BDO Statsautoriseret revisionsaktieselskabHavneholmen 29DK-1561 København V20222670Årsrapport2025-07-07Nicholas William ManolisGAN INTEGRITY SOLUTIONS ApSKronprinsessegade 54, 2.1306 Copenhagen KErklæring om udvidet gennemgang282797792004-10-01Copenhagen2024-01-012024-12-312023-01-012023-12-31BDO Statsautoriseret revisionsaktieselskabHavneholmen291561Copenhagen VNordeaHelgeshøj Alle 332630TaastrupDLA Piper Denmark AdvokatpartnerselskabOslo Plads22100Copenhagen ØCopenhagen2025-07-07Nicholas William ManolisNeil HodgsonMonica Elizabeth BruniKonklusion med forbeholdGrundlag for konklusion med forbeholdCopenhagen2025-07-07BDO Statsautoriseret revisionsaktieselskab20222670Søren Søndergaard JensenErklæring om udvidet gennemgangState Authorised Public Accountantmne320692141702832031332449521373517436835790486750531-27114157-98935675343324274363025032924-32882328-985374800-32882328-9853748-32882328-9853748-32882328-9853748017229614017229614022653191496428137516114964283640480126666495527112666649552712763092218253659358346112600482346070315058899620226234319135377641772155536977039463836933852838563963736232247240089401254146906545480528780528708538401-253331932-197495946-252526645-188152258026313402603111260119213221472395260119213224338640020645602334483016493071290110730919333253284632879072292652059257217712401254146906545480528713439099-20239664400-31492059-32882328-13439099134390998052870-25333193264464370026733897932579194359617672676916819449521373517436853433200427435343324274354100400892463292463025032924102103311021033110210331102103310039371420100018804937330025619810878923034409040149642695527131139312666641266664254709174Regnskabsklasse BtruetrueToday the Executive Board have discussed and approved the Annual Report of GAN INTEGRITY SOLUTIONS ApS for the financial year 1 January - 31 December 2024. The Annual Report is presented in accordance with the Danish Financial Statements Act. In our opinion the Financial Statements give a true and fair view of the Company's assets, liabilities and financial position at 31 December 2024 and of the results of the Company's operations for the financial year 1 January - 31 December 2024. The Management Commentary includes in our opinion a fair presentation of the matters dealt with in the Commentary. We recommend the Annual Report be approved at the Annual General Meeting. To the Shareholder of GAN INTEGRITY SOLUTIONS ApS We have performed an extended review of the Financial Statements of GAN INTEGRITY SOLUTIONS ApS for the financial year 1 January - 31 December 2024, which comprise income statement, Balance Sheet, statement of changes in equity and notes, including a summary of significant accounting policies. The Financial Statements are prepared under the Danish Financial Statements Act. Based on the work performed and except for the possible effects of the matters described in the ''Basis for Qualified Conclusion'' paragraph, it is our conclusion that the Financial Statements give a true and fair view of the Company's financial position at 31 December 2024 and of the results of the Company's operations for the financial year 1 January - 31 December 2024 in accordance with the Danish Financial Statements Act. Basis for Qualified Conclusion Grundlag for konklusion med forbehold Because we did not express an audit opinion in the annual report 2023 due to lack of audit evidence, we have further not been able satisfy ourselves concerning the ending balance of 31.12.2023 by alternative means in this years audit. The opening balance is furthermore adjusted with 31.5 million DKK compared to the annual report for 2023 and it has not been possible to obtain an audit evidence on the corrected opening balance. Since uncertainties in the opening balance can affect the determination of the results of operations in current years, we were unable to determine whether adjustments to the results of operations and opening retained earnings might be necessary for 2024. Our opinion on the current period’s financial statements is modified because of the possible effect of this matter on the comparability of the current period’s figures and the corresponding figures We conducted our extended review in accordance with the Danish Business Authority's Assurance Standard for Small Enterprises and FSR – Danish Auditors' standard on extended review of Financial Statements prepared in accordance with the Danish Financial Statements Act. Our responsibilities under those standards and requirements are further described in the "Auditor's Responsibilities for the Extended Review of the Financial Statements” section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) and the additional requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements. In our opinion, the evidence we have obtained is sufficient and appropriate to provide a basis for our qualified conclusion. Management's Responsibilities for the Financial Statements Management is responsible for the preparation of Financial Statements that give a true and fair view in accordance with the Danish Financial Statements Act, and for such Internal control as Management determines is necessary to enable the preparation of Financial Statements that are free from material misstatement, whether due to fraud or error. In preparing the Financial Statements, Management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting in preparing the Financial Statements unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Our responsibility is to express a conclusion on the Financial Statements. This requires that we plan and perform procedures in order to obtain limited assurance for our conclusion on the Financial Statements and in addition perform specifically required supplementary procedures to obtain further assurance for our conclusion. An extended review comprises procedures that primarily consist of making inquiries of Management and others within the Company, as appropriate, analytical procedures and the specifically required supplementary procedures as well as evaluation of the evidence obtained. The procedures performed in an extended review are less than those performed in an audit, and accordingly, we do not express an audit opinion on the Financial Statements. Statement on the Management Commentary Management is responsible for the Management Commentary. Our conclusion on the Financial Statements does not cover the Management Commentary, and we do not express any form of assurance conclusion thereon. In connection with our extended review of the Financial Statements, our responsibility is to read the Management Commentary and, in doing so, consider whether the Management Commentary is materially inconsistent with the Financial Statements or our knowledge obtained during the extended review, or otherwise appears to be materially misstated. Moreover, it is our responsibility to consider whether the Management Commentary provides the information required under the Danish Financial Statements Act. Based on the work we have performed, we conclude that the Management Commentary is in accordance with the Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstatement in the Management Commentary. Principal activities The company is a technology provider on a SaaS basis to the GRC market Unusual matters The company's management has identified an error in the annual report due to the opening equity not matching the comparative figures for 2023. Reference is also made to the description under applied accounting policies, including an explanation of the impact on the annual report resulting from the correction of material errors. Significant events after the end of the financial year No events have occurred after the end of the financial year of material importance for the Company's financial position. DKK Share capital Reserve for development costs Retained earnings Total Equity at 1 January 2024 805,287 13,439,099 -202,396,644 -188,152,258 Change of equity due to correction of errors -31,492,059 -31,492,059 Adjusted equity at 1 January 2024 805,287 13,439,099 -233,888,703 -219,644,317 Proposed profit allocation -32,882,328 -32,882,328 Transfers Depreciations -13,439,099 13,439,099 0 Equity at 31 December 2024 805,287 0 -253,331,932 -252,526,645 1 | Staff costs Average number of full time employees 64 46 Wages and salaries 43,700,267 33,897,932 Social security costs 579,194 359,617 Other staff costs 672,676 916,819 44,952,137 35,174,368 2 | Other financial income Interest income from group enterprises 534,332 0 172.110 Other interest income 0 42,743 534,332 42,743 3 | Other financial expenses Interest expenses to group enterprises 5,410,040 0 173.107 Other interest expenses 892,463 2,924 6,302,503 2,924 4 | Intangible assets DKK Development projects completed, including patents and similar rights originating from development projects Cost at 1 January 2024 10,210,331 Cost at 31 December 2024 10,210,331 Amortisation at 1 January 2024 10,210,331 Amortisation at 31 December 2024 10,210,331 Carrying amount at 31 December 2024 0 Capitalized development projects are amortised over 3 years. 5 | Property, plant and equipment DKK Land and buildings Other plant, fixtures and equipment Cost at 1 January 2024 0 3,937,142 Additions 0 1,000,188 Cost at 31 December 2024 0 4,937,330 Depreciation and impairment losses at 1 January 2024 0 2,561,981 Depreciation for the year 0 878,923 Depreciation and impairment losses at 31 December 2024 0 3,440,904 Carrying amount at 31 December 2024 0 1,496,426 6 | Financial non-current assets DKK Rent deposit and other receivables Cost at 1 January 2024 955,271 Additions 311,393 Cost at 31 December 2024 1,266,664 Carrying amount at 31 December 2024 1,266,664 7 | Long-term liabilities 31/12 2024 Debt outstanding 31/12 2023 DKK total liabilities after 5 years total liabilities Lease liabilities 0 0 263,134 Deferred income 0 0 2,603,108 Payables to group enterprises 260,119,213 254,709,174 221,472,396 260,119,213 254,709,174 224,338,638 Contingent liabilities Joint liabilities The Company is jointly and severally liable together with the Parent Company and the other group companies in the joint taxable group for tax on the group’s joint taxable income and for certain possible withholding taxes, such as dividend tax, etc. Tax payable on the Group’s joint taxable income is stated in the annual report of GAN Integrity Solutions Holding ApS, which serves as management Company for the joint taxation. 9 | Charges and securities There are no charges and securities at the balance sheet date. 10 | Going concern assumptions The company is operating at a loss and has lost its equity. The ultimate parent company, GAN Integrity Holdings Inc., has issued a letter of support to the Company, in which the ultimate parent company commits to guaranteeing the company's obligations and thereby ensuring the subsidiary's continued operations until December 31, 2025. Based on this letter of support and management's assessment of the company's future earning potential, management believes that the company can continue its operations, and therefore the annual report has been prepared on a going concern basis. 11 | Consolidated Financial Statements The company is included in the consolidated financial statements of the parent company, GAN Integrity Holdings Inc. 228 Park Avenue S, PMB 44939 New York, NY 10003 USA The Annual Report of GAN INTEGRITY SOLUTIONS ApS for 2024 has been presented in accordance with the provisions of the Danish Financial Statements Act for enterprises in reporting class B and certain provisions applying to reporting class C. Regnskabsklasse B1 true true The Annual Report is prepared consistently with the accounting principles applied last year. Change resulting from material misstatement It has been established that the 2024 annual report contains a material error due to the opening equity not matching the comparative figures for 2023. The company recognizes assets and liabilities in accordance with the accounting policies applied by the group and subsequently adjusts these to comply with the provisions of the Danish Financial Statements Act. In 2024, it was found that the opening equity did not align with the 2023 annual report as a result of this process. Since assets and liabilities have been correctly recognized in 2024, this has resulted in an error in equity amounting to DKK 31.5 million. The error has been incorporated into the 2024 annual report directly as an adjustment to equity, and thus, the comparative figures have not been restated. The error has been incorporated in the annual report as an adjustment to opening equity, thereby adjusting equity by DKK 31.5 million as of the beginning of the year. The error has no impact on the loss for the year, nor does it affect the total balance sheet. The change also has no impact on calculated taxes. The impact of the material error has been recognized directly in opening equity under the line item "Correction of errors." Comparative figures have not been adjusted. It has been established that the 2024 annual report contains a material error due to the opening equity not matching the comparative figures for 2023. The company recognizes assets and liabilities in accordance with the accounting policies applied by the group and subsequently adjusts these to comply with the provisions of the Danish Financial Statements Act. In 2024, it was found that the opening equity did not align with the 2023 annual report as a result of this process. Since assets and liabilities have been correctly recognized in 2024, this has resulted in an error in equity amounting to DKK 31.5 million. The error has been incorporated into the 2024 annual report directly as an adjustment to equity, and thus, the comparative figures have not been restated. The error has been incorporated in the annual report as an adjustment to opening equity, thereby adjusting equity by DKK 31.5 million as of the beginning of the year. The error has no impact on the loss for the year, nor does it affect the total balance sheet. The change also has no impact on calculated taxes. The impact of the material error has been recognized directly in opening equity under the line item "Correction of errors." Comparative figures have not been adjusted. Net revenue Sale of services is generally recognised on the basis of a measurable degree of completion, using straight-line recognition of services delivered over time in a regular pattern. Where the degree of completion is not measurable or the sales value or the total costs of completion are uncertain, revenue is recognised by the amount that the enterprise as a maximum believes to have a right to claim and is expected to be received for services delivered at the Balance Sheet date. Cost of sales Cost of sales comprise costs incurred to achieve the net revenue for the year, including direct and indirect costs of raw materials and consumables. Costs of raw materials and consumables Raw materials and consumables comprises the costs of raw materials and consumables used to reach the revenue for the year. Additionally, decrease or increase of inventories of raw materials and consumables for the year is included, as well as normal impairment of inventories of raw materials and consumables. Other external expenses Other external expenses include other production, sales, delivery and administrative costs, including costs of energy, marketing, premises, loss on bad debts, operating lease expenses, etc Payments related to operating lease expenses and other lease agreements are recognised in the Income Statement over the contract period. The Company’s total liability concerning operating and other lease agreements are stated under contingencies, etc. Staff costs Staff costs comprise wages and salaries, including holiday pay and pensions, and other costs of social security etc., for the Company's employees. Financial income and expenses Financial income and expenses include interest income and expenses, financial expenses of finance leases, realised and unrealised gains and losses arising from securities, debt and transactions in foreign currencies, as well as charges and allowances under the tax-on-account scheme, etc. Financial income and expenses are recognised by the amounts that relate to the financial year. Interest income and expenses are calculated on amortised cost prices. Tax The tax for the year, which consists of the current tax for the year and changes in deferred tax, is recognised in the Income Statement by the share that may be attributed to the profit for the year, and is recognised directly in equity by the share that may be attributed to entries directly to equity. Intangible fixed assets Development projects comprise costs, including wages and salaries, and amortisation, which directly or indirectly can be related to the Company’s development activities and which fulfil the criteria for recognition in the Balance Sheet. The accounting item is measured at the lower of the capitalised costs less accumulated amortisation and recoverable amount. Capitalised development costs are amortised on a straight-line basis over the estimated useful life after completion of the development work. The amortisation period is normally 3 years. Intangible fixed assets are generally written down to the recoverable amount if this is lower than the carrying amount. Profit or loss from sale of intangible fixed assets is calculated at the difference between the sales price and the carrying amount at the time of the sale. Profit and loss are recognised in the Income Statement under other operating income or other operating expenses. Property, plant and equipment Land and buildings, production plant and machinery, other plant, fixtures and equipment are measured at cost less accumulated depreciation and impairment losses. The depreciation base is cost less estimated residual value after end of useful life. The cost includes the acquisition price and costs incurred directly in connection with the acquisition until the time when the asset is ready to be used. Straight-line depreciation is provided on the basis of an assessment of the expected useful lives of the assets and their residual value: Useful life Residual value Other plant, fixtures and equipment 3-4 years 0% Profit or loss on sale of tangible fixed assets is stated as the difference between the sales price less selling costs and the carrying amount at the date of sale. Profit or loss is recognised in the Income Statement as other operating income or other operating expenses. Lease contracts Lease contracts relating to tangible fixed assets The capitalised residual lease liability is recognised in the Balance Sheet as a liability and the interest portion of the lease payment is recognised in the Income Statement over the contract period. Financial non-current assets Deposits include rental deposits which are recognised and measured at cost. Deposits are not depreciated. Impairment of fixed assets The carrying amount of intangible fixed and property, plant and equipment together with fixed assets, which are not measured at fair value,, are assessed annually for indications of impairment other than that reflected by amortisation and depreciation. In the event of impairment indications, an impairment test is made for each asset or group of assets, respectively. If the recoverable amount is lower than the carrying amount, the asset is written down to the recoverable amount. The recoverable amount is calculated at the higher of the capital value and the sales value less expected costs of a sale. The capital value is determined as the Company's share in the current value of the net cash flows which the subsidiary is expected to generate through its activities and from sale of assets after the end of their useful lives. A discount rate is used which reflects the risk-free market rate and the owners' minimum return on interest requirements for similar assets. The growth rate in the terminal period is determined in accordance with the standards within the industry. Receivables Receivables are measured at amortised cost which usually corresponds to nominal value. The value is written down to meet expected losses. Write-off is performed to provide for losses when an objective indication has been assessed to have incurred that a receivable or a portfolio of receivables are impaired. If there is an objective indication that an individual receivable is impaired, the write-off is performed at individual level. Receivables for which there are no objective indication of impairment at individual level are assessed at portfolio level for objective indication of impairment. The portfolios are primarily based on the debtors’ registered office and credit rating in accordance with the Company’s policy for credit risk management. The objective indicators, which are applied for portfolios, are determined based on the historical loss experiences. Write-off is determined as the difference between the carrying amount of receivables and the present value of the expected cash flows, including realisable value of any received collaterals. The effective interest rate is used as discount rate for the single receivable or portfolio. Accruals, assets Accruals recognised as assets include costs incurred relating to the subsequent financial year. Tax payable and deferred tax Current tax liabilities and receivable current tax are recognised in the Balance Sheet as the calculated tax on the taxable income for the year, adjusted for tax on the taxable income for previous years and taxes paid on account. Deferred tax is measured on the temporary differences between the carrying amount and the tax value of assets and liabilities. Deferred tax assets, including the tax value of tax loss carryforwards, are measured at the amount at which the asset is expected to be used within a reasonable number of years, either by setoff against tax on future earnings or by setoff against deferred tax liabilities within the same legal tax entity. Deferred tax is measured on the basis of the tax rules and tax rates that under the legislation in force on the Balance Sheet date will be applicable when the deferred tax is expected to crystallise as current tax. Any changes in the deferred tax resulting from changes in tax rates, are recognised in the income statement, except from items recognised directly in equity. Liabilities Financial liabilities are recognised at the time of borrowing by the amount of proceeds received less transaction costs. In subsequent periods, the financial liabilities are measured at amortised cost equal to the capitalised value when using the effective interest, the difference between the proceeds and the nominal value being recognised in the Income Statement over the loan period. 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