S-1/A: High Roller Technologies Eyes NYSE American Listing with $13.5 Million IPO

High Roller Technologies, an online gaming operator, aims to raise $13.5 million through an IPO, seeking a listing on NYSE American under the symbol ROLR.

Summary

• High Roller Technologies, Inc., an evolving global online gaming operator, has filed an amendment to its Form S-1 registration statement for a firm commitment initial public offering.
• The company plans to offer 1,500,000 shares of its common stock, with an anticipated initial public offering price between $8.00 and $10.00 per share.
• High Roller Technologies has applied to list its common stock on NYSE American under the symbol ROLR; however, the offering will not proceed if the listing is not approved.
• The company is an emerging growth company and has elected to comply with certain reduced public company reporting requirements.
• The total addressable worldwide gambling market (TAM) in 2023 was estimated to be $540 billion of which iGaming is estimated to exceed $135 billion or about 25% of TAM.
• The market is expected to grow to $681 billion by 2027, of which iGaming is expected to account for $210 billion or about 31% of TAM.
• This estimated growth in the iGaming market represents a compound annual growth rate, or CAGR, of 9%.
• The company intends to use the net proceeds from this offering for marketing, promotion and advertising, to finance expansion into the North American or other locally regulated markets, for launching one or more new iCasino brands, as well as for general corporate and working capital purposes.
• The company soft launched its second brand, Fruta.com, in December 2023, and formally launched it in February 2024.
• The company expects to launch at least one new iCasino brand approximately every twelve months.
• The number of shares of common stock to be outstanding after this offering is based on 7,002,317 shares of common stock outstanding as of April 5, 2024.
• Revenue increased by $11,183,142, or 60%, to $29,674,690 during the year ended December 31, 2023 as compared to $18,491,548 during the year ended December 31, 2022.
• Net loss was $2,817,851 for the year ended December 31, 2023, as compared to net loss of $3,058,327 for the year ended December 31, 2022.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While revenue growth is positive, the company's net losses and going concern warning temper the overall outlook. The IPO plan and expansion strategies offer potential for future improvement.

Positives

• The company's revenue increased by 60% to $29,674,690 in 2023, compared to $18,491,548 in 2022.
• The company is implementing a multi-brand strategy to scale its business and compete for increased market share.
• The company is planning to expand into new regulated markets, including North America.
• The company has a team with over 100 years of combined iGaming and e-commerce experience.
• The company has a scalable platform that allows it to launch new brands with existing resources.

Negatives

• The company has a net working capital deficiency of $4,576,857 and an accumulated deficit of $21,219,959 as of December 31, 2023.
• The company's financial statements have been prepared on a going concern basis, and its financial condition creates substantial doubt about its ability to continue as a going concern.
• The company relies on third-party service providers for various aspects of its business, including payment processing and content delivery.
• The company faces intense competition in the online casino gaming industry.
• The company is subject to taxation in a number of jurisdictions, and changes in tax laws could result in additional tax liabilities.

Risks

• Intense competition in the online casino gaming industry may hinder the company's ability to attract and retain users.
• The company has a limited history of operations and financial information on which to assess its current business strategy.
• The company's financial statements have been prepared on a going concern basis, and its financial condition creates substantial doubt as to whether it will be able to continue as a going concern.
• The success of existing or future online wagering products depends on a variety of factors and is not completely controlled by the company.
• Failure to comply with regulatory requirements or to successfully obtain licenses or permits could adversely impact the company's ability to operate.
• The company relies on information technology and other systems and platforms, and failures, errors, defects or disruptions therein could diminish its brand and reputation.
• The company may require additional capital to support its growth plans, and that capital may not be available on terms acceptable to it, or at all.
• Economic downturns and political and market conditions beyond the company's control could adversely affect its business.
• The lack of public company experience of the company's management team could adversely impact its ability to comply with the reporting requirements of U.S. securities laws.

Future Outlook

High Roller intends to achieve rapid, cost efficient and sustainable growth by utilizing high margin cash flow generated from online casino operations in its current international markets and to enter and grow sustainable revenues in newly regulated and soon to be regulated markets. The company expects to launch at least one new iCasino brand approximately every twelve months to expand market share in existing markets and reduce customer acquisition cost and attrition rates.

Management Comments

• Management believes that this strategy mitigates any material negative impact on operations or financial position by leveraging scalable processes and technologies within our Platform.
• Management believes that the combination of higher lifetime player value, which we refer to as LTV, and player demographics of iGaming players creates a superior value proposition for iCasino.

Industry Context

The announcement highlights the growing iGaming market, estimated at $135 billion in 2023 and projected to reach $210 billion by 2027, reflecting a 9% CAGR. This growth is driven by technological advancements and increasing regulation, creating opportunities for experienced operators like High Roller Technologies.

Comparison to Industry Standards

• The document mentions key players in the iCasino game offerings, such as Evolution Gaming, Pragmatic Play, Push Gaming, No Limit City, Playn GO, Relax Gaming, Red Tiger Gaming, Big Time Gaming, Netent, Quickspin, and Games Global.
• These companies are industry leaders in providing content and gaming licenses, indicating that High Roller Technologies is partnering with established and reputable providers.
• The document also mentions that the company competes with other providers of retail or online iCasino gaming, as well as against providers of online and mobile entertainment and leisure products more generally.
• The document states that other companies producing online gaming and/or interactive entertainment products and services are often established and well-financed, and other well-capitalized companies may introduce competitive services.

Management Changes

Legal Proceedings

• Ellmount Entertainment, Ltd., a subsidiary of the Company, has litigation pending in Austria and Germany regarding player claims and related legal fees.
• The Company is also currently subject to administrative claims initiated by the Czech Ministry of Finance regarding the operation of gaming activities in 2018 without a license and has been ordered to pay a fine of approximately $216,000, which is under appeal.

Related Party Transactions

• The company has engaged in transactions with affiliates, such as Happy Hour, Spike Up Media, Ellmount Interactive and other related parties, to operate online gaming.
• The company has relied on the customer lead generation services provided to it by Spike Up Media, an affiliate.
• The company has been dependent on Happy Hour Entertainment Holdings Ltd. to provide it with certain services.

Stakeholder Impact

• Shareholders will experience immediate and substantial dilution of $8.02 per share.
• The company's growth prospects and market potential will depend on its ability to obtain licenses to operate in a number of jurisdictions.
• The company's success depends in part on its ability to anticipate and satisfy user preferences in a timely manner.

Next Steps

• Secure listing approval on NYSE American.
• Execute marketing, promotion, and advertising plans.
• Finance expansion into North American or other locally regulated markets.
• Launch one or more new iCasino brands.
• Obtain a gaming license directly from the government of Curacao.

Key Dates

Keywords

iGaming, online casino, IPO, High Roller Technologies, NYSE American, gaming, licensing, regulation, marketing, Fruta.com