Exhibit 99.1

PRELIMINARY NOTE

The unaudited Condensed Consolidated Financial Statements for the nine month period ended September 30, 2021 included herein, have been prepared in accordance with accounting principles accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The condensed consolidated financial statements are presented in United States Dollars (“USD”). All references in this interim report to “$,” and “U.S. dollars” mean U.S. dollars and all references to “£” and “GBP” mean British Pounds Sterling, unless otherwise noted.

This interim report, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains or may contain forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve significant risks and uncertainties. All statements other than statements of historical facts are forward-looking statements. These forward-looking statements include information about our possible or assumed future results of operations or our performance. Words such as “expects,” “intends,” “plans,” “believes,” “anticipates,” “estimates,” and variations of such words and similar expressions are intended to identify the forward-looking statements. The risk factors and cautionary language referred to or incorporated by reference in this Report provide examples of risks, uncertainties and events that may cause actual results to differ materially from the expectations described in our forward-looking statements, including among other things, the items identified in the section entitled “Risk Factors” of the Company’s Annual Report on Form 20-F.

 

1

Genius Sports Limited

Condensed Consolidated Balance Sheets

(In thousands, except share data)

 

		(Unaudited)
		September 30				December 31
		2021				2020
ASSETS
Current assets:
Cash and cash equivalents		$	234,238			$	11,781
Accounts receivable, net			39,391				24,776
Contract assets			15,778				10,088
Prepaid expenses			33,079				4,107
Other current assets			11,447				10,584
Total current assets			333,933				61,336
Property and equipment, net			11,931				5,002
Intangible assets, net			196,319				114,542
Goodwill			346,229				200,624
Deferred tax asset			6				5
Other assets			8,473				9,496
Total assets		$	896,891			$	391,005
LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable		$	11,301			$	10,106
Accrued expenses			35,178				35,220
Deferred revenue			32,127				26,036
Current debt			23				10,272
Derivative warrant liabilities			54,761				—
Other current liabilities			12,943				3,714
Total current liabilities			146,333				85,348
Long-term debt – less current portion			72				82,723
Deferred tax liability			28,707				8,097
Other liabilities			9,681				3,589
Total liabilities			184,793				179,757
Temporary equity:
Preference shares, $0.0001 par value, none authorized, issued and outstanding at September 30, 2021; 218,561,319 shares authorized, issued and outstanding at December 31, 2020			—				350,675
Total temporary equity			—				350,675
Shareholders’ equity (deficit)
Common stock, $0.01 par value, unlimited shares authorized, 191,700,674 shares issued and outstanding at September 30, 2021; 70,040,242 shares authorized, issued and outstanding at December 31, 2020			1,917				24
B Shares, $0.0001 par value, 22,500,000 shares authorized, 18,500,000 shares issued and outstanding at September 30, 2021; none authorized, issued and outstanding at December 31, 2020			2				—
Additional paid-in capital			1,424,196				2,393
Accumulated deficit			(704,027	)			(153,237	)
Accumulated other comprehensive income (loss)			(9,990	)			11,393
Total shareholders’ equity (deficit)			712,098				(139,427	)
Total liabilities, temporary equity and shareholders’ equity (deficit)		$	896,891			$	391,005

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

2

Genius Sports Limited

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share data)

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2021				2020				2021				2020
Revenue		$	69,136			$	40,556			$	178,723			$	102,722
Cost of revenue			86,441				29,148				366,746				79,657
Gross (loss) profit			(17,305	)			11,408				(188,023	)			23,065
Operating expenses:
Sales and marketing			6,077				2,515				16,943				9,640
Research and development			9,789				2,069				19,928				6,644
General and administrative			28,741				6,917				262,442				20,701
Transaction expenses			2,876				53				9,646				53
Total operating expense			47,483				11,554				308,959				37,038
Loss from operations			(64,788	)			(146	)			(496,982	)			(13,973	)
Interest income (expense), net			(175	)			(1,979	)			(3,185	)			(5,799	)
Gain (loss) on disposal of assets			—				—				(1	)			—
Change in fair value of derivative warrant liabilities			(10,452	)			—				(49,319	)			—
Gain (loss) on foreign currency			4,941				115				9,645				(242	)
Total other income (expenses)			(5,686	)			(1,864	)			(42,860	)			(6,041	)
Loss before income taxes			(70,474	)			(2,010	)			(539,842	)			(20,014	)
Income tax benefit (expense)			497				197				379				3,171
Net loss		$	(69,977	)		$	(1,813	)		$	(539,463	)		$	(16,843	)
Net loss per common share:
Basic and diluted		$	(0.37	)		$	(0.03	)		$	(3.94	)		$	(0.24	)
Weighted average common stock outstanding:
Basic and diluted			188,866,430				70,040,242				137,022,447				70,040,242

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

3

Genius Sports Limited

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(In thousands)

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2021				2020				2021				2020
Net loss		$	(69,977	)		$	(1,813	)		$	(539,463	)		$	(16,843	)
Other comprehensive loss:
Foreign currency translation adjustments			(19,629	)			8,878				(21,383	)			(6,716	)
Comprehensive income (loss)		$	(89,606	)		$	7,065			$	(560,846	)		$	(23,559	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

4

Genius Sports Limited

Condensed Consolidated Statements of Changes in Temporary Equity and Shareholders’ Equity (Deficit)

(Unaudited)

(In thousands, except share data)

 

		Temporary Equity								Permanent Equity
		Preference Shares				Amounts				Common Stock				Amounts				B Shares				Amounts				Additional Paid in Capital				Accumulated Deficit				Accumulated Other Comprehensive Income (Loss)				Total Shareholders’ Equity (Deficit)
Balance at January 1, 2021 (as previously reported)			218,561,319			$	350,675				1,873,423			$	24				—			$	—			$	2,393			$	(153,237	)		$	11,393			$	(139,427	)
Retroactive application of reverse capitalization			—				—				68,166,819				676				—				—				(676	)			—				—				—
Balance at January 1, 2021, effect of reverse capitalization (see Note 2 – Reverse Capitalization)			218,561,319			$	350,675				70,040,242			$	700				—			$	—			$	1,717			$	(153,237	)		$	11,393			$	(139,427	)
Net loss			—				—				—				—				—				—				—				(5,322	)			—				(5,322	)
Foreign currency translation adjustment			—				—				—				—				—				—				—				—				932				932
Preferred share accretion			—				9,261				—				—				—				—				—				(9,261	)			—				(9,261	)
Balance at March 31, 2021			218,561,319			$	359,936				70,040,242			$	700				—			$	—			$	1,717			$	(167,820	)		$	12,325			$	(153,078	)
Net loss			—				—				—				—				—				—				—				(464,164	)			—				(464,164	)
Foreign currency translation adjustment			—				—				—				—				—				—				—				—				(2,686	)			(2,686	)
Preferred share accretion			—				2,066				—				—				—				—				—				(2,066	)			—				(2,066	)
Merger recapitalization			(218,561,319	)			(362,002	)			9,547,104				96				—				—				49,842				—				—				49,938
Merger and PIPE financing, net of equity issuance costs of $38,215			—				—				67,498,704				675				—				—				481,182				—				—				481,857
Issuance of common stock in connection with additional equity offering, net of equity issuance costs of $9,293			—				—				13,000,000				130				—				—				237,577				—				—				237,707
Issuance of common stock in connection with the business combinations			—				—				5,606,234				56				—				—				102,235				—				—				102,291
Stock-based compensation			—				—				—				—				—				—				391,356				—				—				391,356
Vesting of restricted shares			—				—				20,766,840				208				—				—				1,240				—				—				1,448
Issuance of B shares			—				—				—				—				18,500,000				2				—				—				—				2
Balance at June 30, 2021			—			$	—				186,459,124			$	1,865				18,500,000			$	2			$	1,265,149			$	(634,050	)		$	9,639			$	642,605
Net loss			—				—				—				—				—				—				—				(69,977	)			—				(69,977	)
Foreign currency translation adjustment			—				—				—				—				—				—				—				—				(19,629	)			(19,629	)
Issuance of common stock in connection with additional equity offering, net of equity issuance costs of $583			—				—				928,447				9				—				—				17,058				—				—				17,067
Issuance of common stock in connection with business combinations			—				—				499,998				5				—				—				8,195				—				—				8,200
Issuance of common stock in connection with warrant redemptions			—				—				3,813,105				38				—				—				96,356				—				—				96,394
Stock-based compensation			—				—				—				—				—				—				37,438				—				—				37,438
Balance at September 30, 2021			—			$	—				191,700,674			$	1,917				18,500,000			$	2			$	1,424,196			$	(704,027	)		$	(9,990	)		$	712,098
		Temporary Equity								Permanent Equity
		Preference Shares				Amounts				Common Stock				Amounts				B Shares				Amounts				Additional Paid in Capital				Accumulated Deficit				Accumulated Other Comprehensive Income (Loss)				Total Shareholders’ Equity (Deficit)
Balance at January 1, 2020			218,561,319			$	318,805				1,873,423			$	24				—			$	—			$	2,393			$	(91,019	)		$	7,240			$	(81,362	)
Retroactive application of reverse capitalization			—				—				68,166,819				676				—				—				(676	)			—				—				—
Balance at January 1, 2020, effect of reverse capitalization (see Note 2 – Reverse Capitalization)			218,561,319			$	318,805				70,040,242			$	700				—			$	—			$	1,717			$	(91,019	)		$	7,240			$	(81,362	)
Net loss			—				—				—				—				—				—				—				(7,544	)			—				(7,544	)
Foreign currency translation adjustment			—				—				—				—				—				—				—				—				(14,256	)			(14,256	)
Preferred share accretion			—				7,897				—				—				—				—				—				(7,897	)			—				(7,897	)
Balance at March 31, 2020			218,561,319			$	326,702				70,040,242			$	700				—			$	—			$	1,717			$	(106,460	)		$	(7,016	)		$	(111,059	)
Net loss			—				—				—				—				—				—				—				(7,486	)			—				(7,486	)
Foreign currency translation adjustment			—				—				—				—				—				—				—				—				(1,338	)			(1,338	)
Preferred share accretion			—				7,662				—				—				—				—				—				(7,662	)			—				(7,662	)
Balance at June 30, 2020			218,561,319			$	334,364				70,040,242			$	700				—			$	—			$	1,717			$	(121,608	)		$	(8,354	)		$	(127,545	)
Net loss			—				—				—				—				—				—				—				(1,813	)			—				(1,813	)
Foreign currency translation adjustment			—				—				—				—				—				—				—				—				8,878				8,878
Preferred share accretion			—				8,061				—				—				—				—				—				(8,061	)			—				(8,061	)
Balance at September 30, 2020			218,561,319			$	342,425				70,040,242			$	700				—			$	—			$	1,717			$	(131,482	)		$	524			$	(128,541	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

5

Genius Sports Limited

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

		Nine Months Ended September 30,
		2021				2020
Cash Flows from operating activities:
Net loss		$	(539,463	)		$	(16,843	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization			41,936				25,400
Loss (gain) on disposal of assets			1				—
Stock-based compensation			451,943				—
Change in fair value of derivative warrant liabilities			49,319				—
Non-cash interest expense (income), net			2,630				4,977
Amortization of contract cost			591				450
Deferred income taxes			(505	)			(3,171	)
Loss (gain) on foreign currency remeasurement			(5,498	)			1,874
Changes in assets and liabilities
Effect of business combinations			(23,596	)			—
Accounts receivable, net			(15,302	)			(5,004	)
Contract asset			(5,950	)			1,197
Prepaid expenses			(29,581	)			(262	)
Other current assets			537				(660	)
Other assets			320				(2,515	)
Accounts payable			1,245				(1,393	)
Accrued expenses			368				7,339
Deferred revenue			6,621				6,199
Other current liabilities			4,530				1,014
Other liabilities			(844	)			(954	)
Net cash provided by (used in) operating activities			(60,698	)			17,648
Cash flows from investing activities:
Purchases of property and equipment			(3,608	)			(1,158	)
Capitalization of internally developed software costs			(16,297	)			(12,206	)
Repayment of executive loan notes			4,738				—
Purchases of intangible assets			—				(1,296	)
Acquisition of business, net of cash acquired			(104,942	)			—
Proceeds from disposal of assets			156				25
Net cash used in investing activities			(119,953	)			(14,635	)
Cash flows from financing activities:
Proceeds from merger with dMY Technology Group, Inc. II			276,341				—
dMY Technology Group, Inc. II transaction costs			(24,828	)			—
Capitalization of Genius equity issuance costs			(20,217	)			—
PIPE financing, net of equity issuance costs			316,800				—
Issuance of common stock in connection with additional equity offering, net of equity issuance costs			254,774				—
Issuance of B shares			2				—
Preference shares payout and Incentive Securities Catch-Up Payment			(313,162	)			—
Repayment of loans and mortgage			(96,959	)			(17	)
Proceeds from exercise of Public Warrants			16,292				—
Proceeds from shareholder deposits			—				92
Net cash provided by financing activities			409,043				75
Effect of exchange rate changes on cash			(5,935	)			(2,430	)
Net increase (decrease) in cash			222,457				658
Cash, beginning of period			11,781				8,228
Cash, end of period		$	234,238			$	8,886
Supplemental disclosure of cash activities:
Cash paid during the period for interest		$	555			$	822
Cash paid (received) during the period for income taxes		$	3,209			$	691
Supplemental disclosure of noncash investing and financing activities:
Preferred share accretion		$	11,327			$	23,620
Conversion of preference shares to common stock		$	69,272			$	—
Warrants acquired as part of merger with dMY Technology Group, Inc. II		$	(84,664	)		$	—
Exercise of Private Placement Warrants		$	65,876			$	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

6

Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1. Description of Business and Summary of Significant Accounting Policies

Description of Business

Genius Sports Limited (the “Company” or “Genius”) is a non-cellular company limited by shares incorporated on October 21, 2020 under the laws of Guernsey. The Company was formed for the purpose of effectuating a merger pursuant to a definitive business combination agreement (“Business Combination Agreement”), dated October 27, 2020, by and among dMY Technology Group, Inc. II (“dMY”), Maven Topco Limited (“Maven Topco”), Maven Midco Limited, Galileo NewCo Limited, Genius Merger Sub, Inc., and dMY Sponsor II, LLC (the “Merger”). Upon the closing of the Merger on April 20, 2021 (the “Closing”), the Company changed its name from Galileo NewCo Limited to Genius Sports Limited. The Company’s ordinary shares and public warrants are currently listed on the New York Stock Exchange (“NYSE”) under the symbol “GENI” and “GENI WS”, respectively.

The Company is a provider of scalable, technology-led products and services to the sports, sports betting, and sports media industries. The Company is a data and technology company that enables consumer-facing businesses such as sports leagues, sportsbook operators and media companies to engage with their customers. The scope of the Company’s software bridges the entire sports data journey, from intuitive applications that enable accurate real-time data capture, to the creation and provision of in-game betting odds and digital content that helps the Company’s customers create engaging experiences for the ultimate end-users, who are primarily sports fans.

Basis of Presentation and Principles of Consolidation

The Merger was accounted for as a reverse capitalization in accordance with accounting principles accepted in the United States of America (“US GAAP”). The Merger was first accounted for as a capital reorganization whereby the Company was the successor to its predecessor Maven Topco. As a result of the first step described above, the existing shareholders of Maven Topco continued to retain control through ownership of the Company. The capital reorganization was immediately followed by the acquisition of dMY, which was accounted for within the scope of Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”). Under this method of accounting, dMY was treated as the “acquired” company for financial reporting purposes. This determination was primarily based on post-combination relative voting rights, composition of the governing board, relative size of the pre-combination entities, and intent of the Merger. Accordingly, for accounting purposes, the Merger was treated as the equivalent of the Company issuing stock for the net assets of dMY, accompanied by a recapitalization. The net assets of dMY were stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Merger are those of legacy Maven Topco. Upon Closing, outstanding capital stock of legacy shareholders of Maven Topco was converted to the Company’s common stock, in an amount determined by application of the exchange ratio of 37.38624 (“Exchange Ratio”), which was based on Maven Topco’s implied price per share prior to the Merger. For periods prior to the Merger, the reported share and per share amounts have been retroactively converted by applying the Exchange Ratio.

The accompanying unaudited condensed consolidated financial statements are presented in conformity with US GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes thereto included in our Annual Report on Form 20-F for the year ended December 31, 2020. The condensed consolidated balance sheet as of December 31, 2020, included herein, was derived from the audited financial statements of the Company as of that date.

The unaudited condensed consolidated interim financial statements, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company’s financial position as of September 30, 2021, its results of operations, comprehensive loss and shareholders’ deficit for the three months and nine months ended September 30, 2021 and 2020, and its cash flows for the nine months ended September 30, 2021 and 2020. The results of the three months and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ended December 31, 2021 or for any interim period or for any other future year.

The condensed consolidated financial statements include the accounts and operations of the Company, inclusive of its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Certain prior period amounts reported in our condensed consolidated financial statements and notes thereto have been reclassified to conform to current period presentation.

Stock-based Compensation

The Company records stock-based compensation in accordance with ASC 718, Compensation — Stock Compensation (“ASC 718”). The Company measures the cost of stock-based awards including restricted shares and stock options granted to employees and directors based on the grant date fair value of the awards. For stock-based awards subject only to service conditions, the Company recognizes compensation cost for these awards on a straight-line basis over the requisite service period. For stock-based awards subject to market conditions, the Company recognizes compensation cost on a tranche-by-tranche basis (the accelerated attribution method). The Company’s equity-classified non-employee awards are measured based on the grant date fair value of the awards and the Company recognizes compensation cost on a tranche-by-tranche basis. The Company elects to recognize the effect of forfeitures in the period they occur.

 

7

Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02 codified as ASC 842, Leases (“ASC 842”), which addresses the recognition and measurement of leases. Under the new guidance, for all leases (with the exception of short-term leases), at the commencement date, lessees will be required to recognize a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and a right-of-use (“ROU”) asset, which is an asset that represents the lessee’s right to control the use of a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. In July 2018, the FASB issued ASU 2018-11, Targeted Improvements – Leases (Topic 842). This update provides an alternative transition method that allows entities to elect to apply the standard prospectively at its effective date, versus recasting the prior periods presented. In June 2020, the FASB issued ASU 2020-05, deferring the effective date for one year for all other entities to annual periods beginning after December 15, 2021 and interim periods within annual periods beginning after December 15, 2022. The Company plans to adopt ASC 842 using the alternative transition method for our annual reporting period beginning on January 1, 2022. The qualitative and quantitative effects of adoption of ASC 842 are still being analyzed, and the Company is in the process of evaluating the full effect, including the total amount of both financing and operating leases, the new guidance will have on the condensed consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments, which, together with subsequent amendments, amends the requirement on the measurement and recognition of expected credit losses for financial assets held. ASU 2016-13 is effective for the Company beginning January 1, 2023, with early adoption permitted. The Company is currently in the process of evaluating the effects of this pronouncement on the Company’s financial statements and does not expect it to have a material impact on the Company’s condensed consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 is effective for the Company beginning January 1, 2022, with early adoption permitted. The Company is currently in the process of evaluating the effects of this pronouncement on the Company’s condensed consolidated financial statements and does not expect it to have a material impact on the consolidated financial statements.

Recently Adopted Accounting Guidance

In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718), to simplify the accounting for stock-based payments to non-employees by aligning it with the accounting for stock-based payments to employees, with certain exceptions. Under the new standard, equity-classified non-employee awards will be initially measured on the grant date and re-measured only upon modification, rather than at each reporting period. Measurement will be based on an estimate of the fair value of the equity instruments to be issued. Refer to Note 12 – Stock-based Compensation for the impact of the standard on the Company’s condensed consolidated financial statements, for non-employee stock compensation.

In August 2018, the FASB issued ASU 2018-15, Intangibles Goodwill and Other Internal-Use Software (Topic 350-40). This ASU addresses users’ accounting for implementation costs incurred in a cloud computing arrangement that is a service contract and also adds certain disclosure requirements related to implementation costs incurred for internal-use software and cloud computing arrangements. The amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 is effective for fiscal years beginning January 1, 2021. The amendments in this ASU can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company adopted the standard and the adoption had no material impact on the Company’s condensed consolidated financial statements.

Note 2. Reverse Capitalization

On April 20, 2021, the Merger was consummated.

Pursuant to the Business Combination Agreement, at Closing, the Company underwent a pre-closing reorganization wherein all existing classes of shares of Maven Topco (except for certain preference shares which were redeemed and cancelled as part of the reorganization) were exchanged for newly issued ordinary shares of the Company (“Genius ordinary shares”). Additionally, solely with respect to the Incentive Securities (defined below in Note 12 – Stock-based Compensation) of Maven Topco that were unvested prior to such reorganization and because the holders of such shares executed and delivered support agreements agreeing to the vesting and restrictions provisions therein, such shares were exchanged for the Company’s restricted shares. See Note 12 – Stock-based Compensation.

Pursuant to the Business Combination Agreement, subject to the satisfaction or waiver of certain conditions set forth therein, the following has occurred: (a) dMY’s issued and outstanding shares of Class B shares have converted automatically on a one-for-one basis into Class A shares; and (b) Genius Merger Sub, Inc, a whole-owned subsidiary of the Company, has merged with and into dMY, with dMY continuing as the surviving company, as a result of which (i) dMY has become a wholly-owned subsidiary of the Company; (ii) each issued and outstanding unit of dMY, consisting of one Class A share and one-third of one warrant were automatically detached, (iii) each issued and outstanding Class A share was converted into the right to receive one Genius ordinary share; (iv) each issued and outstanding dMY warrant to purchase a share of dMY Class A common stock have become exercisable for one Genius ordinary share. Additionally, pursuant to the Business Combination Agreement, certain dMY shareholders exercised their right to redeem certain of their outstanding shares for cash, resulting in the redemption of 1,296 shares of dMY common stock for gross redemption payments of $12,966.

 

8

Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Concurrently with the execution of the Business Combination Agreement, a number of accredited and institutional investors (the “PIPE Investors”) subscribed to purchase an aggregate of 33,000,000 Genius ordinary shares, for a purchase price of $10.00 per share, for an aggregate purchase price of $330,000,000, to be issued immediately prior to or substantially concurrently with the Closing (the “PIPE Investment”). The PIPE Investment was also consummated on April 20, 2021.

The Merger was accounted for as a reverse capitalization in accordance with US GAAP. Under this method of accounting, dMY was treated as the “acquired” company for financial reporting purposes and the Merger was treated as the equivalent of the Company issuing stock for the net assets of dMY, accompanied by a recapitalization. See “Basis of Presentation and Principles of Consolidation” in Note 1 -– Description of Business and Summary of Significant Accounting Policies for further details. In connection with the Merger, the Company raised gross proceeds of $606.3 million including the contribution of $276.3 million of cash held in dMY’s trust account from its initial public offering and gross proceeds from PIPE Investment of $330 million less issuance costs of $13.2 million.

Pursuant to the Business Combination Agreement, with the proceeds raised, the Company paid for redemption of certain preference shares of Maven Topco of $292.7 million, repaid certain loans granted by Maven Topco of $96.9 million and made a catch-up payment of $15.7 million related to certain executive’s holdings of the Company’s Incentive Securities (net of proceeds from repayment of certain employee loan).

In connection with the Merger, the Company incurred direct and incremental transaction costs of approximately $20.2 million associated with equity issuance, consisting primarily of investment banking, legal, accounting and other professional fees, which were recorded to additional paid-in capital as a reduction of proceeds in the condensed consolidated statements of changes in temporary equity and shareholders’ deficit.

The number of Genius ordinary shares issued immediately following the consummation of the Merger was:

 

dMY Class A common stock outstanding prior to the Merger			27,600,000
Less: redemption of dMY shares			1,296
Genius ordinary shares issued to dMY Class A common stockholders			27,598,704
Genius ordinary shares issued to dMY Class B common stockholders			6,900,000
Genius ordinary shares issued to PIPE Investors			33,000,000
Total Genius ordinary shares issued in connection with the Merger and PIPE Investment			67,498,704
Genius ordinary shares converted from legacy Maven Topco shares(1)			100,137,777
Total Genius ordinary shares issued immediately after the Merger			167,636,481

 

(1)	Includes 79,587,346 Genius ordinary shares converted from existing classes of shares of Maven Topco and 20,550,431 Genius ordinary shares related to vested rollover Incentive Securities. See Note 12 – Stock-based Compensation for further details.

Note 3. Business Combinations

Second Spectrum Acquisition

On June 15, 2021, the Company acquired all outstanding equity interests in Second Spectrum, Inc (“Second Spectrum”) for a total consideration of $199.4 million including $116.1 million in cash and $83.3 million in equity. Second Spectrum is a leading provider of cutting-edge data tracking and visualization solutions that partners with elite football and basketball clubs, leagues, federations, and media organizations around the world. The financial results of Second Spectrum have been included in the Company’s condensed consolidated statements of operations statements since the acquisition date of June 15, 2021.

Consideration Transferred

The summary computation of consideration transferred is presented as follows (in thousands):

 

		Consideration Transferred
Cash for outstanding Second Spectrum capital stock(1)		$	112,606
Fair value of Genius Sports Limited common stock issued for outstanding Second Spectrum capital stock(2)			83,291
Cash for vested outstanding Second Spectrum equity awards(3)			3,490
Total consideration transferred		$	199,387

 

(1)	Includes cash consideration paid to former Second Spectrum shareholders totaling $112.6 million

(2)	Represents the issuance of 4.7 million shares of the Company’s common stock at June 15, 2021 closing price of $17.74 per share to the former Second Spectrum shareholders

(3)	Includes $3.5 million cash settlement of Second Spectrum’s vested outstanding stock options as of June 15, 2021 associated with the pre-acquisition services provided by former Second Spectrum shareholders

 

9

Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Preliminary Purchase Price Allocation

Fair values are based on management’s analysis including work performed by third party valuation specialists. The following table summarizes the fair value of assets acquired and liabilities assumed on the acquisition date of June 15, 2021, with the excess recorded as goodwill (in thousands):

 

Fair value of net assets acquired		As of June 15, 2021
Cash and cash equivalents		$	43,865
Accounts receivables, net			1,126
Prepaid expenses			252
Other current assets			1
Property and equipment, net			5,187
Intangible assets, net			83,800
Other assets			167
Goodwill			102,482
Total assets acquired		$	236,880
Accounts payable			273
Accrued expenses			13,961
Deferred revenue			6,670
Other current liabilities			454
Deferred tax liability			16,135
Total liabilities assumed		$	37,493
Total consideration transferred		$	199,387

The following table sets forth the components of identifiable intangible assets acquired and their weighted average useful lives by major class of intangible assets as of the acquisition date of June 15, 2021 (in thousands):

 

		Useful Lives				As of June 15, 2021
		(years)				(in thousands)
Technology			3			$	50,000
Marketing products(1)			3 – 15				33,800
Total intangible assets acquired subject to amortization						$	83,800

 

(1)	Includes customer relationships of $31.0 million with a useful life of 3 years and trademarks of $2.8 million with an useful life of 15 years

Goodwill is primarily attributed to expected growth in new contracted customer contracts, new technologies anticipated from the acquisition and the assembled workforce of Second Spectrum. The goodwill acquired will not generate amortization deductions for income tax purposes.

During the nine months ended September 30, 2021, the Company incurred transaction costs of $5.7 million in connection with the acquisition of Second Spectrum which was recorded in transaction expenses in the condensed consolidated statements of operations.

The Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2021 included revenue of $5.8 million and $6.4 million respectively and net loss of $6.6 million and $8.2 million respectively since the acquisition date of June 15, 2021.

Unaudited Pro Forma Information

The following unaudited pro forma financial information presents combined results of operations for the periods presented as if the acquisition of Second Spectrum had occurred on January 1, 2020 (in thousands):

 

		Three Months Ended September 30,
		2021				2020
Pro forma revenue		$	69,136			$	44,032
Pro forma net loss			(68,999	)			(12,791	)

 

		Nine Months Ended September 30,
		2021				2020
Pro forma revenue		$	188,269			$	117,302
Pro forma net loss			(536,209	)			(62,632	)

 

10

Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

The unaudited pro forma financial information has been presented for illustrative purposes only and is not necessarily indicative of results of operations that would have been achieved had the acquisition taken place on the date indicated, or the future consolidated results of operations of the Company. The pro forma financial information presented above has been derived from the historical condensed consolidated financial statements of the Company and from the historical accounting records of Second Spectrum.

The unaudited pro forma results include certain pro forma adjustments to revenue and net loss that were directly attributable to the acquisition, assuming the acquisition had occurred on January 1, 2020, including the following:

 

(1)	Transaction costs of approximately $10.7 million are assumed to have occurred on January 1, 2020 and are recognized as if incurred in the first quarter of 2020. Of these transaction costs, $6.6 million are incurred by Second Spectrum and $4.1 million are incurred by the Company.

 

(2)	Payment of approximately $1.6 million related to the acceleration of Second Spectrum’s historical unvested stock options as a result of the acquisition is assumed to have occurred on January 1, 2020 and is recognized as if incurred in the first quarter of 2020.

FanHub Acquisition

On June 9, 2021, the Company acquired all outstanding equity interests in Fan Hub Media Holdings Pty Limited. (“FanHub”) for cash of approximately $13.2 million and equity of approximately $19.0 million. FanHub is a leading provider of free-to-play (F2P) games and fan engagement solutions and provides a suite of technology solutions built around three core service offerings: games, betting and social activation. The Company included the financial results of FanHub in the condensed consolidated financial statements from the date of the acquisition. The Company incurred transaction costs of $0.4 million in connection with the acquisition of FanHub which was recorded in transaction expenses in the condensed consolidated statements of operations. In allocating consideration transferred based on estimated fair values, the Company recorded $13.0 million of newly acquired intangible assets including Technology and Marketing Products and $20.5 million of goodwill. The goodwill is not deductible for U.S. income tax purposes. The acquisition was not material to the Company’s condensed consolidated financial statements.

Spirable Acquisition

On August 17, 2021, the Company acquired all outstanding equity interests in Photospire Limited (“Spirable”) for an aggregate consideration transferred of $43.5 million including cash, equity and contingent consideration of $27.2 million, $9.7 million and $6.6 million, respectively. Spirable, based in London, United Kingdom, is a leading creative performance platform that allows brands, agencies and rights holders to create, automate and optimize highly personalized content. The Company incurred transaction costs of $2.8 million in connection with the acquisition of Spirable which was recorded in transaction expenses in the consolidated statements of operations. In allocating consideration transferred based on estimated fair values, the Company recorded $13.8 million of newly acquired intangible assets including Technology and Marketing Products and $30.5 million of goodwill. The goodwill is not deductible for U.S. income tax purposes. The acquisition is not material to the Company’s condensed consolidated financial statements.

Changes in the carrying amount of goodwill for the periods presented in accompanying condensed consolidated financial statements are as follows (in thousands):

 

Balance as of December 31, 2020		$	200,624
Goodwill acquired			153,492
Effect of currency translation remeasurement			(7,887	)
Balance as of September 30, 2021		$	346,229

For the nine months ended September 30, 2021, the carrying amount of goodwill increased by $20.5 million due to the FanHub acquisition, $102.5 million due to the Second Spectrum acquisition and $30.5 million due to the Spirable acquisition, respectively.

No impairment of goodwill was recognized for the three and nine months ended September 30, 2021.

Note 4. Revenue

Disaggregation of Revenues

Revenue by Major Product Group

The Company’s product offerings primarily deliver a service to a customer satisfied over time, and not at a point in time. Point in time revenues were immaterial for all periods presented in the condensed consolidated statements of operations. Revenue for the Company’s major product groups consists of the following (in thousands):

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2021				2020				2021				2020
Revenue by Product Group
Betting Technology, Content and Services		$	43,644			$	29,580			$	123,272			$	75,353
Sports Technology and Services			11,594				4,484				24,190				11,808
Media Technology, Content and Services			13,898				6,492				31,261				15,561
Total		$	69,136			$	40,556			$	178,723			$	102,722

 

11

Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Revenue by Geographic Market

Geographical regions are determined based on the region in which the customer is headquartered or domiciled. Revenues by geographical market consists of the following (in thousands):

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2021				2020				2021				2020
Revenue by geographical market:
Europe		$	46,024			$	31,774			$	127,761			$	82,137
Americas			18,597				5,850				38,511				13,676
Rest of the world			4,515				2,932				12,451				6,909
Total		$	69,136			$	40,556			$	178,723			$	102,722

In the three months ended September 30, 2021, the United States, United Kingdom, Gibraltar and Malta represented 20%, 14%, 13% and 13% of total revenue, respectively. In the nine months ended September 30, 2021, Malta, the United States, Gibraltar and the United Kingdom represented 15%, 14%, 14% and 13% of total revenue, respectively. In the three months ended September 30, 2020, Malta, the United Kingdom and Gibraltar represented 16%, 15% and 14% of total revenue, respectively. In the nine months ended September 30, 2020, Malta, Gibraltar and the United Kingdom represented 16%, 15% and 14% of total revenue, respectively.

Revenues by Major Customers

No customers accounted for 10% or more of revenue in the three and nine months ended September 30, 2021 and 2020, respectively.

Remaining Performance Obligations

Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods and excludes constrained variable consideration. The Company has excluded contracts with an original expected term of one year or less and variable consideration allocated entirely to wholly unsatisfied promises that form part of a single performance obligation from the disclosure of remaining performance obligations.

Revenue allocated to remaining performance obligations was $278.9 million as of September 30, 2021. The Company expects to recognize approximately 40% in revenue within one year, and the remainder in the next 13 – 119 months.

During the three and nine months ended September 30, 2021, the Company recognized revenue of $8.3 million and $23.4 million, respectively for variable consideration related to revenue share contracts for Betting Technology, Content and Services.

Contract Balances

The timing of revenue recognition may differ from the timing of invoicing to customers, and these timing differences result in receivables, contract assets, or contract liabilities (deferred revenue) on the Company’s condensed consolidated balance sheets. The Company records a contract asset when revenue is recognized prior to the right to invoice or deferred revenue when revenue is recognized subsequent to invoicing. Contract assets are transferred to receivables when the rights to invoice and receive payment become unconditional.

As of September 30, 2021, the Company had $15.8 million contract assets and $32.1 million of contract liabilities, recognized as deferred revenue. As of December 31, 2020, the Company had $10.1 million contract assets and $26.0 million of contract liabilities, recognized as deferred revenue.

The Company expects to recognize substantially all of the deferred revenue beginning balance within the next 12 months.

COVID-19

Due to COVID-19, sporting events were suspended, postponed or cancelled, resulting in service issues related to certain customer contracts for Betting Technology, Content and Services as there was a lack of available official sports data for higher-tiered sporting events, and customers entered into these contracts with the expectation they would have access to official sports data for higher-tiered sporting events. As a result, the Company entered into contract modifications with certain customers in the second and third quarter of 2020 to provide one-time discounts on fixed fees in connection with Betting Technology, Content & Services, as compensation for the service issues, resulting in a reduction in revenue in the periods impacted. While the Company did not experience any service issues as a result of COVID-19 for the three and nine months ended September 30, 2021, the extent of the ongoing and future effects of COVID-19 on the Company’s business is uncertain.

 

12

Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 5. Accounts Receivable, net

As of September 30, 2021, accounts receivables, net consisted of accounts receivable of $40.3 million less allowance for doubtful accounts of $0.9 million. As of December 31, 2020, accounts receivables, net consisted of accounts receivable of $26.1 million less allowance for doubtful accounts of $1.3 million.

Note 6. Intangible Assets, net

Intangible assets subject to amortization as of September 30, 2021 consist of the following (in thousands, except years):

 

		Weighted Average Remaining Useful Lives		Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
		(years)
Data rights		7		$	71,007			$	21,750			$	49,257
Marketing products		7			62,575				9,287				53,288
Technology		3			112,224				48,316				63,908
Capitalized software		2			59,745				29,879				29,866
Total intangible assets				$	305,551			$	109,232			$	196,319

Intangible assets subject to amortization as of December 31, 2020 consist of the following (in thousands, except years):

 

		Weighted Average Remaining Useful Lives		Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
		(years)
Data rights		8		$	71,797			$	16,621			$	55,176
Marketing products		12			24,757				4,548				20,209
Technology		1			44,720				32,625				12,095
Capitalized software		2			44,374				17,312				27,062
Total intangible assets				$	185,648			$	71,106			$	114,542

Amortization expense was $18.3 million and $8.6 million for the three months ended September 30, 2021 and 2020 respectively. Amortization expense was $39.9 million and $24.2 million for the nine months ended September 30, 2021 and 2020 respectively.

Note 7. Other Assets

Other assets (current and long-term) as of September 30, 2021 and December 31, 2020 are as follows (in thousands):

 

		September 30,				December 31,
		2021				2020
Other current assets:
Non-trade receivables		$	10,803			$	3,448
Deferred offering costs			—				2,093
Executive note receivable			—				4,659
Inventory			644				384
Total other current assets		$	11,447			$	10,584
Other assets:
Security deposit		$	3,766			$	3,622
Corporate tax receivable			1,353				1,256
Sales tax receivable			1,801				3,042
Contract costs			1,553				1,576
Total other assets		$	8,473			$	9,496

 

13

Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 8. Debt

The following table summarizes outstanding debt balances as of September 30, 2021 and December 31, 2020 (in thousands):

 

Instrument		Date of Issuance		Maturity Date		Effective interest rate				September 30, 2021				December 31, 2020
Investor Loan Notes		September 2018 to December 2019		April 2021			10	%		$	—			$	82,631
Data Project Srl Mortgage		December 2010		December 2025			1	%			95				116
Related party loan		December 2020		April 2021			4	%			—				10,248
										$95				$92,995
Less current portion of debt											(23	)			(10,272	)
Non-current portion of debt										$	72			$	82,723

Investor Loan Notes

On September 7, 2018, the Company issued to Maven TopHoldings SARL, a subsidiary of a fund advised by Apax and other shareholders $56.2 million aggregate principal amount of unsecured investor loan notes with interest of 10% per annum and $5.2 million aggregate principal amount of unsecured manager loan notes with interest at 10% per annum (collectively the “Investor Loan Notes”). During September and December 2019, supplemental deeds to the Investor Loan Notes were entered into by the Company, providing for the issuance of additional Investor Loan Notes with an aggregate principal amount of $1.4 million. See Note 16 – Related Party Transactions. The Company repaid the Investor Loan Notes in full upon the consummation of the Merger.

Data Project Srl Mortgage

On December 1, 2010, Genius Sports entered into a loan agreement in Euros for the equivalent of $0.3 million to be paid in accordance with the quarterly floating rate amortization schedule over the course of the loan.

Related Party Loan

On December 8, 2020, certain investment funds affiliated with Apax entered into a loan agreement with a subsidiary of the Company (the “Related Party Loan”) for an aggregate amount of $10.0 million in order to fund cash consideration payable with respect to acquisition of business, properties or assets, as well as to fund general corporate expenses, including working capital. The Related Party Loan carries an interest rate of 4.00% per annum. See Note 16 – Related Party Transactions. The Company repaid the Related Party Loan in full upon the consummation of the Merger.

Secured Overdraft Facility

The Company has access to short-term borrowings and lines of credit. The Company’s main facility is a secured overdraft facility with Barclays Bank PLC, which incurs a variable interest rate of 4.00% over the Bank of England rate. As of September 30, 2021 and December 31, 2020, the Company had no outstanding borrowings under its lines of credit.

As of September 30, 2021 and December 31, 2020, the Company was in compliance with all applicable covenants related to its indebtedness.

Interest Expense

Interest expense was $0.2 million and $2.0 million for the three months ended September 30, 2021 and 2020 respectively. Interest expense was $3.2 million and $5.9 million for the nine months ended September 30, 2021 and 2020 respectively.

Debt Maturities

Expected future payments for all borrowings as of September 30, 2021 are as follows:

 

Fiscal Period:		(in thousands)
2021 (remainder)		$	6
2022			23
2023			23
2024			24
2025			19
Thereafter			—
Total payment outstanding		$	95

 

14

Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 9. Derivative Warrant Liabilities

As part of dMY’s initial public offering (“IPO”) in 2020, dMY issued 9,200,000 warrants to third party investors, and each whole warrant entitles the holder to purchase one share of the Company’s Class A common stock at an exercise price of $11.50 per share (the “Public Warrants”). Simultaneously with the closing of the IPO, dMY completed the private sale of 5,013,333 warrants to dMY’s sponsor (“Private Placement Warrants”) and each Private Placement Warrant allows the sponsor to purchase one share of the Company’s Class A common stock at $11.50 per share.

Public Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the units and only whole Public Warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the IPO. The Public Warrants have an exercise price of $11.50 per share, subject to adjustments and will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation. In the three months ended September 30, 2021, 1,530,346 Public Warrants were exercised at a price of $11.50 per share, resulting in proceeds of $17.6 million (of which $1.3 million is included in Other current assets in the condensed consolidated balance sheets as of September 30, 2021), and the issuance of 1,530,346 shares of Common Stock. As of September 30, 2021, 7,669,626 Public Warrants remained outstanding.

The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants and the shares of common stock issuable upon the exercise of the Private Placement Warrants are not transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants are non-redeemable so long as they are held by the Sponsor or its permitted transferees. If the Private Placement Warrants are held by someone other than the sponsor or its permitted transferees, the Private Placement Warrants are redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. On September 15, 2021, the Private Placement Warrants were exercised in full on a cashless basis, resulting in the issuance of 2,282,759 shares of Common Stock. None of the Private Placement Warrants remain outstanding as of September 30, 2021.

The Company accounts for Public Warrants and Private Placement Warrants as liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (ASC 480) and ASC 815, Derivatives and Hedging (ASC 815). Specifically, the Public and Private Placement Warrants meet the definition of a derivative but do not qualify for an exception from derivative accounting since the warrants are not indexed to the Company’s stock and therefore, are precluded from equity classification. Since the Public and Private Placement Warrants meet the definition of a derivative under ASC 815, the Company recorded these warrants as liabilities on the balance sheet at fair value upon the closing of the Merger, with subsequent changes in their respective fair values recognized in the consolidated statement of operations. For the three and nine months ended September 30, 2021, a loss of $10.5 million and $49.3 million was recognized from the change in fair value of the Public and Private Placement Warrants in the Company’s condensed consolidated statements of operations, respectively.

Note 10. Other Liabilities

Other liabilities (current and long-term) as of September 30, 2021 and December 31, 2020 are as follows (in thousands):

 

		September 30,				December 31,
		2021				2020
Other current liabilities:
Other payables		$	5,167			$	3,576
Deferred consideration			6,245				—
Contingent consideration			1,531				138
Total other current liabilities		$	12,943			$	3,714
Other liabilities:
Deferred consideration		$	2,444			$	—
Contingent consideration			7,237				2,164
Incentive securities			—				1,425
Total other liabilities		$	9,681			$	3,589

Note 11. Loss Per Share

The Company uses the two-class method to calculate net loss per share and apply the more dilutive of the two-class method, treasury stock method or if-converted method to calculate diluted net loss per share. Undistributed earnings for each period are allocated to participating securities, based on the contractual participation rights of the security to share in the current earnings as if all current period earnings had been distributed. As there is no contractual obligation for Preference Shares outstanding in the periods to share in losses, the Company’s basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average shares of common stock outstanding during periods with undistributed losses. Additionally, the B Shares, issued in connection with the License Agreement (defined below), are not included in the loss per share calculations below as they are non-participating securities with no rights to dividends or distributions. Diluted net loss per share attributable to common stockholders is computed by giving effect to all potentially dilutive securities. Basic and diluted net loss per share attributable to common stockholders was the same for all periods presented as the inclusion of all potentially dilutive securities outstanding was anti-dilutive.

 

15