. The investors in the February 2018 Private Placement purchased an aggregate principal amount of CDN $670,000 ($521,900) debentures and received warrants to purchase up to 20,938 shares of the Company’s common stock and 13,875 shares of common stock. As a result of the lower debenture conversion price and the warrant exercise price of the May 31, 2018 Private Placement described below, the whole or any part of the principal amount of the February 2018 Private Placement debentures plus any accrued and unpaid interest may be converted into shares of the Company’s common stock at a price equal to $3.20 per share and the warrants can be exercised at a price equal to $4.00 per share.

In April 2018, the Company issued debenture units to certain investors (the “April 2018 Private Placement”). Each debenture unit was comprised of (i) a debenture in the principal amount of CDN $1,000 bearing interest at a rate of 10% per annum, with a maturity date of two years from the date of issuance, (ii) warrants to purchase up to 31.25 shares of the Company’s common stock at an exercise price equal to the lesser of $5.00 or 125% of the proposed initial Canadian public offering price per warrant, expiring in April 2020, and (iii) 20 shares of restricted common stock. The investors in the April 2018 Private Placement purchased an aggregate principal amount of CDN $135,000 ($105,200) debentures and received warrants to purchase up to 4,218.75 shares of the Company’s common stock and 2,700 shares of restricted common stock. As a result of the lower debenture conversion price and the warrant exercise price of the May 31, 2018 Private Placement described below, the whole or any part of the principal amount of the April 2018 Private Placement debentures plus any accrued and unpaid interest may be converted into shares of the Company’s common stock at a price equal to $3.20 per share and the warrants can be exercised at a price equal to $4.00 per share

On April 19, 2018, the Company re-issued debenture units that were first issued to certain investors between January 24, 2017 and January 31, 2018 in order to simplify the various debentures into a single series with the same terms as new convertible debenture units issued on February 26, 2018 (the “April 19, 2018 Debentures”). Each debenture unit was comprised of (i) a debenture in the principal amount of CDN $1,000 bearing interest at a rate of 10% per annum, with a maturity date of two years from the date of issuance, (ii) warrants to purchase up to 31.25 shares of the Company’s common stock at an exercise price equal to the lesser of $5.00 or 125% of the proposed initial Canadian public offering price per warrant, expiring on April 19, 2020, and (iii) 20 shares of restricted common stock. The investors in the April 19, 2018 Private Placement received an aggregate principal amount of CDN $1,436,000 ($1,118,600) debentures, warrants to purchase up to 44,875 shares of the Company’s common stock and 28,720 restricted shares of common stock. As a result of the lower debenture conversion price and the warrant exercise price of the May 31, 2018 Private Placement described below, the whole or any part of the principal amount of the April 19, 2018 Debentures plus any accrued and unpaid interest may be converted into shares of the Company’s common stock at a price equal to $3.20 per share and the warrants can be exercised at a price equal to $4.00 per share.

On May 11, 2018, the Company issued debenture units to certain investors (the “May 11, 2018 Private Placement”). Each debenture unit was comprised of (i) a debenture in the principal amount of CDN $1,000 bearing interest at a rate of 10% per annum, with a maturity date of two years from the date of issuance, (ii) warrants to purchase up to 31.25 shares of the Company’s common stock at an exercise price equal to the lesser of $5.00 or 125% of the proposed initial Canadian public offering price per warrant, expiring on May 11, 2020, and (iii) 20 shares of restricted common stock. The investors in the May 11, 2018 Private Placement purchased an aggregate principal amount of CDN $131,000 ($102,000) debentures and received warrants to purchase up to 4,093.75 shares of the Company’s common stock and 2,620 restricted shares of common stock. As a result of the lower debenture conversion price and the warrant exercise price of the May 31, 2018 Private Placement described below, the whole or any part of the principal amount of the May 11, 2018 Private Placement plus any accrued and unpaid interest may be converted into shares of the Company’s common stock at a price equal to $3.20 per share and the warrants can be exercised at a price equal to $4.00 per share.

On May 31, 2018, the Company closed a private placement offering of up to 7,500 units and entered into Subscription Agreements (the “Agreements”) with certain accredited investors (the “May 31, 2018 Private Placement”). The units were offered in both U.S. and Canadian dollar denominations. Each unit sold to U.S. investors was sold at a per unit price of $1,000 and was comprised of (i) a 10% convertible debenture in the principal amount of $1,000 (the “U.S. Debentures”) maturing on May 31, 2020, (ii) 26 shares of our common stock and (ii) warrants to purchase up to 135.25 shares of the Company’s common stock (the “U.S. Warrants”). Each unit sold to Canadian investors was sold at a per unit price of CND $1,000 and was comprised of (i) a 10% convertible debenture in the principal amount of CND $1,000 (the “Canadian Debentures” and together with the U.S. Debentures, the “May Debentures”), (ii) 20 shares of our common stock and (ii) warrants to purchase up to 104.06 shares of our common stock (the “Canadian Warrants” and together with the U.S. Warrants, the “May Warrants”).

The May 31, 2018 Warrants are exercisable at an exercise price of $4.00 per share and expire on May 31, 2020.

The accounting treatment relating to the convertible debentures issued was in accordance with the guidance in ASC 480 and ASC 815.

The proceeds received from the convertible debentures were; (i) net of finders fees issued to certain brokers; (ii) in addition, the Company issued shares of common stock to the convertible debenture holders; as well as (iii) certain two year warrants exercisable for shares of common stock at an exercise price of $4.00 per share; (iv) in conjunction with the finders fees paid, the Company also issued warrants to certain brokers on the same terms and conditions as the warrants issued to the convertible debenture holders; and (v) the convertible debentures are convertible into shares of common stock at a conversion price of $3.20 per share.

The accounting treatment of the above is as follows:

(i)

The convertible debentures were recorded at gross value;

(ii)

The cash fee paid to the brokers was $427,314 and the fair value of the warrants issued to the brokers were valued at fair value as described in (iv) below and were recorded as a debt discount against the gross value of the convertible debentures;

(iii)

The shares of common stock issued to the convertible debenture holders were valued at $582,486, the market price of the common stock on the date of issue and were recorded as debt discount against the gross value of the convertible debt;

(iv)

The warrants issued to the convertible debenture holders and brokers were valued at $2,929,712 using a Black-Scholes valuation model, the value of the warrants was recorded as a discount against the gross value of the convertible debentures and initially recorded as a derivative liability on the basis of standard anti-dilution language being interpreted as a down round feature, the warrants do not provide for any down round features and subsequent to the initial recording the Company adopted ASU 2017-11in September 2018 and eliminated the derivative liability;

(v)

The conversion feature of the convertible debentures was in-the-money at date of issuance, giving rise to a beneficial conversion feature valued at intrinsic value of $2,585,055.

(vi)

The company originally recorded the conversion feature as a derivative liability on the basis that the standard anti-dilution clauses in the convertible debt agreements relating to stock splits and stock mergers amounted to a down-round feature, the convertible debentures do not provide for down round features and accordingly, the Company adopted ASU2017-11 in September 2018 and eliminated the derivative liability.

The total debt discount above amounted to $6,524,567 which is being amortized over the two year life of the debentures on a straight line basis.

As of December 31, 2019 and 2018, the Company has outstanding, US Dollar convertible debentures of $2,083,000 and $3,268,000, respectively and Canadian Dollar denominated Convertible debentures of CDN$1,794,600 and CDN$6,801,165, respectively.

During the year ended December 31, 2019, investors in Canadian Dollar convertible debentures converted the aggregate principal amount of CDN$5,367,400, including interest thereon of CDN$791,861 and investors in US Dollar convertible debentures converted the aggregate principal amount of $1,185,000, including interest thereon of $133,959, into 1,866,528 shares of common stock.

The Aggregate convertible debentures outstanding consists of the following:

	December 31, 2019			December 31, 2018
Principal Outstanding
Opening balance	$	8,529,751		$	1,610,980
Additions		—			7,080,308
Conversion to equity		(5,240,736	)		—
Foreign exchange movements		175,722			(161,537	)
		3,464,737			8,529,751
Accrued Interest
Opening balance		520,523			—
Interest expense		719,931			520,523
Conversion to equity		(731,731	)		—
Foreign exchange movements		15,504			—
		524,227			520,523
Debenture Discount
Opening balance		(4,587,228	)		(462,872	)
Additions		—			(6,119,484	)
Amortization		3,959,601			1,995,128
		(627,627	)		(4,587,228	)
Convertible Debentures, net	$	3,361,337		$	4,463,046

Deferred Purchase Consideration

12 Months Ended

Dec. 31, 2019

Deferred Purchase Consideration

12.

Deferred Purchase Consideration

In terms of the acquisition of Virtual Generation on January 31, 2019, disclosed in Note 3 above, the Company issued non-interest bearing promissory notes of €3,803,000 owing to both related parties and non-related parties. The value of the promissory notes payable related parties was €1,521,200 and to non-related parties was €2,281,800.

The promissory notes payable to non-related parties are to be settled as follows:

	(a)	an aggregate of €1,435,200 in cash in 23 equal and consecutive monthly instalments of €62,400 with the first such payment due and payable on the date that was one month after the Closing Date; and
	(b)	an aggregate of €846,600 in shares of the Company’s common stock in 17 equal and consecutive monthly instalments of €49,800 as determined by the average of the closing prices of such shares on the last 10 trading days immediately preceding the determination date of each monthly issuance, which issuances commenced on March 1, 2019.

Pursuant to the terms of the Purchase Agreement that the Company entered into with VG, the Company agreed to pay the sellers of VG an earnout payment in shares of our common stock equal to an aggregate amount of €500,000 (approximately $561,500), if the amounts of bets made by users of the VG platform grew by more than 5% for the year ended December 31, 2019 compared to the year ended December 31, 2018, based on the 18,449,380 tickets sold in 2019 the VG Sellers have qualified for the earnout payment. The earnout payment was considered remote at the time of entering into the transaction and was not recorded as a component of deferred purchase consideration, accordingly it has been expensed through the statement of operations for the year ended December 31, 2019. The amount due to the non-related party VG sellers amounts to €300,000 (Approximately $336,810).

The future payments on the promissory notes were discounted to present value using the Company’s average cost of funding of 10%. The discount is being amortized over the repayment period of the promissory note using the effective interest rate method.

The movement on deferred purchase consideration consists of the following:

Description	December 31, 2019
Principal Outstanding
Promissory note due to non-related parties	$	2,745,811
Additional earnout earned		336,810
Settled by the issuance of common shares		(616,387	)
Repayment in cash		(607,555	)
Foreign exchange movements		(56,295	)
		1,802,384
Present value discount on future payments
Present value discount		(242,089	)
Amortization		117,192
Foreign exchange movements		4,793
		(120,104	)
Deferred purchase consideration, net	$	1,682,280

Disclosed as follows:
Current liability	$	1,619,349
Long term liability		62,931
Deferred purchase consideration, net	$	1,682,280

Bank Loan Payable

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Bank Loan Payable

13.

Bank Loan Payable

In September 2016, the Company obtained a loan of €500,000 (approximately $545,000) from Intesa Sanpaolo Bank in Italy, which loan is secured by the Company's assets. The loan has an underlying interest rate of 4.5% above the Euro Inter Bank Offered Rate, subject to quarterly review and is amortized over 57 months ending March 31, 2021. Monthly repayments of €9,760 began in January 2017.

The Company made payments of €117,120 (approximately $131,163) for the year ended December 31, 2019 which included principal of €110,518 (approximately $123,769) and interest of €6,602 approximately $7,394) for the year ended December 31, 2019.

Other Long Term Liabilities

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Other Long Term Liabilities

14.

Other Long-term Liabilities

Other long-term liabilities represent the Italian “Trattamento di Fine Rapporto” which is a severance amount set up by Italian companies to be paid to employees on termination or retirement as well as shop deposits that are held by Ulisse.

Balances of other long-term liabilities were as follows:

	December 31, 2019		December 31, 2018
Severance liability	$	211,734	$	168,706
Customer deposit balance		407,810		440,021
	$	619,544	$	608,727

Related party

12 Months Ended

Dec. 31, 2019

Relateded party

15.

Related Parties

Notes Payable, Related Party

The Company had three promissory notes entered into in 2015 and 2016 with a related party with an aggregate principal amount outstanding of $318,078. The promissory notes bore interest at 12% to 24% per annum and were due on demand.

On September 4, 2019, in terms of an agreement entered into with the note holder, the promissory notes amounting to $318,078 together with interest thereon of $139,383, totaling $457,461 were exchanged for 142,956 shares of common stock.

The movement on notes payable, Related Party, consists of the following:

	December 31, 2019			December 31, 2018

Principal Outstanding
Opening balance	$	318,078		$	318,078
Settled by issuance of common shares		(318,078	)		—
		—			318,078
Accrued Interest
Opening balance		113,553			75,384
Interest expense		25,830			38,169
Conversion to equity		(139,383	)		—
		—			113,553
Convertible Debentures, net	$	—		$	431,631

Deferred Purchase consideration, Related Party

In terms of the acquisition of Virtual Generation on January 31, 2019, disclosed in Note 3 above, the Company issued non-interest bearing promissory notes in the principal amount of €3,803,000 owing to both related parties and non-related parties. The value of the promissory notes payable to non-related parties was €2,281,800 and to related parties was €1,521,200.

The related party promissory notes are due to Luca Pasquini, a director and officer of the Company and Gabriele Peroni, an officer of the Company.

The promissory notes are to be settled as follows:

	(a)	an aggregate of €956,800 in cash in 23 equal and consecutive monthly instalments of €41,600 with the first such payment due and payable on the date that is one month after the Closing Date; and
	(b)	an aggregate of €564,400 in shares of the Company’s common stock in 17 equal and consecutive monthly instalments of €33,200 as determined by the average of the closing prices of such shares on the last 10 trading days immediately preceding the determination date of each monthly issuance, commencing on March 1, 2019.

Pursuant to the terms of the Purchase Agreement that the Company entered into with VG, the Company agreed to pay the sellers of VG an earnout payment in shares of our common stock equal to an aggregate amount of €500,000 (approximately $561,500), if the amounts of bets made by users of the VG platform grew by more than 5% for the year ended December 31, 2019 compared to the year ended December 31, 2018, based on the 18,449,380 tickets sold in 2019 the VG Sellers have qualified for the earnout payment. The earnout payment was considered remote at the time of entering into the transaction and was not recorded as a component of deferred purchase consideration, accordingly it has been expensed through the statement of operations for the year ended December 31, 2019. The amount due to the related party VG sellers amounts to €200,000 (approximately $224,540).

The future payments on the promissory notes were discounted to present value using the Company’s average cost of funding of 10%. The discount is being amortized over the repayment period of the promissory note using the effective interest rate method.

The movement on deferred purchase consideration consists of the following:

Description	December 31, 2019
Principal Outstanding
Promissory notes due to related parties	$	1,830,541
Additional earnout earned		224,540
Settled by the issuance of common shares		(410,925	)
Repayment in cash		(328,734	)
Foreign exchange movements		(35,992	)
		1,279,430
Present value discount on future payments
Present value discount		(161,393	)
Amortization		78,128
Foreign exchange movements		3,195
		(80,069	)
Deferred purchase consideration, net	$	1,199,361

Disclosed as follows:
Current liability	$	1,157,407
Long term liability		41,954
Deferred purchase consideration, net	$	1,199,361

Related party (payables) receivables

Related party payables and receivables represent non-interest-bearing (payables) receivables that are due on demand.

The balances outstanding are as follows:

	December 31, 2019			December 31, 2018
Related Party payables
Gold Street Capital Corp.	$	(2,551	)	$	(39,237	)

Related Party Receivables
Luca Pasquini	$	4,123		$	—

Amounts due to Gold Street Capital Corp., the major stockholder of Newgioco Group, are for reimbursement of expenses. The Company paid no management fees and $72,000 in management fees to Gold Street Capital Corp. during the years ended December 31, 2019 and 2018, respectively.

In January 2018, the Company advanced €100,000 (approximately $116,000) to an officer to cover fees related to an application for a gaming license in Malta, under the name Ulisse Services, Ltd. The advance has been repaid and the gaming license in Malta is still under consideration.

During the year ended December 31, 2018, the Company paid management fees of approximately €480,000 (approximately $549,000) to Ulisse Services, Ltd. to cover office and set-up expenses.

Michele Ciavarella

On July 5, 2019, the Company issued to Mr. Ciavarella, the Chief Executive Officer and chairman of the board and officer of the Company, ten year options to purchase 39,375 shares of common stock at an exercise price of $2.96 per share.

On August 29, 2019, the Company issued to Mr. Ciavarella ten year options to purchase 25,000 shares of common stock at an exercise price of $2.80 per share.

On September 4, 2019, Mr. Ciavarella converted $500,000 of accrued salaries into 125,000 shares of common stock at a conversion price of $4 per share.

Gold Street Capital

Gold Street Capital is wholly owned by Gilda Ciavarella, the spouse of Mr. Ciavarella.

On September 4, 2019, the Company issued 15,196 shares of common stock to Gold Street Capital in settlement of $48,508 of advances made to the Company for certain reimbursable expenses.

Luca Pasquini

On January 31, 2019, the Company acquired Virtual Generation for €4,000,000 (approximately $4,576,352), Mr. Pasquini was a 20% owner of Virtual Generation and was due gross proceeds of €800,000 (approximately $915,270). The gross proceeds of €800,000 was to be settled by a payment in cash of €500,000 over a twelve month period and by the issuance of common stock valued at €300,000 over an eighteen month period. As of December 31, 2019, the Company has paid Mr. Pasquini cash of €125,600 (approximately $141,014) and issued 68,247 shares valued at €183,800 (approximately $205,463).

In addition, due to the attainment of an earnout clause per the agreement, a further €500,000 (approximately $561,351) was earned as of December 31, 2019, which earnout is to be settled by the issue of shares of common stock of which Mr. Pasquini’s shares is €100,000 (approximately $112,270).

On August 29, 2019, the Company issued to Mr. Pasquini, ten year options to purchase 25,000 shares of common stock at an exercise price of $2.80 per share.

Gabriele Peroni

On January 31, 2019, the Company acquired Virtual Generation Limited for €4,000,000 (approximately $4,576,352), Mr. Peroni was a 20% owner of Virtual Generation and was due gross proceeds of €800,000 (approximately $915,270). The gross proceeds of €800,000 was to be settled by a payment in cash of €500,000 over a twelve month period and by the issuance of common stock valued at €300,000 over an eighteen month period. As of December 31, 2019, the Company has paid Mr. Peroni cash of €167,200 (approximately $187,720) and issued 68,247 shares valued at €183,800 (approximately $205,463).

In addition, due to the attainment of an earnout clause per the agreement, a further €500,000 (approximately $561,351) was earned as of December 31, 2019, which earnout is to be settled by the issue of shares of common stock of which Mr. Peroni’s shares is €100,000 (Approximately $112,270).

On August 29, 2019, the Company issued to Mr. Peroni, ten year options to purchase 25,000 shares of common stock at an exercise price of $2.80 per share.

Franco Salvagni

On August 29, 2019, the Company issued to Mr. Salvagni, an officer of the Company, ten year options to purchase 25,000 shares of common stock at an exercise price of $2.80 per share.

Beniamino Gianfelici

On August 29, 2019, the Company issued to Mr. Gianfelici, an officer of the Company, ten year options to purchase 25,000 shares of common stock at an exercise price of $2.80 per share.

Mark Korb

On July 1, 2019, the Company issued to Mr. Korb, the chief financial officer of the Company, seven year options to purchase 25,000 shares of common stock at an exercise price of $2.72 per share.

Paul Sallwasser

On July 5, 2019, the Company issued to Mr. Sallwasser, a director of the Company, ten year options to purchase 20,625 shares of common stock at an exercise price of $2.96 per share.

Steven Shallcross

On July 5, 2019, the Company issued to Mr. Shallcross, a director of the Company, ten year options to purchase 10,313 shares of common stock at an exercise price of $2.96 per share.

Stockholders Equity

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Stockholders Equity

Notes to the Consolidated Financial Statements

16.

Stockholders’ Equity

The Company issued the following shares of common stock to promissory note holders in terms of the agreement entered into for the acquisition of Virtual Generation, as disclosed in Note 3 above.

·

On January 31, 2019, 32,450 shares of common stock valued at $101,763;

·

On March 1, 2019, 32,848 shares of common stock valued at $101,249;

·

On April 1, 2019, 29,975 shares of common stock valued at $86,328;

·

On May 1, 2019, 33,105 shares of common stock valued at $93,018;

·

On June 1, 2019, 37,256 shares of common stock valued at $92,961;

·

On July 1, 2019, 35,751 shares of common stock valued at $93,875;

·

On August 1, 2019, 35,048 shares of common stock valued at $91,810;

·

On September 1, 2019, 33,353 shares of common stock valued at $91,255;

·

On October 1, 2019, 26,285 shares of common stock valued at $90,526

·

On November 1, 2019, 28,565 shares of common stock valued at $92,608

·

On December 8, 2019, 26,610 shares of common stock valued at $91,922

For the year ended December 31, 2019, the Company issued a total of 1,866,528 shares of common stock, valued at $5,972,507, upon the conversion of convertible debentures into equity (Note 11).

On April 22, 2019, the Company issued 14,083 shares of common stock, valued at $45,066, to certain convertible debenture holders as an incentive for them to transfer their convertible debentures to another investor.

Between September 4, 2019 and September 17, 2019, the Company issued 284,721 shares of common stock, valued at $728,884 in settlement of promissory notes amounting to $457,461 and other liabilities amounting to $553,525.

Warrants

12 Months Ended

Dec. 31, 2019

Net Loss per Common Share

Warrants

17.

Warrants

In connection with the convertible debenture agreements entered into with accredited investors in the first and second quarters of 2018, for each $1,000 debenture unit the Company issued two-year warrants to purchase up to 135.28 shares of the Company’s common stock and for each CDN $1,000 debenture unit the Company issued two-year warrants to purchase up to 104.06 shares of the Company’s common stock at an exercise price of $4.00 per share.

The warrants were valued at fair value of $2,929,712 in terms of ASC 820 at the date of issuance, using a Black Sholes valuation model.

A summary of all of the Company’s warrant activity during the period January 1, 2018 to December 31, 2019 is as follows:

	Year ended December 31, 2018
Exercise price/shares at issuance	$	4.00 – 4.60
Common stock share price	$	2.08
Risk free interest rate		0.91	%
Expected life		1.37 years
Expected volatility of underlying stock		459	%
Expected dividend rate		0	%

	Number of shares			Exercise price per share		Weighted average exercise price
Outstanding January 1, 2018		76,566		$	4.32	$	4.32
Granted		1,096,224			4.00		4.00
Forfeited/cancelled		(27,000	)		5.04		5.04
Exercised		(40,761	)		4.64		4.64
Expired		(15,555	)		4.64		4.64
Outstanding December 31, 2018		1,089,474		$	4.00		4.00
Granted		—			—		—
Forfeited/cancelled		—			—		—
Exercised		—			—		—
Outstanding December 31, 2019		1,089,474		$	4.00	$	4.00

The following tables summarize information about warrants outstanding as of December 31, 2019:

		Warrants outstanding					Warrants exercisable
	Exercise price		Number of shares	Weighted average remaining years		Weighted average exercise price		Number of shares		Weighted average exercise price
$	4.00		1,089,474	0.41	$	4.00		1,089,474	$	4.00

Stock Options

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Stock Options

18.

Stock options

In September 2018, our stockholders approved our 2018 Equity Incentive Plan, which provides for a maximum of 1,150,000 awards that can be issued as options, stock appreciation rights, restricted stock, stock units, other equity awards or cash awards. No awards were granted under the 2018 Equity Incentive Plan as of December 31, 2018. During July 2019, we issued an aggregate of 95,313 options to purchase common stock, of which options to purchase 25,000 shares of common stock were issued to our Chief Financial Officer, options to purchase 39,375 shares of common stock were issued to our Chief Executive Officer and options to purchase 30,938 shares of common stock were issued to directors. During August 2019, we issued an aggregate of 150,000 options to purchase shares of common stock of which options to purchase 25,000 shares of common stock were issued to each of Michele Ciavarella, our Chief Executive Officer, Alessandro Marcelli, our Vice President of Operations, Luca Pasquini, our Vice President of Technology, Gabriele Peroni, our Vice President Business Development, Franco Salvagni, our Vice President of Land-based Operations and Beniamino Gianfelici, our Vice President Regulatory Affairs. On November 11,2019 we issued options to purchase 70,625 shares of common stock to various employees at an exercise price of $2.80 per share. As of December 12, 2019, there was an aggregate of 315,938 options to purchase shares of common stock granted under our 2018 Equity Incentive Plan and 834,062 reserved for future grants.

There were no option awards during or prior to the year ended December 31, 2018.

The options awarded during the year ended December 31, 2019 were valued using a Black-Scholes option pricing model.

The following assumptions were used in the Black-Scholes model:

	Year ended December 31, 2019
Exercise price		2.72 to 2.96
Risk free interest rate		1.50 to 2.04
Expected life of options		7 to 10 years
Expected volatility of underlying stock		237.4 to 270.2
Expected dividend rate		0	%

A summary of all of the Company’s option activity during the period January 1, 2019 to December 31, 2019 is as follows:

	Number of shares		Exercise price per share		Weighted average exercise price

Granted		315,938		$2.72 to $2.96	$	2.84
Forfeited/cancelled		—		—		—
Exercised		—		—		—
Outstanding December 31, 2019		315,938		$2.72 to $2.96	$	2.84

The following tables summarize information about stock options outstanding as of December 31, 2019:

Options outstanding				Options exercisable
	Exercise price	Number of shares	Weighted average remaining years		Weighted Average exercise price	Number of shares		Weighted average exercise price

$	2.72	25,000	6.50			—
$	2.80	220,625	9.73			13,971
$	2.96	70,313	9.52			35,859
		315,938	9.30	$	2.83	49,830	$	2.92

The weighted-average grant-date fair values of options granted during the year ended December 31, 2019 was $899,704 ($2.85 per share), of which $201,106 was recorded as compensation cost for the year ended December 31, 2019. As of December 31, 2019, there were unvested options to purchase 237,982 shares of common stock. Total expected unrecognized compensation cost related to such unvested options is $698,598 which is expected to be recognized over a period of 47 months.

The intrinsic value of the options at December 31, 2019 was $354,078.

Revenues

12 Months Ended

Dec. 31, 2019

Revenues [Abstract]

Revenues

19.

Revenues

The following table represents disaggregated revenues from our gaming operations for the years ended December 31, 2019 and 2018. Net Gaming Revenues represents Turnover (also referred to as “Handle”), the total bets processed for the period, less customer winnings paid out, commissions paid to agents, and taxes due to government authorities, while Commission Revenues represents commissions on lotto ticket sales and Service Revenues is revenue invoiced for our Elys software service and royalties invoiced for the sale of virtual products.

	For the Year Ended December 31,
	2019		2018
Handle (Turnover)
Handle web-based	$	328,385,837	$	235,891,170
Handle land-based		125,747,337		177,334,592
Total Handle (Turnover)	$	454,133,174	$	413,225,762

Winnings/Payouts
Winnings web-based		309,214,993		223,064,978
Winnings land-based		105,011,619		152,446,130
Total Winnings/Payouts		414,226,612		375,511,108

Gross Gaming Revenues	$	39,906,562	$	37,714,654

Less: ADM Gaming Taxes		4,697,085		3,417,150

Net Gaming Revenues	$	35,209,477	$	34,297,504
Betting platform software and services		373,654		277,593
Revenues	$	35,583,131	$	34,575,097

Net Loss per Common Share

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

20.

Net Loss per Common Share

Basic loss per share is based on the weighted-average number of common shares outstanding during each period. Diluted loss per share is based on basic shares as determined above, plus the incremental shares that would be issued upon the assumed exercise of “in-the-money” warrants using the treasury stock method and the inclusion of all convertible securities, including convertible debentures, assuming these securities were converted at the beginning of the period or at the time of issuance, if later. The computation of diluted net loss per share does not assume the issuance of common shares that have an anti-dilutive effect on net loss per share.

For the years ended December 31, 2019 and 2018, the following options, warrants and convertible debentures were excluded from the computation of diluted loss per share as the result of the computation was anti-dilutive:

Description	Year ended December 31, 2019		Year ended December 31, 2018

Options		315,938		—
Warrants		1,089,474		1,089,474
Convertible debentures		1,246,551		2,856,764
		2,651,963		3,946,238

Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

21.

Income Taxes

The Company is incorporated in the United States of America and is subject to United States federal taxation. No provisions for income taxes have been made as the Company had no U.S. taxable income for the years ended December 31, 2019 and December 31, 2018.

The Company's Italian subsidiaries are governed by the income tax laws of Italy. The corporate tax rate in Italy is 28.82% (IRES at 24% plus IRAP ordinary at 4.82%) on income reported in the statutory financial statements after appropriate tax adjustments.

The Company's Austrian subsidiaries are governed by the income tax laws of Austria. The corporate tax rate in Austria is 25% on income reported in the statutory financial statements after appropriate tax adjustments.

The Company's Canadian subsidiary is governed by the income tax laws of Canada and the Province of Ontario. The combined Federal and Provincial corporate tax rate in Canada is 26.5% on income reported in the statutory financial statements after appropriate tax adjustments.

The Company continues to evaluate the accounting for uncertainty in tax positions at the end of each reporting period. The guidance requires companies to recognize in their financial statements the impact of a tax position if the position is more likely than not of being sustained if the position were to be challenged by a taxing authority. The position ascertained inherently requires judgment and estimates by management.

The reconciliation of income tax expense at the U.S. statutory rate of 21% and 35% during 2019 and 2018, respectfully, to the Company’s effective tax rate is as follows:

	December 31, 2019			December 31, 2018
U.S. Statutory rate	$	1,822,092		$	530,472
Items not allowed for tax purposes		(1,142,776	)		(716,534	)
Foreign tax rate differential		(66,163	)		394,401
Additional foreign taxation		(15,190	)		—
Prior year over provision		1,167			—
Prior year net operating loss adjustment		(917,820	)		—
Movement in valuation allowances		(279,486	)		(1,311,040	)
Income tax expense	$	(598,176	)	$	(1,102,701	)

The Company has accumulated a net operating loss carry forward (“NOL”) of approximately $16.7 million as of December 31, 2019 in the U.S. The U.S. NOL carry forward includes adjustments based on prior year assessments of $4.9 million due the assessment of tax losses carried forward. This NOL may be offset against future taxable income through the year 2038. The company also has net operating loss carry forwards in Italy, Austria and Malta of approximately €0.12 million ($0.14 million) and in Canada of approximately CDN$0.4 million ($0.32 million). The use of these losses to reduce future income taxes will depend on the generation of sufficient taxable income prior to the expiration of the NOL. The Company periodically evaluates whether it is more likely than not that it will generate sufficient taxable income to realize the deferred income tax asset. At the present time, management cannot presently determine when the Company will be able to generate sufficient taxable income to realize the deferred tax asset; accordingly, a 100% valuation allowance has been established to offset the asset.

Utilization of NOLs are subject to limitation due to any ownership change (as defined under Section 382 of the Internal Revenue Code of 1986) which resulted in a change in business direction. Unused limitations may be carried over to future years until the NOLs expire. Utilization of NOLs may also be limited in any one year by alternative minimum tax rules.

Under Italian tax law, the operating loss carryforwards available for offset against future profits can be used indefinitely. Operating loss carryforwards are only available for offset against national income tax, up to the limit of 80% of taxable annual income. This restriction does not apply to the operating loss incurred in the first three years of the Company's activity, which are therefore available for 100% offsetting.

Under Austrian tax law, the operating loss carryforwards available for offset against future profits can be used indefinitely. Operating loss carryforwards are only available for offset against national income tax, up to the limit of 75% of taxable annual income.

Under Canadian tax law, the operating loss carryforwards available for offset against future profits can be used indefinitely.

The provisions for income taxes consist of currently payable income tax in Italy, Malta and Austria and deferred tax movements on intangible assets.

The provisions for income taxes are summarized as follows:

	December 31, 2019			December 31, 2018
Current	$	(683,830	)	$	(1,102,701	)
Deferred		85,654			—
Total	$	(598,176	)	$	(1,102,701	)

The tax effects of temporary differences that give rise to the Company’s net deferred tax assets and liabilities are as follows:

	December 31, 2019			December 31, 2018
Working capital movements	$	641,089		$	—
Net loss carryforward - Foreign		119,251			124,407
Net loss carryforward - US		3,505,182			3,861,629
		4,265,522			3,986,036
Less valuation allowance		(4,265,522	)		(3,986,036	)
Deferred tax assets	$	—		$	—

Intangible assets	$	(1,315,954	)	$	—
	$	(1,315,954	)	$	—

The Net loss carry forward for US entities includes an adjustment of $917,821 based on taxation assessments which differed to the amounts originally provided for.

The following tax years remain subject to examination:

USA:	Three years from the date of tax return filing which is currently the 2017 to 2019 tax years
Italy and Austria:	Five years from the date of filing which is currently the 2015 to 2019 tax years
Malta:	Eight years from fiscal year end which is currently 2012 to 2019.

The Company is not currently under examination and it has not been notified of a pending examination.

There are no unrecognized tax benefits.

Segment Reporting

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Segment Reporting

22.

Segmental Reporting

The Company has two reportable operating segments. These segments are:

(i)

Betting establishments

Provider of certified betting Platform software services to leisure betting establishments in Italy and 11 other countries and;

(ii)

Betting platform software and services

The operating of web based as well as land based leisure betting establishments situated throughout Italy.

The operating assets and (liabilities) of the reportable segments are as follows:

	December 31, 2019
	Betting establishments			Betting platform software and services			All other			Total

Purchase of Non-Current assets	$	202,042		$	5,456,358		$	—		$	5,658,400
Assets
Current assets		6,620,800			470,127			216,948			7,307,875
Non-Current assets		12,761,177			6,615,905			1,183,550			20,560,632
Liabilities
Current liabilities		(5,395,212	)		(615,564	)		(10,450,390	)		(16,461,166	)
Non-Current liabilities		(1,266,145	)		(1,339,911	)		—			(2,696,056	)
Intercompany balances		5,461,766			423,926			(5,885,692	)		—
Net asset position	$	18,182,386		$	5,554,483		$	(14,935,584	)	$	8,801,285

The segment operating results of the reportable segments are disclosed as follows:

	Year ended December 31, 2019

	Betting establishments			Betting platform software and services			All other			Adjustments			Total

Net Gaming Revenue	$	35,209,477		$	373,654		$	—		$	—		$	35,583,131
Intercompany Service revenue		452,776			2,839,211			—			(3,291,987	)		—
		35,662,253			3,212,865			—			(3,291,987	)		35,583,131
Operating expenses
Intercompany service expense		2,839,211			452,776			—			(3,291,987	)		—
Selling expenses		25,583,913			2,000,579			—			—			27,584,492
General and administrative expenses		5,109,135			1,294,617			4,590,802			—			10,994,554
		33,532,259			3,747,972			4,590,802			(3,291,987	)		38,579,046

(Loss) income from operations		2,129,994			(535,107	)		(4,590,802	)		—			(2,995,915	)

Other (expense) income
Interest expense, net		(190,206	)		3			(782,240	)		—			(972,443	)
Amortization of debt discount		—			—			(4,154,922	)		—			(4,154,922	)
Virtual Generation earnout		—			—			(561,351	)		—			(561,351	)
Loss on share issuances		—			—			(44,063	)		—			(44,063	)
Other income		114,818			—			34,747			—			149,565
Loss on marketable securities		—			—			(97,500	)		—			(97,500	)
Total other (expenses) income		(75,388	)		3			(5,605,329	)		—			(5,680,714	)

Loss before Income Taxes		2,054,606			(535,104	)		(10,196,131	)		—			(8,676,629	)
Income tax provision		(641,528	)		(43,352	)		—			—			(598,176	)
Net Loss	$	1,413,078		$	(491,752	)	$	(10,196,131	)	$	—		$	(9,274,802	)

The operating assets and (liabilities) of the reportable segments are as follows:

	December 31, 2018
	Betting establishments			Betting platform software and services			All other			Total

Purchase of fixed assets	$	10,019,807		$	167,322		$	6,856		$	10,193,985
Assets
Current assets		7,026,752			62,395			462,216			7,551,363
Non-Current assets		12,289,853			1,562,295			1,249,970			15,102,118
Liabilities
Current liabilities		(4,393,736	)		(281,553	)		(2,741,884	)		(7,417,173	)
Non-Current liabilities		(833,859	)		—			(4,463,046	)		(5,296,905	)
Intercompany balances		2,177,319			223,409			(2,400,728	)		—
Net asset position	$	16,266,329		$	1,566,546		$	(7,893,472	)	$	9,939,403

The segment operating results of the reportable segments are disclosed as follows:

	Year ended December 31, 2018
	Betting establishments			Betting platform software and services			All other			Adjustments			Total

Net Gaming Revenue	$	34,433,461		$	141,636		$	—		$	—		$	34,575,097
Intercompany Service revenue		260,063			2,168,870			—			(2,428,933	)		—
		34,693,524			2,310,506			—			(2,428,933	)		34,575,097
Operating expenses
Intercompany service expense		2,168,870			260,063			—			(2,428,933	)		—
Selling expenses		24,142,110			—			—			—			24,142,110
General and administrative expenses		4,968,280			2,360,357			3,259,525			—			10,588,162
		31,279,260			2,620,420			3,259,525			(2,428,933	)		34,730,272

(Loss) income from operations		3,414,264			(309,914	)		(3,259,525	)		—			(155,175	)

Other (expense) income
Interest expense, net		(25,910	)		—			(593,799	)		—			(619,709	)
Amortization of debt discount		—			—			(1,995,128	)		—			(1,995,128	)
Gain on litigation settlement		—			—			516,120			—			516,120
Imputed interest on related party advances		—			—			(761	)		—			(761	)
Loss on issuance of debt		—			—			(196,403	)		—			(196,403	)
Mark-to-market of marketable securities		—			—			(75,000	)		—			(75,000	)
Total other (expenses) income		(25,910	)		—			(2,344,971	)		—			(2,370,881	)

Loss before Income Taxes		3,388,354			(309,914	)		(5,604,496	)		—			(2,526,056	)
Income tax provision		(1,082,919	)		(18,042	)		(1,740	)		—			(1,102,701	)
Net Loss	$	2,305,435		$	(327,956	)	$	(5,606,236	)	$	—		$	(3,628,757	)

Subsequent events

12 Months Ended

Dec. 31, 2019

Subsequent Events [Abstract]

Subsequent events

23.

Subsequent Events

Subsequent to year end, between January 12, 2020 and May 20, 2020, the Company converted convertible debentures in the aggregate principal amount of $400,000 including interest thereon of $70,492 and CDN$305,600 (approximately $227,227) including interest thereon of CDN$42,504 (approximately $31,604) into 226,792 shares of common stock at a conversion price of $3.20 per share.

The Company also repurchased a convertible debenture in the aggregate principal amount of CDN$10,000 (approximately $7,289, including interest thereon of CDN2,000 (approximately $1,458) on February 26, 2020.

Additionally, Company issued the following shares of common stock to promissory note holders in terms of the agreement entered into for the acquisition of Virtual Generation, as disclosed in Note 3 above:

·

On January 1, 2020, 22,030 shares of common stock valued at $93,077;

·

On February 1, 2020, 23,890 shares of common stock valued at $91,542;

·

On March 1, 2020, 25,690 shares of common stock valued at $96,372;

·

On April 1, 2020, 61,040 shares of common stock valued at $90,745;

·

On May 1, 2020, 24,390 shares of common stock valued at $91,265

·

On June 1, 2020, 29,300 shares of common stock valued at $92,321

On February 15, 2020 the Company and Handle 19, Inc. a District of Columbia corporation (the “Customer”) entered into a Management Services Provider (“MSP”) agreement which is in effect for an initial term of 12 months commencing from the first date on which both parties receive the necessary licenses from the District of Columbia Office of Lottery and Gaming (“DC Lottery”), and the Customer may extend for an additional forty-eight (48) months at its sole discretion. The Customer has defined the first installation location at 319 Pennsylvania Ave, Southeast, Washington, DC (the “Establishment”). Under terms of the agreement, the Company shall:

a)

design, create, install and operate unique sports betting products and services for the Customer at the Establishment in compliance with District of Columbia law. This shall be a customized Americanized Interface. All equipment and software provided by Licensor shall meet the latest version of the GLI-33 or other generally accepted standards that are approved by the DC Lottery

b)

provide a customized Shop Client design as well as Ancillary Services for each individual Gaming Application activated by the Customer including the processing of payments of wagers for each of the activated Gaming Applications;

c)

provide Ancillary Services including customer support, technical support, financial support, risk management and Reporting Service for Settlement by the Service Provider, in full compliance with this Agreement and all applicable laws including, without limitation, the Legislation.

The Company shall invoice the Customer a fee based on the Gross Gaming Revenue calculated after the assessment and payment of all relevant taxes imposed under the District of Columbia Sports Wagering Lottery Amendment of 2018.

On May 28, 2020 the Company formed Elys Gameboard Technologies, LLC, a wholly owned subsidiary in the State of Delaware for the purposes of operating the Company’s US sports betting operations.

The global coronavirus pandemic has created a significant disruption and uncertainty since March 2020. On March 11, 2020, the Company reported that approximately 150 betting shop locations throughout Italy were temporarily closed and that the closing of the physical locations did not affect the Company’s continuing online and mobile operations. The Company has also implemented a smart-work initiative to permit the safe separation of office staff during this period because government forced lockdowns made it impossible for the Company to access its administrative offices in Europe. Additionally, the cancellation of sports events around the world disrupted our ability to provide our sports betting products through our land-based establishments and online channels. These restrictions and other difficulties, in both not having sports betting events available to wager on and the backlog of tasks imposed on our employees upon the return to work, are affecting our ability to consistently deliver our products to market.

The Company has evaluated subsequent events through the date the financial statements were issued, other than disclosed above, we did not identify any other subsequent events that would have required adjustment or disclosure in the financial statements.

Nature of Business (Policies)

12 Months Ended

Dec. 31, 2019

Nature Of Business

Nature of Business

Nature of Business

Established in the state of Delaware in 1998, Newgioco Group, Inc. (“Newgioco Group” or the “Company”) is an international, vertically integrated commercial-stage company engaged in various aspects of the leisure gaming industry. The Company is a licensed gaming operator in the regulated Italian leisure betting market offering gaming services, including a variety of lottery, casino gaming and sports betting products through two distribution channels: an online channel and a land-based retail channel. Additionally, the Company is a global gaming technology company (known as a “Provider”), which owns and operates a betting software designed with a unique “distributed model” (“shop-client”) software architecture colloquially named Elys Game Board (the “Platform”). The Platform is a fully integrated “omni-channel” framework that combines centralized technology for updating, servicing and operations with multi-channel functionality to accept all forms of customer payment through the two distribution channels described above. The omni-channel software design is fully integrated with a built-in player gaming account management system and sports book.

The Company and its subsidiaries are as follows:

Name	Acquisition date	Domicile	Functional Currency

Newgioco Group, Inc.	Parent Company	USA	US Dollar
Multigioco Srl (“Multigioco”)	August 15, 2014	Italy	Euro
Rifa Srl (“Rifa”)	January 1, 2015	Italy	Euro
Ulisse GmbH (“Ulisse”)	July 1, 2016	Austria	Euro
Odissea Betriebsinformatik Beratung GmbH (“Odissea”)	July 1, 2016	Austria	Euro
Virtual Generation Limited (“VG”)	January 31, 2019	Malta	Euro
Naos Holdings limited (“Naos”)	January 31, 2019	Malta	Euro
Newgioco Group Inc. (“NG Canada”)	January 17, 2017	Canada	Canadian Dollar
Elys Technology Group Limited (“Elys”)	April 4, 2019	Malta	Euro
Newgioco Colombia SAS	November 22, 2019	Colombia	Colombian Peso

The Company operates in two lines of business: (i) provider of certified betting Platform software services to leisure betting establishments in Italy and 11 other countries and; (ii) the operating of web based as well as land based leisure betting establishments situated throughout Italy. The Company’s operations are carried out through the following three geographically organized groups:

	a)	an operational group is based in Europe and maintains administrative offices headquartered in Rome, Italy with satellite offices for operations administration in Naples and Teramo, Italy and San Gwann, Malta;
	b)	a technology group which is based in Innsbruck, Austria and manages software development, training and administration; and
	c)	a corporate group which is based in North America and operates out of our principal executive offices in Toronto, Canada and satellite offices in the USA in Fort Lauderdale and Boca Raton, Florida, through which we carry-out corporate activities, handle day-to-day reporting and U.S. development planning, and through which various independent contractors and vendors are engaged.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Principles of Consolidation

Basis of Presentation

a)

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).

All amounts referred to in the notes to the consolidated financial statements are in United States Dollars ($) unless stated otherwise.

b)

Principles of consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries, all of which are wholly-owned. All significant inter-company transactions are eliminated upon consolidation.

Certain items in the prior periods were reclassified to conform to the current period presentation.

All amounts referred to in the Notes to the consolidated financial statements are in United States Dollars ($) unless stated otherwise.

Foreign Operations

c)

Foreign operations

The Company translated the assets and liabilities of its foreign subsidiaries into US Dollars at the exchange rate in effect at year end and the results of operations and cash flows at the average rate throughout the year. The translation adjustments are recorded directly as a separate component of stockholders’ equity, while transaction gains (losses) are included in net income (loss).

All revenues were generated in Euro during the years presented.

Gains and losses from foreign currency transactions are recognized in current operations.

Business Combinations

d)

Business Combinations

The Company allocates the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired users, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

Use of Estimates

e)

Use of Estimates

The preparation of consolidated 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 dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. These estimates and assumptions include valuing equity securities issued in share-based payment arrangements, determining the fair value of assets acquired, allocation of purchase price, impairment of long-lived assets, the collectability of receivables, leasing arrangements, convertible debentures, contingencies and the value of deferred taxes and related valuation allowances. Certain estimates, including evaluating the collectability of receivables and advances, could be affected by external conditions, including those unique to the Company’s industry and general economic conditions. It is possible that these external factors could have an effect on the Company’s estimates that could cause actual results to differ from the Company’s estimates. The Company re-evaluates all of its accounting estimates at least quarterly based on these conditions and records adjustments when necessary.

Loss Contingencies

f)

Loss Contingencies

The Company may be subject to claims, suits, government investigations, and other proceedings involving competition and antitrust, intellectual property, privacy, indirect taxes, labor and employment, commercial disputes, content generated by our users, goods and services offered by advertisers or publishers using the Company’s website platforms, and other matters. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages. The Company records a liability when it believes that it is both probable that a loss has been incurred, and the amount can be reasonably estimated. If the Company determines that a loss is possible, and a range of the loss can be reasonably estimated, it discloses the range of the possible loss in the Notes to the Consolidated Financial Statements.

The Company evaluates, on a regular basis, developments in its legal matters that could affect the amount of liability that has been previously accrued, and the matters and related ranges of possible losses disclosed and makes adjustments and changes to our disclosures as appropriate. Significant judgment is required to determine both likelihood of there being and the estimated amount of a loss related to such matters. Until the final resolution of such matters, there may be an exposure to loss in excess of the amount recorded, and such amounts could be material. Should any of the Company’s estimates and assumptions change or prove to have been incorrect, it could have a material impact on its business, consolidated financial position, results of operations, or cash flows.

To date, none of these types of litigation matters, most of which are typically covered by insurance, has had a material impact on the Company’s operations or financial condition. The Company has insured and continues to insure against most of these types of claims.

Fair Value Measurements

g)

Fair Value Measurements

ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy which requires classification based on observable and unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

The carrying value of the Company's accounts receivables, gaming accounts receivable, lines of credit - bank, accounts payable, gaming accounts payable and bank loans payable approximate fair value because of the short-term maturity of these financial instruments.

Derivative Financial Instruments

h)

Derivative Financial Instruments

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described.

The Company determined that the conversion feature of the convertible debt did not qualify as a derivative liability and is not bifurcated from the host instrument but contains a beneficial conversion feature.

Cash and Cash Equivalents

i)

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with maturities of three months or less at the time acquired to be cash equivalents. The Company had no cash equivalents as of December 31, 2019 and 2018, respectively.

The Company primarily places cash balances in the USA with high-credit quality financial institutions located in the United States which are insured by the Federal Deposit Insurance Corporation up to a limit of $250,000 per institution, in Canada which are insured by the Canadian Deposit Insurance Corporation up to a limit of CDN$100,000 per institution, in Italy which is insured by the Italian deposit guarantee fund Fondo Interbancario di Tutela dei Depositi (FITD) up to a limit of €100,000 per institution, and in Germany which is a member of the Deposit Protection Fund of the Association of German Banks (Einlagensicherungsfonds des Bundesverbandes deutscher Banken) up to a limit of €100,000 per institution.

Gaming Accounts Receivable

j)

Gaming Accounts Receivable

Gaming accounts receivable represent gaming deposits made by customers to their online gaming accounts either directly by credit card, bank wire, e-wallet or other accepted method through one of our websites or indirectly by cash collected at the cashier of a betting shop but not yet credited to the Company’s bank accounts and subject to normal trade collection terms without discounts. The Company periodically evaluates the collectability of its gaming accounts receivable and considers the need to record or adjust an allowance for doubtful accounts based upon historical collection experience and specific customer information. Actual amounts could vary from the recorded estimates. The Company does not require collateral to support customer receivables. The Company recorded a bad debt expense of $163,942 and $0 for the years ended December 31, 2019 and 2018, respectively. All balances previously recorded as allowance for doubtful accounts were written off as uncollectible.

Gaming Accounts Payable

k)

Gaming Accounts Payable

Gaming accounts payable represent customer balances, including winnings and deposits, that are held as credits in online gaming accounts and have not as of yet been used or withdrawn by the customers. Customers can request payment of winnings from the Company at any time and the payment to customers can be made through bank wire, credit card, or cash disbursement from one of our locations. Online gaming account credit balances are non-interest bearing.

Long-Lived Assets

l)

Long-Lived Assets

The Company evaluates the carrying value of its long-lived assets for impairment by comparing the expected undiscounted future cash flows of the assets to the net book value of the assets when events or circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. If the expected undiscounted future cash flows are less than the net book value of the assets, the excess of the net book value over the estimated fair value will be charged to earnings.

Fair value is based upon discounted cash flows of the assets at a rate deemed reasonable for the type of asset and prevailing market conditions, appraisals, and, if appropriate, current estimated net sales proceeds from pending offers.’’

Property, Plant and Equipment

m)

Property, Plant and Equipment

Plant and equipment is stated at acquisition cost less accumulated depreciation and adjustments for impairment losses. Expenditures are capitalized only when they increase the future economic benefits embodied in an item of plant and equipment. All other expenditures are recognized as expenses in the statement of operations as incurred.

Depreciation is charged on a straight-line basis over the estimated remaining useful lives of the individual assets. Amortization commences from the time an asset is put into operation. The range of the estimated useful lives is as follows:

Description		Useful Life (in years)

Leasehold improvements		Life of the underlying lease
Computer and office equipment		3 to5
Furniture and fittings		7 to 10
Computer Software		3 to 5
Vehicles		4 to 5

Intangible Assets

n)

Intangible Assets

Intangible assets are stated at acquisition cost less accumulated amortization, if applicable, less any adjustments for impairment losses.

Amortization is charged on a straight-line basis over the estimated remaining useful lives of the individual intangibles. Where intangibles are deemed to be impaired the Company recognizes an impairment loss measured as the difference between the estimated fair value of the intangible and its book value.

The range of the estimated useful lives is as follows:

Description		Useful Life (in years)

Betting Platform Software		15
Ulisse Bookmaker License		Indefinite
Multigioco and Rifa ADM Licenses		1.5 - 7
Location contracts		5 - 7
Customer relationships		10 - 15
Trademarks/Tradenames		14
Websites		5

The Ulisse Bookmaker has no expiration date and is therefore not amortized.

Goodwill

o)

Goodwill

The Company allocates the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired users, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

The Company annually assesses whether the carrying value of its goodwill exceeds its fair value and, if necessary, records an impairment loss equal to any such excess. Each interim reporting period, the Company assesses whether events or circumstances have occurred which indicate that the carrying amount of goodwill exceeds its fair value. If the carrying amount of the goodwill exceeds its fair value, an asset impairment charge will be recognized in an amount equal to that excess.

In terms of ASC 350, the Company skipped the requirement to perform a qualitative assessment and performed a quantitative assessment on its goodwill and other intangible assets as of December 31, 2019, concluding that no impairment was considered necessary.

Income Taxes

p)

Income Taxes

The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity's financial statements or tax returns. Deferred tax assets and liabilities are 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 is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions for any of the reporting periods presented.

In Italy, tax years beginning 2015 forward, are open and subject to examination, while in Austria companies are open and subject to inspection for five years and ten years for inspection of serious infractions. In the United States and Canada, tax years beginning 2015 forward, are subject to examination. The Company is not currently under examination and it has not been notified of a pending examination.

Revenue Recognition

q)

Revenue Recognition

The Company recognizes revenue when control of its products and services is transferred to its customers in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those products and services. Revenues from sports-betting, casino, cash and skill games, slots, bingo and horse race wagers represent the gross pay-ins (also referred to as turnover) from customers less gaming taxes and payouts to customers. Revenues are recorded when the game is closed which is representative of the point in time at which the Company has satisfied its performance obligation. In addition, the Company receives commissions from the sale of scratch tickets and other lottery games. Commissions are recorded when the ticket for scratch off tickets and lottery tickets are sold.

Revenues from the Betting Platform include software licensing fees, training, installation, and product support services. The Company does not sell its proprietary software. Revenue is recognized when transfer of control to the customer has been made and the Company’s performance obligation has been fulfilled. License fees are calculated as a percentage of each licensee’s level of activity and are contingent upon the licensee’s usage. The license fees are recognized on an accrual basis as earned.

Stock Based Compensation

r)

Stock-Based Compensation

The Company records its compensation expense associated with stock options and other forms of equity compensation based on their fair value at the date of grant using the Black-Scholes option pricing model. Stock-based compensation includes amortization related to stock option awards based on the estimated grant date fair value. Stock-based compensation expense related to stock options is recognized ratably over the vesting period of the option. In addition, the Company records expense related to Restricted Stock Units (“RSU’s”) granted based on the fair value of those awards on the grant date. The fair value related to the RSUs is amortized to expense over the vesting term of those awards. Forfeitures of stock options and RSUs are recognized as they occur.

Stock-based compensation expense for a stock-based award with a performance condition is recognized when the achievement of such performance condition is determined to be probable. If the outcome of such performance condition is not determined to be probable or is not met, no compensation expense is recognized and any previously recognized compensation expense is reversed.

Comprehensive Income (Loss)

s)

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, including foreign currency translation adjustments.

Earnings Per Share

t)

Earnings Per Share

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 260, “Earnings Per Share” provides for calculation of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income (loss) available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflects the dilutive impact on the number of shares outstanding should they be exercised. Securities that have the potential to dilute shareholder's interests include unexercised stock options and warrants as well as unconverted debentures.

On December 12, 2019, the Company effected an 1 for 8 reverse stock split, all references made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the reverse stock split.

Related Parties

u)

Related Parties

Parties are considered to be related to the Company if the parties directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions are recorded at fair value of the goods or services exchanged.

Adoption of accounting standards

v)

Adoption of Accounting Standards

In February 2016, the Financial Accounting Standards Board (“FSAB”) issued Accounting Standards Update (“ASU”), No. 2016-02, Leases (Topic 842) (ASC 842)

The amendments in this update establishes a comprehensive new lease accounting model. The new standard: (a) clarifies the definition of a lease; (b) requires a dual approach to lease classification similar to current lease classifications; and (c) causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease-term of more than twelve months. The new standard is effective for fiscal years and interim periods beginning after December 15, 2018, with early adoption permitted. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, including a number of optional practical expedients that entities may elect to apply. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, an update which provides another transition method, the prospective transition method, which allows entities to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company adopted the new standard on January 1, 2019 using the prospective transition method.

The Company has identified all material leases and reviewed the leases to determine the impact of ASC 842 on its consolidated financial statements. The Company has elected to apply all of the practical expedients to all leases, which include not reassessing (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases, and (3) initial direct costs for any existing leases. The adoption of the new standard resulted in; (i) the recording of a right-of-use asset of $646,138 and an operating lease liability of $617,352 on the consolidated balance sheet with effect from January 1, 2019 utilizing implicit borrowing rates where available and incremental borrowing rates where rates were not readily available. The right of use asset and operating lease liability are subsequently amortized. No cumulative effect adjustment to opening retained earnings was made as the amounts are immaterial.

Recent Accounting Pronouncements Not Yet Adopted

w)

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): “Measurement of Credit Losses on Financial Instruments,” which replaces the incurred loss methodology with an expected credit loss methodology that is referred to as the current expected credit loss (CECL) methodology. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The amendments in this update are required to be applied using the modified retrospective method with an adjustment to accumulated deficit and are effective for the Company beginning with fiscal year 2020, including interim periods. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. An entity with trade receivables will be required to use historical loss information, current conditions, and reasonable and supportable forecasts to determine expected lifetime credit losses. Pooling of assets with similar risk characteristics is also required.

The Company adopted ASU 2016-13 on January 1, 2020 on a modified retrospective basis, and is currently evaluating the impact of adoption of the amendments in these updates, which are not expected to have a material impact on the Company’s financial position, results of operations, and related disclosures.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), the Amendments in this update reduce the complexity in accounting for income taxes by removing certain exceptions to accounting for income taxes and deferred taxes and simplifying the accounting treatment of franchise taxes, a step up in the tax basis of goodwill as part of business combinations, the allocation of current and deferred tax to a legal entity not subject to tax in its own financial statements, reflecting changes in tax laws or rates in the annual effective rate in interim periods that include the enactment date and minor codification improvements.

This ASU is effective for fiscal years and interim periods beginning after December 15, 2020.

The effects of this ASU on the Company’s financial statements is not considered to be material.

The FASB issued several updates during the period, none of these standards are either applicable to the Company or require adoption at a future date and none are expected to have a material impact on the consolidated financial statements upon adoption.

Reporting by segment

x)

Reporting by segment

The Company has two operating segments from which it derives revenue. These segments are:

(i)

provider of certified betting Platform software services to leisure betting establishments in Italy and 11 other countries and;

(ii)

the operating of web based as well as land based leisure betting establishments situated throughout Italy.

Comparatives

y)

Comparatives

Certain items in the prior year were reclassified to conform to the current period presentation. These reclassifications had no impact on net loss or comprehensive loss.

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Property, plant and equipment useful life

Description		Useful Life (in years)

Leasehold improvements		Life of the underlying lease
Computer and office equipment		3 to5
Furniture and fittings		7 to 10
Computer Software		3 to 5
Vehicles		4 to 5

Intangible assets useful life

Description		Useful Life (in years)

Betting Platform Software		15
Ulisse Bookmaker License		Indefinite
Multigioco and Rifa ADM Licenses		1.5 - 7
Location contracts		5 - 7
Customer relationships		10 - 15
Trademarks/Tradenames		14
Websites		5

Acquisitions (Tables)

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Purchase Price - Acquisitions

	Amount
Purchase consideration, net of discount of $382,778	$	4,193,375

Fair value of assets acquired
Cash		47,268
Current assets		178,181
Property, Plant and Equipment		41,473
Betting Platform		4,004,594
		4,271,516
Less: liabilities assumed		(78,141	)
Less: Imputed Deferred taxation on identifiable intangible acquired (Betting platform)		(1,401,608	)

Total identifiable assets less liabilities assumed		2,791,767
Goodwill arising on acquisition		1,401,608
Total purchase consideration	$	4,193,375

Plant and Equipment (Tables)

12 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

Plant and Equipment

	December 31, 2019							December 31, 2018
	Cost		Accumulated depreciation			Net book value		Net book value

Leasehold improvements	$	47,291	$	(14,886	)	$	32,405	$	8,038
Computer and office equipment		835,793		(522,969	)		312,824		258,448
Fixtures and fittings		135,869		(78,271	)		57,598		62,795
Vehicles		98,115		(25,589	)		72,526		88,262
Computer software		125,831		(80,459	)		45,372		58,504
	$	1,242,899	$	(722,174	)	$	520,725	$	476,047

Leases (Tables)

12 Months Ended

Dec. 31, 2019

Right of use assets and lease costs

Right of use assets are included in the consolidated balance sheet are as follows:

	December 31, 2019

Non-Current assets
Right-of-use assets - operating leases, net of amortization	$	792,078
Right-of-use assets – finance leases, net of amortization (included in plant and equipment)	$	37,091

Lease costs consists of the following:

	Year ended December 31, 2019

Finance lease cost:	$	13,292
Amortization of right-of-use assets		11,890
Interest expense on lease liabilities		1,402

Operating lease cost		210,881

Total lease cost	$	224,173

Other lease information:

	Year ended December 31, 2019



Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases	$	(1,252	)
Operating cash flows from operating leases		(210,881	)
Financing cash flows from finance leases		(11,371	)

Right-of-use assets obtained in exchange for new finance leases		14,989
Right-of-use assets disposed of under operating leases prior to lease maturity		(81,263	)
Right-of -use assets obtained in exchange for new operating leases	$	442,281

Weighted average remaining lease term – finance leases		3.46 years
Weighted average remaining lease term – operating leases		3.74 years

Weighted average discount rate – finance leases		3.52	%
Weighted average discount rate – operating leases		3.42	%

Maturity of Lease Liabilities

Finance lease liability

The amount of future minimum lease payments under finance leases are as follows:

	Amount

2020	$	13,611
2021		10,413
2022		8,431
2023		6,560
2024		802
Total undiscounted minimum future lease payments		39,967
Imputed interest		(2,466	)
Total finance lease liability	$	37,501

Disclosed as:
Current portion	$	12,476
Non-Current portion		25,025
	$	37,501

Operating lease liability

The amount of future minimum lease payments under operating leases are as follows:

	Amount

2020	$	222,497
2021		214,693
2022		180,470
2023		150,570
2024 and beyond		28,741
Total undiscounted minimum future lease payments		796,971
Imputed interest		(47,358	)

Total operating lease liability	$	749,613

Disclosed as:
Current portion	$	200,866
Non-Current portion		548,747
	$	749,613

Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Intangibles

	December 31, 2019							December 31, 2018
	Cost		Accumulated depreciation			Net book value		Net book value

Betting platform software	$	5,689,965	$	(637,320	)	$	5,052,645	$	1,405,134
Licenses		10,694,227		(764,732	)		9,929,495		10,037,980
Location contracts		1,000,000		(768,688	)		231,312		374,169
Customer relationships		870,927		(301,227	)		569,700		630,161
Trademarks		116,175		(42,300	)		73,875		75,583
Websites		40,000		(40,000	)		—		4,953
	$	18,411,294	$	(2,554,267	)	$	15,857,027	$	12,527,980

Goodwill (Tables)

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

	December 31, 2019			December 31, 2018

Opening balance	$	262,552		$	260,318
Acquisition of Virtual Generation		1,401,608			—
Impairment charge		—			—
Foreign exchange movements		(775	)		2,234
Closing balance	$	1,663,385		$	262,552

Other Long Term Liabilities (Tables)

12 Months Ended

Dec. 31, 2019

Other Long Term Liabilities Tables Abstract

Other Long Term Liabilities

	December 31, 2019		December 31, 2018
Severance liability	$	211,734	$	168,706
Customer deposit balance		407,810		440,021
	$	619,544	$	608,727

Debentures and Convertible Notes (Tables)

12 Months Ended

Dec. 31, 2019

Debentures And Convertible Notes

Debentures outstanding

	December 31, 2019			December 31, 2018
Principal Outstanding
Opening balance	$	8,529,751		$	1,610,980
Additions		—			7,080,308
Conversion to equity		(5,240,736	)		—
Foreign exchange movements		175,722			(161,537	)
		3,464,737			8,529,751
Accrued Interest
Opening balance		520,523			—
Interest expense		719,931			520,523
Conversion to equity		(731,731	)		—
Foreign exchange movements		15,504			—
		524,227			520,523
Debenture Discount
Opening balance		(4,587,228	)		(462,872	)
Additions		—			(6,119,484	)
Amortization		3,959,601			1,995,128
		(627,627	)		(4,587,228	)
Convertible Debentures, net	$	3,361,337		$	4,463,046

Deferred Purchase Consideration (Tables)

12 Months Ended

Dec. 31, 2019

Deferred Purchase consideration

Description	December 31, 2019
Principal Outstanding
Promissory note due to non-related parties	$	2,745,811
Additional earnout earned		336,810
Settled by the issuance of common shares		(616,387	)
Repayment in cash		(607,555	)
Foreign exchange movements		(56,295	)
		1,802,384
Present value discount on future payments
Present value discount		(242,089	)
Amortization		117,192
Foreign exchange movements		4,793
		(120,104	)
Deferred purchase consideration, net	$	1,682,280

Disclosed as follows:
Current liability	$	1,619,349
Long term liability		62,931
Deferred purchase consideration, net	$	1,682,280

Related party (Tables)

12 Months Ended

Dec. 31, 2019

Related party debt

	December 31, 2019			December 31, 2018

Principal Outstanding
Opening balance	$	318,078		$	318,078
Settled by issuance of common shares		(318,078	)		—
		—			318,078
Accrued Interest
Opening balance		113,553			75,384
Interest expense		25,830			38,169
Conversion to equity		(139,383	)		—
		—			113,553
Convertible Debentures, net		—			431,631

Description	December 31, 2019
Principal Outstanding
Promissory notes due to related parties	$	1,830,541
Additional earnout earned		224,540
Settled by the issuance of common shares		(410,925	)
Repayment in cash		(328,734	)
Foreign exchange movements		(35,992	)
		1,279,430
Present value discount on future payments
Present value discount		(161,393	)
Amortization		78,128
Foreign exchange movements		3,195
		(80,069	)
Deferred purchase consideration, net	$	1,199,361

Disclosed as follows:
Current liability	$	1,157,407
Long term liability		41,954
Deferred purchase consideration, net	$	1,199,361

Related party

	December 31, 2019			December 31, 2018
Related Party payables
Gold Street Capital Corp.	$	(2,551	)	$	(39,237	)

Related Party Receivables
Luca Pasquini	$	4,123		$	—

Warrants (Tables)

12 Months Ended

Dec. 31, 2019

Stock options outstanding

Black-scholes modle

	Year ended December 31, 2018
Exercise price/shares at issuance	$	4.00 – 4.60
Common stock share price	$	2.08
Risk free interest rate		0.91	%
Expected life		1.37 years
Expected volatility of underlying stock		459	%
Expected dividend rate		0	%

Summary of warrants

	Number of shares			Exercise price per share		Weighted average exercise price
Outstanding January 1, 2018		76,566		$	4.32	$	4.32
Granted		1,096,224			4.00		4.00
Forfeited/cancelled		(27,000	)		5.04		5.04
Exercised		(40,761	)		4.64		4.64
Expired		(15,555	)		4.64		4.64
Outstanding December 31, 2018		1,089,474		$	4.00		4.00
Granted		—			—		—
Forfeited/cancelled		—			—		—
Exercised		—			—		—
Outstanding December 31, 2019		1,089,474		$	4.00	$	4.00

Warrants outstanding

		Warrants outstanding					Warrants exercisable
	Exercise price		Number of shares	Weighted average remaining years		Weighted average exercise price		Number of shares		Weighted average exercise price
$	4.00		1,089,474	0.41	$	4.00		1,089,474	$	4.00

Stock Options (Tables)

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Assumptions

	Year ended December 31, 2019
Exercise price		2.72 to 2.96
Risk free interest rate		1.50 to 2.04
Expected life of options		7 to 10 years
Expected volatility of underlying stock		237.4 to 270.2
Expected dividend rate		0	%

Stock option activity

	Number of shares		Exercise price per share		Weighted average exercise price

Granted		315,938		$2.72 to $2.96	$	2.84
Forfeited/cancelled		—		—		—
Exercised		—		—		—
Outstanding December 31, 2019		315,938		$2.72 to $2.96	$	2.84

Options outstanding				Options exercisable
	Exercise price	Options Number of shares	Weighted average remaining years		Weighted Average exercise price	Options Number of shares		Weighted average exercise price

$	2.72	25,000	6.50			—
$	2.80	220,625	9.73			13,971
$	2.96	70,313	9.52			35,859
		315,938	9.30	$	2.83	49,830	$	2.92

Net Loss per Common Share (Tables)

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Net Loss per share

Description	Year ended December 31, 2019		Year ended December 31, 2018

Options		315,938		—
Warrants		1,089,474		1,089,474
Convertible debentures		1,246,551		2,856,764
		2,651,963		3,946,238

Revenues (Tables)

12 Months Ended

Dec. 31, 2019

Revenues [Abstract]

Revenue

	For the Year Ended December 31,
	2019		2018
Handle (Turnover)
Handle web-based	$	328,385,837	$	235,891,170
Handle land-based		125,747,337		177,334,592
Total Handle (Turnover)	$	454,133,174	$	413,225,762

Winnings/Payouts
Winnings web-based		309,214,993		223,064,978
Winnings land-based		105,011,619		152,446,130
Total Winnings/Payouts		414,226,612		375,511,108

Gross Gaming Revenues	$	39,906,562	$	37,714,654

Less: ADM Gaming Taxes		4,697,085		3,417,150

Net Gaming Revenues	$	35,209,477	$	34,297,504
Betting platform software and services		373,654		277,593
Revenues	$	35,583,131	$	34,575,097

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Taxes Tables Abstract

Reconciliation of income tax expense

	December 31, 2019			December 31, 2018
U.S. Statutory rate	$	1,822,092		$	530,472
Items not allowed for tax purposes		(1,142,776	)		(716,534	)
Foreign tax rate differential		(66,163	)		394,401
Additional foreign taxation		(15,190	)		—
Prior year over provision		1,167			—
Prior year net operating loss adjustment		(917,820	)		—
Movement in valuation allowances		(279,486	)		(1,311,040	)
Income tax expense	$	(598,176	)	$	(1,102,701	)

Deferred tax assets

	December 31, 2019			December 31, 2018
Current	$	(683,830	)	$	(1,102,701	)
Deferred		85,654			—
Total	$	(598,176	)	$	(1,102,701	)

Provisions for income taxes

	December 31, 2019			December 31, 2018
Working capital movements	$	641,089		$	—
Net loss carryforward - Foreign		119,251			124,407
Net loss carryforward - US		3,505,182			3,861,629
		4,265,522			3,986,036
Less valuation allowance		(4,265,522	)		(3,986,036	)
Deferred tax assets	$	—		$	—

Intangible assets	$	(1,315,954	)	$	—
	$	(1,315,954	)	$	—

Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Operating assets and liabilities

	December 31, 2019
	Betting establishments			Betting platform software and services			All other			Total

Purchase of Non-Current assets	$	202,042		$	5,456,358		$	—		$	5,658,400
Assets
Current assets		6,620,800			470,127			216,948			7,307,875
Non-Current assets		12,761,177			6,615,905			1,183,550			20,560,632
Liabilities
Current liabilities		(5,395,212	)		(615,564	)		(10,450,390	)		(16,461,166	)
Non-Current liabilities		(1,266,145	)		(1,339,911	)		—			(2,696,056	)
Intercompany balances		5,461,766			423,926			(5,885,692	)		—
Net asset position	$	18,182,386		$	5,554,483		$	(14,935,584	)	$	8,801,285

	December 31, 2018
	Betting establishments			Betting platform software and services			All other			Total

Purchase of fixed assets	$	10,019,807		$	167,322		$	6,856		$	10,193,985
Assets
Current assets		7,026,752			62,395			462,216			7,551,363
Non-Current assets		12,289,853			1,562,295			1,249,970			15,102,118
Liabilities
Current liabilities		(4,393,736	)		(281,553	)		(2,741,884	)		(7,417,173	)
Non-Current liabilities		(833,859	)		—			(4,463,046	)		(5,296,905	)
Intercompany balances		2,177,319			223,409			(2,400,728	)		—
Net asset position	$	16,266,329		$	1,566,546		$	(7,893,472	)	$	9,939,403

Operating results

	Year ended December 31, 2019

	Betting establishments			Betting platform software and services			All other			Adjustments			Total

Net Gaming Revenue	$	35,209,477		$	373,654		$	—		$	—		$	35,583,131
Intercompany Service revenue		452,776			2,839,211			—			(3,291,987	)		—
		35,662,253			3,212,865			—			(3,291,987	)		35,583,131
Operating expenses
Intercompany service expense		2,839,211			452,776			—			(3,291,987	)		—
Selling expenses		25,583,913			2,000,579			—			—			27,584,492
General and administrative expenses		5,109,135			1,294,617			4,590,802			—			10,994,554
		33,532,259			3,747,972			4,590,802			(3,291,987	)		38,579,046

(Loss) income from operations		2,129,994			(535,107	)		(4,590,802	)		—			(2,995,915	)

Other (expense) income
Interest expense, net		(190,206	)		3			(782,240	)		—			(972,443	)
Amortization of debt discount		—			—			(4,154,922	)		—			(4,154,922	)
Virtual Generation earnout		—			—			(561,351	)		—			(561,351	)
Loss on share issuances		—			—			(44,063	)		—			(44,063	)
Other income		114,818			—			34,747			—			149,565
Loss on marketable securities		—			—			(97,500	)		—			(97,500	)
Total other (expenses) income		(75,388	)		3			(5,605,329	)		—			(5,680,714	)

Loss before Income Taxes		2,054,606			(535,104	)		(10,196,131	)		—			(8,676,629	)
Income tax provision		(641,528	)		(43,352	)		—			—			(598,176	)
Net Loss	$	1,413,078		$	(491,752	)	$	(10,196,131	)	$	—		$	(9,274,802	)

	Year ended December 31, 2018
	Betting establishments			Betting platform software and services			All other			Adjustments			Total

Net Gaming Revenue	$	34,433,461		$	141,636		$	—		$	—		$	34,575,097
Intercompany Service revenue		260,063			2,168,870			—			(2,428,933	)		—
		34,693,524			2,310,506			—			(2,428,933	)		34,575,097
Operating expenses
Intercompany service expense		2,168,870			260,063			—			(2,428,933	)		—
Selling expenses		24,142,110			—			—			—			24,142,110
General and administrative expenses		4,968,280			2,360,357			3,259,525			—			10,588,162
		31,279,260			2,620,420			3,259,525			(2,428,933	)		34,730,272

(Loss) income from operations		3,414,264			(309,914	)		(3,259,525	)		—			(155,175	)

Other (expense) income
Interest expense, net		(25,910	)		—			(593,799	)		—			(619,709	)
Amortization of debt discount		—			—			(1,995,128	)		—			(1,995,128	)
Gain on litigation settlement		—			—			516,120			—			516,120
Imputed interest on related party advances		—			—			(761	)		—			(761	)
Loss on issuance of debt		—			—			(196,403	)		—			(196,403	)
Mark-to-market of marketable securities		—			—			(75,000	)		—			(75,000	)
Total other (expenses) income		(25,910	)		—			(2,344,971	)		—			(2,370,881	)

Loss before Income Taxes		3,388,354			(309,914	)		(5,604,496	)		—			(2,526,056	)
Income tax provision		(1,082,919	)		(18,042	)		(1,740	)		—			(1,102,701	)
Net Loss	$	2,305,435		$	(327,956	)	$	(5,606,236	)	$	—		$	(3,628,757	)

Summary of Significant Accounting Policies (Details 1)	12 Months Ended
Summary of Significant Accounting Policies (Details 1)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2019 CAD ($)	Dec. 31, 2019 EUR (€)
Accounting Policies [Abstract]
FDIC Insured Amount	$ 250,000		$ 100,000	€ 100,000
Bad Debt Expense	163,942	$ 0
Goodwill acquired in acquisition	$ 1,401,608

Summary of Significant Accounting Policies (Details 2)	12 Months Ended
Summary of Significant Accounting Policies (Details 2)	Dec. 31, 2019
Computer and Office equipment [Member] \| Minimum [Member]
Useful Life	3 years
Computer and Office equipment [Member] \| Maximum[Member]
Useful Life	5 years
Furniture and fittings [Member] \| Minimum [Member]
Useful Life	7 years
Furniture and fittings [Member] \| Maximum[Member]
Useful Life	10 years
Computer Software [Member] \| Minimum [Member]
Useful Life	3 years
Computer Software [Member] \| Maximum[Member]
Useful Life	5 years
Vehicles [Member] \| Minimum [Member]
Useful Life	4 years
Vehicles [Member] \| Maximum[Member]
Useful Life	5 years

Summary of Significant Accounting Policies (Details 3)	12 Months Ended
Summary of Significant Accounting Policies (Details 3)	Dec. 31, 2019
Betting platform system [Member]
Useful Life	15 years
Multigioco and Rifa ADM Licenses [Member] \| Minimum [Member]
Useful Life	1 year 5 months
Multigioco and Rifa ADM Licenses [Member] \| Maximum[Member]
Useful Life	7 years
Location contracts [Member] \| Minimum [Member]
Useful Life	5 years
Location contracts [Member] \| Maximum[Member]
Useful Life	7 years
Customer relationships [Member] \| Minimum [Member]
Useful Life	10 years
Customer relationships [Member] \| Maximum[Member]
Useful Life	15 years
Trademarks[Member]
Useful Life	14 years
Website [Member]
Useful Life	5 years

Acquisitions (Details Narrative)

1 Months Ended

5 Months Ended

6 Months Ended

12 Months Ended

Jan. 30, 2019

USD ($)

Jan. 30, 2019

EUR (€)

May 31, 2018

USD ($)

$ / shares

shares

May 31, 2018

EUR (€)

shares

Jun. 30, 2016

shares

Dec. 31, 2019

USD ($)

Dec. 31, 2019

EUR (€)

Dec. 31, 2018

USD ($)

Repurchased and retired shares, value | $

$ (2,261,307)

Issuance of common stock, value | $

5,587,675

Virtual Generation bonus earnout | $

$ (561,351)

Ulisse [Member]

Share issued for acquisition | shares

Purchase price

$ 11,700,000

€ 10,000,000

591,950

416,400

Agreement

option to resell to the Company 50% of the shares of common stock (or 208,200 shares) issued in consideration for the purchase price at a fixed price of USD $4.00 per share (the “Ulisse Put Option”)

Purchase price paid in cash

$ 5,850,000

€ 5,000,000

Share price | $ / shares

$ 9.44

Multigioco [Member]

Repurchased and retired shares, share | shares

255,000

Repurchased and retired shares, value

$ 595,000

€ 510,000

Virtual Generation [Member]

Issuance of common stock, value

Purchase price

$ 4,576,352

€ 4,000,000

89,000

Purchase price paid in cash

108,000

Promissory Note

€ 3,803,000

Number of payments

23

17

Payments on Loan

€ 104,000

€ 83,000

Total payments

2,392,000

1,411,000

Principal payments

€ 1,435,200

846,600

Virtual Generation bonus earnout

$ 561,500

^[1]

€ 500,000

[1]	VG platform grew by more than 5% for the year ended December 31, 2019 compared to the year ended December 31, 2018, based on the 18,449,380 tickets sold in 2019 the VG Sellers have qualified for the earnout payment.

Acquisition- Purchase price (Details) - Virtual Generation [Member]	12 Months Ended
	Dec. 31, 2019 USD ($)
Business Combination, Separately Recognized Transactions [Line Items]
Purchase price	$ 4,193,374
Fair value of assets acquired
Cash	47,268
Current assets	178,181
Property, Plant and Equipment	41,473
Betting Platform	4,004,594
Identifiable intangible assets:	$ 4,271,516
Remaining useful life	15 years
Less: liabilities assumed	$ (78,141)
Less: Imputed Deferred taxation on identifiable intangible acquired (Betting platform)	(1,401,608)
Total identifiable assets less liabilities assumed	2,791,767
Goodwill arising on acquisition	1,401,608
Total identifiable assets less liabilities assumed	$ 4,193,375

Restricted Cash (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Restricted Cash [Abstract]
Line of credit - bank	$ 1,000,000	$ 750,000
Collateral	$ 1,000,000

Plant and Equipment - Plant and Equipment (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Plant and Equipment, gross	$ 1,242,899
Accumulated Depreciation	(722,174)
Property, plant and equipment	520,725	$ 476,047
Leasehold improvements [Member]
Plant and Equipment, gross	47,291
Accumulated Depreciation	(14,886)
Property, plant and equipment	32,405	8,038
Computer and Office equipment [Member]
Plant and Equipment, gross	835,793
Accumulated Depreciation	(522,969)
Property, plant and equipment	312,824	258,448
Fixtures and fittings[Member]
Plant and Equipment, gross	135,869
Accumulated Depreciation	(78,271)
Property, plant and equipment	57,598	62,795
Vehicles[Member]
Plant and Equipment, gross	98,115
Accumulated Depreciation	(25,589)
Property, plant and equipment	72,526	88,262
Computer software [Member]
Plant and Equipment, gross	125,831
Accumulated Depreciation	(80,459)
Property, plant and equipment	$ 45,372	$ 58,504

Plant and Equipment (Details Narrative) - USD ($)	12 Months Ended
Plant and Equipment (Details Narrative) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment [Abstract]
Depreciation charge	$ 283,497	$ 228,715

Leases - Right of Use Assets (Details Narrative) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Leases [Abstract]
Right of use asset for operating leases	$ 792,078	$ 646,138
Right of use assets for finance leases	$ 37,091

Leases Cost (Details Narrative) - USD ($)	12 Months Ended
Leases Cost (Details Narrative) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Lease, Cost [Abstract]
Amortization of right-of-use assets	$ 11,890
Interest expense on lease liabilities	1,402
Finance lease cost	13,292
Operating lease cost	210,881
Total lease cost	224,173
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases	(1,252)
Operating cash flows from operating leases	(210,881)
Financing cash flows from finance leases	(11,371)
Right-of-use assets obtained in exchange for new finance leases	14,989
Right-of-use assets disposed of under operating leases prior to lease maturity	(81,263)
Right-of -use assets obtained in exchange for new operating leases	$ 442,281
Weighted average remaining lease term - finance leases	3 years 167 days 21 hours 36 minutes
Weighted average remaining lease term - operating leases	3 years 270 days 2 hours 24 minutes
Weighted average discount rate- finance leases	3.52%
Weighted average discount rate- operating leases	3.42%

Leases - Maturity of Lease Liabilities (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Maturity of Lease Liabilities
Financial lease liability, Current	$ 12,476
Financial lease liability, Non-Current	25,025
Operating lease liability, Current	200,866
Operating lease liability,Non-Current	548,747
Financial lease liability [Member]
Maturity of Lease Liabilities
2020	13,611
2021	10,413
2022	8,431
2023	6,560
2024	802
Total undiscounted lease payments	39,967
Less: Imputed interest	(2,466)
Present value of lease liabilities	37,501
Financial lease liability, Current	12,476
Financial lease liability, Non-Current	25,025
Operating lease liability [Member]
Maturity of Lease Liabilities
2020	222,497
2021	214,693
2022	180,470
2023	150,570
2024	28,741
Total undiscounted lease payments	796,971
Less: Imputed interest	(47,358)
Present value of lease liabilities	749,613
Operating lease liability, Current	200,866
Operating lease liability,Non-Current	$ 548,747

Intangible Assets - Intangibles (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Intangible assets, gross	$ 18,411,294
Accumulated amortization	(2,554,267)
Intangible assets	15,857,027	$ 12,527,980
Betting platform system [Member]
Intangible assets, gross	5,689,965
Accumulated amortization	(637,320)
Intangible assets	5,052,645	1,405,134
License [Member]
Intangible assets, gross	10,694,227
Accumulated amortization	(764,732)
Intangible assets	9,929,495	10,037,980
Location contracts [Member]
Intangible assets, gross	1,000,000
Accumulated amortization	(768,688)
Intangible assets	231,312	374,169
Customer relationships [Member]
Intangible assets, gross	870,927
Accumulated amortization	(301,227)
Intangible assets	569,700	630,161
Trademarks[Member]
Intangible assets, gross	116,175
Accumulated amortization	(42,300)
Intangible assets	73,875	75,583
Website [Member]
Intangible assets, gross	40,000
Accumulated amortization	(40,000)
Intangible assets		$ 4,953

Intangible Assets (Details Narrative) - USD ($)	12 Months Ended
Intangible Assets (Details Narrative) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization Expense	$ 771,665	$ 468,551

Goodwill - Goodwill (Details) - USD ($)	12 Months Ended
Goodwill - Goodwill (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Opening balance	$ 262,552	$ 260,318
Acquisition of Virtual Generation	1,401,608
Impairment charge
Foreign exchange movements	(1,022)	2,234
Goodwill	$ 1,663,385	$ 262,552

Marketable Securities (Details Narrative) - USD ($)	12 Months Ended
Marketable Securities (Details Narrative) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Investments, Debt and Equity Securities [Abstract]
Marketable securities, shares	2,500,000
Per Share	$ 0.071
Loss on marketable securities	$ (97,500)	$ (75,000)

Line of Credit-Bank (Details Narrative) - Revolving Line of Credit [Member]	Dec. 31, 2019 USD ($)
Line of credit	$ 1,000,000
Security Deposit	$ 1,000,000
Interest rate	3.00%

- Definition

The carrying value as of the balance sheet date of the current and noncurrent portions of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

Convertible Debt (Details Narrative)	12 Months Ended
Convertible Debt (Details Narrative)	Dec. 31, 2019 USD ($) $ / shares shares	Dec. 31, 2019 CAD ($) shares	Dec. 31, 2018 USD ($)	Dec. 31, 2019 CAD ($) shares	Dec. 31, 2018 CAD ($)
Convertible Debentures	$ 2,083,000		$ 3,268,000	$ 1,794,600	$ 6,801,165
Broker Fee \| $	427,314
Common stock issued with debt \| $			$ 582,486
Warrants fair value \| $	2,929,712
Conversion feature of the convertible debentures, intrinsic Value \| $	2,585,055
Debt Discount \| $	6,524,567
Convertible Debentures [Member]
Princpal	1,185,000			5,367,400
Interest	133,959	$ 791,861
Issuance of common shares \| $	$ 1,866,528
February 2018 Private Placement [Member]
Debenture carrying value, note payable \| $				$ 1,000
Interest rate	10.00%	10.00%
Maturity date	Feb. 25, 2020	Feb. 25, 2020
Warrants to purchase shares	31.25			31.25
Initial Warrant price \| $ / shares	$ 5.00
Resticted common stock, shares	20	20
Proceeds from private placement	$ 521,900	$ 670,000
Shares issued for warrants, shares	20,938	20,938
Shares issued for private placement, shares	13,875	13,875
Price per share \| $ / shares	$ 3.20
Warrant price \| $ / shares	$ 4.00
April 2018 Private Placement [Member]
Debenture carrying value, note payable \| $				$ 1,000
Interest rate	10.00%	10.00%
Maturity date	Apr. 30, 2020	Apr. 30, 2020
Warrants to purchase shares	31.25			31.25
Initial Warrant price \| $ / shares	$ 5.00
Resticted common stock, shares	20	20
Proceeds from private placement	$ 105,200	$ 135,000
Shares issued for warrants, shares	4,218.75	4,218.75
Shares issued for private placement, shares	2,700	2,700
Price per share \| $ / shares	$ 3.20
Warrant price \| $ / shares	$ 4.00
April 19, 2018 Private Placement [Member]
Debenture carrying value, note payable \| $				$ 1,000
Interest rate	10.00%	10.00%
Maturity date	Apr. 19, 2020	Apr. 19, 2020
Warrants to purchase shares	31.25			31.25
Initial Warrant price \| $ / shares	$ 5.00
Resticted common stock, shares	20	20
Proceeds from private placement	$ 1,118,600	$ 1,436,000
Shares issued for warrants, shares	44,875	44,875
Shares issued for private placement, shares	28,720	28,720
May 11, 2018 Private Placement [Member]
Debenture carrying value, note payable \| $				$ 1,000
Interest rate	10.00%	10.00%
Maturity date	May 11, 2020	May 11, 2020
Warrants to purchase shares	31.25			31.25
Initial Warrant price \| $ / shares	$ 5.00
Resticted common stock, shares	20	20
Proceeds from private placement	$ 102,000	$ 131,000
Shares issued for warrants, shares	4,093.75	4,093.75
Shares issued for private placement, shares	2,620	2,620
Price per share \| $ / shares	$ 3.20
Warrant price \| $ / shares	$ 4.00
May 31, 2018 Private Placement [Member]
Private Placement , units	7,500	7,500
Debenture carrying value, note payable	$ 1,000			$ 1,000
Interest rate	10.00%	10.00%
Maturity date	May 31, 2020	May 31, 2020
Warrants to purchase shares	26			26
Initial Warrant price \| $ / shares	$ 135.25
Resticted common stock, shares	20	20
Price per share \| $ / shares	$ 104.60

Convertible Debt (Details) - USD ($)	12 Months Ended
Convertible Debt (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Foreign exchange movements	$ (1,022)	$ 2,234
Debenture Discount
Amortization	4,154,922	1,995,128
Convertible Debenture	3,361,337
Debentures [Member]
Convertible Debt, gross	8,529,751	1,610,980
Additions		7,080,308
Conversion to equity	(5,240,736)
Foreign exchange movements	175,722	(161,537)
Convetible debt, ending	3,464,737	8,529,751
Accrued Interest
Accrued interest, opening balance	520,523
Interest expense	719,931	520,523
Conversion to equity	(731,731)
Foreign exchange movements	15,504
Accrued interest, ending balance	524,227	520,523
Debenture Discount
Debenture Discount, opening balance	(4,587,228)	(462,872)
Additions		(6,119,484)
Amortization	3,959,601	1,995,128
Debenture Discount, ending balance	$ (627,627)	(4,587,228)
Convertible Debenture		$ 4,463,046

Disclosure - Deferred Purchase Consideration (Details Narrative) - Virtual Generation [Member] - EUR (€)	Dec. 31, 2019	Jan. 30, 2019
Debt Instrument [Line Items]
Promissory note payable		€ 3,803,000
Related Party [Member]
Debt Instrument [Line Items]
Promissory note payable	€ 1,521,200
Non Related Party [Member]
Debt Instrument [Line Items]
Promissory note payable	€ 2,281,800

Deferred Purchase Consideration - Deferred Purchase consideration (Details) (USD $) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Present value discount on future payments
Deferred purchase consideration, net	$ 1,682,280
Deferred purchase consideration, Current	1,682,280
Notes Payable [Member]
Principal Outstanding
Promissory note due to non-related parties, beginning	2,745,811
Additional earnout earned	336,810
Settled by the issuance of common shares	(616,387)
Repayment in cash	(607,555)
Foreign exchange movements	(56,295)
Promissory note due to non-related parties, ending	1,802,384	2,745,811
Present value discount on future payments
Present value discount, beginning	(242,089)
Amortization	117,192
Foreign exchange movements	4,793
Present value discount, ending	(120,104)	$ (242,089)
Deferred purchase consideration, net	$ 1,682,280

Bank Loan Payable (Details Narrative) - Bank Loan [Member]	12 Months Ended
	Dec. 31, 2019 USD ($)	Dec. 31, 2019 EUR (€)	Dec. 31, 2016 USD ($)	Dec. 31, 2016 EUR (€)	Dec. 31, 2019 EUR (€)
Proceeds for notes payable			$ 545,000	€ 500,000
Number of payments			57	57
Payments on Loan	$ 131,163	€ 117,120
Principal payments	123,769				€ 110,518
Principal payments				€ 9,760
Interest payments	$ 7,394	€ 6,602

Other Long Term Liabilities (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Other long term liabilities	$ 619,544	$ 608,728
Serverance Liability [Member]
Other long term liabilities	211,734	168,706
Customer deposit balance [Member]
Other long term liabilities	$ 407,810	$ 440,021

Related party transactions and balances (Details Narrative)	12 Months Ended
	Dec. 31, 2019 USD ($) shares	Dec. 31, 2019 EUR (€) shares	Dec. 31, 2018 USD ($)
Related Party Transaction [Line Items]
Notes payable - related party			$ 431,631
Issuance of common stock, value			5,587,675
Interest rate	12.00%	12.00%
Debt repaid			$ 49,914
Management fee paid	549,000
Vritual Generation Limited Related Party[Member]
Related Party Transaction [Line Items]
Principal payments \| €		€ 956,800
Issuance of common stock, value \| €		564,400
Original payment \| €		41,600
Monthly installments \| €		€ 33,200
Related Party[Member]
Related Party Transaction [Line Items]
Issuance of common stock, value	$ 457,461
Issuance of common stock, shares \| shares	42,956	42,956
Accrued interest	$ 139,383
Promissory note	$ 457,461

Related party transactions and balances (Details)	12 Months Ended
Related party transactions and balances (Details)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 EUR (€)	Dec. 31, 2018 USD ($)
Accrued Interest
Convertible Debentures, net			$ 431,631
Present value discount on future payments
Notes payable - Related Party, net	1,147,963
Deferred purchase consideration, Related Party, net of discount of $75,319	1,199,361
Related party Notes Payable [Member]
Principal Outstanding
Opening balance	318,078		318,078
Settled by the issuance of common shares	(318,078)
Ending balance			318,078
Accrued Interest
Accrued interest, opening balance	113,553		75,384
Interest expense	25,830		38,169
Settled by the issuance of common shares	(139,383)
Accrued interest, ending balance			113,553
Convertible Debentures, net			431,631
Present value discount on future payments
Present value discount, beginning	(161,393)
Amortization	56,604
Foreign exchange movements	5,882
Present value discount, ending	(98,907)		161,393
Related party Deferred Purchase Consideration [Member]
Principal Outstanding
Opening balance	1,830,541
Additional earnout earned	224,540	€ 200,000
Settled by the issuance of common shares	(410,925)
Repayment in cash	(328,734)
Foreign exchange movements	(35,992)
Ending balance	1,279,430		1,830,541
Present value discount on future payments
Present value discount, beginning	(161,393)
Amortization	78,128
Foreign exchange movements	3,195
Present value discount, ending	(80,069)		$ 161,393
Notes payable - Related Party, net	1,199,361
Deferred purchase consideration, Related Party, net of discount of $4,750	$ 41,954

Related party transactions and balances - Related party (Details) - USD ($)	8 Months Ended	12 Months Ended
	Sep. 04, 2019	Dec. 31, 2018	Dec. 31, 2019
Related Party Transaction [Line Items]
Advances from stockholders		$ 39,237	$ 2,551
Gold Street Capital Corp. [Member]
Related Party Transaction [Line Items]
Advances from stockholders		39,237	2,551
Managment Fees	$ 72,000
Other Stockholders [Member]
Related Party Transaction [Line Items]
Advances from stockholders
Luca Pasquini [Member]
Related Party Transaction [Line Items]
Advances from stockholders			$ 4,123
Managment Fees

Related party transactions and balances Additional (Details Narrative)	1 Months Ended		6 Months Ended		8 Months Ended		12 Months Ended
	Jan. 31, 2019 USD ($)	Jan. 31, 2019 EUR (€)	Jul. 05, 2019 $ / shares shares	Jul. 01, 2019 $ / shares shares	Sep. 04, 2019 USD ($) $ / shares shares	Aug. 29, 2019 $ / shares shares	Dec. 31, 2019 USD ($) $ / shares shares	Dec. 31, 2019 EUR (€) shares	Dec. 31, 2018 USD ($) shares
Stock Options available							834,062		1,150,000
Per share \| $ / shares							$ 2.85
Stock based compensation \| $							$ 201,106
Common stock issued to settle liabilities \| $							1,009,981
Issuance of common stock, value \| $									$ 5,587,675
Virtual Generation bonus earnout \| $							$ (561,351)
Chief Excutive Officer [Member]
Stock option term			10 years			10 years
Stock Options available			39,375			25,000
Per share \| $ / shares			$ 2.96		$ 4.00	$ 2.8
Stock based compensation \| $					$ 500,000
Stock based compensation, shares					125,000
Gold Street Capital Corp. [Member]
Common stock issued to settle liabilities, shares					15,196
Common stock issued to settle liabilities \| $					$ 48,508
Luca Pasquini [Member]
Stock option term						10 years
Stock Options available						25,000
Per share \| $ / shares						$ 2.80
Purchase price	$ 4,576,352	€ 4,000,000
Issuance of common stock, shares							68,247	68,247
Issuance of common stock, value		300,000					$ 205,463	€ 183,800
Purchase price paid in cash	$ 915,270	800,000
Payments on Loan		500,000					141,014	125,600
Total payments \| €		€ 800,000
Virtual Generation bonus earnout							$ 112,270	€ 100,000
Gabriele Peroni [Member]
Stock option term						10 years
Stock Options available						25,000
Per share \| $ / shares						$ 2.80
Issuance of common stock, shares							68,247	68,247
Issuance of common stock, value							$ 205,463	€ 183,800
Payments on Loan							187,720	167,200
Virtual Generation bonus earnout							$ 112,270	€ 100,000
Franco Salvagni [Member]
Stock option term						10 years
Stock Options available						25,000
Per share \| $ / shares						$ 2.80
Beniamino Gianfelici [Member]
Stock option term						10 years
Stock Options available						25,000
Per share \| $ / shares						$ 2.80
Mark Korb[Member]
Stock option term				7 years
Stock Options available				25,000
Per share \| $ / shares				$ 2.72
Paul Sallwasser[Member]
Stock option term			10 years
Stock Options available			20,625
Per share \| $ / shares			$ 2.96
Steven Sallwasser[Member]
Stock option term			10 years
Stock Options available			10,313
Per share \| $ / shares			$ 2.96

Stockholders Equity (Details Narrative) - USD ($)		1 Months Ended		2 Months Ended		3 Months Ended		4 Months Ended			5 Months Ended		6 Months Ended	7 Months Ended	8 Months Ended	9 Months Ended	10 Months Ended	11 Months Ended	12 Months Ended
Stockholders Equity (Details Narrative) - USD ($)	Jan. 02, 2020	Feb. 01, 2020	Jan. 31, 2019	Mar. 01, 2020	Mar. 01, 2019	Apr. 01, 2020	Apr. 02, 2019	May 01, 2020	May 01, 2019	Apr. 22, 2019	Jun. 01, 2020	Jun. 01, 2019	Jul. 02, 2019	Aug. 01, 2019	Sep. 01, 2019	Oct. 02, 2019	Nov. 01, 2019	Dec. 08, 2019	Dec. 31, 2019	Dec. 31, 2018
Share issued for acquisition, amount																				$ 5,587,675
Virtual Generation [Member]
Share issued for acquisition, shares	22,030	23,890	32,450	25,690	32,848	61,040	29,975	24,390	33,105		29,300	37,256	35,751	35,048	33,353	26,285	28,565	26,610
Share issued for acquisition, amount	$ 93,077	$ 91,542	$ 101,763	$ 96,372	$ 101,249	$ 90,745	$ 86,328	$ 91,265	$ 93,018		$ 92,321	$ 92,961	$ 93,875	$ 91,810	$ 91,255	$ 90,526	$ 92,608	$ 91,922
Debentures [Member]
Shares issued for debt, shares										14,083									1,866,528
Shares issued for debt, amount										$ 45,066									$ 5,972,507
Promissory Notes [Member]
Shares issued for debt, shares																			284,721
Shares issued for debt, amount																			$ 728,884
Liabilities [Member]
Shares issued for debt, shares										457,461
Shares issued for debt, amount										$ 553,525

Warrants (Details Narrative)	12 Months Ended
Warrants (Details Narrative)	Dec. 31, 2019 USD ($) shares	Dec. 31, 2018 $ / shares shares	Dec. 31, 2018 CAD ($) shares
Warrants fair value \| $	$ 2,929,712
Investors [Member]
Debenture carrying value \| $			$ 1,000
Warrants to purchase shares \| shares			135.28
Common stock, shares issued for private placement, shares \| shares		104.06
Price per share \| $ / shares		$ 4.00
Warrant [Member]
Shares issued for warrants, shares \| shares	70,625
Warrants fair value \| $	$ 2,929,712

Warrants (Details) - $ / shares	12 Months Ended
Warrants (Details) - $ / shares	Dec. 31, 2019	Dec. 31, 2018
Weighted Average Exercise Price Per Common Share
Outstanding at end of period	$ 2.85
Warrant [Member]
Warrant Shares [Rollforward]
Outstanding at beginning of period	1,089,474	76,566
Issued during the period		1,096,224
Excercised during the period		(40,761)
Canceled during the period		(27,000)
Expired during the period		(15,555)
Outstanding at end of period	1,089,474	1,089,474
Weighted Average Exercise Price Per Common Share
Outstanding at beginning of period	$ 4.00	$ 4.32
Issued during the period		4.00
Canceled during the period		5.04
Exercised during the period		4.64
Expired during the period		4.64
Outstanding at end of period	$ 4.00	$ 4.00
Weighted Average Life per Warrant
Exercisable at end of period	4 months 1 day

Warrants - Assumptions (Details) - Warrant [Member]	12 Months Ended
Warrants - Assumptions (Details) - Warrant [Member]	Dec. 31, 2019 $ / shares
Share price per share	$ 2.08
Risk free interest rate	0.91%
Expected life	1 year 135 days 1 hour 12 minutes
Expected volatility of underlying stock	459.00%
Expected dividend rate	0.00%
Maximum[Member]
Exercise price	$ 4.60
Minimum [Member]
Exercise price	$ 4.00

Stock Options - Assumptions (Details)	12 Months Ended
Stock Options - Assumptions (Details)	Dec. 31, 2019 $ / shares
Expected life of options	9 years 3 months
Stock options [Member]
Expected dividend rate	0.00%
Stock options [Member] \| Minimum [Member]
Exercise price per share	$ 2.72
Risk free interest rate	150.00%
Expected life of options	7 years
Expected volatility of underlying stock	237.40%
Stock options [Member] \| Maximum[Member]
Exercise price per share	$ 2.96
Risk free interest rate	204.00%
Expected life of options	10 years
Expected volatility of underlying stock	270.20%

Stock Options - Stock option activity (Details) - $ / shares	7 Months Ended	8 Months Ended	12 Months Ended
	Jul. 31, 2019	Aug. 31, 2019	Dec. 31, 2019
Stock option Activity
Options outstanding, shares			315,938
Weighted average exercise price
Options outstanding, weighted average exercise price			$ 2.83
Stock option [Member]
Stock option Activity
Options outstanding, shares
Granted			315,938
Forfeited/cancelled
Exercised	95,313	150,000
Options outstanding, shares			315,938
Weighted average exercise price
Options outstanding, weighted average exercise price
Granted			2.72
Forfeited/cancelled
Exercised
Options outstanding, weighted average exercise price			$ 2.72

Stock Options - Stock options outstanding (Details)	12 Months Ended
Stock Options - Stock options outstanding (Details)	Dec. 31, 2019 $ / shares shares
Options outstanding, shares	315,938
Options oustanding, weighted average remaining years	9 years 3 months
Options outstanding, weighted average exercise price \| $ / shares	$ 2.83
Options exercisable, shares	49,830
Options exercisable, weighted average exercise price \| $ / shares	$ 2.92
$2.72[Member]
Exercise price per share \| $ / shares	$ 2.72
Options outstanding, shares	25,000
Options oustanding, weighted average remaining years	6 years 5 months
Options exercisable, shares
$2.80[Member]
Exercise price per share \| $ / shares	$ 2.80
Options outstanding, shares	220,625
Options oustanding, weighted average remaining years	9 years 7 months 3 days
Options exercisable, shares	13,971
$2.96[Member]
Exercise price per share \| $ / shares	$ 2.96
Options outstanding, shares	70,313
Options oustanding, weighted average remaining years	9 years 5 months 2 days
Options exercisable, shares	35,859

Stock Options (Details Narrative) - USD ($)

7 Months Ended

8 Months Ended

12 Months Ended

Jul. 31, 2019

Aug. 31, 2019

Dec. 31, 2019

Dec. 31, 2018

Stock Options available

834,062

1,150,000

Options outstanding, shares

315,938

Fair values of options

$ 899,704

Per share

$ 2.85

Stock based compensation expense

$ 201,106

Unvested options, shares

237,982

Unvested options, amount

$ 698,598

Intrinsic Value of stock options

$ 354,078

Stock option [Member]

Options outstanding, shares

95,313

150,000

315,938

Executives [Member]

Chief Excutive Officer [Member]

25,000

^[1]

39,375

Directors [Member]

Chief Financial Officer [Member]

30,938