Bragg believes cyber breach resolved

Executive Summary

• Bragg Gaming Group secured a new $6.0 million (U.S.) credit facility with Bank of Montreal (BMO) to support working capital and general corporate requirements, replacing prior indebtedness to entities controlled by Doug Fallon.
• The company provided an update on a cybersecurity incident detected on August 16, 2025, stating the incident is resolved, no personal information was affected, and there is no material financial impact or operational disruption.
• Management highlighted significant cost savings, noting that borrowing costs on the new facility are estimated to be less than half of the prior note debt, while also reporting $2 million in annualized synergies and progress toward a 20% adjusted EBITDA margin target for H2 2025.

Key Details

• Financing Structure:
  • Lender: Bank of Montreal (BMO).
  • Facility Amount: Maximum aggregate amount of up to $6.0 million (U.S.).
  • Purpose: Working capital and general corporate requirements.
  • Security: First-ranking security interest over all assets of the company and certain key operating subsidiaries.
  • Terms: Uncommitted facility, repayable upon the earlier of: (i) demand by BMO; (ii) occurrence of certain insolvency events; or (iii) the one-year anniversary of the closing date (unless extended at BMO's discretion).
  • Covenants:
    • Total financed debt to EBITDA ratio not exceeding 2.50 to 1.00.
    • Fixed charge coverage ratio of not less than 1.25 to 1.00.
    • Tested on a consolidated basis at the end of each fiscal quarter.
• Financial Impact & Costs:
  • Prior Debt: Outstanding promissory note with entities controlled by Doug Fallon has been repaid in full.
  • Interest Rates: Estimated borrowing costs of 6.9% to 7.9% for prime-based loans or 5.9% to 6.9% for Canadian-overnight-repo-rate-average-based loans.
  • Fees: Standby fees on the unused portion range from 0.75% to 1.75% per annum.
  • Savings: Management estimates annualized borrowing costs will be less than half of the prior note debt.
• Cybersecurity Incident Update:
  • Detection Date: August 16, 2025.
  • Status: Incident considered resolved with assistance from independent cybersecurity experts.
  • Impact: No personal information affected; no impact on operations, revenue, or profitability; no material financial impact expected from response costs.
  • Remediation: Cybersecurity defenses enhanced based on investigation findings.
• Strategic & Operational Updates:
  • Synergies: $2 million in annualized synergies already realized.
  • Targets: On track to achieve 20% adjusted EBITDA margin target for the second half of 2025.
  • Partnerships: Expanding partnerships with operators including Fanatics and Hard Rock Digital.
  • Focus: Prioritizing margin and cash generation over lower-margin revenue; focusing on proprietary content and technology pipeline.

Notable Quotes

• "Securing this BMO facility represents a critical milestone in our strategic plan to strengthen Bragg's financial foundation and accelerate value creation for our shareholders... With our cybersecurity incident contained and our borrowing costs cut by more than half, we are laser-focused on executing our strategic shift toward higher-quality earnings." — Matevz Mazij, Chief Executive Officer
• "We are very pleased to establish this new relationship with the Bank of Montreal... This new credit facility strengthens our balance sheet and provides us with a flexible capital structure to execute our strategic plan." — Robbie Bressler, Chief Financial Officer