SciPlay Corp - Quarter Report: 2023 June (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-38889

SCIPLAY CORPORATION

(Exact name of registrant as specified in its charter)


Nevada						83-2692460
(State or other jurisdiction of						(I.R.S. Employer Identification No.)
incorporation or organization)

6601 Bermuda Road, Las Vegas, Nevada 89119

(Address of principal executive offices)

(Zip Code)

(702) 897-7150

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $.001 par value	SCPL	The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and(2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The registrant has the following number of shares outstanding of each of the registrant’s classes of common stock as of August 4, 2023:

Class A Common Stock: 21,218,896

Class B Common Stock: 103,547,021

SCIPLAY CORPORATION

INDEX TO FINANCIAL INFORMATION

AND OTHER INFORMATION

THREE AND SIX MONTHS ENDED JUNE 30, 2023


		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements (unaudited)	6

	Consolidated Statements of Income for the Three and Six Months Ended June 30, 2023 and 2022	6

	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2023 and 2022	7

	Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022	8

	Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2023 and 2022	9

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022	10

	Notes to Condensed Consolidated Financial Statements	11

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28

Item 4.	Controls and Procedures	28

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	28

Item 1A.	Risk Factors	28

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

Item 3.	Defaults Upon Senior Securities	30

Item 4.	Mine Safety Disclosures	30

Item 5.	Other Information	30

Item 6.	Exhibits	31

FORWARD-LOOKING STATEMENTS

Throughout this Quarterly Report on Form 10-Q, we make “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements describe future expectations, plans, results or strategies and can often be identified by the use of terminology such as “may,” “will,” “estimate,” “intend,” “plan,” “continue,” “believe,” “expect,” “anticipate,” “target,” “should,” “could,” “potential,” “opportunity,” “goal,” or similar terminology. The forward-looking statements contained in this Quarterly Report on Form 10-Q are generally located in the material set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” but may be found in other locations as well. These statements are based upon management’s current expectations, assumptions and estimates and are not guarantees of timing, future results or performance. Therefore, you should not rely on any of these forward-looking statements as predictions of future events. Actual results may differ materially from those contemplated in these statements due to a variety of risks and uncertainties and other factors, including, among other things:

•our ability to attract and retain players;

•expectations of growth in total consumer spending on social gaming, including social casino gaming;

•our reliance on third-party platforms and our ability to track data on those platforms;

•our ability to continue to launch and enhance games that attract and retain a significant number of paying players;

•our ability to expand in international markets;

•our reliance on a small percentage of our players for nearly all of our revenue;

•our ability to adapt to, and offer games that keep pace with, changing technology and evolving industry standards;

•competition;

•our dependence on the optional purchases of coins, chips and bingo cards (collectively referred to as “coins, chips and cards”) to supplement the availability of periodically offered free coins, chips and cards;

•our ability to access additional financing and restrictions and covenants in debt agreements, including those that could result in acceleration of the maturity of our indebtedness;

•the discontinuation or replacement of the London Interbank Offer Rate, which may adversely affect interest rates;

•fluctuations in our results due to seasonality and other factors;

•dependence on skilled employees with creative and technical backgrounds;

•U.S. and international economic and industry conditions, including increases in benchmark interest rates and the effects of inflation;

•public perception of our response to environmental, social and governance issues;

•changes in, or the elimination of, our share repurchase program;

•our ability to use the intellectual property rights of Light & Wonder, Inc. (“Light & Wonder”, “L&W” and “Parent”) and other third parties, including the third-party intellectual property rights licensed to Light & Wonder, under our intellectual property license agreement (“IP License Agreement”) with our Parent;

•protection of our proprietary information and intellectual property, inability to license third-party intellectual property and the intellectual property rights of others;

•security and integrity of our games and systems;

•security breaches, cyber-attacks or other privacy or data security incidents, challenges or disruptions;

•reliance on or failures in information technology and other systems;

•loss of revenue due to unauthorized methods of playing our games;

•the possibility that the conditions to the completion of the Merger (as defined below) may not be satisfied on the anticipated schedule or at all;

•the possibility that the Merger may not be consummated or that Light & Wonder and SciPlay may be unable to achieve expected operational, strategic and financial benefits of the Merger;

•the possibility of any event, change or other circumstances that could give rise to the termination of the Merger Agreement (as defined below);

•the outcome of any legal proceedings that may be instituted following announcement of the Merger;

•failure to retain key management and employees of SciPlay;

•unfavorable reaction to the Merger by customers, competitors, suppliers and employees; and

•unpredictability and severity of catastrophic events, including but not limited to acts of terrorism, war or hostilities or the COVID-19 pandemic, as well as management’s response to any of the aforementioned factors;

•the impact of legal and regulatory restrictions on our business, including significant opposition in some jurisdictions to interactive social gaming, including social casino gaming, and how such opposition could lead these jurisdictions to adopt legislation or impose a regulatory framework to govern interactive social gaming or social casino gaming specifically, and how this could result in a prohibition on interactive social gaming or social casino gaming altogether, restrict our ability to advertise our games, or substantially increase our costs to comply with these regulations;

•laws and government regulations, both foreign and domestic, including those relating to our Parent and to data privacy and security, including with respect to the collection, storage, use, transmission, sharing and protection of personal information and other consumer data, and those laws and regulations that affect companies conducting business on the internet, including ours;

•the continuing evolution of the scope of data privacy and security regulations, and our belief that the adoption of increasingly restrictive regulations in this area is likely within the U.S. and other jurisdictions;

•risks related to foreign operations, including the complexity of foreign laws, regulations and markets; the uncertainty of enforcement of remedies in foreign jurisdictions; the effect of currency exchange rate fluctuations; the impact of foreign labor laws and disputes; the ability to attract and retain key personnel in foreign jurisdictions; the economic, tax and regulatory policies of local governments; and compliance with applicable anti-money laundering, anti-bribery and anti-corruption laws;

•influence of certain stockholders, including decisions that may conflict with the interests of other stockholders;

•our ability to achieve some or all of the anticipated benefits of being a standalone public company;

•our dependence on distributions from SciPlay Parent Company, LLC (“SciPlay Parent LLC”) to pay our taxes and expenses, including substantial payments we will be required to make under the Tax Receivable Agreement (the “TRA”);

•failure to establish and maintain adequate internal control over financial reporting;

•stock price volatility;

•litigation and other liabilities relating to our business, including litigation and liabilities relating to consumer protection, gambling-related matters, employee matters, alleged service and system malfunctions, alleged intellectual property infringement and claims relating to our contracts, licenses and strategic investments;

•our ability to complete acquisitions and integrate businesses successfully;

•our ability to pursue and execute new business initiatives;

•our expectations of future growth that will place significant demands on our management and operations;

•natural events and health crises that disrupt our operations or those of our providers or suppliers;

•changes in tax laws or tax rulings, or the examination of our tax positions;

•levels of insurance coverage against claims; and

•our dependence on certain key providers.

Additional information regarding risks and uncertainties and other factors that could cause actual results to differ materially from those contemplated in forward-looking statements is included from time to time in our filings with the SEC, including the Company’s current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K, including the latest annual report filed with the SEC on March 1, 2023 (“2022 Form 10-K”) (including under the headings “Forward Looking Statements” and “Risk Factors”). Forward-looking statements speak only as of the date they are made and, except for our ongoing obligations under the U.S. federal securities laws, we undertake no and expressly disclaim any

obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.

This Quarterly Report on Form 10-Q may contain references to industry market data and certain industry forecasts. Industry market data and industry forecasts are obtained from publicly available information and industry publications. Industry publications generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of that information is not guaranteed. Although we believe industry information to be accurate, it is not independently verified by us and we do not make any representation as to the accuracy of that information. In general, we believe there is less publicly available information concerning international social gaming industries than the same industries in the U.S. Some data is also based on our good faith estimates, which are derived from our review of internal surveys or data, as well as the independent sources referenced above. Assumptions and estimates of our and our industry's future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described under “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q and Part I, Item 1A “Risk Factors” in our 2022 Form 10-K. These and other factors could cause future performance to differ materially from our assumptions and estimates.

Due to rounding, certain numbers presented herein may not precisely recalculate.

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (unaudited)

SCIPLAY CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited, in millions, except per share amounts)



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Revenue	$	189.9	$	160.1	$	376.3	$	318.1
Operating expenses:
Cost of revenue(1)	58.2		47.9		115.9		96.1
Sales and marketing(1)	42.9		46.6		89.8		86.6
General and administrative(1)	24.1		14.7		46.2		31.4
Research and development(1)	12.5		11.3		25.2		22.8
Depreciation, amortization and impairments	11.2		5.5		17.1		10.2
Restructuring and other	1.8		1.1		3.2		3.3
Operating income	39.2		33.0		78.9		67.7
Other income (expense), net	3.8		—		9.8		(0.5)
Net income before income taxes	43.0		33.0		88.7		67.2
Income tax expense	1.6		0.7		5.5		2.9
Net income	41.4		32.3		83.2		64.3
Less: Net income attributable to the noncontrolling interest	35.8		26.6		72.1		54.2
Net income attributable to SciPlay	$	5.6	$	5.7	$	11.1	$	10.1

Basic and diluted net income attributable to SciPlay per share:
Basic	$	0.26	$	0.23	$	0.51	$	0.41
Diluted	$	0.25	$	0.23	$	0.49	$	0.41

Weighted average number of shares of Class A common stock used in per share calculation:
Basic shares	21.4		24.6		21.7		24.6
Diluted shares	22.3		24.8		22.8		24.8
(1) Excludes depreciation, amortization and impairments.

See accompanying notes to condensed consolidated financial statements.

SCIPLAY CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited, in millions)



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Net income	$	41.4	$	32.3	$	83.2	$	64.3
Other comprehensive loss:
Foreign currency translation loss, net of tax	(0.7)		(4.3)		(2.2)		(5.9)
Total comprehensive income	40.7		28.0		81.0		58.4
Less: Comprehensive income attributable to the noncontrolling interest	35.2		23.1		70.3		49.4
Comprehensive income attributable to SciPlay	$	5.5	$	4.9	$	10.7	$	9.0


















See accompanying notes to condensed consolidated financial statements.

SCIPLAY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in millions, except par value)



	As of
	June 30, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	394.9	$	330.1
Accounts receivable, net	63.7		51.0
Prepaid expenses and other current assets	5.6		8.0
Total current assets	464.2		389.1
Property and equipment, net	4.3		3.0
Operating lease right-of-use assets	3.7		4.8
Goodwill	215.6		217.6
Intangible assets and software, net	72.1		74.8
Deferred income taxes	72.3		74.5
Other assets	1.9		1.9
Total assets	$	834.1	$	765.7
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	19.2	$	18.4
Accrued liabilities	41.0		35.2
Due to affiliate	3.2		3.8
Total current liabilities	63.4		57.4

Operating lease liabilities	1.9		3.1
Liabilities under TRA	60.2		60.2
Other long-term liabilities	25.1		29.4
Total liabilities	150.6		150.1
Commitments and contingencies (see Note 8)
Stockholders’ equity:
Class A common stock, par value $0.001 per share, 625.0 shares authorized, 25.3 and 24.9 shares issued, 21.2 and 22.1 shares outstanding as of June 30, 2023 and December 31, 2022, respectively	—		—
Class B common stock, par value $0.001 per share, 130.0 shares authorized, 103.5 shares issued and outstanding as of June 30, 2023 and December 31, 2022	0.1		0.1
Additional paid-in capital	91.4		72.0
Retained earnings	85.7		74.6
Treasury stock, at cost, 4.1 and 2.7 shares, respectively	(60.2)		(37.1)
Accumulated other comprehensive loss	(0.8)		(0.4)
Total SciPlay stockholders’ equity	116.2		109.2
Noncontrolling interest	567.3		506.4
Total stockholders’ equity	683.5		615.6
Total liabilities and stockholders’ equity	$	834.1	$	765.7

See accompanying notes to condensed consolidated financial statements.

SCIPLAY CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited, in millions)



	Class A common stock			Class B common stock			Additional paid-in capital		Retained earnings		Treasury stock		Accumulated other comprehensive income (loss)		Noncontrolling interest		Total
	Shares	Amount		Shares	Amount
December 31, 2022	22.1	$	—	103.5	$	0.1	$	72.0	$	74.6	$	(37.1)	$	(0.4)	$	506.4	$	615.6
Net income	—	—		—	—		—		5.5		—		—		36.3		41.8
Stock-based compensation	—	—		—	—		1.2		—		—		—		3.0		4.2
Settlement of liability awards	—	—		—	—		0.8		—		—		—		3.6		4.4
Vesting of RSUs, net of tax withholdings and other	0.3	—		—	—		(0.2)		—		—		—		(0.7)		(0.9)
Distributions to Parent and affiliates, net	—	—		—	—		—		—		—		—		(0.1)		(0.1)
Repurchases of stock	(0.5)	—		—	—		6.8		—		(8.2)		—		(6.8)		(8.2)
Economic rebalancing(1)	—	—		—	—		(0.1)		—		—		—		0.1		—
Currency translation	—	—		—	—		—		—		—		(0.3)		(1.2)		(1.5)
March 31, 2023	21.9	$	—	103.5	$	0.1	$	80.5	$	80.1	$	(45.3)	$	(0.7)	$	540.6	$	655.3
Net income	—	—		—	—		—		5.6		—		—		35.8		41.4
Stock-based compensation	—	—		—	—		0.7		—		—		—		2.2		2.9
Vesting of RSUs, net of tax withholdings and other	0.2	—		—	—		—		—		—		—		(0.1)		(0.1)
Distributions to Parent and affiliates, net	—	—		—	—		—		—		—		—		(0.4)		(0.4)
Repurchases of stock	(0.9)	—		—	—		12.3		—		(14.9)		—		(12.3)		(14.9)
Economic rebalancing(1)	—	—		—	—		(2.1)		—		—		—		2.1		—
Currency translation	—	—		—	—		—		—		—		(0.1)		(0.6)		(0.7)
June 30, 2023	21.2	$	—	103.5	$	0.1	$	91.4	$	85.7	$	(60.2)	$	(0.8)	$	567.3	$	683.5











	Class A common stock			Class B common stock			Additional paid-in capital		Retained earnings		Treasury stock		Accumulated other comprehensive income (loss)		Noncontrolling interest		Total
	Shares	Amount		Shares	Amount
December 31, 2021	24.5	$	—	103.5	$	0.1	$	45.2	$	52.2	$	—	$	1.1	$	426.4	$	525.0
Net income	—	—		—	—		—		4.4		—		—		27.6		32.0
Stock-based compensation	—	—		—	—		0.4		—		—		—		1.5		1.9
Vesting of RSUs, net of tax withholdings and other	0.2	—		—	—		—		—		—		—		(0.1)		(0.1)
Distributions to Parent and affiliates, net	—	—		—	—		—		—		—		—		(0.2)		(0.2)
Currency translation	—	—		—	—		—		—		—		(0.3)		(1.3)		(1.6)
March 31, 2022	24.7	$	—	103.5	$	0.1	$	45.6	$	56.6	$	—	$	0.8	$	453.9	$	557.0
Net income	—	—		—	—		—		5.7		—		—		26.6		32.3
Stock-based compensation	—	—		—	—		0.2		—		—		—		1.2		1.4

Distributions to Parent and affiliates, net	—	—		—	—		—		—		—		—		(0.1)		(0.1)
Repurchases of stock	(0.5)	—		—	—		5.7		—		(7.1)		—		(5.7)		(7.1)
Economic rebalancing(1)	—	—		—	—		(1.3)		—		—		—		1.3		—
Currency translation	—	—		—	—		—		—		—		(0.8)		(3.5)		(4.3)
June 30, 2022	24.2	$	—	103.5	$	0.1	$	50.2	$	62.3	$	(7.1)	$	—	$	473.7	$	579.2







(1) SciPlay Parent LLC equity attributable to SciPlay Corporation and the noncontrolling interest holders is rebalanced, as needed, to reflect changes in LLC Unit ownership.

See accompanying notes to condensed consolidated financial statements.

SCIPLAY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in millions)



	Six Months Ended
	June 30,
	2023		2022
Net cash provided by operating activities	$	101.9	$	74.2
Cash flows from investing activities:
Capital expenditures	(10.4)		(5.1)
Acquisition of business, net of cash acquired	—		(106.2)

Net cash used in investing activities	(10.4)		(111.3)
Cash flows from financing activities:

Payments on license obligations	(1.8)		(1.9)
Payments of contingent consideration	—		(1.0)
Purchases of treasury stock	(23.0)		(7.1)
Distributions to Light & Wonder and affiliates, net	(0.5)		(0.3)
Taxes paid related to net share settlement of equity awards and other	(1.1)		(0.4)

Net cash used in financing activities	(26.4)		(10.7)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(0.3)		(0.5)
Increase (decrease) in cash, cash equivalents and restricted cash	64.8		(48.3)
Cash, cash equivalents and restricted cash, beginning of period	330.1		364.4
Cash, cash equivalents and restricted cash, end of period	$	394.9	$	316.1


Supplemental cash flow information:
Cash paid for income taxes	$	4.7	$	2.0


Supplemental non-cash transactions:
Non-cash additions to intangible assets related to license agreements	$	5.6	$	1.9

See accompanying notes to condensed consolidated financial statements.

SCIPLAY CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited, amounts in USD, table amounts in millions, except per share amounts)

(1) Description of the Business and Summary of Significant Accounting Policies

Background and Nature of Operations

SciPlay Corporation was formed as a Nevada corporation on November 30, 2018 as a subsidiary of Light & Wonder, Inc. (“Light & Wonder”, “L&W” or “Parent”), for the purposes of completing a public offering and related transactions in order to carry on the business of SciPlay Parent LLC and its subsidiaries (collectively referred to as “SciPlay”, the “Company”, “we”, “us” and “our”). As the managing member of SciPlay Parent LLC, SciPlay operates and controls all of the business affairs of SciPlay Parent LLC and its subsidiaries.

We develop, market and operate a portfolio of games played on various mobile and web platforms, including Jackpot Party® Casino, Quick Hit® Slots, Gold Fish® Casino, Hot Shot Casino®, Bingo Showdown®, MONOPOLY® Slots, 88 Fortunes® Slots, Solitaire Pets™ Adventure and Backgammon Live as well as other games in the hyper-casual space, such as Candy Challenge 3D™, Boss Life™ and Deep Clean Inc.™. Our games are available in various formats. We have one operating segment with one business activity, developing and monetizing games.

On August 8, 2023, Light & Wonder and SciPlay entered into a definitive agreement whereby Light & Wonder will acquire the remaining equity interest in SciPlay not already owned by Light & Wonder (approximately 17%) pursuant to a merger in which SciPlay’s shareholders will receive $22.95 for each share of SciPlay Class A common stock they own (subject to certain exceptions set forth in the Merger Agreement, dated as of August 8, 2023, by and among Light & Wonder, Bern Merger Sub, Inc. and SciPlay (the “Merger Agreement”)) in an all-cash transaction (the “Merger”). Following the execution of the Merger Agreement, the wholly owned subsidiary of Light & Wonder holding approximately 98% of the voting power of the outstanding shares of SciPlay common stock delivered to SciPlay a written consent approving the Merger Agreement and the Merger. No further approval of the stockholders of SciPlay is required to approve the Merger Agreement and the Merger. The transaction is expected to close during the fourth quarter of 2023, subject to customary closing conditions. As a result of the Merger, SciPlay will cease to be publicly traded and will become a wholly owned subsidiary of Light & Wonder.

The Merger Agreement contains certain termination rights for SciPlay and Light & Wonder, including the right of either party to terminate the Merger Agreement if the SciPlay Acquisition is not consummated on or before February 8, 2024.

Basis of Presentation

The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). All intercompany balances and transactions have been eliminated in consolidation.

In the opinion of management, we have made all adjustments necessary to present fairly our consolidated statements of income, consolidated statements of comprehensive income, condensed consolidated balance sheets, consolidated statements of changes in stockholders’ equity and condensed consolidated statements of cash flows for the periods presented. Such adjustments are of a normal, recurring nature. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related Notes included in our 2022 Form 10-K. Interim results of operations are not necessarily indicative of results of operations to be expected for a full year.

Variable Interest Entities (“VIE”) and Consolidation

Our sole material asset is our member’s interest in SciPlay Parent LLC. In accordance with the Operating Agreement of SciPlay Parent LLC (the “Operating Agreement”), we have all management powers over the business and affairs of SciPlay Parent LLC and to conduct, direct and exercise full control over the activities of SciPlay Parent LLC. Class A common stock does not hold majority voting rights but holds 100% of the economic interest in the Company, which results in SciPlay Parent LLC being considered a VIE. Due to our power to control the activities most directly affecting the results of SciPlay Parent LLC, we are considered the primary beneficiary of the VIE. Accordingly, we consolidate the financial results of SciPlay Parent LLC and its subsidiaries.

Significant Accounting Policies

There have been no changes to our significant accounting policies described within the Notes of our 2022 Form 10-K.

New Accounting Guidance

There have been no recent accounting pronouncements or changes in accounting pronouncements since those described within the Notes of our 2022 10-K that are expected to have a material impact on our consolidated financial statements.

Revenue Recognition

We generate revenue from the sale of coins, chips and cards, which players can use to play casino-style slot games, table games and bingo games (i.e., spin in the case of slot games, bet in the case of table games and use bingo cards in the case of bingo games). We distribute our games through various global social web and mobile platforms such as Facebook, Apple, Google, Amazon and Microsoft. The games we offer are internally branded franchises, original content and third-party branded games. We also generate revenue from providing advertising platforms with access to our game software platform, which facilitates the placement of advertising inventory.

Disaggregation of Revenue

We believe disaggregation of our revenue on the basis of platform type and geographical location of our players is appropriate because the nature of revenue and the number of players generating revenue could vary on such basis, which represent different economic risk profiles.

The following table presents our revenue disaggregated by platform type:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Mobile in-app purchases	$	169.6	$	137.7	$	335.3	$	277.4
Web in-app purchases and other(1)	20.3		22.4		41.0		40.7

Total revenue	$	189.9	$	160.1	$	376.3	$	318.1
(1) Other primarily represents advertising revenue, which was not material in the periods presented.

The following table presents our revenue disaggregated based on the geographical location of our players:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
North America(1)	$	175.9	$	145.7	$	348.8	$	290.6
International	14.0		14.4		27.5		27.5
Total revenue	$	189.9	$	160.1	$	376.3	$	318.1
(1) North America revenue includes revenue derived from the U.S., Canada and Mexico.

Contract Assets, Contract Liabilities and Other Disclosures

We receive customer payments based on the payment terms established in our contracts. Payment for the purchase of coins, chips and cards is made at purchase, and such payments are non-refundable in accordance with our standard terms of service. Such payments are initially recorded as a contract liability, and revenue is subsequently recognized as we satisfy our performance obligations.

The following table summarizes our opening and closing balances in contract assets, contract liabilities and accounts receivable:


	Accounts Receivable		Contract Assets(1)		Contract Liabilities(2)
Beginning of period balance	$	51.0	$	0.1	$	3.0
Balance as of June 30, 2023	63.7		0.1		2.0
(1) Contract assets are included within Prepaid expenses and other current assets in our consolidated balance sheets. (2) Contract liabilities are included within Accrued liabilities in our consolidated balance sheets.

During the six months ended June 30, 2023 and 2022, we recognized $1.2 million and $0.4 million, respectively, of revenue that was included in the opening contract liability balance. Substantially all of our unsatisfied performance obligations relate to contracts with an original expected length of one year or less.

Concentration of Credit Risk

Our revenue and accounts receivable are generated via certain platform providers, which subject us to a concentration of credit risk. The following tables summarize the percentage of revenues and accounts receivable generated via our platform providers in excess of 10% of our total revenues and total accounts receivable:


	Revenue Concentration
	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Apple	50.2%	46.5%	49.5%	47.2%
Google	33.3%	34.3%	33.8%	34.6%
Facebook	11.1%	11.8%	11.2%	12.0%


	Accounts Receivable Concentration as of
	June 30, 2023	December 31, 2022
Apple	63.5%	48.3%
Google	23.0%	30.5%
Facebook	7.4%	10.7%

Alictus Acquisition

On March 1, 2022, we acquired 80% of all issued and outstanding share capital of privately-held Alictus Yazilim Anonim Şirketi (“Alictus”), a Turkey-based hyper-casual gaming studio. The remaining 20% was to be acquired ratably for potential additional consideration payable annually based upon the achievement of specified revenue and earnings targets by Alictus during each of the five years following the acquisition date. The specified financial targets for the first year were not met, resulting in extinguishment of $2.9 million in redeemable non-controlling interest liability, which was recorded within the other income (expense), net line item in our consolidated statement of income during the first quarter of 2023. The remaining payout ranges from a minimum of $0.0 million to a maximum payout of $200.0 million.

We incurred acquisition-related costs, which were recorded in Restructuring and other, of $1.2 million for the six months ended June 30, 2022. The results of operations from Alictus have been included in our consolidated statement of income since the date of acquisition and are not significant to our operations.

(2) Goodwill, Intangible Assets and Software, net

The table below reconciles the changes in the carrying value of goodwill for the period from December 31, 2022 to June 30, 2023.


	Total
Balance as of December 31, 2022	$	217.6

Foreign currency adjustments	(2.0)
Balance as of June 30, 2023	$	215.6

The following table presents certain information regarding our intangible assets and software:


	Gross Carrying Amount		Accumulated Amortization		Net Balance
Balance as of June 30, 2023
Intellectual property	$	67.8	$	(43.1)	$	24.7
Customer relationships	29.7		(25.1)		4.6
Software	43.2		(25.2)		18.0
Licenses	33.2		(12.9)		20.3
Brand names and other	9.9		(5.4)		4.5
Total intangible assets and software	$	183.8	$	(111.7)	$	72.1

Balance as of December 31, 2022
Intellectual property	$	75.2	$	(43.2)	$	32.0
Customer relationships	29.9		(24.1)		5.8
Software	37.6		(22.6)		15.0
Licenses	25.9		(9.4)		16.5
Brand names and other	10.6		(5.1)		5.5
Total intangible assets and software	$	179.2	$	(104.4)	$	74.8

The following reflects amortization expense related to intangible assets and software included within Depreciation, amortization and impairments:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Amortization expense(1)	$	10.6	$	5.0	$	16.1	$	9.3
(1) Amortization expense for the three and six months ended June 30, 2023 includes intangible asset and software impairments of $4.8 million.

During the second quarter of 2023, we initiated the restructuring of one of our foreign studios, which resulted in $4.1 million and $0.7 million non-cash impairment charges of related intangible assets and software, respectively.

(3) Leases

Our operating leases primarily consist of real estate office leases, and total expenses related to these leases were $0.7 million and $1.4 million for the three and six months ended June 30, 2023, respectively, and $0.7 million and $1.4 million for the three and six months ended June 30, 2022, respectively. We do not have any material finance leases. Our total variable and short-term lease payments and operating lease expenses were immaterial for all periods presented.

Supplemental balance sheet and cash flow information related to operating leases is as follows:


	As of
	June 30, 2023			December 31, 2022
Operating lease right-of-use assets	$	3.7		$	4.8

Accrued liabilities	2.3			2.3
Operating lease liabilities	1.9			3.1
Total operating lease liabilities	$	4.2		$	5.4

Weighted average remaining lease term, years	1.8			2.3
Weighted average discount rate	4.9		%	4.9		%

	Six Months Ended June 30,
	2023			2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	1.2		$	1.3

Lease liability maturities:


	Operating Leases
Remainder of 2023	$	1.2
2024	2.4
2025	0.7



Less: imputed interest	(0.1)
Total	$	4.2

As of June 30, 2023, we did not have material additional operating leases that have not yet commenced.

(4) Income Taxes

We hold an economic interest of 17.0% in SciPlay Parent LLC. The 83.0% economic interest that we do not own represents a noncontrolling interest for financial reporting purposes. SciPlay Parent LLC is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As such, SciPlay Parent LLC is not subject to income tax in most jurisdictions, and SciPlay Parent LLC’s members, of which we are one, are liable for income taxes based on their allocable share of SciPlay Parent LLC’s taxable income. The effective income tax rates for the three and six months ended June 30, 2023 were 3.7% and 6.2%, respectively, and 2.1% and 4.3% for the three and six months ended June 30, 2022, respectively. The effective income tax rates were determined using an estimated annual effective tax rate after considering any discrete items for such periods. Our effective tax rate differs from the U.S. statutory rate of 21.0% primarily because we generally do not record income taxes for the noncontrolling interest portion of U.S. pre-tax income.

TRA

During the six months ended June 30, 2023 and 2022, there were no payments made to Light & Wonder pursuant to the TRA. As of both June 30, 2023 and December 31, 2022, the total TRA liability was $64.3 million, of which $4.1 million was included in Accrued liabilities for each of the periods.

(5) Related Party Transactions

The following is the summary of expenses paid to Light & Wonder and settled in cash:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022		Financial Statement Line Item
Royalties to Light & Wonder for third-party IP	$	—	$	0.1	$	0.2	$	0.4	Cost of revenue
Parent services	1.5		1.6		3.1		3.0		General and administrative

Distributions to Parent and affiliates, net(1)	0.4		0.1		0.5		0.3		Noncontrolling interest

(1) Under the terms of the Operating Agreement, SciPlay Corporation relies on distributions from SciPlay Parent LLC to pay its obligations under the TRA and any other tax obligations. All distributions must be on a pari passu basis, thus initiating a pro-rata distribution to Parent and affiliates.

The following is the summary of balances due to affiliates:


	June 30, 2023		December 31, 2022
Royalties to Light & Wonder for third-party IP	$	—	$	0.2
Parent services	0.8		0.4
Reimbursable expenses to (from) Light & Wonder and its subsidiaries	2.4		3.2
	$	3.2	$	3.8

Parent Equity Awards

See Note 6 for disclosures related to Parent’s equity awards.

IP Royalties

As more fully described in Note 10 of our 2022 Form 10-K, we entered into the IP License Agreement under which we obtained an exclusive (subject to certain limited exceptions), perpetual, non-royalty-bearing license from LNW Gaming, Inc. (a subsidiary of the Parent, formerly known as Bally Gaming, Inc.) (“LNW Gaming”) for intellectual property created or acquired by LNW Gaming or its affiliates on or before the third anniversary of the date of the IP License Agreement. Under the terms of the IP License Agreement, some rights would have changed from exclusive to non-exclusive for newly created intellectual property and other rights would not have extended to newly created intellectual property as of May 6, 2022. On May 6, 2022, we entered into an amendment which extended our rights under the IP License Agreement through July 7, 2022. We are in the process of negotiating new terms with the Parent.

(6) Stockholders’ Equity and Noncontrolling Interest

Noncontrolling Interest

We are a holding company, and our sole material assets are SciPlay Parent LLC Interests (“LLC Interest”) that we purchased from SciPlay Parent LLC and LNW Holding Company I, LLC, an indirect wholly owned subsidiary of Parent, formerly known as SG Holding Company I, LLC (“the L&W Member”), representing an aggregate 17.0% economic interest in SciPlay Parent LLC. The remaining 83.0% economic interest in SciPlay Parent LLC is owned indirectly by Light & Wonder, through the ownership of LLC Interests by the L&W Member.

Stock-Based Compensation

The following table summarizes stock-based compensation expense that is included in General and administrative expenses:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022


SciPlay awards(1)	$	6.9	$	1.6	$	12.8	$	4.1
Parent awards	0.3		(0.1)		0.9		—
Total	$	7.2	$	1.5	$	13.7	$	4.1

(1)Includes $4.3 million and $6.6 million of stock-based compensation classified as liability awards for the three and six months ended June 30, 2023 and $0.1 million and $0.7 million for the three and six months ended June 30, 2022, respectively.

As of June 30, 2023, we had $32.0 million in unrecognized stock-based compensation expense that is expected to be recognized over a weighted-average expected vesting period of 1.2 years, of which $15.7 million relates to performance-based restricted stock units.

Share Repurchase Program

On May 9, 2022, our Board of Directors approved a share repurchase program under which the Company is authorized to repurchase, from time to time through May 9, 2024, up to an aggregate amount of $60.0 million of our outstanding Class A common stock. Repurchases may be made at the discretion of the Board of Directors through one or more open market transactions, privately negotiated transactions, including block trades, accelerated share repurchases, issuer tender offers or other derivative contracts or instruments, “10b5-1” plan, or other financial arrangements or other arrangements. Repurchases are funded from cash flows generated by SciPlay Parent LLC and its operating subsidiaries. Immediately prior to the execution of such repurchases, a redemption is effected of a corresponding number of SciPlay Parent LLC partnership units held by the Company at an aggregate redemption price equal to the aggregate purchase price (plus any expenses related thereto) of the shares of Class A common stock being repurchased by the Company. During the six months ended June 30, 2023, we repurchased 1.4 million shares of Class A common stock under the program at an aggregate cost of $23.1 million (including excise tax). On May 3, 2023, our Board of Directors approved a new share repurchase program under which the Company is authorized to repurchase, from time to time through May 3, 2024, up to an aggregate amount of $60.0 million of our outstanding Class A common stock. No share repurchases have been made under the new program as of June 30, 2023.

(7) Earnings per Share

The table below sets forth a calculation of basic earnings per share ("EPS") based on Net income attributable to SciPlay divided by the basic weighted average number of Class A common stock outstanding during the period. Diluted EPS of Class A common stock is computed by dividing Net income attributable to SciPlay by the weighted average number of shares of Class A common stock outstanding adjusted to give effect to all potentially dilutive securities, using the treasury stock method. No material number of restricted stock units was excluded from the calculation of diluted weighted-average common shares outstanding for the three- and six-month periods ended June 30, 2023 and 2022.

We excluded Class B common stock from the computation of basic and diluted EPS, as holders of Class B common stock do not have an economic interest in us, and, therefore, a separate presentation of EPS of Class B common stock under the two-class method has not been presented.


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Numerator:
Net income	$	41.4	$	32.3	$	83.2	$	64.3
Less: net income attributable to the noncontrolling interest	35.8		26.6		72.1		54.2
Net income attributable to SciPlay	$	5.6	$	5.7	$	11.1	$	10.1
Denominator:
Weighted average shares of Class A common stock for basic EPS	21.4		24.6		21.7		24.6
Effect of dilutive securities:
Stock-based compensation grants	0.9		0.2		1.1		0.2
Weighted average shares of Class A common stock for diluted EPS	22.3		24.8		22.8		24.8
Basic and diluted net income attributable to SciPlay per share:
Basic	$	0.26	$	0.23	$	0.51	$	0.41
Diluted	$	0.25	$	0.23	$	0.49	$	0.41

(8) Litigation

From time to time, we are subject to various claims, complaints and legal actions, including notifications of alleged infringement of patent or other intellectual property rights, in the normal course of business.

Boorn Matter

On September 15, 2022, plaintiff Hannelore Boorn filed a putative class action against Light & Wonder, Inc., SciPlay Corporation, and Appchi Media Ltd. in the Fayette Circuit Court of the Commonwealth of Kentucky. In her complaint, plaintiff seeks to represent a putative class of all persons in Kentucky who, within the past five years, purchased and allegedly lost $5.00 or more worth of chips, in a 24-hour period, playing SciPlay's online social casino games. The complaint asserts claims for alleged violations of Kentucky’s “recovery of gambling losses” statute and for unjust enrichment, and seeks unspecified money damages, the award of reasonable attorneys' fees and costs, pre- and post-judgment interest, and injunctive and/or other declaratory relief. On October 18, 2022, defendants removed the action to the United States District Court for the Eastern District of Kentucky. On October 26, 2022, the plaintiff filed a notice voluntarily dismissing the lawsuit without prejudice. On October 27, 2022, the district court entered an order dismissing the lawsuit. On November 17, 2022, the plaintiff filed an arbitration demand against defendants before the American Arbitration Association, pursuant to which she seeks declaratory judgments that (1) SciPlay’s online social casino games constitute gambling under Kentucky law, and (2) SciPlay’s terms of service are void under Kentucky law. On January 12, 2023, the respondents filed their answering statement to plaintiff’s arbitration demand. We are currently unable to determine the likelihood of an outcome or estimate a range of reasonably possible losses, if any. We believe that the claims in the arbitration demand are without merit, and intend to vigorously defend against them.

Allah Beautiful Matter

On December 19, 2022, claimant Prince Imanifest Allah Beautiful filed an arbitration demand against respondent SciPlay Corporation before the American Arbitration Association. The complaint asserts claims for alleged violations of New Jersey’s anti-gambling statutes and seeks unspecified money damages, including recovery of monies allegedly lost by New Jersey players of SciPlay’s online social casino games other than the claimant. On March 7, 2023, the respondent filed its answering statement to claimant’s arbitration demand. We are currently unable to determine the likelihood of an outcome or estimate a range of reasonably possible losses, if any. We believe that the claims in the arbitration demand are without merit, and intend to vigorously defend against them.

Sprinkle Matter

On December 12, 2022, claimant Matthew Sprinkle filed an arbitration demand against respondent SciPlay Corporation before the American Arbitration Association. The complaint asserts claims for alleged violations of Ohio’s anti-

gambling statutes and seeks unspecified money damages, including recovery of monies allegedly lost by Ohio players of SciPlay’s online social casino games other than the claimant. On March 7, 2023, the respondent filed its answering statement to claimant’s arbitration demand. We are currently unable to determine the likelihood of an outcome or estimate a range of reasonably possible losses, if any. We believe that the claims in the arbitration demand are without merit, and intend to vigorously defend against them.

Sornberger Matter

On March 8, 2023, plaintiff Andrea Sornberger filed a complaint against SciPlay Corporation and SciPlay Games LLC in the Circuit Court of the Franklin County, Alabama. The complaint asserts claims for alleged violations of Alabama anti-gambling statutes and seeks unspecified money damages, including recovery of monies allegedly lost by Alabama players of SciPlay’s online social casino games other than the plaintiff, the award of interests and costs, and injunctive and other relief. On April 12, 2023, defendants removed the action to the United States District Court for the Northern District of Alabama. We are currently unable to determine the likelihood of an outcome or estimate a range of reasonably possible losses, if any. We believe that the claims in the lawsuit are without merit and intend to vigorously defend against them.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion is intended to enhance the reader’s understanding of our operations and current business environment from management’s perspective and should be read in conjunction with the description of our business included under Part I, Item 1 “Condensed Consolidated Financial Statements” and Part II, Item 1A “Risk Factors” in this Quarterly Report on Form 10-Q and under Part I, Item 1 “Business”, Item 1A “Risk Factors” and Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2022 Form 10-K. The terms “we” and “our” as used herein refer to SciPlay and its consolidated subsidiaries.

This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and should be read in conjunction with the disclosures and information contained and referenced under “Forward-Looking Statements” and “Risk Factors” included in this Quarterly Report on Form 10-Q and “Risk Factors” included in our 2022 Form 10-K.

You can access our filings with the SEC through the SEC website at https://www.sec.gov or through our website, and we strongly encourage you to do so. We routinely post information that may be important to investors on our website at https://www.sciplay.com/investors/, and we use this website address as a means of disclosing material information to the public in a broad, non-exclusionary manner for purposes of the SEC’s Regulation Fair Disclosure (Reg FD). The contents of our website are not incorporated by reference in this Form 10-Q and shall not be deemed “filed” under the Securities Exchange Act of 1934, as amended.

BUSINESS OVERVIEW

We are a leading developer and publisher of digital games on mobile and web platforms. We operate primarily in the social gaming market, which is characterized by gameplay online or on mobile devices that is social, competitive and self-directed in pace and session length. We also operate in the hyper-casual space, which is characterized by simpler core loops and more repetitive gameplay than casual games. We generate a substantial portion of our revenue from in-app purchases in the form of coins, chips and cards, which players can use to play slot games, table games or bingo games. Players who install our social games typically receive free coins, chips or cards upon the initial launch of the game and additional free coins, chips or cards at specific time intervals. Players may exhaust the coins, chips or cards that they receive for free and may choose to purchase additional coins, chips or cards in order to extend their time of game play. Once obtained, coins, chips and cards (either free or purchased) cannot be redeemed for cash nor exchanged for anything other than game play within our apps. We generate additional revenue through advertising arrangements in our hyper-casual games. Players who install our hyper-casual games receive free, unlimited gameplay that requires viewing of periodic in-game advertisements.

We currently offer a variety of social casino games, including Jackpot Party® Casino, Gold Fish® Casino, Quick Hit® Slots, 88 Fortunes® Slots, MONOPOLY® Slots and Hot Shot Casino®. We continue to pursue our strategy of expanding into the casual games market. Current casual game titles include Bingo Showdown®, Solitaire Pets™ Adventure and Backgammon Live as well as other titles in the hyper-casual space, including games such as Candy Challenge 3D™, Boss Life™ and Deep Clean Inc. 3D™. During the three months ended June 30, 2023, we continued development and testing of various new games. Our social casino games typically include slots-style game play and occasionally include table games-style game play, while our casual games blend solitaire-style or bingo game play with adventure game features and our hyper-casual games include many simple core loop mechanics. All of our games are offered and played across multiple platforms, including Apple, Google, Facebook, Amazon and Microsoft. In addition to our internally created game content, our content library includes recognizable game content from Light & Wonder. This content allows players who like playing land-based game content to enjoy some of those same titles in our free-to-play games. We have access to Light & Wonder’s library of more than 1,500 iconic casino titles, including titles and content from third-party licensed brands such as MONOPOLY™ and JAMES BOND™(1). We believe our access to this content, coupled with our years of experience developing in-house content, uniquely positions us to create compelling digital games.

(1) The MONOPOLY name and logo, the distinctive design of the game board, the four corner squares, the MR. MONOPOLY name and character, as well as each of the distinctive elements of the board, cards and the playing pieces are trademarks of Hasbro for its property trading game and game equipment and are used with permission. © 1935, 2023 Hasbro. All Rights Reserved. Licensed by Hasbro.

On May 9, 2022 our Board of Directors approved a share repurchase program under which the Company is authorized to repurchase, from time to time through May 9, 2024, up to an aggregate amount of $60.0 million of our outstanding Class A common stock (see Note 6). During the three months ended June 30, 2023, we returned $14.9 million (including excise tax) of capital to shareholders through the repurchase of 0.9 million shares of Class A common stock. Since the initiation of the program on May 9, 2022 and through May 9, 2023, we returned $60.0 million of capital to shareholders through the repurchase of approximately 4.1 million shares of Class A common stock, completing the initial share repurchase program authorization. On May 3, 2023, our Board of Directors approved a new share repurchase program under which the Company is authorized to repurchase, from time to time through May 3, 2024, up to an aggregate amount of $60.0 million of our outstanding Class A common stock. No share repurchases have been made under the new program as of June 30, 2023.

Following the execution of the Merger Agreement, the wholly owned subsidiary of Light & Wonder holding approximately 98% of the voting power of the outstanding shares of SciPlay common stock delivered to SciPlay a written consent approving the Merger Agreement and the Merger. No further approval of the stockholders of SciPlay is required to approve the Merger Agreement and the Merger. The transaction is expected to close during the fourth quarter of 2023, subject to customary closing conditions. As a result of the Merger, SciPlay will cease to be publicly-traded and will become a wholly owned subsidiary of Light & Wonder.

RESULTS OF OPERATIONS

Summary of Results of Operations


	Three Months Ended											Six Months Ended
	June 30,						Variance					June 30,						Variance
($ in millions)	2023			2022			2023 vs. 2022					2023			2022			2023 vs. 2022
Revenue	$	189.9		$	160.1		$	29.8		19	%	$	376.3		$	318.1		$	58.2		18	%
Operating expenses	150.7			127.1			23.6			19	%	297.4			250.4			47.0			19	%
Operating income	39.2			33.0			6.2			19	%	78.9			67.7			11.2			17	%
Net income	41.4			32.3			9.1			28	%	83.2			64.3			18.9			29	%
Net income attributable to SciPlay	5.6			5.7			(0.1)			(2)	%	11.1			10.1			1.0			10	%
AEBITDA	$	59.4		$	41.1		$	18.3		45	%	$	112.9		$	85.3		$	27.6		32	%
Net income margin	21.8		%	20.2		%	1.6		pp	nm		22.1		%	20.2		%	1.9		pp	nm
AEBITDA margin	31.3		%	25.7		%	5.6		pp	nm		30.0		%	26.8		%	3.2		pp	nm
pp = percentage points. nm = not meaningful.

Non-GAAP Financial Measures

Adjusted EBITDA, or AEBITDA, as used herein, is a non-GAAP financial measure that is presented as supplemental disclosure and is reconciled to net income attributable to SciPlay as the most directly comparable GAAP measure as set forth in the below table. We define AEBITDA to include net income attributable to SciPlay before: (1) net income attributable to noncontrolling interest; (2) interest expense; (3) income tax expense; (4) depreciation, amortization and impairments; (5) restructuring and other, which includes charges or expenses attributable to: (a) employee severance; (b) management changes; (c) restructuring and integration; (d) M&A and other, which includes: (i) M&A transaction costs; (ii) purchase accounting adjustments (including contingent acquisition consideration); (iii) unusual items (including legal settlements related to major litigation); and (iv) other non-cash items; and (e) cost-savings initiatives; (6) stock-based compensation; (7) loss or gain on debt financing transactions; and (8) other expense or income including foreign currency gains and losses. We also use AEBITDA margin, a non-GAAP measure, which we calculate as AEBITDA as a percentage of revenue.

Our management uses AEBITDA and AEBITDA margin to, among other things: (i) monitor and evaluate the performance of our business operations; (ii) facilitate our management’s internal comparisons of our historical operating performance and (iii) analyze and evaluate financial and strategic planning decisions regarding future operating investments and operating budgets. In addition, our management uses AEBITDA and AEBITDA margin to facilitate management’s external comparisons of our results to the historical operating performance of other companies that may have different capital structures and debt levels.

Our management believes that AEBITDA and AEBITDA margin are useful as they provide investors with information regarding our financial condition and operating performance that is an integral part of our management’s reporting and planning processes. In particular, our management believes that AEBITDA is helpful because this non-GAAP financial measure eliminates the effects of restructuring, transaction, integration or other items that management believes have less bearing on our ongoing underlying operating performance. Management believes AEBITDA margin is useful as it provides investors with information regarding the underlying operating performance and margin generated by our business operations.

The following table reconciles Net income attributable to SciPlay to AEBITDA and AEBITDA margin:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
($ in millions, except percentages)	2023			2022			2023			2022
Net income attributable to SciPlay	$	5.6		$	5.7		$	11.1		$	10.1
Net income attributable to noncontrolling interest	35.8			26.6			72.1			54.2
Net income	41.4			32.3			83.2			64.3
Restructuring and other	1.8			1.1			3.2			3.3
Depreciation, amortization and impairments	11.2			5.5			17.1			10.2
Income tax expense	1.6			0.7			5.5			2.9
Stock-based compensation	7.2			1.5			13.7			4.1
Other (income) expense, net	(3.8)			—			(9.8)			0.5
AEBITDA	$	59.4		$	41.1		$	112.9		$	85.3
Revenue	$	189.9		$	160.1		$	376.3		$	318.1
Net income margin (Net income/Revenue)	21.8		%	20.2		%	22.1		%	20.2		%
AEBITDA margin (AEBITDA/Revenue)	31.3		%	25.7		%	30.0		%	26.8		%

Revenue, Key Performance Indicators and Other Metrics


	Three Months Ended								Six Months Ended
	June 30,				Variance				June 30,				Variance
($ in millions)	2023		2022		2023 vs. 2022				2023		2022		2023 vs. 2022
Mobile in-app purchases	$	169.6	$	137.7	$	31.9	23	%	$	335.3	$	277.4	$	57.9	21	%
Web in-app purchases and other(1)	20.3		22.4		(2.1)		(9)	%	41.0		40.7		0.3		1	%

Total revenue	$	189.9	$	160.1	$	29.8	19	%	$	376.3	$	318.1	$	58.2	18	%
(1) Other primarily represents advertising revenue, which was not material in the periods presented.

Revenue information by geography is summarized as follows:


	Three Months Ended								Six Months Ended
	June 30,				Variance				June 30,				Variance
($ in millions)	2023		2022		2023 vs. 2022				2023		2022		2023 vs. 2022
North America(1)	$	175.9	$	145.7	$	30.2	21	%	$	348.8	$	290.6	$	58.2	20	%
International	14.0		14.4		(0.4)		(3)	%	27.5		27.5		—		—	%
Total revenue	$	189.9	$	160.1	$	29.8	19	%	$	376.3	$	318.1	$	58.2	18	%
(1) North America revenue includes revenue derived from the U.S., Canada and Mexico.

Revenue

For the three months ended June 30, 2023, revenues increased as social casino payer engagement increased and average monthly revenue per paying user reached a new record high.

For the six months ended June 30, 2023, revenues increased as social casino payer engagement increased with an increase in average monthly paying users.

The following reflects our Key Performance Indicators and Other Metrics:

We manage our business by tracking several key performance indicators, each of which is tracked by our internal analytics systems and referred to in our discussion of operating results. Our key performance indicators are impacted by several factors that could cause them to fluctuate on a quarterly basis, such as platform providers’ policies, restrictions, seasonality, user connectivity and addition of new content to certain portfolios of games. Future growth in players and

engagement will depend on our ability to retain current players, attract new players, launch new games and features and expand into new markets and distribution platforms.

For a description of the definitions of our key performance indicators and other metrics and their usefulness to our investors, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2022 Form 10-K.


(in millions, except ARPDAU, AMRPPU, Average MPUs and percentages)	Three Months Ended											Six Months Ended
	June 30,						Variance					June 30,						Variance
	2023			2022			2023 vs. 2022					2023			2022			2023 vs. 2022
In-App Purchases(1):
Mobile Penetration	91%			90%			1.0		pp	nm		91		%	90		%	1.0		pp	nm
Average MAU	5.8			5.9			(0.1)			(1.7)	%	5.9			6.1			(0.2)			(3.3)	%
Average DAU	2.2			2.3			(0.1)			(4.3)	%	2.3			2.3			—			—	%
ARPDAU	$	0.93		$	0.74		$	0.19		25.7	%	$	0.91		$	0.74		$	0.17		23.0	%
Average MPUs (in thousands)	609			560			49			8.8	%	617			560			57			10.2	%
AMRPPU	$	102.04		$	90.99		$	11.05		12.1	%	$	99.74		$	91.72		$	8.02		8.7	%
Payer conversion rate	10.5		%	9.4		%	1.1		pp	nm		10.4		%	9.2		%	1.2		pp	nm




(1) The above KPIs include only in-app purchases, as advertising revenue is not material for the periods presented. pp = percentage points. nm = not meaningful.

The increase in mobile penetration percentage for the three and six months ended June 30, 2023 primarily reflects a continued trend of players migrating from web to mobile platforms to play our games.

Average MAU for the three and six months ended June 30, 2023 decreased due to the turnover in users.

ARPDAU increased with an increase in payers and higher daily average revenue per player while DAU slightly declined for the three months ended June 30, 2023.

ARPDAU increased as a function of flat average DAU coupled with an increase in payers for the six months ended June 30, 2023.

For the three and six months ended June 30, 2023, AMRPPU and average MPU increased as payer conversion improved compared to the three and six months ended June 30, 2022.

For the three and six months ended June 30, 2023, payer conversion rates continue to be elevated due to consistent payer interaction with the games by our players as a result of our focus on introducing new content, features and live events in our games.

Operating Expenses


	Three Months Ended
	June 30,				Variance				Percentage of Revenue
($ in millions)	2023		2022		2023 vs. 2022				2023		2022		2023 vs. 2022 Change

Operating expenses:
Cost of revenue(1)	$	58.2	$	47.9	$	10.3	22	%	30.6	%	29.9	%	0.7	pp
Sales and marketing(1)	42.9		46.6		(3.7)		(8)	%	22.6	%	29.1	%	(6.5)	pp
General and administrative(1)	24.1		14.7		9.4		64	%	12.7	%	9.2	%	3.5	pp
Research and development(1)	12.5		11.3		1.2		11	%	6.6	%	7.1	%	(0.5)	pp
Depreciation, amortization and impairments	11.2		5.5		5.7		104	%	5.9	%	3.4	%	2.5	pp
Restructuring and other	1.8		1.1		0.7		64	%	nm		nm		nm
Total operating expenses	$	150.7	$	127.1	$	23.6	19	%

(1) Excludes depreciation, amortization and impairments. pp = percentage points. nm = not meaningful.


	Six Months Ended
	June 30,				Variance				Percentage of Revenue
($ in millions)	2023		2022		2023 vs. 2022				2023		2022		2023 vs. 2022 Change

Operating expenses:
Cost of revenue(1)	$	115.9	$	96.1	$	19.8	21	%	30.8	%	30.2	%	0.6	pp
Sales and marketing(1)	89.8		86.6		3.2		4	%	23.9	%	27.2	%	(3.3)	pp
General and administrative(1)	46.2		31.4		14.8		47	%	12.3	%	9.9	%	2.4	pp
Research and development(1)	25.2		22.8		2.4		11	%	6.7	%	7.2	%	(0.5)	pp
Depreciation, amortization and impairments	17.1		10.2		6.9		68	%	4.5	%	3.2	%	1.3	pp
Restructuring and other	3.2		3.3		(0.1)		(3)	%	nm		nm		nm
Total operating expenses	$	297.4	$	250.4	$	47.0	19	%

(1) Excludes depreciation, amortization and impairments. pp = percentage points. nm = not meaningful.

Cost of revenue

For the three and six months ended June 30, 2023, cost of revenue increased due to higher platform fees in line with revenue growth.

Sales and marketing

For the three months ended June 30, 2023, sales and marketing expense decreased primarily due to lower marketing spend of $5.5 million, partially offset by higher salaries and benefits of $1.6 million, as a result of an average increased headcount.

For the six months ended June 30, 2023, sales and marketing expense increased primarily due to higher salaries and benefits of $3.1 million, as a result of an average increased headcount.

General and administrative

For the three and six months ended June 30, 2023, general and administrative expenses increased primarily due to a $5.7 million and $9.6 million increase in stock-based compensation, respectively, coupled with a $2.6 million and $3.5 million increase, respectively, in salaries and benefits related to an average increased headcount.

Research and development

For the three and six months ended June 30, 2023, research and development expenses increased primarily due to an increase of $1.3 million and $1.6 million, respectively, in salary and benefits costs as a result of a increases of 4% and 5% in research and development average headcount for the same period, respectively. For the six months ended June 30, 2023, this increase was coupled with higher professional services costs.

Depreciation, amortization and impairments

For the three and six months ended June 30, 2023, depreciation, amortization and impairment expense increased primarily due to a $4.8 million non-cash impairment charge of intangible assets and software related to our foreign studio restructuring, as discussed within Note 2.

Restructuring and other

For the three months ended June 30, 2023, the increase in restructuring and other is primarily due to a $0.8 million severance charge related to our foreign studio restructuring, as discussed within Note 2.

For the six months ended June 30, 2023, the decrease in restructuring and other is primarily due to a decrease in costs related to mergers and acquisitions-related activity.

Other income (expense)

For the three months ended June 30, 2023, the increase in other income (expense) is primarily due to the increase in interest income of $3.7 million.

For the six months ended June 30, 2023, the increase in other income (expense) is primarily due to the increase in interest income of $7.0 million and the $2.9 million extinguishment of redeemable non-controlling interest liability related to the Alictus acquisition.

Net income and AEBITDA

For the three and six months ended June 30, 2023, net income and AEBITDA increased primarily due to an increase in revenue, as discussed above. Net income margin increased by 1.6 and 1.9 percentage points, respectively, and AEBITDA margin increased by 5.6 and 3.2 percentage points, respectively, also primarily due to an increase in revenue and an increase of a lesser percentage in expenses.

RECENTLY ISSUED ACCOUNTING GUIDANCE

For a description of recently issued accounting pronouncements, see Note 1.

CRITICAL ACCOUNTING ESTIMATES

For a description of our policies regarding our critical accounting estimates, see “Critical Accounting Estimates” in our 2022 Form 10-K. There have been no significant changes in our critical accounting estimate policies or the application or the results of the application of those policies to our condensed consolidated financial statements.

LIQUIDITY, CAPITAL RESOURCES AND WORKING CAPITAL

Introduction

SciPlay is a holding company, with no material assets other than its ownership of SciPlay Parent LLC Interests, no operating activities on its own and no independent means of generating revenue or cash flow. Operations are carried out by SciPlay Parent LLC and its subsidiaries, and we depend on distributions from SciPlay Parent LLC to pay our taxes and expenses. SciPlay Parent LLC’s ability to make distributions to us is restricted by the terms of the Revolver (as defined below) by and among SciPlay Games, LLC, as the successor borrower, SciPlay Parent LLC, as a guarantor, the subsidiary guarantors party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent, and may be restricted by any future credit agreement we or our subsidiaries enter into, any future debt or preferred equity securities we or our subsidiaries issue, other contractual restrictions or applicable Nevada law.

We have funded our operations primarily through cash flows from operating activities. Based on our current plans and market conditions, we believe that cash flows generated from our operations and borrowing capacity under the Revolver will be sufficient to satisfy our anticipated cash requirements for the foreseeable future. However, we intend to continue to make significant investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new games and features or enhance our existing games, improve our operating infrastructure or acquire complementary businesses, personnel and technologies. Accordingly, we may need to engage in equity or debt financings to secure additional funds. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired, and our business may be harmed.

Our total cash on hand was $394.9 million and $330.1 million as of June 30, 2023 and December 31, 2022, respectively. There have been no material changes to our contractual obligations from what was disclosed in our 2022 Form 10-K.

Dividend Policy

We have never paid any cash dividends on our common stock and do not presently intend to pay cash dividends on our common stock. However, we reconsider our dividend policy on a regular basis and may determine in the future to declare or pay cash dividends on our common stock. Under the terms of the Revolver, we are limited in our ability to pay cash dividends or make certain other restricted payments (other than stock dividends) on our common stock.

Revolving Credit Facility

For a description of the Revolver, see “Liquidity, Capital Resources and Working Capital” in our 2022 Form 10-K.

The Revolver was undrawn as of June 30, 2023. We were in compliance with the financial covenants under the Revolver as of June 30, 2023.

Changes in Cash Flows

The following table presents a summary of our cash flows for the periods indicated:


	Six Months Ended
	June 30,
($ in millions)	2023		2022
Net cash provided by operating activities	$	101.9	$	74.2
Net cash used in investing activities	(10.4)		(111.3)
Net cash used in financing activities	(26.4)		(10.7)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(0.3)		(0.5)
Increase (decrease) in cash, cash equivalents and restricted cash	$	64.8	$	(48.3)

Net cash provided by operating activities increased primarily due to an increase in revenue.

Net cash used in investing activities decreased primarily due to a $106.2 million decrease in cash paid for business acquisition, partially offset by $5.3 million increase in capital expenditures.

Net cash used in financing activities increased primarily due to a $15.9 million increase in the repurchase of Class A common stock shares.

Off Balance Sheet Obligations

As of June 30, 2023, we did not have any significant off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

As of June 30, 2023, we had no material exposure to market risks.

Item 4. Controls and Procedures

Under the supervision and with the participation of our management, including the Chief Executive Officer and Interim Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Interim Chief Financial Officer have concluded that these disclosure controls and procedures are effective as of June 30, 2023.

There were no changes in our internal control over financial reporting during the quarter ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

For a description of our legal proceedings, see Note 8.

Item 1A. Risk Factors

There have been no material changes in our risk factors from those disclosed under Item 1A “Risk Factors” included in our 2022 Form 10-K, except as noted below.

Uncertainties associated with the Merger could adversely impact our business, financial results, results of operations, cash flows or stock price.

The announcement and pendency of the Merger, as well as any delays in the expected timeframe, could cause disruption in and create uncertainties, which could have an adverse effect on our business, results of operations and financial condition, regardless of whether the Merger is completed. These risks include, but are not limited to:

•inability to achieve the expected operational, strategic and financial benefits of the Merger;

•being subject to certain restrictions on the conduct of our business;

•increased difficulties in attracting, retaining or motivating key management personnel;

•the potential loss of key customers, suppliers, vendors and other key business partners;

•substantial costs related to the Merger, such as legal, accounting, financial advisory and integration costs that have already been incurred or will continue to be incurred until closing;

•a diversion of management’s time to the processes associated with consummating the Merger; and

•general competitive, economic, political and market conditions and fluctuations.

Failure to complete the Merger could adversely affect our business and the market price of our shares of common stock.

While it is currently anticipated that the Merger will be consummated during the fourth quarter of 2023, there can be no assurance that the conditions to consummating the Merger will be satisfied in a timely manner or at all, or that an effect, event, development or change will not transpire that could delay or prevent these conditions from being satisfied. The Merger Agreement contains certain termination rights for us and Light & Wonder, including, among others, the right to terminate the Merger Agreement by us or Light & Wonder if the Merger has not been consummated on or before February 8, 2024. If the Merger is not completed, our ongoing business may be adversely affected and we would be subject to a number of risks, including: (i) adverse reactions from the financial markets, including negative impacts on our stock price; (ii) adverse reactions from our customers, regulators and employees; and (iii) the fact that matters relating to the Merger will require substantial commitments of time and resources by management which could otherwise have been devoted to ongoing operations and other opportunities that may have been beneficial to us as an independent company.

Potential litigation instituted against us and our directors challenging the Merger may prevent the Merger from becoming effective within the expected timeframe or at all.

Potential litigation related to the Merger may result in injunctive or other relief prohibiting, delaying or otherwise adversely affecting our ability to complete the Merger. Such relief may prevent the Merger from becoming effective within the expected timeframe or at all. In addition, defending against such claims may be expensive and divert management's attention and resources, which could adversely affect our business.

The Merger Agreement contains provisions that limit our ability to pursue alternatives to the Merger.

Under the Merger Agreement, we are prohibited from, among other things, (i) initiating, soliciting or knowingly encouraging or facilitating (including by way of providing non-public information) the making of any Acquisition Proposals (as defined in the Merger Agreement) from third parties or (ii) engaging in negotiations or substantive discussions with, or furnishing any nonpublic information to, any third party relating to an Acquisition Proposal or any inquiry, proposal or request for information that may reasonably be expected to lead to an Acquisition Proposal. These provisions could discourage a third party that may have an interest in acquiring all or a significant part of our business from considering or proposing that acquisition, even if such third party were prepared to pay consideration with a higher value than the value of the consideration in the Merger.

While the Merger is pending, SciPlay will be subject to business uncertainties and certain contractual restrictions that could adversely affect the business and operations of SciPlay.

Due to certain restrictions in the Merger Agreement on the conduct of business prior to completing the Merger, SciPlay may be unable (without Light & Wonder’s prior written consent), during the pendency of the Merger, to pursue certain actions, even if such actions would prove beneficial and may cause SciPlay to forego certain opportunities it might otherwise pursue. In addition, the pendency of the Merger may make it more difficult for SciPlay to effectively retain and incentivize key personnel and may cause distractions from SciPlay’s strategy and day-to-day operations for its current employees and management.

Item 2. Unregistered Sales of Equity Securities

We repurchased 0.9 million shares under the share repurchase program during the three months ended June 30, 2023.


(in millions, except for price per share)
ISSUER PURCHASES OF EQUITY SECURITIES
Period	Total Number of Shares Purchased as Part of Publicly Announced Programs(1)	Average Price Paid per Share(2)		Total Cost of Repurchase(2)		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs(1)(2)













4/1/2023 - 4/30/2023	0.6	$	17.13	$	9.5	$	5.2
5/1/2023 - 5/31/2023	0.3	$	16.96	5.2		$	60.0
6/1/2023 - 6/30/2023	—	$	—	—		$	60.0



Total	0.9	$	17.07	$	14.7




(1) On May 3, 2023, our Board of Directors approved a new share repurchase program under which the Company is authorized to repurchase, from time to time through May 3, 2024, up to an aggregate amount of $60.0 million. No share repurchases have been made under the new program as of June 30, 2023.
(2) Average price paid per share is calculated on a settlement basis and excludes excise tax. As of January 1, 2023, our share repurchases in excess of issuances are subject to a 1% excise tax enacted by the Inflation Reduction Act. Any excise tax incurred is recognized as part of the cost basis of the shares acquired in the Consolidated Statements of Equity, and was $0.2 million as of June 30, 2023.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Certain of our officers or directors have made elections to participate in, and are participating in, our 401(k) plan and have made, and may from time to time make, elections to have shares withheld to cover withholding taxes, which may be designed to satisfy the affirmative defense conditions of Rule 10b5-1 under the Exchange Act or may constitute non-Rule 10b5-1 trading arrangements (as defined in Item 408(c) of Regulation S-K). During the three months ended June 30, 2023, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" as such term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits


Exhibit Number						Description

3.1						Amended and Restated Articles of Incorporation of SciPlay Corporation (incorporated by reference to Exhibit 3.1 to SciPlay Corporation’s Current Report on Form 8-K filed on May 8, 2019).
3.2						Second Amended and Restated Bylaws of SciPlay Corporation (incorporated by reference to Exhibit 3.1 to SciPlay Corporation’s Current Report on Form 8-K filed on July 29, 2022).

31.1						Certification of the Chief Executive Officer of SciPlay Corporation pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(†)
31.2						Certification of the Interim Chief Financial Officer of SciPlay Corporation pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(†)
32.1						Certification of the Chief Executive Officer of SciPlay Corporation pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.2						Certification of the Interim Chief Financial Officer of SciPlay Corporation pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
101.INS						Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH						Inline XBRL Taxonomy Extension Schema Document
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						Inline XBRL Taxonomy Extension Definition Label Linkbase Document
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
(†) Filed herewith. ** Furnished herewith. * Management contracts and compensation plans and arrangements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		SCIPLAY CORPORATION
		(Registrant)

		By:	/s/ Daniel O’Quinn
		Name:	Daniel O’Quinn
		Title:	Interim Chief Financial Officer and Secretary
Dated:	August 8, 2023