Document:

Exhibit 4.4

 

BRAGG GAMING GROUP INC.

 

 

BRAGG GAMING GROUP INC.

 

INTERIM UNAUDITED CONDENSED 

CONSOLIDATED FINANCIAL
STATEMENTS

 

Three-month periods ended March 31, 2021 and
2020 

 

Presented in Euros (Thousands)

 

     

     

    

 

BRAGG GAMING GROUP INC.

 

TABLE OF CONTENTS

 

	INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE INCOME (LOSS)	 	1
	 	 	 
	INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION	 	2
	 	 	 
	INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY	 	3
	 	 	 
	INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	 	4

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

	1       BASIS OF PRESENTATION AND GOING CONCERN	 	5
	 	 	 
	2       SIGNIFICANT ACCOUNTING POLICIES	 	7
	 	 	 
	3       LOSS BEFORE INCOME TAXES CLASSIFIED BY NATURE	 	18
	 	 	 
	4       DISCONTINUED OPERATIONS	 	19
	 	 	 
	5       SHARE CAPITAL	 	20
	 	 	 
	6       PUBLIC OFFERING COMPLETED NOVEMBER 18, 2020	 	21
	 	 	 
	7       WARRANTS	 	22
	 	 	 
	8       SHARE BASED COMPENSATION	 	25
	 	 	 
	9       DEFERRED AND CONTINGENT CONSIDERATION	 	28
	 	 	 
	10       INTANGIBLE ASSETS	 	29
	 	 	 
	11       CASH AND CASH EQUIVALENTS	 	29
	 	 	 
	12       TRADE AND OTHER RECEIVABLES	 	30
	 	 	 
	13       PREPAID EXPENSES AND OTHER ASSETS	 	31
	 	 	 
	14       TRADE PAYABLES AND OTHER LIABILITIES	 	31
	 	 	 
	15       RELATED PARTY TRANSACTIONS	 	32
	 	 	 
	16       FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT	 	33
	 	 	 
	17       SUPPLEMENTARY CASHFLOW INFORMATION	 	37
	 	 	 
	18       SEGMENT INFORMATION	 	38
	 	 	 
	19       INCOME TAXES	 	39
	 	 	 
	20       CONTINGENT LIABILITIES	 	41
	 	 	 
	21       SUBSEQUENT EVENTS	 	42

 

     

    

    

	BRAGG GAMING GROUP INC.	1

INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND
COMPREHENSIVE INCOME (LOSS)

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

	 	 	 	 	 	 	 	Three Months Ended March 31,	 
	 	 	 	Note	 	 	 	     2021	 	 	 	 2020	 
	Revenue	 	 	3	 	 	 	14,196	 	 	 	8,784	 
	Cost of revenue	 	 	 	 	 	 	(7,547	)	 	 	(4,817	)
	Gross Profit	 	 	 	 	 	 	6,649	 	 	 	3,967	 
	Selling, general and administrative expenses	 	 	3	 	 	 	(7,154	)	 	 	(4,079	)
	Gain on remeasurement of consideration receivable 
	 	 	 	 	 	 	6	 	 	 	-	 
	Loss on remeasurement of deferred and contingent consideration	 	 	3, 9	 	 	 	-	 	 	 	(4,968	)
	Operating Loss	 	 	 	 	 	 	(499	)	 	 	(5,080	)
	Net interest expense and other financing charges	 	 	3	 	 	 	(68	)	 	 	(61	)
	Loss Before Income Taxes	 	 	3	 	 	 	(567	)	 	 	(5,141	)
	Income taxes	 	 	19	 	 	 	(507	)	 	 	(243	)
	Net Loss from Continuing Operations	 	 	 	 	 	 	(1,074	)	 	 	(5,384	)
	Net loss from discontinued operations after tax	 	 	4	 	 	 	-	 	 	 	(316	)
	Net
                                            Loss
 
 
	 	 	 	 	 	 	(1,074	)	 	 	(5,700	)
	Items to be reclassified to net loss:	 	 	 	 	 	 	 	 	 	 	 	 
	Cumulative translation adjustment - continuing operations	 	 	 	 	 	 	1,125	 	 	 	38	 
	Cumulative translation adjustment - discontinued operations	 	 	 	 	 	 	-	 	 	 	(11	)
	Net Comprehensive Income (Loss)	 	 	 	 	 	 	51	 	 	 	(5,673	)
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Basic and Diluted Loss Per Share
 
	 	 	 	 	 	 	 	 	 	 	 	 
	Continuing operations	 	 	 	 	 	 	(0.06	)	 	 	(0.67	)
	Discontinued operations	 	 	 	 	 	 	0.00	 	 	 	(0.04	)
	 	 	 	 	 	 	 	(0.06	)	 	 	(0.71	)
	 	 	 	 	 	 	 	
Millions
	 	 	 	
Millions
	 
	Weighted average number of shares - basic and diluted	 	 	 	 	 	 	18.1	 	 	 	8.0	 

 

See accompanying notes to the interim unaudited condensed consolidated
financial statements.

 

     

    

    

	BRAGG GAMING GROUP INC.	2

INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

	 	 	 	 	 	As at	 	 	As at	 
	 	 	 	 	 	March 31,	 	 	December 31,	 
	 	 	 	Note	 	 	 	2021	 	 	 	2020	 
	Cash and cash equivalents	 	 	11	 	 	 	30,112	 	 	 	26,102	 
	Trade and other receivables	 	 	12	 	 	 	8,407	 	 	 	10,297	 
	Prepaid expenses and other assets	 	 	13	 	 	 	1,096	 	 	 	263	 
	Consideration receivable	 	 	4	 	 	 	160	 	 	 	148	 
	Total Current Assets	 	 	 	 	 	 	39,775	 	 	 	36,810	 
	Property and equipment	 	 	 	 	 	 	251	 	 	 	272	 
	Right-of-use assets	 	 	 	 	 	 	670	 	 	 	708	 
	Consideration receivable	 	 	4	 	 	 	1	 	 	 	44	 
	Intangible assets	 	 	10	 	 	 	14,098	 	 	 	14,279	 
	Goodwill	 	 	 	 	 	 	19,938	 	 	 	19,938	 
	Other assets	 	 	 	 	 	 	43	 	 	 	43	 
	Total Assets	 	 	 	 	 	 	74,776	 	 	 	72,094	 
	Trade payables and other liabilities	 	 	14	 	 	 	16,890	 	 	 	16,968	 
	Deferred revenue	 	 	 	 	 	 	496	 	 	 	102	 
	Income taxes payable	 	 	19	 	 	 	1,913	 	 	 	1,318	 
	Lease obligations on right of use assets - current	 	 	 	 	 	 	143	 	 	 	133	 
	Deferred and contingent consideration	 	 	9	 	 	 	-	 	 	 	11,521	 
	Total Current Liabilities	 	 	 	 	 	 	19,442	 	 	 	30,042	 
	Deferred income tax liability	 	 	19	 	 	 	1,231	 	 	 	1,415	 
	Non-current lease obligations on right of use assets	 	 	 	 	 	 	559	 	 	 	593	 
	Other non-current liabilities	 	 	 	 	 	 	160	 	 	 	147	 
	Total Liabilities	 	 	 	 	 	 	21,392	 	 	 	32,197	 
	Share capital	 	 	5	 	 	 	99,302	 	 	 	62,304	 
	Warrants	 	 	7	 	 	 	-	 	 	 	1,642	 
	Broker warrants	 	 	7	 	 	 	38	 	 	 	399	 
	Shares to be issued	 	 	5, 11	 	 	 	-	 	 	 	22,608	 
	Contributed surplus	 	 	 	 	 	 	15,374	 	 	 	14,325	 
	Deficit	 	 	 	 	 	 	(62,305	)	 	 	(61,231	)
	Accumulated other comprehensive income (loss)	 	 	 	 	 	 	975	 	 	 	(150	)
	Total Equity	 	 	 	 	 	 	53,384	 	 	 	39,897	 
	Total Liabilities and Equity	 	 	 	 	 	 	74,776	 	 	 	72,094	 
	Going Concern	 	 	1	 	 	 	 	 	 	 	 	 

 

See accompanying notes to the interim unaudited condensed consolidated
financial statements.

 

Approved on behalf of the Board

 

	Richard Carter	Lara Falzon
	Chief Executive Officer	Non Executive Director

 

     

    

    

 

	BRAGG GAMING GROUP INC.	3

INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
EQUITY

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AMOUNTS)

 

	 	 	Note	 	 	Share
    

capital	 	 	Shares
    to 

be issued	 	 	Warrants	 	 	Special
 warrants
                                            - compensation
 options
	 	 	Broker
    

warrants	 	 	 
Contributed
 surplus
	 	 	Deficit	 	 	Accumulated
 other
                                            comprehensive
 income
                                            (loss)
	 	 	Total
    Equity	 
	Balance as at January 1, 2020	 	 	 	 	 	 	40,204	 	 	 	-	 	 	 	1,565	 	 	 	660	 	 	 	-	 	 	 	11,064	 	 	 	(46,665	)	 	 	(212	)	 	 	6,616	 
	Share-based compensation	 	 	8	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	51	 	 	 	-	 	 	 	-	 	 	 	51	 
	Net loss for the period	 	 	 	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(5,700	)	 	 	-	 	 	 	(5,700	)
	Other comprehensive income	 	 	 	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	27	 	 	 	27	 
	Balance as at March 31, 2020	 	 	 	 	 	 	40,204	 	 	 	-	 	 	 	1,565	 	 	 	660	 	 	 	-	 	 	 	11,115	 	 	 	(52,365	)	 	 	(185	)	 	 	994	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Balance as at January 1, 2021	 	 	 	 	 	 	62,304	 	 	 	22,608	 	 	 	1,642	 	 	 	-	 	 	 	399	 	 	 	14,325	 	 	 	(61,231	)	 	 	(150	)	 	 	39,897	 
	Shares issued upon completion of Oryx earn-out	 	 	5	 	 	 	22,000	 	 	 	(22,000	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	Shares issued upon completion of private placement, net
    of issuance costs	 	 	5	 	 	 	1,918	 	 	 	(608	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	1,310	 
	Exercise of RSUs	 	 	5,
                                            8	 	 	 	267	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(267	)	 	 	-	 	 	 	-	 	 	 	-	 
	Exercise of warrants	 	 	7	 	 	 	11,916	 	 	 	-	 	 	 	(1,831	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	10,085	 
	Expiry of warrants	 	 	7	 	 	 	-	 	 	 	-	 	 	 	(7	)	 	 	-	 	 	 	-	 	 	 	7	 	 	 	-	 	 	 	-	 	 	 	-	 
	Exercise of broker warrants	 	 	7	 	 	 	897	 	 	 	-	 	 	 	196	 	 	 	-	 	 	 	(361	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	732	 
	Share-based compensation	 	 	8	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	1,309	 	 	 	-	 	 	 	-	 	 	 	1,309	 
	Net loss for the period	 	 	 	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(1,074	)	 	 	-	 	 	 	(1,074	)
	Other comprehensive income	 	 	 	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	1,125	 	 	 	1,125	 
	Balance as at March 31, 2021	 	 	 	 	 	 	99,302	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	38	 	 	 	15,374	 	 	 	(62,305	)	 	 	975	 	 	 	53,384	 

 

See accompanying notes to the interim unaudited condensed consolidated
financial statements.

 

     

    

    

 

	BRAGG GAMING GROUP INC.	4

INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

	 	 	 	 	 	 	 	Three
                                            Months Ended March 31,	 
	 	 	 	Note	 	 	 	2021	 	 	 	2020	 
	Operating Activities
 
	 	 	 	 	 	 	 	 	 	 	 	 
	Net loss from continuing operations	 	 	 	 	 	 	(1,074	)	 	 	(5,384	)
	Add:	 	 	 	 	 	 	 	 	 	 	 	 
	Net interest expense and other financing charges	 	 	 	 	 	 	68	 	 	 	61	 
	Depreciation and amortization	 	 	3	 	 	 	836	 	 	 	784	 
	Share based compensation	 	 	3, 8	 	 	 	1,309	 	 	 	51	 
	Gain on remeasurement of consideration receivable	 	 	 	 	 	 	(6	)	 	 	-	 
	Loss on remeasurement of deferred and contingent consideration	 	 	9	 	 	 	-	 	 	 	4,968	 
	Deferred income tax recovery	 	 	19	 	 	 	(184	)	 	 	(28	)
	 	 	 	 	 	 	 	949	 	 	 	452	 
	Change in non-cash working capital	 	 	17	 	 	 	1,386	 	 	 	1,861	 
	Change in income taxes payable	 	 	 	 	 	 	595	 	 	 	227	 
	Cash Flows From Operating Activities	 	 	 	 	 	 	2,930	 	 	 	2,540	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Investing Activities	 	 	 	 	 	 	 	 	 	 	 	 
	

 Purchases of property and equipment
	 	 	 	 	 	 	(15	)	 	 	(11	)
	Additions of intangible assets	 	 	10	 	 	 	(581	)	 	 	(351	)
	Deferred and contingent consideration payments	 	 	9	 	 	 	(11,521	)	 	 	-	 
	Cash Flows Used In Investing Activities	 	 	 	 	 	 	(12,117	)	 	 	(362	)
	Financing Activities	 	 	 	 	 	 	 	 	 	 	 	 
	
 Proceeds from exercise of warrants and broker warrants
	 	 	7	 	 	 	10,817	 	 	 	-	 
	Proceeds from shares issued upon private placement, net of issuance costs	 	 	5	 	 	 	1,310	 	 	 	-	 
	Repayment of lease liability	 	 	 	 	 	 	(29	)	 	 	(36	)
	Interest income	 	 	 	 	 	 	15	 	 	 	8	 
	Interest and financing fees	 	 	 	 	 	 	(83	)	 	 	(15	)
	Cash Flows From (Used In) Financing Activities	 	 	 	 	 	 	12,030	 	 	 	(43	)
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Effect of foreign currency exchange rate changes on cash and cash equivalents
	 	 	 	 	 	 	1,167	 	 	 	(14	)
	Net cash flow used in discontinued operations	 	 	4	 	 	 	-	 	 	 	(316	)
	Change in Cash and Cash Equivalents	 	 	 	 	 	 	4,010	 	 	 	1,805	 
	Cash and cash equivalents at beginning of period	 	 	 	 	 	 	26,102	 	 	 	682	 
	Cash and Cash Equivalents at end of period	 	 	 	 	 	 	30,112	 	 	 	2,487	 

 

See accompanying notes to the interim unaudited condensed
consolidated financial statements.

 

     

    

    

 

 

	BRAGG GAMING GROUP INC.	5

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

1      BASIS
OF PRESENTATION AND GOING CONCERN

 

Nature of operations

 

Bragg Gaming Group Inc. and its subsidiaries ("Bragg",
 "BGG", the "Company" or the "Group") is primarily a B2B online gaming technology platform and casino content
aggregator through its acquisition of Oryx Gaming International LLC ("Oryx" or "Oryx Gaming") in 2018.

 

The registered and head office of the Company
is located at 130 King Street West, Suite 1955, Toronto, Ontario, Canada M5X 1E3.

 

Oryx Gaming

 

Oryx Gaming is a B2B gaming solution provider.
Oryx offers a turnkey solution, including an omni-channel retail, online and mobile iGaming platform, as well as an advanced content aggregator,
sportsbook, lottery, marketing, and operational services. Oryx is incorporated in the State of Delaware and headquartered in Las Vegas.
Its primary operations are provided through its wholly owned subsidiaries in Malta, Cyprus, and Slovenia.

 

Classification of online media business unit
as held for sale and discontinued operations

 

During the year ended December 31, 2019,
the Company decided to discontinue its online media business unit. The associated assets and liabilities within the disposal group are
presented as held for sale and the net loss attributable as discontinued operations in the interim unaudited condensed consolidated financial
statements ("interim financial statements"). The Company completed the sale of the majority of its online media business unit
on May 7, 2020 (Note 4).

 

Statement of compliance and basis of presentation

 

The accompanying interim financial statements
have been prepared in accordance with International Accounting Standards (“IAS”) 34, Interim Financial Reporting.
The interim financial statements do not include all of the information required for annual consolidated financial statements and should
be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2020.

 

The financial statements are prepared on a historical
cost basis except for financial instruments classified at fair value through profit or loss (“FVTPL”) which are measured at
fair value. The significant accounting policies set out below have been applied consistently in the preparation of the interim financial
statements for all periods presented.

 

These interim financial statements were, at
the recommendation of the audit committee, approved and authorized for issuance by the Company’s Board of Directors on
May 13, 2021.

 

Going concern

 

The interim financial statements have been prepared
on the going concern basis, which assumes that the Company will be able to continue as a going concern and realize its assets and discharge
its liabilities in the normal course of business, and do not give effect to any adjustments which would be necessary should the Company
be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the
normal course of business and at amounts different from those reflected in the interim financial statements. If the going concern assumption
is not appropriate, material adjustments to the interim financial statements could be required.

 

As at March 31, 2021, the Company had current
assets of EUR 39,775 (December 31, 2020: EUR 36,810) and current liabilities of EUR 19,442 (December 31, 2020: EUR 30,042).
As of March 31, 2021, the Company has a cumulative deficit of EUR 62,305 (December 31, 2020: EUR 61,231). These conditions,
along with the continued generation of positive cash flows from operations indicates that the Company will be able to continue on a going
concern basis.

 

     

     

    

 

	BRAGG GAMING GROUP INC.	6

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

1      BASIS
OF PRESENTATION AND GOING CONCERN (CONTINUED)

 

COVID-19

 

In December 2019, there was a global outbreak
of COVID-19 (coronavirus), which continued to have a significant impact on businesses through the restrictions put in place by the national,
provincial and municipal governments around the world regarding travel, business operations and isolation and quarantine orders.

 

At this time, it is unknown the extent of the
impact the COVID-19 outbreak may have on the Company in the long term as this will depend on future developments that are highly uncertain
and that cannot be predicted with confidence. These uncertainties arise from the inability to predict the ultimate duration of the outbreak,
including the duration of travel restrictions, business closures or disruptions, quarantine and isolation measures that are currently,
or may be put, in place by Canada and other countries to fight the virus.

 

However, the Company derives the majority of its
revenue from online casino gaming. This sector has largely benefited from the various international “lock downs”, requiring
people to stay at home. As a result, such forms of entertainment have prevailed in a similar fashion to the various streaming businesses
such as Netflix. Furthermore, the Company has limited exposure to sports betting revenues that have been impacted by the lack of professional
sports.

 

As at the time of release of these interim financial
statements, the Company’s financial performance, financial position and cash flow had not been adversely impacted by COVID-19 and
the Company has determined no impairment of its goodwill is required.

 

Graduation to the Toronto Stock Exchange (“TSX”)

 

On January 27, 2021, the Company announced
that it had graduated to the Toronto Stock Exchange. As of market open at 09:30 am ET on the date of announcement, the Company began trading
on TSX under the symbol “BRAG”. Concurrent with the TSX listing, the Company’s Common Shares were delisted from the
TSX Venture Exchange.

 

Reverse Stock Split

 

On April 30, 2021, the Company announced
a one-for-ten share consolidation (the “reverse stock split”). At the annual and special meeting of the Company’s shareholders
held on April 28, 2021, the Company’s shareholders granted the Company’s Board of Directors discretionary authority to
implement a consolidation of the issued and outstanding Common Shares of the Company on the basis of a consolidation ratio of up to ten
(10) pre-consolidation Common Shares for one (1) post-consolidation Common Share. The Board of Directors selected a share consolidation
ratio of ten (10) pre- consolidation Common Shares for one (1) post-consolidation Common Share. The Company’s Common Shares
began trading on TSX on a post-consolidation basis under the Company’s existing trade symbol "BRAG" at the opening of
the market on May 5, 2021. In accordance with International Financial Reporting Standards (“IFRS”), the change has been
applied retroactively.

 

     

     

    

 

	BRAGG GAMING GROUP INC.	7

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

2      SIGNIFICANT ACCOUNTING
POLICIES

 

The interim financial statements were prepared
using the same basis of presentation, accounting policies and methods of computation as those of the audited consolidated financial statements
for the year ended December 31, 2020 and which are available at www.sedar.com. They were prepared using the same critical estimates
and judgments in applying the accounting policies as those of the audited consolidated financial statements for the year ended December 31,
2020.

 

Basis of consolidation

 

The interim financial statements include the accounts
of the Company and its wholly owned subsidiaries. Control exists when the Company is exposed, or has rights, to variable returns from
its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. The Company assesses
control on an ongoing basis. The Company’s interest in the voting share capital of all its subsidiaries is 100%.

 

Transactions and balances between the Company
and its consolidated entities have been eliminated on consolidation.

 

The table below summarizes the Company’s
operating subsidiaries and the functional currency for each operating subsidiary:

 

	 	 	Place of
 incorporation
	 	 	 	Functional
	 	 	/ operation	 	Principal activity	 	currency
	Bragg Gaming Group - Group Services Ltd.	 	United Kingdom	 	Corporate activities	 	GBP
	Bragg Gaming Group - Parent Services Ltd.	 	United Kingdom	 	Corporate activities	 	GBP
	Bragg Oryx Holdings Inc.	 	Canada	 	Intermediate holding company	 	CAD
	Oryx Sales Distribution Ltd.	 	Cyprus	 	Distribution	 	EUR
	Oryx Gaming International LLC	 	United States	 	Gaming solution provider	 	EUR
	Oryx Gaming Ltd.	 	Malta	 	Gaming solution provider	 	EUR
	Oryx Marketing Poslovne Storitve D.o.o.	 	Slovenia	 	Marketing	 	EUR
	Oryx Podpora D.o.o.	 	Slovenia	 	B2B support services	 	EUR
	Oryx Razyojne-Storitve D.o.o.	 	Slovenia	 	Gaming solution developer	 	EUR
	Poynt Inc.	 	Canada	 	Distribution	 	CAD
	Win Gaming Ltd.	 	Malta	 	Gaming licence holder	 	EUR

 

     

     

    

 

	BRAGG GAMING GROUP INC.	8

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

2      SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)

 

Presentation currency

 

The presentation currency of the Company is the
Euro, whilst the functional currencies of its subsidiaries are Euro, Canadian dollar, United States dollar, and British pound sterling
due to primary location of individual entities within the Group. The presentation currency of the Euro has been selected as it best represents
the majority of the Company’s economic inflows, outflows as well as its assets and liabilities.

 

The assets and liabilities of operations that
have a functional currency different from that of the Company’s reporting currency are translated into Euros at the foreign currency
exchange rate in effect at the reporting date. The resulting foreign currency exchange gains or losses are recognized in the foreign currency
translation adjustment as part of other comprehensive income (loss). When such foreign operations are disposed of, the related foreign
currency translation reserve is recognized in net earnings as part of the gain or loss on disposal.

 

Revenues and expenses of foreign operations are
translated into Euros at the foreign currency exchange rates that approximate the rates in effect at the dates when such items are transacted.

 

Business combinations

 

Business combinations are accounted for using
the acquisition method as of the date when control is transferred to the Company. The Company measures goodwill as the excess of the sum
of the fair value of the consideration transferred over the net identifiable assets acquired and liabilities assumed, all measured as
at the acquisition date. Transaction costs that the Company incurs in connection with a business combination, other than those associated
with the issuance of debt or equity securities, are expensed as incurred.

 

Net earnings (loss) per share (“EPS”)

 

Basic EPS is calculated by dividing the net earnings
(loss) available to shareholders by the weighted average number of shares outstanding during the period. Diluted EPS is calculated by
adjusting the net earnings available to shareholders and the weighted average number of shares outstanding for the effects of all potential
dilutive instruments.

 

Diluted loss per share is equal to basic loss
per share when the effect of dilutive securities is anti-dilutive.

 

Cash and cash equivalents

 

Cash equivalents consist of highly liquid marketable
investments with an original maturity date of 90 days or less from the date of acquisition and prepaid credit cards. Cash and cash equivalents
also include any cash held in trust as proceeds from future private placement.

 

Trade and other receivables

 

Trade and other receivables consist primarily
of trade receivables from customers for which Oryx Gaming provides services during the period and accrued income in relation to receivables
from customers that have yet to be invoiced, for services provided during the three months ended March 31, 2021 and 2020. Upon invoicing,
amounts are transferred from accrued income to trade receivables and any differences between the accrued and invoiced values are recognized
in the interim unaudited condensed consolidated statements of loss and comprehensive income (loss).

 

     

     

    

 

	BRAGG GAMING GROUP INC.	9

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

2      SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)

 

Revenue recognition

 

The Company recognizes revenue when control of
the goods or services has been transferred. Revenue is measured at the amount of consideration to which the Company expects to be entitled
to, including variable consideration to the extent that it is highly probable that a significant reversal will not occur. Revenue from
continuing operations is derived from software platform licensing, maintenance of source code, bespoke development, management service
fees, marketing fees, content and hosting fees. Revenue is recognized when the service provided to the customer is complete. Specifically:

 

- Games
and content: revenues from content and platform licensing are linked to revenues a customer earns from utilizing the Company’s software
platform and aggregated content in that period. The Company’s revenue is therefore linked to the revenue of the underlying customer,
i.e., the subsequent sale. The Company recognizes revenue once the customer has earned the revenue from the subsequent sale/services as
this is the point where the performance obligation is satisfied.

 

- iGaming
and turnkey projects: the Company charges a fixed monthly management and marketing fee for its services in the month in which the services
are provided, and performance obligations are met. Charges for development projects are charged on a time and materials basis upon delivery
at agreed milestones. Revenue is recognized as it is billed unless services and performance obligations are provided in a future period.
If services and performance obligations are not provided in the reporting period, then revenue is not recognized.

 

Revenue from discontinued operations is derived
from programmatic advertising, branded content and social media management, sales of software maintenance agreements, software customization
services, technical support services and consulting services. Revenue is recognized on a monthly basis as it is billed.

 

Consideration receivable

 

Consideration receivable consists of cash receivables
due as a result of the sale of discontinued operations. The fair value of the consideration receivable is determined by calculating the
present value of expected future cashflows relating to the consideration receivable, applying the Company’s discount rate.

 

Income taxes

 

Current and deferred taxes are recognized in the
interim unaudited condensed consolidated statements of loss and comprehensive income (loss), except for current and deferred taxes related
to a business combination, or amounts charged directly to equity or other comprehensive income (loss), which are recognized in the interim
unaudited condensed consolidated statements of financial position.

 

Current tax is the expected tax payable or receivable
on the taxable income or loss for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment
to tax payable in respect of previous periods.

 

     

     

    

 

	BRAGG GAMING GROUP INC.	10

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

2      SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)

 

Income taxes (continued)

 

Deferred tax is recognized using the asset and
liability method of accounting on temporary differences arising between the financial statement carrying values of existing assets and
liabilities and their respective income tax bases. Deferred tax is measured using enacted or substantively enacted income tax rates expected
to apply in the periods in which those temporary differences are expected to be recovered or settled. A deferred tax asset is recognized
for temporary differences as well as unused tax losses and credits to the extent that it is probable that future taxable profits will
be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent
that it is no longer probable that the related tax benefit will be realized.

 

Deferred tax assets and liabilities are offset
if there is a legally enforceable right to offset current tax liabilities and assets and they relate to income taxes levied by the same
taxation authority on the same taxable entity, or on different taxable entities where the Company intends to settle its current tax assets
and liabilities on a net basis.

 

Deferred tax is recorded on temporary differences
arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Company
and it is probable that the temporary difference will not reverse in the foreseeable future.

 

Property and equipment

 

Property and equipment are recognized and subsequently
measured at cost less accumulated depreciation and any accumulated impairment losses. Cost includes expenditures that are directly attributable
to the acquisition of the asset, including costs incurred to prepare the asset for its intended use and capitalized borrowing costs. The
commencement date for capitalization of costs occurs when the Company first incurs expenditures for the qualifying assets and undertakes
the required activities to prepare the assets for their intended use.

 

Borrowing costs directly attributable to the acquisition,
construction or production of property and equipment, that necessarily take a substantial period of time to prepare for their intended
use and a proportionate share of general borrowings, are capitalized to the cost of those assets, based on a quarterly weighted average
cost of borrowing. All other borrowing costs are expensed as incurred and recognized in net interest expense and other financing charges.

 

The cost of replacing a component of property
and equipment is recognized in the carrying amount if it is probable that the future economic benefits embodied within the component will
flow to the Company and the cost can be measured reliably. The carrying amount of the replaced component is derecognized. The cost of
repairs and maintenance of property and equipment is expensed as incurred and recognized in the interim unaudited condensed consolidated
statements of loss and comprehensive income (loss).

 

Gains and losses on disposal of property and equipment
are determined by comparing the fair value of proceeds from disposal with the net book value of the assets and are recognized on a net
basis in the interim unaudited condensed consolidated statements of loss and comprehensive income (loss).

 

Property and equipment are depreciated on a straight-line
basis over their estimated useful lives of 3 years to their estimated residual value when the assets are available for use. When significant
parts of a property and equipment have different useful lives, they are accounted for as separate components and depreciated separately.
Depreciation methods, useful lives and residual values are reviewed annually and are adjusted for prospectively, if appropriate.

 

     

     

    

 

	BRAGG GAMING GROUP INC.	11

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

2      SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)

 

Leases

 

The Company assesses whether a contract is, or
contains, a lease. If a contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration,
then the contract may contain a lease. The Company assesses whether a contract conveys the right to control the use of an asset by performing
the following tests:

 

		-	assess whether the contract involves the use of an identified asset and may be specified explicitly or
implicitly. It should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier
has a significant right to substitution, then the asset is not identified;

		-	assess whether the Company has the right to obtain substantially all of the economic benefits arising
from the use of the asset throughout the period of use; and

		-	assess that the Company has the right to direct enjoyment of the asset. This right is identified when
the Company has the decision-making rights in how and for what purpose the asset is used. In cases where the decision on how and for what
purpose to use the asset has been predetermined, the Company has the right to direct the use of the asset if either it has the right to
operate the asset, or the Company has designed the asset in a manner that predetermines how and for what purpose the asset will be used.

 

The Company recognizes a right-of-use
asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the
initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on
which it is located, less any lease incentives received.

 

The right-of-use asset is subsequently depreciated
using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the
end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipment.
In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the
lease liability.

 

The lease liability is initially measured at the
present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease
or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental
borrowing rate as the discount rate.

 

Lease payments included in the measurement of
the lease liability comprise the following:

 

		-	fixed payments, including in-substance fixed payments;

		-	variable lease payments that depend on an index or a rate, initially measured using the index or rate
as at the commencement date;

		-	amounts expected to be payable under a residual value guarantee; and

		-	the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments
in an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early termination
of a lease unless the Company is reasonably certain not to terminate early.

 

The lease liability is measured at amortized cost
using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index
or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, or
if the Company changes its assessment of whether it will exercise a purchase, extension or termination option.

 

     

     

    

 

	BRAGG GAMING GROUP INC.	12

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

2      SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)

 

Leases (continued)

 

When the lease liability is remeasured in this
way, a corresponding adjustment is made to the carrying amount of the right of-use asset or is recorded in profit or loss if the carrying
amount of the right-of-use asset has been reduced to zero.

 

The Company has elected not to recognize right-of-use
assets and lease liabilities for short-term leases of equipment that have a lease term of twelve months or less and leases of low-value
assets, including IT equipment. The Company recognizes the lease payments associated with these leases as an expense on a straight-line
basis over the lease term.

 

Intangible assets

 

Intangible assets are measured at cost less any
amortization and accumulated impairment losses. These intangible assets are tested for impairment on an annual basis or more frequently
if there are indicators that intangible assets may be impaired as described in the Impairment of non-financial assets policy.

 

Intangible assets are amortized on a straight-line
basis over their estimated useful lives as follows:

 

	Intellectual property identified upon business combination	8 years
	Intellectual property acquired from third-parties	3 years
	Customer relationships	10 years
	Brands	10 years
	Deferred development costs	3 years
	Trademarks	3 years
	Gaming licences	over the term of the licence

 

Trademarks and gaming licences are classified under “Other”
in the intangible assets disclosure note (Note 10). The Company capitalizes the costs of intangible assets if and only if:

 

		-	it is probable that the expected future economic benefits attributable to the asset will flow to the entity; and

		-	the cost of the asset can be measured reliably.

 

Certain costs incurred in connection with the
development of intellectual property relating to proprietary technology are capitalized to intangible assets as development costs. Intangible
assets are recorded at cost, which consists of directly attributable costs necessary to create such intangible assets, less accumulated
amortization and accumulated impairment losses, if any. The costs mainly include the salaries paid to the software developers and consulting
fees.

 

These costs are recognized as development costs assets when the following
criteria are met:

 

		-	it is technically feasible to complete the software product so that it will be available for use;

		-	management intends to complete the software product;

		-	it can be demonstrated how the software product will generate future economic benefits;

		-	adequate technical, financial, and other resources to complete the development and to use or sell the products are available; and

		-	the expenditure attributable to the software product during its development can be reliably measured.

 

     

     

    

 

	BRAGG GAMING GROUP INC.	13

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

2      SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)

 

Goodwill

 

Goodwill arising in a business combination is
recognized as an asset at the date that control is acquired. Goodwill is subsequently measured at cost less accumulated impairment losses.
Goodwill is not amortized but is tested for impairment on an annual basis or more frequently if there are indicators that goodwill may
be impaired as described in the Impairment of non-financial assets policy.

 

Impairment of non-financial assets

 

At each statement of financial position date,
the Company reviews the carrying amounts of its non-financial assets to determine whether there is any indication of impairment. If any
such indication exists, the asset is then tested for impairment by comparing its recoverable amount to its carrying value. Goodwill is
tested for impairment at least annually.

 

For the purpose of impairment testing, assets,
including right-of-use assets, are grouped together into the smallest group of assets that generate cash inflows from continuing use that
are largely independent of cash inflows of other assets or groups of assets. This grouping is referred to as a cash generating unit ("CGU").

 

Corporate assets, which include head office facilities
and distribution centres, do not generate separate cash inflows. Corporate assets are tested for impairment at the minimum grouping of
CGUs to which the corporate assets can be reasonably and consistently allocated. Goodwill arising from a business combination is tested
for impairment at the minimum grouping of CGUs that are expected to benefit from the synergies of the combination.

 

The recoverable amount of a CGU or CGU grouping
is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows from
the CGU or CGU grouping, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the CGU or CGU grouping. If the CGU or CGU grouping includes right-of-use assets in its
carrying amount, the pre-tax discount rate reflects the risks associated with the exclusion of lease payments from the estimated future
cash flows. The fair value less costs to sell is based on the best information available to reflect the amount that could be obtained
from the disposal of the CGU or CGU grouping in an arm’s length transaction between knowledgeable and willing parties, net of estimates
of the costs of disposal.

 

An impairment loss is recognized if the carrying
amount of a CGU or CGU grouping exceeds its recoverable amount. For asset impairments other than goodwill, the impairment loss reduces
the carrying amounts of the non-financial assets in the CGU on a pro-rata basis, up to an asset’s individual recoverable amount.
Any loss identified from goodwill impairment testing is first applied to reduce the carrying amount of goodwill allocated to the CGU grouping,
and then to reduce the carrying amounts of the other non-financial assets in the CGU or CGU grouping on a pro-rata basis.

 

For assets other than goodwill, an impairment
loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined,
net of depreciation or amortization, if no impairment loss had been recognized. An impairment loss in respect of goodwill is not reversed.

 

     

     

    

 

	BRAGG GAMING GROUP INC.	14

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

2      SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)

 

Financial instruments

 

Financial assets and liabilities are recognized
when the Company becomes party to the contractual provisions of the financial instrument. Upon initial recognition, financial instruments
are measured at fair value plus or minus transaction costs that are directly attributable to the acquisition or issue of financial instruments
that are not classified as fair value through profit or loss.

 

Financial instruments – classification
and measurement

 

The classification and measurement approach for
financial assets reflect the business model in which assets are managed and their cash flow characteristics. Financial assets are classified
and measured based on these categories: amortized cost, fair value through other comprehensive income ("FVOCI"), or fair value
through profit and loss ("FVTPL"). A financial asset is measured at amortized cost if it meets both of the following conditions
and is not designated as FVTPL:

 

		-	the financial asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows;
and

		-	the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.

 

A financial asset is measured at FVOCI if it meets
both of the following conditions and is not designated as at FVTPL:

 

		-	the financial asset is held within a business model in which assets are managed to achieve a particular objective by both collecting
contractual cash flows and selling financial assets; and

		-	the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.

 

A financial asset shall be measured at FVTPL unless
it is measured at amortized cost or at FVOCI.

 

Financial assets are not reclassified subsequent
to their initial recognition unless the Company identifies changes in its business model in managing financial assets.

 

Financial liabilities are classified and measured
based on two categories: amortized cost or FVTPL.

 

Fair values are based on quoted market prices
where available from active markets, otherwise fair values are estimated using valuation methodologies, primarily discounted cash flows
taking into account external market inputs where possible.

 

The amortized cost of a financial asset or liability
is the amount at which the financial asset or liability is measured at initial recognition, minus principal payments, plus or minus the
cumulative amortization using the effective interest method of any difference between the initial amount recognized and the maturity amount,
minus any reduction for impairment.

 

The following table summarizes the classification
and measurement of the Company’s financial assets and liabilities:

 

	Asset / Liability	 	Classification / Measurement
	Cash and cash equivalents	 	FVTPL
	Trade and other receivables	 	Amortized cost
	Consideration receivable	 	FVTPL
	Other assets	 	Amortized cost
	Trade payables and other liabilities	 	Amortized cost
	Deferred and contingent consideration	 	FVTPL
	Lease obligations on right of use assets	 	Amortized cost

 

     

     

    

 

 

	BRAGG GAMING GROUP INC.	15

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

		2	SIGNIFICANT
                                            ACCOUNTING POLICIES (CONTINUED)

 

Financial instruments – valuation

 

The determination of the fair value of financial
instruments is performed by the Company’s treasury and financial reporting departments on a quarterly basis. There was no change
in the valuation techniques applied to financial instruments during the current period.

 

The carrying amounts reported for cash and cash
equivalents, trade and other receivables, consideration receivable, trade payables and other liabilities, and deferred and contingent
consideration approximate fair value because of the immediate short-term maturity of these financial instruments. The carrying value of
lease obligations on right of use assets approximates the fair value based on rates currently available from financial institutions and
various lenders.

 

Gains and losses on FVTPL financial assets and
financial liabilities are recognized in net earnings in the period in which they are incurred. Settlement date accounting is used to account
for the purchase and sale of financial assets. Gains or losses between the trade date and settlement date on FVTPL financial assets are
recorded in the interim unaudited condensed consolidated statements of loss and comprehensive income (loss).

 

Financial instruments – derecognition

 

Financial assets are derecognized when the contractual
rights to receive cash flows and benefits from the financial asset expire, or if the Company transfers the control or substantially all
the risks and rewards of ownership of the financial asset to another party. The difference between the carrying amount of the financial
asset and the sum of the consideration received and receivable is recognized in earnings before income taxes.

 

Financial liabilities are derecognized when obligations
under the contract expire, are discharged, or cancelled. The difference between the carrying amount of the financial liability derecognized
and the consideration paid and payable is recognized in earnings before income taxes.

 

Financial instruments – impairment

 

The Company applies a forward-looking expected
credit loss ("ECL") model at each reporting date to financial assets measured at amortized cost or those measured at FVOCI,
except for investments in equity instruments. The ECL model outlines a three-stage approach to reflect the increase in credit risks of
a financial instrument:

 

		-	Stage 1 is comprised of all financial instruments that have not had a significant increase in credit risks
since initial recognition or that have low credit risk at the reporting date. The Company is required to recognize impairment for Stage
1 financial instruments based on the expected losses over the expected life of the instrument arising from loss events that could occur
during the 12 months following the reporting date.

 

		-	Stage 2 is comprised of all financial instruments that have had a significant increase in credit risks
since initial recognition but that do not have objective evidence of a credit loss event. For Stage 2 financial instruments the impairment
is recognized based on the expected losses over the expected life of the instrument arising from loss events that could occur over the
expected life. The Company is required to recognize a lifetime ECL for Stage 2 financial instruments.

 

		-	Stage 3 is comprised of all financial instruments that have objective evidence of impairment at the reporting
date. The Company is required to recognize impairment based on a lifetime ECL for Stage 3 financial instruments. The ECL model applied
to financial assets require judgment, assumptions, and estimations on changes in credit risks, forecasts of future economic conditions
and historical information on the credit quality of the financial asset. Consideration of how changes in economic factors affect ECLs
are determined on a probability-weighted basis.

 

     

     

    

 

	BRAGG GAMING GROUP INC.	16

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS 

 

		2	SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Financial instruments – impairment (continued)

 

The carrying amount of the financial asset or
group of financial assets are reduced through the use of impairment allowance accounts. In periods subsequent to the impairment where
the impairment loss has decreased, and such decrease can be related objectively to conditions and changes in factors occurring after the
impairment was initially recognized, the previously recognized impairment loss is reversed. The impairment reversal is limited to the
lesser of the decrease in impairment or the extent that the carrying amount of the financial asset at the date the impairment is reversed
does not exceed what the amortized cost would have been had the impairment not been recognized.

 

Deferred and contingent consideration

 

Prior to January 18, 2021, the Company had
deferred and contingent consideration payable to the vendor of Oryx Gaming. Between December 20, 2018 and November 13, 2020
earnout payments were agreed based upon a multiple of EBITDA in financial years ended December 31, 2019 and December 31, 2020
with a minimum amount payable in each twelve-month period. In each reporting period the present value of the deferred and contingent consideration
payable was measured by discounting achieved and forecasted EBITDA by applying the Company’s weighted average cost of capital. A
Black- Scholes calculation was then applied to account for probability of payout and to determine present value of payout after counter-party
risk.

 

Prior to the next remeasurement period an accretion
expense was recorded in the interim unaudited condensed consolidated statements of loss and comprehensive income (loss) as the discount
was unwound towards the reporting date. Upon remeasurement, any gain or loss on remeasurement was also recorded in the interim unaudited
condensed consolidated statements of loss and comprehensive income (loss).

 

On November 13, 2020, the Company entered
into an amending agreement with the vendor of Oryx Gaming whereby the second payment of deferred and contingent consideration was agreed
at a fixed cash value and, following shareholder agreement on November 27, 2020, could be settled in fixed amount of Common Shares.
As the payment can only be settled by way of Common Shares, there is no obligation of the Company to deliver cash or cash equivalents,
and the underlying fair value of the liability and number of Common Shares is fixed, the payment qualifies as an equity instrument and
was recorded as shares to be issued in the interim unaudited condensed consolidated statements of changes in equity. On January 18,
2021, the agreed fixed number of Common Shares was issued from treasury to the vendor and the balance recorded in shares to be issued
was transferred to the share capital account.

 

Short term employee benefits

 

Short term employee benefits include wages, salaries,
compensated absences, and bonuses. Short term employee benefit obligations are measured on an undiscounted basis and are recognized in
operating income as the related service is provided or capitalized if the service rendered is in connection with the creation of an intangible
asset. A liability is recognized for the amount expected to be paid under short term cash bonus plans if the Company has a present legal
or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated
reliably.

 

     

     

    

 

	BRAGG GAMING GROUP INC.	17

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

		2	SIGNIFICANT
                                            ACCOUNTING POLICIES (CONTINUED)

 

Share based payments

 

The Company has stock option plans for directors,
officers, employees, and consultants. Each tranche of an award is considered a separate award with its own vesting period and grant date
fair value. The fair value of each tranche is measured at the date of grant using the Black-Scholes option pricing model. In addition,
the Company also has deferred share unit (“DSU”), restricted share unit (“RSU”) and performance share unit (“PSU”)
plans for directors, officers, employees, and consultants. The fair value of each unit is measured as the share price on date of grant
with nil exercise price.

 

Compensation expense is recognized over each tranche’s
vesting period, based on the number of awards expected to vest, with the offset credited to contributed surplus. The number of awards
expected to vest is reviewed quarterly, with any impact being recognized immediately. When options are exercised, the amount received
is credited to share capital and the fair value attributed to these options is transferred from contributed surplus to share capital.
In the case of DSUs, RSUs or PSUs, only the fair value attributed to these options is transferred from contributed surplus to share capital.

 

Equity

 

Shares are classified as equity. Incremental costs
directly attributable to the issuance of shares are recognized as a deduction from equity. Contributed surplus includes amounts in connection
with conversion options embedded in compound financial instruments, share based payments and the value of expired options and warrants.
Deficit includes all current and prior period income and losses.

 

Warrants

 

The Company accounts for warrants using the Black-Scholes option pricing
model at the date of issuance. If and when warrants ultimately expire, the applicable amounts are transferred to contributed surplus.

 

     

     

    

 

	BRAGG GAMING GROUP INC.	18

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS

 

		3	LOSS BEFORE INCOME TAXES CLASSIFIED BY NATURE

 

The loss before income taxes is classified as follows:

 

	 	 	 	 	 	Three Months Ended March 31,	 
	 	 	Note	 	 	2021	 	 	2020	 
	Revenue	 	 	 	 	 	 	14,196	 	 	 	8,784	 
	Third-party content	 	 	 	 	 	 	(7,547	)	 	 	(4,817	)
	Gross Profit	 	 	 	 	 	 	6,649	 	 	 	3,967	 
	Salaries and subcontractors	 	 	 	 	 	 	(2,636	)	 	 	(2,116	)
	Share based payments	 	 	8	 	 	 	(1,309	)	 	 	(51	)
	Total employee costs	 	 	 	 	 	 	(3,945	)	 	 	(2,167	)
	Depreciation and amortization	 	 	 	 	 	 	(836	)	 	 	(784	)
	IT and hosting	 	 	 	 	 	 	(387	)	 	 	(320	)
	Professional fees	 	 	 	 	 	 	(495	)	 	 	(242	)
	Corporate costs	 	 	 	 	 	 	(185	)	 	 	(71	)
	Sales and marketing	 	 	 	 	 	 	(63	)	 	 	(92	)
	Bad debt expense	 	 	12	 	 	 	(242	)	 	 	(89	)
	Travel and entertainment	 	 	 	 	 	 	-	 	 	 	(108	)
	Transaction and acquisition costs	 	 	 	 	 	 	(563	)	 	 	(37	)
	Other operational costs	 	 	 	 	 	 	(438	)	 	 	(169	)
	Selling, General and Administrative Expenses	 	 	 	 	 	 	(7,154	)	 	 	(4,079	)
	Gain on remeasurement of consideration receivable	 	 	4	 	 	 	6	 	 	 	-	 
	Loss on remeasurement of deferred and contingent consideration	 	 	9	 	 	 	-	 	 	 	(4,968	)
	Operating Loss	 	 	 	 	 	 	(499	)	 	 	(5,080	)
	Interest income	 	 	 	 	 	 	15	 	 	 	8	 
	Accretion on liabilities	 	 	9	 	 	 	-	 	 	 	(54	)
	Interest and financing fees	 	 	 	 	 	 	(83	)	 	 	(15	)
	Net Interest Expense and Other Financing Charges	 	 	 	 	 	 	(68	)	 	 	(61	)
	Loss Before Income Taxes	 	 	 	 	 	 	(567	)	 	 	(5,141	)

 

     

     

    

 

	BRAGG GAMING GROUP INC.	19

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

		4	DISCONTINUED OPERATIONS

 

During the year ended December 31, 2019,
the Company decided to discontinue its online media business unit.

 

On April 30, 2020, the Company discontinued
its GIVEMEBET operation and as of March 31, 2021, this subsidiary is considered dormant with no remaining assets and liabilities.
Any associated net loss for this subsidiary continues to be presented as discontinued operations in the interim unaudited condensed consolidated
financial statements.

 

On May 7, 2020, the Company completed the
sale of its GIVEMESPORT operation for cash consideration of GBP 50 (EUR 56) plus additional consideration equivalent to the net current
assets disposed plus consideration receivable of 10% of GIVEMESPORT aggregate revenues for a period of twenty-one months from date of
completion. As of March 31, 2021, consideration receivable has been recognized at a present value of EUR 161 of which EUR 160 is
due within twelve months of the reporting date. Consideration is settled in cash at three-month intervals from the date of sale. As of
March 31, 2021, the Company has not identified any assets or liabilities as held for sale.

 

Consolidated statements of cash flows

 

	 	 	Three Months Ended March 31,	 
	 	 	2021	 	 	2020	 
	Net cash used in operating activities	 	 	-	 	 	 	(253	)
	Net cash used in financing activities	 	 	-	 	 	 	(63	)
	Net cash flows for the period	 	 	-	 	 	 	(316	)

 

Consolidated statements of loss and comprehensive
loss

 

	 	 	Three Months Ended March 31,	 
	 	 	2021	 	 	2020	 
	Revenue	 	 	-	 	 	 	478	 
	Cost of revenue	 	 	-	 	 	 	(156	)
	Gross Profit	 	 	-	 	 	 	322	 
	Selling, general and administrative expenses	 	 	-	 	 	 	(606	)
	Operating Loss	 	 	-	 	 	 	(284	)
	Net interest expense and other financing charges	 	 	-	 	 	 	(32	)
	Net Loss	 	 	-	 	 	 	(316	)
	Cumulative translation adjustment	 	 	-	 	 	 	(11	)
	Net Comprehensive Loss	 	 	-	 	 	 	(327	)

 

In the three months ended March 31, 2021,
remeasurement of the present value of the consideration receivable resulted in a gain on remeasurement of consideration receivable of
EUR 6 (three months ended March 31, 2020: EUR nil).

 

     

     

    

 

	BRAGG GAMING GROUP INC.	20

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS

 

		5	SHARE CAPITAL

 

Authorized - Unlimited Common Shares, fully paid

 

The following is a continuity of the Company’s share capital:

 

	 	 	 	 	Note	 	 	Number	 	 	Value	 
	January 1, 2020 and	 	 	 	 	 	 	 	 	 	 	 
	March 31, 2020	 	Balance	 	 	 	 	 	 	7,986,385	 	 	 	40,204	 
	January 1, 2021	 	Balance	 	 	 	 	 	 	13,111,248	 	 	 	62,304	 
	January 11, 2021 to February 22, 2021	 	Exercise of warrants	 	 	7	 	 	 	1,554,082	 	 	 	11,916	 
	January 21, 2021 to February 18, 2021	 	Exercise of broker warrants	 	 	7	 	 	 	160,548	 	 	 	897	 
	January 13, 2021	 	Shares issued on completion of private placement	 	 	 	 	 	 	247,934	 	 	 	1,918	 
	January 18, 2021	 	Shares issued upon completion of Oryx earn-out	 	 	 	 	 	 	4,700,000	 	 	 	22,000	 
	March 12, 2021 to March 17, 2021	 	Issuance of share capital upon exercise of RSUs	 	 	8	 	 	 	50,000	 	 	 	267	 
	 	 	Rounding of fractional shares after consolidation	 	 	 	 	 	 	2	 	 	 	-	 
	March 31, 2021	 	Balance	 	 	 	 	 	 	19,823,814	 	 	 	99,302	 

 

The Company’s Common Shares have no par
value.

 

Effective as of April 30, 2021, the Company
underwent a reverse stock split on the basis of one post-consolidation Common Share for every ten pre-consolidation Common Shares (1-for-10).
The share capital has been reported on a post-consolidation basis (Note 1).

 

Private placement

 

On January 13, 2021, the Company completed
a non-brokered private placement offering comprised of 247,934 Common Shares at a price of CAD 12.10 per share for aggregate gross proceeds
of EUR 1,937. This offering was exclusively taken up by Company employees and Board members and is subject to a hold period expiring May 14,
2021. No commission or finder's fee was paid in connection with the offering.

 

As at March 31, 2021, EUR nil (December 31,
2020: EUR 608) was held in trust on behalf of the Company for subscription receipts related to the private placement offering. This amount
was recorded in cash and cash equivalents.

 

     

     

    

 

 

	BRAGG GAMING GROUP INC.	21

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

5      SHARE CAPITAL (CONTINUED)

 

Completion of Oryx earn-out

 

On January 18, 2021, the Company satisfied
its earn-out obligations to K.A.V.O. Holdings Limited via a combination of cash and Common Shares of the Company. A total of 4,700,000
Common Shares of the Company were issued to the vendor with a recorded fair-value of EUR 22,000. The Common Shares are subject to a hold
period expiring May 19, 2021.

 

In connection with this transaction Matevž
Mazij became a “control person” of the Company, in accordance with section 1(1) of the Ontario Securities Act, with a
total shareholding through K.A.V.O. Holdings Limited of 4,900,000 Common Shares representing over 27% of the outstanding Common Shares
of the Company as of the settlement date.

 

6      PUBLIC
OFFERING COMPLETED NOVEMBER 18, 2020

 

On October 26, 2020, the Company announced
that it had entered into an agreement with a syndicate of underwriters pursuant to which the underwriters agreed to purchase 1,786,000
units (the "Units") from the treasury of the Company, at a price of CAD 7.00 per Unit and offer them to the public by way of
short form prospectus for total gross proceeds of approximately CAD 12,500 (the "Offering"). On October 27, 2020 the Company
agreed to increase the size of the Offering whereby the Underwriters agreed to purchase 2,571,500 Units for aggregate gross proceeds of
CAD 18,001.

 

The Company granted the underwriters an option
(the "Over-Allotment Option") to purchase up to an additional 15% of the Units of the Offering on the same terms exercisable
at any time up to 30 days following the closing of the Offering. The underwriters exercised the Over-Allotment Option in full and, together
with the base offering, purchased 2,957,225 Units in total for aggregate gross proceeds of EUR 13,343 (CAD 20,701). Issuance costs directly
associated with raise of funds amounted to EUR 1,216 (CAD 1,887) resulting in cash proceeds, net of issuance costs, of EUR 12,127 (CAD
18,814). Closing of the Offering occurred on November 18, 2020 with net proceeds to be used for growth initiatives, working capital
and general corporate purposes.

 

Each Unit consists of one Common Share and one
half of one warrant (each whole warrant, a "Public Offering Warrant") of the Company. Each Public Offering Warrant entitled
the holder thereof to purchase one Common Share at a price equal to CAD 10.00 for a period of 36 months following the closing of the Offering
(Note 7).

 

The Public Offering Warrants included an acceleration
provision, exercisable at the Company's option, if the Company's daily volume weighted average share price is greater than CAD 15.00 for
at least ten consecutive trading days. On January 21, 2021, the Company announced that it elected to exercise its right under the
terms of the warrant indenture to accelerate the expiry date of the warrants. Accordingly, the Company gave notice to all registered warrant
holders that the expiry date for the Warrants was accelerated to February 22, 2021. As of March 31, 2021, all such warrants
have been exercised or have expired.

 

In addition to the Units, the Company
granted 177,434 broker warrants (“Broker Warrants”), each convertible to one Common Share and half of one Public
Offering Warrant at a price equal to CAD 7.00 (Note 7).

 

     

     

    

 

	BRAGG GAMING GROUP INC.	22

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

7     WARRANTS

 

The following are continuities of the Company’s warrants:

 

	 	 	 	 	 	 	 		 	 	Special	 	 	 	 
	Number of Warrants	 	 	 	 
Warrants
	 	 	Warrants

                                                                                                                         issued upon
 
 Public Offering
	 	 	warrants-
 compensation
  
 
 options
	 	 	Broker
 
 warrants
	 
	January 1, 2020 and March 31, 2020	 	Balance	 	 	2,705,880	 	 	 	-	 	 	 	160,178	 	 	 	-	 
	January 1, 2021	 	Balance	 	 	-	 	 	 	1,478,512	 	 	 	-	 	 	 	177,434	 
	January 11, 2021 to February 22, 2021	 	Exercise of warrants	 	 	-	 	 	 	(1,554,082	)	 	 	-	 	 	 	-	 
	January 21, 2021 to February 18, 2021	 	Exercise of broker warrants	 	 	-	 	 	 	80,274	 	 	 	-	 	 	 	(160,548	)
	February 22, 2021	 	Expiry of warrants	 	 	-	 	 	 	(4,704	)	 	 	-	 	 	 	-	 
	March 31, 2021	 	Balance	 	 	-	 	 	 	-	 	 	 	-	 	 	 	16,886	 

 

Each unit consists of the following characteristics:

 

	 	 	 	 	 	 	 	 	Special	 	 	 	 
	 	 	Warrants	 	 	Warrants	 	 	warrants -	 	 	 	 
	 	 	issued	 	 	issued upon	 	 	compensation	 	 	Broker	 
	 	 	March 14, 2019	 	 	Public Offering	 	 	options	 	 	warrants	 
	Number of underlying shares	 	 	1	 	 	 	1	 	 	 	1	 	 	 	1	 
	Number of underlying warrants	 	 	-	 	 	 	-	 	 	 	1	 	 	 	0.5	 
	Exercise price of unit (CAD)	 	 	7.60	 	 	 	10.00	 	 	 	5.10	 	 	 	7.00	 

 

     

     

    

 

	BRAGG GAMING GROUP INC.	23

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

7     WARRANTS (CONTINUED)

 

Warrants issued upon completion of Public Offering

 

Upon completion of the Public Offering on November 18,
2020 (Note 6) 1,478,612 Public Offering Warrants were issued resulting in an increase in the fair value of Public Offering Warrants of
EUR 1,887, before issuance costs. The assumptions used to measure the fair value of the Public Offering Warrants under the Black-Scholes
valuation model were as follows:

 

	Expected dividend yield (%)	 	 	0.0	 
	Expected share price volatility (%)	 	 	103.5	 
	Risk-free interest rate (%)	 	 	0.11	 
	Expected life of warrants (years)	 	 	1.0	 
	Underlying share price (CAD)	 	 	8.00	 

 

The Public Offering Warrants were issued with
an exercise price of CAD 10.00 and were convertible to one Common Share per Public Offering Warrant initially expiring November 18,
2023. The Public Offering Warrant indenture included an acceleration provision, exercisable at the Company's option, if the Company's
daily volume weighted average Common Share price is greater than CAD 15.00 for at least ten consecutive trading days. The Company had
the option to accelerate the exercise period of the Public Offering Warrants to a period ending at least 30 days from the date notice
of such acceleration is provided to the holders of the Public Offering Warrants. On January 21, 2021, the Company announced that
it elected to exercise its right under the terms of a warrant indenture to accelerate the expiry date of the warrants. Accordingly, the
Company gave notice to all registered warrant holders that the expiry date for the Warrants was accelerated to February 22, 2021.

 

Between January 1, 2021 and February 22,
2021, 1,554,082 Public Offering Warrants were exercised resulting in issuance of 1,554,082 shares and cash receipt of EUR 10,085. An increase
in share capital of EUR 11,916 and decrease in fair value of warrants of EUR 1,831 was recognized in the interim unaudited condensed consolidated
statements of changes in equity. On February 22, 2021, 4,704 Public Offering Warrants expired resulting in a decrease in fair value
of warrants and corresponding increase in contributed surplus of EUR 7.

 

     

     

    

 

	BRAGG GAMING GROUP INC.	24

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

7     WARRANTS (CONTINUED)

 

Broker Warrants issued upon completion of Public Offering

 

Upon completion of the Public Offering on November 18,
2020 (Note 6), 177,434 broker warrants (“Broker Warrants”) were issued resulting in an increase in the fair value of warrants
of EUR 399, a decrease in share capital of EUR 331 and decrease in fair value of warrants of EUR 68. The Broker Warrants were issued with
an exercise price of CAD 7.00 and are convertible to one Common Share plus one-half of a Public Offering Warrant per Broker Warrant expiring
November 18, 2023. The assumptions used to measure the fair value of the Broker Warrants under the Black-Scholes valuation model
were as follows:

 

	Expected dividend yield (%)	 	 	0.0	 
	Expected share price volatility (%)	 	 	103.5	 
	Risk-free interest rate (%)	 	 	0.11	 
	Expected life of warrants (years)	 	 	1.0	 
	Underlying share price (CAD)	 	 	8.00	 

 

The underlying Public Offering Warrants were subject
to the same acceleration provision and notice of acceleration that was given on January 21, 2021. Between January 21, 2021 and
February 18, 2021, 160,548 Broker Warrants were exercised for 160,548 Common Shares and 80,274 Public Offering Warrants resulting
in an increase in share capital of EUR 897, an increase in fair value of warrants of EUR 196 and decrease in fair value of Broker Warrants
of EUR 361. Broker Warrants may still be exercised for Common Shares until date of expiry.

 

     

     

    

 

	BRAGG GAMING GROUP INC.	25

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

		8	SHARE BASED COMPENSATION

 

The Company maintains an Omnibus Incentive Equity
Plan ("OEIP") for certain employees and consultants. The plan was approved at an annual and special meeting of shareholders
on November 27, 2020. Under the plan, the Company may grant options for up to 3,180,000 of its shares.

 

The following is a continuity of the Company’s
equity incentive plans:

 

	 	 	DSU	 	 	RSU	 	 	 	 	 	FSO	 
	 	 	 	 	 	 	 	 	 	 	 	Weighted

	 
	 	 	Outstanding

	 	 	Outstanding

	 	 	Outstanding

	 	 	Average

	 
	 	 	DSU Units

	 	 	RSU Units

	 	 	FSO Options

	 	 	Exercise

	 
	 	 	(Number of

	 	 	(Number of

	 	 	(Number

	 	 	Price / Share

	 
	 	 	of shares)	 	 	of shares)	 	 	of shares)	 	 	CAD	 
	As at January 1, 2020	 	 	408,000	 	 	 	-	 	 	 	745,576	 	 	 	6.02	 
	Expired	 	 	-	 	 	 	-	 	 	 	(750	)	 	 	44.86	 
	Forfeited / Cancelled	 	 	-	 	 	 	-	 	 	 	(47,321	)	 	 	11.64	 
	As at March 31, 2020	 	 	408,000	 	 	 	-	 	 	 	697,505	 	 	 	5.60	 
	As at January 1, 2021	 	 	120,000	 	 	 	210,000	 	 	 	1,228,410	 	 	 	6.37	 
	Granted	 	 	133,800	 	 	 	75,000	 	 	 	-	 	 	 	n/a	 
	Exercised	 	 	-	 	 	 	(50,000	)	 	 	-	 	 	 	n/a	 
	Forfeited / Cancelled	 	 	-	 	 	 	-	 	 	 	(1,782	)	 	 	2.30	 
	As at March 31, 2021	 	 	253,800	 	 	 	235,000	 	 	 	1,226,628	 	 	 	6.38	 

 

The following table summarizes information about
the outstanding share options as at March 31, 2021:

 

	 	 	Outstanding	 	 	 	 	 	 	 	 	Exercisable	 	 	 	 
	 	 	 	 	 	Weighted

	 	 	Weighted

	 	 	 	 	 	Weighted

	 
	 	 	 	 	 	Average

	 	 	Average

	 	 	 	 	 	Average

	 
	 	 	Options	 	 	Remaining

	 	 	Exercise

	 	 	Options

	 	 	Exercise

	 
	Range of exercise	 	(Number	 	 	Contractual

	 	 	Price / Share

	 	 	(Number

	 	 	Price / Share

	 
	prices (CAD)	 	of shares)	 	 	Life (Years)	 	 	CAD	 	 	of shares)	 	 	CAD	 
	2.30 - 5.00	 	 	267,218	 	 	 	4	 	 	 	2.99	 	 	 	164,410	 	 	 	3.20	 
	5.01 - 5.60	 	 	225,000	 	 	 	3	 	 	 	5.60	 	 	 	181,250	 	 	 	5.60	 
	5.61 - 7.80	 	 	732,858	 	 	 	5	 	 	 	7.80	 	 	 	732,858	 	 	 	7.80	 
	7.81 - 33.30	 	 	1,552	 	 	 	5	 	 	 	33.30	 	 	 	1,552	 	 	 	33.30	 
	 	 	 	1,226,628	 	 	 	4	 	 	 	6.38	 	 	 	1,080,070	 	 	 	6.77	 

 

     

     

    

 

	BRAGG GAMING GROUP INC.	26

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

 

8     SHARE BASED COMPENSATION
(CONTINUED)

 

The following table summarizes information about the outstanding share
options as at March 31, 2020:

 

	 	 	 	 	 	Outstanding	 	 	 	 	 	Exercisable	 
	 	 	 	 	 	Weighted

	 	 	Weighted

	 	 	 	 	 	Weighted

	 
	 	 	 	 	 	Average

	 	 	Average

	 	 	 	 	 	Average

	 
	 	 	Options

	 	 	Remaining

	 	 	Exercise

	 	 	Options

	 	 	Exercise

	 
	Range of exercise	 	(Number

	 	 	Contractual

	 	 	Price / Share

	 	 	(Number

	 	 	Price / Share

	 
	prices (CAD)	 	of shares)	 	 	Life (Years)	 	 	CAD	 	 	of shares)	 	 	CAD	 
	2.30 - 5.00	 	 	300,703	 	 	 	4	 	 	 	2.88	 	 	 	128,154	 	 	 	3.65	 
	5.01 - 5.60	 	 	336,667	 	 	 	4	 	 	 	5.60	 	 	 	138,750	 	 	 	5.60	 
	5.61 - 33.30	 	 	60,135	 	 	 	6	 	 	 	19.18	 	 	 	47,135	 	 	 	19.24	 
	 	 	 	697,505	 	 	 	4	 	 	 	5.60	 	 	 	314,039	 	 	 	6.85	 

 

During the three months ended March 31, 2021,
a share based payment charge of EUR 40 has been recognized in the interim unaudited condensed consolidated statements of loss and comprehensive
income (loss) (three months ended March 31, 2020: EUR 51) in relation to the fixed stock options.

 

Deferred Share Units

 

Exercises of grants may only be settled in shares,
and only when the employee or consultant has left the Company. Under the plan, the Company may grant options of its shares at nil cost
that vest immediately.

 

During the three months ended March 31, 2021,
133,800 DSUs (three months ended March 31, 2020: nil DSUs) were granted with a fair value of CAD 21.80 per unit (three months ended
March 31, 2020: nil) determined as the share price on the date of grant.

 

During the three months ended March 31, 2021
a share based payment charge of EUR 861 has been recognized in the interim unaudited condensed consolidated statements of loss and comprehensive
income (loss) (three months ended March 31, 2020: EUR nil) in relation to the deferred share units.

 

     

     

    

 

	BRAGG GAMING GROUP INC.	27

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

		8	SHARE BASED
                                            COMPENSATION (CONTINUED)

 

Restricted Share Units

 

During the three months ended March 31, 2021,
75,000 RSUs (three months ended March 31, 2020: nil) were granted with a fair value of CAD 21.80 per unit (three months ended March 31,
2020: nil) determined as the share price on the date of grant.

 

During the three months ended March 31, 2021,
a share based payment charge of EUR 408 has been recognized in the interim unaudited condensed consolidated statements of loss and comprehensive
income (loss) (three months ended March 31, 2020: EUR nil) in relation to the RSUs.

 

During the three months ended March 31, 2021,
50,000 Common Shares were issued upon exercise of 50,000 RSUs. Upon exercise of RSUs, EUR 267 was transferred from contributed surplus
to share capital in the interim unaudited condensed consolidated statement of changes in equity.

 

    

     

    

 

	BRAGG GAMING GROUP INC.	28

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

		9	DEFERRED AND CONTINGENT CONSIDERATION

 

The Company completed the acquisition of Oryx
Gaming International LLC together with its subsidiaries on December 20, 2018. The vendor is now part of the Company’s key management,
though was not at the time of the acquisition. Deferred and contingent consideration on December 31, 2020 related to two earnout
payments due, comprised of both cash and shares to be issued.

 

The following is a continuity of the Company’s
deferred and contingent consideration:

 

	As at January 1, 2020	 	 	23,732	 
	Cash paid on settlement of deferred and contingent consideration	 	 	(527	)
	Accretion expense	 	 	1,037	 
	Shares to be issued	 	 	(22,000	)
	Loss on remeasurement of deferred and contingent consideration	 	 	9,276	 
	Effect of movements in exchange rates	 	 	3	 
	As at December 31, 2020	 	 	11,521	 
	Cash paid on settlement of deferred and contingent consideration	 	 	(11,521	)
	As at March 31, 2021	 	 	-	 

 

In the three month period ended March 31,
2021, EUR nil (three month period ended March 31, 2020: EUR 4,968) of loss on remeasurement of deferred and contingent consideration
and EUR nil (three month period ended March 31, 2020: EUR 54) of accretion expense was recognized in the interim unaudited condensed
consolidated statements of loss and comprehensive income (loss).

 

Deferred and contingent consideration is disclosed
in the interim unaudited condensed consolidated statement of financial position as follows:

 

	 	 	As at	 	 	As at	 
	 	 	March 31,	 	 	December 31,	 
	 	 	2021	 	 	2020	 
	Deferred and Contingent Consideration	 	 	-	 	 	 	11,521	 

 

All contingent liabilities were settled in full
to the Oryx vendor on January 18, 2021 following shareholder approval on November 27, 2020. On January 18, 2021, the Company
satisfied its earn-out obligations to K.A.V.O. Holdings Limited via a combination of cash and Common Shares (Note 5) of the Company. Cash
paid totalled EUR 11,598, of which EUR 11,521 fully settled deferred and contingent consideration payable, EUR 52 settled interest payable
and EUR 25 settled legal fees.

 

    

     

    

 

	BRAGG GAMING GROUP INC.	29

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

		29	INTANGIBLE
                                            ASSETS

 

	 	 	 	 	 	Deferred	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Intellectual	 	 	Development	 	 	Customer	 	 	 	 	 	 	 	 	 	 
	 	 	Property	 	 	Costs	 	 	Relationships	 	 	Brands	 	 	Other	 	 	Total	 
	Cost	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	As at December 31, 2019	 	 	8,801	 	 	 	1,222	 	 	 	4,903	 	 	 	1,357	 	 	 	128	 	 	 	16,411	 
	Additions	 	 	165	 	 	 	2,075	 	 	 	-	 	 	 	-	 	 	 	46	 	 	 	2,286	 
	As at December 31, 2020	 	 	8,966	 	 	 	3,297	 	 	 	4,903	 	 	 	1,357	 	 	 	174	 	 	 	18,697	 
	Additions	 	 	10	 	 	 	571	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	581	 
	As at March 31, 2021	 	 	8,976	 	 	 	3,868	 	 	 	4,903	 	 	 	1,357	 	 	 	174	 	 	 	19,278	 
	Accumulated Amortization	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	As at December 31, 2019	 	 	1,119	 	 	 	76	 	 	 	504	 	 	 	140	 	 	 	11	 	 	 	1,850	 
	Amortization	 	 	1,169	 	 	 	754	 	 	 	490	 	 	 	136	 	 	 	19	 	 	 	2,568	 
	As at December 31, 2020	 	 	2,288	 	 	 	830	 	 	 	994	 	 	 	276	 	 	 	30	 	 	 	4,418	 
	Amortization	 	 	300	 	 	 	299	 	 	 	123	 	 	 	34	 	 	 	6	 	 	 	762	 
	As at March 31, 2021	 	 	2,588	 	 	 	1,129	 	 	 	1,117	 	 	 	310	 	 	 	36	 	 	 	5,180	 
	Carrying Amount	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	As at December 31, 2020	 	 	6,678	 	 	 	2,467	 	 	 	3,909	 	 	 	1,081	 	 	 	144	 	 	 	14,279	 
	As at March 31, 2021	 	 	6,388	 	 	 	2,739	 	 	 	3,786	 	 	 	1,047	 	 	 	138	 	 	 	14,098	 

 

		11	CASH AND CASH EQUIVALENTS

 

As at March 31, 2021 and December 31,
2020, cash and cash equivalents consisted of cash held in banks, marketable investments with an original maturity date of 90 days or less
from the date of acquisition, and prepaid credit cards.

 

As at March 31, 2021, EUR nil (December 31,
2020: EUR 608) was held in trust on behalf of the Company for subscription receipts related to a non-brokered private placement offering
that completed on January 13, 2021 (Note 5). This amount was recorded in cash and cash equivalents.

 

    

     

    

 

	BRAGG GAMING GROUP INC.	30

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

		30	TRADE AND
                                            OTHER RECEIVABLES

 

The following is an aging of the Company’s trade and other receivables:

 

	 	 	As at	 	 	As at	 
	 	 	March 31,	 	 	December 31,	 
	 	 	2021	 	 	2020	 
	Less than one month	 	 	8,007	 	 	 	9,563	 
	Between two and three months	 	 	763	 	 	 	1,193	 
	Greater than three months	 	 	1,656	 	 	 	1,296	 
	 	 	 	10,426	 	 	 	12,052	 
	Provision for expected credit losses	 	 	(2,019	)	 	 	(1,755	)
	Trade and Other Receivables	 	 	8,407	 	 	 	10,297	 

 

The balance of accrued income is included in receivables aged less
than one month as this balance will be converted to accounts receivable upon issuance of sales invoices.

 

The following is a continuity of the Company’s provision for
expected credit losses related to trade and other receivables:

 

	As at December 31, 2019	 	 	941	 
	Bad debt written-off	 	 	(419	)
	Net additional provision for doubtful debts	 	 	1,076	 
	Provision for late interest receivable	 	 	157	 
	As at December 31, 2020	 	 	1,755	 
	Net additional provision for doubtful debts	 	 	242	 
	Provision for late interest receivable	 	 	22	 
	As at March 31, 2021	 	 	2,019	 

 

    

     

    

 

	BRAGG GAMING GROUP INC.	31

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

		13	PREPAID EXPENSES AND OTHER ASSETS

 

Prepaid expenses and other assets comprises:

 

	 	 	As at	 	 	As at	 
	 	 	March 31,	 	 	December 31,	 
	 	 	2021	 	 	2020	 
	Prepayments	 	 	1,011	 	 	 	249	 
	Deposits	 	 	68	 	 	 	-	 
	Other assets	 	 	17	 	 	 	14	 
	Prepaid Expenses and Other Assets	 	 	1,096	 	 	 	263	 

 

		14	TRADE PAYABLES AND OTHER LIABILITIES

 

Trade payables and other liabilities comprises:

 

	 	 	As at	 	 	As at	 
	 	 	March 31,	 	 	December 31,	 
	 	 	2021	 	 	2020	 
	Trade payables	 	 	4,871	 	 	 	6,406	 
	Accrued liabilities	 	 	9,195	 	 	 	6,099	 
	Sales tax payable	 	 	2,734	 	 	 	4,356	 
	Other payables	 	 	90	 	 	 	107	 
	Trade Payables and Other Liabilities	 	 	16,890	 	 	 	16,968	 

 

    

     

    

 

	BRAGG GAMING GROUP INC.	32

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

		15	RELATED PARTY TRANSACTIONS

 

The Company’s policy is to conduct all transactions
and settle all balances with related parties on market terms and conditions for those in the normal course of business. Transactions between
the Company and its consolidated entities have been eliminated on consolidation and are not disclosed in this note.

 

Key Management Personnel

 

The Company’s key management personnel are
comprised of members of the Board and the executive team which consists of the Interim Chief Executive Officer (“CEO”), Chief
Financial Officer (“CFO”), Chief Strategy Officer (“CSO”) and Managing Director of Oryx. Three key management
employees are also shareholders in the Company. Transactions and balances between the Company and its key management personnel are as
follows:

 

		•	Revenues for the three months ended March 31, 2021 to a shareholder
of the Company totalled EUR 21 (three months ended March 31, 2020: EUR 4).

		•	Total compensation for salaries, director fees, share-based payments and
short-term employee benefits of key management personnel of the Company for the three months ended March 31, 2021 totalled EUR 1,668
(three months ended March 31, 2020: EUR 438).

		•	Loss on remeasurement of deferred and contingent consideration payable to
the Managing Director of Oryx for the three months ended March 31, 2021 was nil (three months ended March 31, 2020: EUR 4,968).

		•	Interest expense on deferred and contingent consideration payable to the
Managing Director of Oryx for the three months ended March 31, 2021 totalled EUR 52 (three months ended March 31, 2020: nil).

		•	During the three months ended March 31, 2021, legal fees of EUR 25 payable
to the Managing Director of Oryx in relation to the Oryx earn-out was recognized in the interim unaudited condensed consolidated statements
of loss and comprehensive income (loss) (three months ended March 31, 2020: nil).

		•	During the three months ended March 31, 2021, a total of EUR 11,521
in payments were made to the Managing Director of Oryx for deferred consideration (three months ended March 31, 2020: nil).

		•	During the three months ended March 31, 2021, a total of EUR 140 in
payments were made to the Managing Director of Oryx for interest on deferred and contingent consideration payable (three months ended
March 31, 2020: nil).

		•	As at March 31, 2021, EUR 5 of trade and other receivables was receivable
from the Managing Director of Oryx and other shareholders (December 31, 2020: EUR 4).

		•	As at March 31, 2021, EUR 172 of trade payables and other liabilities
was due to the CEO, CFO, the Managing Director of Oryx and member of Board (December 31, 2020: EUR 166).

		•	As at March 31, 2021, nil of deferred and contingent consideration (Note
9) was payable to the Managing Director of Oryx (December 31, 2020: EUR 11,521).

		•	During the three months ended March 31, 2021, EUR 22,000 of share capital
(three months ended March 31, 2020: EUR nil) was issued to the Managing Director of Oryx upon completion of the earn-out (Note 9).
A corresponding decrease in shares to be issued was recognized in the interim unaudited condensed consolidated statements of changes in
equity.

		•	During the three months ended March 31, 2021, EUR 267 additional share
capital was recognized in the interim unaudited condensed consolidated statements of changes in equity with a corresponding reduction
in contributed surplus for exercise of RSUs by key management personnel of the Company (Note 8) (three months ended March 31, 2020:
nil).

 

    

     

    

 

	BRAGG GAMING GROUP INC.	33

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

		16	FINANCIAL
                                            INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

 

The financial instruments measured at amortized cost are summarised
below:

 

Financial Assets

 

	 	Financial assets as subsequently
	 	measured at amortized cost
	 	 	March 31,	 	 	December 31,	 
	 	 	2021	 	 	2020	 
	Trade and other receivables	 	 	8,407	 	 	 	10,297	 

 

Financial Liabilities

 

	 	Financial liabilities as subsequently
	 	measured at amortized cost
	 	 	March 31,	 	 	December 31,	 
	 	 	2021	 	 	2020	 
	Trade payables	 	 	4,871	 	 	 	6,406	 
	Accrued liabilities	 	 	9,195	 	 	 	6,099	 
	Other liabilities	 	 	90	 	 	 	107	 
	Lease obligations on right of use assets	 	 	702	 	 	 	726	 
	 	 	 	14,858	 	 	 	13,338	 

 

The carrying values of the financial instruments approximate their
fair values.

 

    

     

    

 

	BRAGG GAMING GROUP INC.	34

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

		16	FINANCIAL
                                            INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED)

 

Fair Value Hierarchy

 

The following table presents the fair values and fair value hierarchy
of the Company’s financial instruments.

 

	 	March 31, 2021	 	December 31, 2020	 
	 	 	Level 1	 	 	Level 3	 	 	Total	 	 	Level 1	 	 	Level 3	 	 	Total	 
	Financial assets	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Fair value through profit and loss:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Cash and cash equivalents	 	 	30,112	 	 	 	-	 	 	 	30,112	 	 	 	26,102	 	 	 	-	 	 	 	26,102	 
	Consideration receivable	 	 	-	 	 	 	161	 	 	 	161	 	 	 	-	 	 	 	192	 	 	 	192	 
	Financial liabilities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Fair value through profit and loss:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Deferred and contingent consideration	 	 	-	 	 	 	-	 	 	 	-	 	 	 	11,521	 	 	 	-	 	 	 	11,521	 

 

There were no transfers between the levels of
the fair value hierarchy during the periods.

 

During the three months ended March 31, 2021,
a loss of EUR nil (three months ended March 31, 2020: EUR 4,968), was recognized in the interim unaudited condensed consolidated
statements of loss and comprehensive income (loss) as loss on remeasurement of deferred and contingent consideration (Note 9) for financial
instruments designated as FVTPL.

 

    

     

    

 

	BRAGG GAMING GROUP INC.	35

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 

PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

		16	FINANCIAL
                                            INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED)

 

As a result of holding and issuing financial instruments,
the Company is exposed to certain risks. The following is a description of those risks and how the exposures are managed.

 

Liquidity risk

 

Liquidity risk is the risk that the Company is
unable to generate or obtain sufficient cash and cash equivalents in a cost-effective manner to fund its obligations as they come due.
The Company will experience liquidity risks if it fails to maintain appropriate levels of cash and cash equivalents, is unable to access
sources of funding or fails to appropriately diversify sources of funding. If any of these events were to occur, they could adversely
affect the financial performance of the Company.

 

The Company has a planning and budgeting process
in place by which it anticipates and determines the funds required to support its normal operating requirements. The Company coordinates
this planning and budgeting process with its financing activities through its capital management process. The Company holds sufficient
cash and cash equivalents and working capital, maintained through stringent cash flow management, to ensure sufficient liquidity is maintained.
The Company is not subject to any externally imposed capital requirements.

 

The following are the undiscounted contractual
maturities of significant financial liabilities and the total contractual obligations of the Company as at March 31, 2021:

 

	 	 	2021	 	 	2022	 	 	2023	 	 	2024	 	 	Thereafter	 	 	Total	 
	Trade payables and other liabilities	 	 	16,890	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	16,890	 
	Lease obligations on right of use assets	 	 	118	 	 	 	157	 	 	 	157	 	 	 	157	 	 	 	157	 	 	 	746	 
	 	 	 	17,008	 	 	 	157	 	 	 	157	 	 	 	157	 	 	 	157	 	 	 	17,636	 

 

Foreign currency exchange risk

 

The Company’s financial statements are presented
in EUR, however a portion of the Company’s net assets and operations are denominated in other currencies, particularly the Canadian
dollar. Such net assets are translated into EUR at the foreign currency exchange rate in effect at the reporting date, and operations
at the foreign currency exchange rates that approximate the rates in effect at the dates when such items are recognized. As a result,
the Company is exposed to foreign currency translation gains and losses, which are recorded in accumulated other comprehensive loss.

 

The Company is also exposed to risk on transaction
in currencies other than its functional currency resulting in realized and unrealized foreign currency gains and loss which are recorded
in other operational costs. The Company estimates that an appreciation of the EUR of 10% relative to other currencies would result in
a decrease of EUR 355 in earnings before income taxes while a depreciating EUR will have the opposite impact.

 

The Company has no derivative instruments in the
form of futures contracts and forward contracts to manage its current and anticipated exposure to fluctuations in EUR exchange rates.

 

    

     

    

 

 

	BRAGG GAMING GROUP INC.	36
	NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020
	PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

		16	FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED)

 

Credit risk

The Company is exposed to credit risk resulting
from the possibility that counterparties could default on their financial obligations to the Company including cash and cash equivalents,
other assets and accounts receivable. Failure to manage credit risk could adversely affect the financial performance of the Company.

 

The risk related to cash and cash equivalents
is reduced by policies and guidelines that require that the Company enters into transactions only with counterparties or issuers that
have a minimum long term “BBB” credit rating from a recognized credit rating agency. The Company mitigates the risk of credit
loss relating to accounts receivable by evaluating the creditworthiness of new customers and establishes a provision for expected credit
losses. The Company applies the simplified approach to provide for expected credit losses as prescribed by IFRS 9, Financial Instruments,
which permits the use of the lifetime expected loss provision for all accounts receivable. The expected credit loss provision is based
on the Company’s historical collections and loss experience and incorporates forward-looking factors, where appropriate.

 

The provision matrix below shows the expected
credit loss rate for each aging category of accounts receivable as at March 31, 2021:

 

	 	 	 	 	 	 	Aging (months)	 	 	 	 	 
	 	 	Note	 	 	<1	 	 	1 - 3	 	 	>3	 	 	Total	 
	Gross accounts receivable	 	 	12	 	 	 	8,007	 	 	 	763	 	 	 	1,656	 	 	 	10,426	 
	Expected loss rate	 	 	 	 	 	 	3.60	%	 	 	40.63	%	 	 	85.81	%	 	 	19.37	%
	Expected Loss Provision	 	 	12	 	 	 	288	 	 	 	310	 	 	 	1,421	 	 	 	2,019	 

 

The provision matrix below shows the expected
credit loss rate for each aging category of accounts receivable as at December 31, 2020:

 

	 	 	 	 	 	 	Aging (months)	 	 	 	 	
	 	 	Note	 	 	<1	 	 	1 - 3	 	 	>3	 	 	Total	 
	Gross
accounts receivable
	 	 	12	 	 	 	9,563	 	 	 	1,193	 	 	 	1,296	 	 	 	12,052	 
	Expected loss rate	 	 	 	 	 	 	4.51	%	 	 	14.84	%	 	 	88.50	%	 	 	14.56	%
	Expected Loss Provision	 	 	12	 	 	 	431	 	 	 	177	 	 	 	1,147	 	 	 	1,755	 

 

Gross accounts receivable includes the balance
of accrued income within the aging category of less than one month.

 

    

     

    

	BRAGG GAMING GROUP INC.	37
	NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020
	PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

		16	FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED)

 

Concentration risk

 

For the three months ended March 31, 2021,
two customers (three months ended March 31, 2020: two customers) contributed more than 10% each to the Company’s revenues.
Aggregate revenues from these customers totalled EUR 4,175 (three months ended March 31, 2020: EUR 2,032).

 

As at March 31, 2021, one customer (December 31,
2020: one customer) constituted more than 10% each to the Company’s accounts receivable. The balance owed by this customer totalled
EUR 1,069 (December 31, 2020: EUR 1,247). The Company continues to expand its customer base to reduce the concentration risk.

 

		17	SUPPLEMENTARY CASHFLOW INFORMATION

 

Cash flows arising from changes in non-cash working capital are summarized
below:

 

	 	 	Three Months Ended March 31,
		 	2021	 	 	2020	 
	Cash flows arising from movement in:	 	 	 	 	 	 
	Trade and other receivables	 	 	1,890	 	 	 	(902	)
	Prepaid expenses and other assets	 	 	(833	)	 	 	1	 
	Deferred revenue	 	 	394	 	 	 	-	 
	Trade payables and other liabilities	 	 	(78	)	 	 	2,762	 
	Other liabilities - non-current	 	 	13	 	 	 	-	 
	Changes in Non-Cash Working Capital	 	 	1,386	 	 	 	1,861	 

 

    

     

    

	BRAGG GAMING GROUP INC.	38
	NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020
	PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

		18	SEGMENT INFORMATION

 

Operating

The Company has one reportable operating segment in its continuing
operations, B2B Online Gaming.

 

The accounting policies of the reportable operating
segments are the same as those described in the Company’s summary of significant accounting policies (Note 2). The Company measures
each reportable operating segment’s performance based on adjusted EBITDA. No reportable operating segment is reliant on any single
external customer.

 

Intersegment charges have been eliminated on
consolidation.

 

Geography – Revenue

Revenue for continuing operations was generated
from the following jurisdictions:

 

	 	 	 	Three Months Ended March 31,	 
	 	 	 	2021	 	 	2020	 
	Malta	 	 	 	9,475	 	 	 	5,936	 
	Curaçao	 	 	 	2,773	 	 	 	1,742	 
	Croatia	 	 	 	425	 	 	 	286	 
	Germany	 	 	 	426	 	 	 	45	 
	Romania	 	 	 	319	 	 	 	150	 
	Serbia	 	 	 	199	 	 	 	128	 
	Other	 	 	 	579	 	 	 	497	 
	Revenue	 	 	 	14,196	 	 	 	8,784	 

 

This segmentation is not correlated to the geographical location of
the Company’s worldwide end-user base.

 

Geography – Non-Current Assets

Non-current assets are held in the following jurisdictions:

 

	 	 	As at	 	 	As at	 
	 	 	March 31,	 	 	December 31,	 
	 	 	2021	 	 	2020	 
	United States	 	 	33,927	 	 	 	34,104	 
	Other	 	 	1,074	 	 	 	1,180	 
	Non-Current Assets	 	 	35,001	 	 	 	35,284	 

 

    

     

    

	BRAGG GAMING GROUP INC.	39
	NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020
	PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

		19	INCOME TAXES

 

The components of income taxes recognized in the interim unaudited
condensed consolidated statements of financial position are as follows:

 

	 	 	As at	 	 	As at	 
	 	 	March 31,	 	 	December 31,	 
	 	 	2021	 	 	2020	 
	Income taxes payable	 	 	1,913	 	 	 	1,318	 
	Deferred income tax liabilities	 	 	1,231	 	 	 	1,415	 

 

The components of income taxes recognized in the interim unaudited
condensed consolidated statements of loss and comprehensive income (loss) are as follows:

 

	 	 	Three Months Ended March 31,	 
	 	 	2021	 	 	2020	 
	Current period	 	 	691	 	 	 	271	 
	Adjustment in respect of prior periods	 	 	-	 	 	 	-	 
	Current Income Taxes	 	 	691	 	 	 	271	 
	Deferred income tax recovery	 	 	(184	)	 	 	(28	)
	Deferred Income Tax Recovery	 	 	(184	)	 	 	(28	)
	Income Taxes	 	 	507	 	 	 	243	 

 

There is no income tax expense recognized in other comprehensive income
(loss).

 

    

     

    

	BRAGG GAMING GROUP INC.	40
	NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020
	PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

		19	INCOME TAXES (CONTINUED)

 

The effective income tax rates in the interim
unaudited condensed consolidated statements of loss and comprehensive income (loss) were reported at rates different than the combined
Canadian federal and provincial statutory income tax rates for the following reasons:

 

	 	 	Three Months Ended March 31,	 
	 	 	2021	 	 	2020	 
	 	 	 	%	 	 	 	%	 
	Canadian statutory tax rate	 	 	26.5	 	 	 	26.5	 
	Effect of tax rate in foreign jurisdictions	 	 	20.5	 	 	 	1.5	 
	Impact of foreign currency translation	 	 	-	 	 	 	1.1	 
	Non-deductible and non-taxable items	 	 	(74.0	)	 	 	(8.3	)
	Remeasurement of contingent and deferred consideration	 	 	-	 	 	 	(14.2	)
	Accretion expense of contingent consideration	 	 	-	 	 	 	(4.5	)
	Change in tax benefits not recognized	 	 	(62.4	)	 	 	(5.1	)
	Adjustments in respect of prior periods	 	 	-	 	 	 	(2.2	)
	Other	 	 	-	 	 	 	0.5	 
	Effective Income Tax Rate Applicable to Loss Before Income Taxes	 	 	(89.4	)	 	 	(4.7	)

 

Deferred income tax liabilities recognized in the interim unaudited
condensed consolidated statements of financial position were attributable solely to acquired intangible assets (Note 10).

 

    

     

    

	BRAGG GAMING GROUP INC.	41
	NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020
	PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

		19	INCOME TAXES (CONTINUED)

 

The portion of the income tax losses related
to Canada which have a limited carry-forward period expire in the years 2026 to 2041 as follows:

 

	2026	 	 	 	97	 
	2027	 	 	 	182	 
	2028	 	 	 	170	 
	2029	 	 	 	87	 
	2030	 	 	 	60	 
	2031	 	 	 	60	 
	2032	 	 	 	101	 
	2033	 	 	 	68	 
	2034	 	 	 	126	 
	2035	 	 	 	126	 
	2036	 	 	 	134	 
	2037	 	 	 	279	 
	2038	 	 	 	1,897	 
	2039	 	 	 	2,001	 
	2040	 	 	 	3,100	 
	2041	 	 	 	1,379	 
	 	 	 	 	9,867	 

 

The United Kingdom losses are carried forward
indefinitely unless subject to certain restrictions and are now classified in the current year as discontinued operations as unrecognized
deferred income tax assets. The deductible temporary differences do not expire under current income tax legislation. Deferred income
tax assets were not recognized in respect of these items because it is not probable that future taxable income will be available to the
Company to utilize the benefits.

 

		20	CONTINGENT LIABILITIES

 

In the ordinary course of business, the Company
is involved in and potentially subject to, legal actions and proceedings. In addition, the Company is subject to tax audits from various
tax authorities on an ongoing basis. As a result, from time to time, tax authorities may disagree with the positions and conclusions
taken by the Company in its tax filings or legislation could be amended or interpretations of current legislation could change, any of
which events could lead to reassessments.

 

The Company is not aware of any legal, administrative,
or other proceedings pending, which would materially affect its financial condition.

 

    

     

    

	BRAGG GAMING GROUP INC.	42
	NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020
	PRESENTED IN EUROS (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

		21	SUBSEQUENT EVENTS

 

Reverse Stock Split

At the annual and special meeting of shareholders
of the Company held on April 28, 2021, the shareholders approved a consolidation (reverse stock split) of the Common Shares. The
Board of Directors determined that the consolidation would be on the basis of one post-consolidation Common Share for every ten pre-consolidation
Common Shares (1-for-10).

 

The consolidation became effective as of April 30,
2021, and the Common Shares commenced trading on the Toronto Stock Exchange on a post-consolidation basis at the open of trading on May 5,
2021.

 

Amendment and Restatement of Omnibus Equity
Incentive Plan

The Company maintains an OEIP for certain employees
and consultants. At the annual and special meeting of shareholders of the Company held on April 28, 2021, the shareholders approved
the increase in the number of Common Shares available for issuance as awards under the plan from 3,180,000 to 3,965,000.

 

Base Shelf Prospectus

In order to support future growth initiatives,
on May 4, 2021, the Company filed a short form base shelf prospectus (the "Base Shelf Prospectus"), with securities regulators
in each of the provinces and territories of Canada. The Base Shelf Prospectus permits the Company to offer and sell Common Shares, unsecured
debt securities, subscription receipts, warrants, other securities convertible or exchange for Common Shares or other securities of the
Company or any combination thereof in various offerings having an aggregate value of up to CAD 500 million during the 25-month period
that the Base Shelf Prospectus remains effective.

 

Acquisition of Spin Games LLC

On May 12, 2021, the Company announced it
had entered into an agreement to acquire Spin Games LLC (“Spin”) in a cash and stock transaction for a purchase price of
approximately USD 30 million. Under the deal the sellers of Spin will receive USD 10 million in cash and USD 20 million in Common Shares
of the Company of which USD 5 million in Common Shares will be issued on closing and the balance over the next three years. The transaction
is expected to close following final approval from state gaming regulators and satisfaction of other customary closing conditions.Exhibit 4.5

 

 

Bragg Gaming Group Inc

 

MANAGEMENT DISCUSSION & ANALYSIS
FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2021

 

     

     

    

 

 

TABLE OF CONTENTS

 

		1.	MANAGEMENT
DISCUSSION & ANALYSIS	2

 

		2.	CAUTION
REGARDING FORWARD-LOOKING STATEMENTS	3

 

		3.	LIMITATIONS
OF KEY METRICS AND OTHER DATA	4

 

		4.	OVERVIEW
OF Q1 2021	6

 

		5.	FINANCIAL
RESULTS	15

 

		5.1	Basis
of financial discussion	15

 

		5.2	Selected
interim information	16

 

		5.3	Other
financial information	17

 

		5.4	Selected
financial information	18

 

		5.5	Summary
of quarterly results	20

 

		5.6	Liquidity
and capital resources	20

 

		5.7	Cash
flow summary	22

 

		6	TRANSACTIONS
BETWEEN RELATED PARTIES	23

 

		7	DISCLOSURE
OF OUTSTANDING SHARE DATA	24

 

		8	CRITICAL
ACCOUNTING ESTIMATES	25

 

		9	CHANGES
IN ACCOUNTING POLICY	28

 

		10	RISK
FACTORS AND UNCERTAINTIES	28

 

		11	ADDITIONAL
INFORMATION	31

 

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	1

     

    

 

		1.	MANAGEMENT DISCUSSION & ANALYSIS

 

This Management Discussion and Analysis (“MD&A”)
provides a review of the results of operations, financial condition and cash flows for Bragg Gaming Group Inc on a consolidated basis,
for the three months ended March 31, 2021 (“Q1 2021”). References to “Bragg”, or the “Corporation”
in this MD&A refer to Bragg Gaming Group Inc and its subsidiaries, unless the context requires otherwise. This document should be
read in conjunction with the information presented in the interim unaudited condensed consolidated financial statements for the three
months ended March 31, 2021 (the “Interims”).

 

For reporting purposes, the Corporation prepared
the Interims in European Euros (“EUR”) and, unless otherwise indicated, in conformity with International Accounting Standards
(“IAS”) 34, Interim Financial Reporting as issued by the International Accounting Standards Board (“IASB”).
The financial information contained in this MD&A was derived from the Interims. Unless otherwise indicated, all references to a specific
 “note” refer to the notes to the Interims.

 

This MD&A references non-IFRS financial measures,
including those under the headings “Selected Financial Information” and “Key Metrics” below. The Corporation believes
these non-IFRS financial measures will provide investors with useful supplemental information about the financial performance of its business,
enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for
greater transparency with respect to key metrics used by management in operating its business and making decisions. Although management
believes these financial measures are important in evaluating the Corporation, they are not intended to be considered in isolation or
as a substitute for, or superior to, financial information prepared and presented in accordance with IFRS. Non-IFRS measures are not recognized
measures under IFRS and do not have standardized meanings prescribed by IFRS. These measures may be different from non-IFRS financial
measures used by other companies, limiting their usefulness for comparison purposes. These non-IFRS measures and metrics are used to provide
investors with supplemental measures of our operating performance and liquidity and thus highlight trends in our business that may nor
otherwise be apparent when relying solely on IFRS measures.

 

For purposes of this MD&A, the term “gaming
license” refers collectively to all the different licenses, consents, permits, authorizations, and other regulatory approvals that
are necessary to be obtained in order for the recipient to lawfully conduct (or be associated with) gaming in a particular jurisdiction.

 

Unless otherwise stated, in preparing this MD&A
the Corporation has considered information available to it up to May 13, 2021, the date the Corporation’s board of directors
(the “Board”) approved this MD&A.

 

On April 30, 2021, the Corporation
announced a one-for-ten share consolidation. At the annual and special meeting of the Corporation’s shareholders held on
April 28, 2021, the Corporation’s shareholders granted the Corporation’s Board of Directors discretionary authority
to implement a consolidation of the issued and outstanding Common Shares of the Corporation on the basis of a consolidation ratio of
up to ten (10) pre-consolidation Common Shares for one (1) post-consolidation Common Share. The Board of Directors
selected a share consolidation ratio of ten (10) pre-consolidation Common Shares for one (1) post- consolidation Common
Share. The Corporation’s Common Shares began trading on the Toronto Stock Exchange (“TSX”) on a post-consolidation
basis under the Corporation’s existing trade symbol "BRAG" at the opening of the market on May 5, 2021. In
accordance with IFRS accounting principles, the change has been applied retroactively and all balances of Common Shares, warrants
and equity-based compensation such as share options, deferred share unites and restricted share units have been restated after
applying the consolidation ratio.

 

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	2

     

    

 

		2.	CAUTION REGARDING FORWARD-LOOKING STATEMENTS

 

This MD&A may contain forward-looking
information and statements (collectively, “forward-looking statements”) within the meaning of the Canadian securities
legislation and applicable securities laws, including financial and operational expectations and projections. These statements,
other than statements of historical fact, are based on management’s current expectations and are subject to a number of risks,
uncertainties, and assumptions, including market and economic conditions, business prospects or opportunities, future plans and
strategies, projections, technological developments, anticipated events and trends and regulatory changes that affect the
Corporation, its subsidiaries and their respective customers and industries. Although the Corporation and management believe the
expectations reflected in such forward-looking statements are reasonable and are based on reasonable assumptions and estimates as of
the date hereof, there can be no assurance that these assumptions or estimates are accurate or that any of these expectations will
prove accurate. Forward-looking statements are inherently subject to significant business, regulatory, economic and competitive
risks, uncertainties and contingencies that could cause actual events to differ materially from those expressed or implied in such
statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”,
 “anticipate”, “plan”, “continue”, “estimate”, “expect”,
 “may”, “will”, “project”, “predict”, “potential”,
 “targeting”, “intend”, “could”, “might”, “would”, “should”,
 “believe”, “objective”, “ongoing”, “imply” or the negative of these words or other
variations or synonyms of these words or comparable terminology and similar expressions.

 

By their nature forward-looking statements are
subject to known and unknown risks, uncertainties, and other factors which may cause actual results, events or developments to be materially
different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include,
among other things, the Corporation’s stage of development, long-term capital requirements and future ability to fund operations,
future developments in the Corporation’s markets and the markets in which it expects to compete, risks associated with its strategic
alliances and the impact of entering new markets on the Corporation’s operations. Each factor should be considered carefully, and
readers are cautioned not to place undue reliance on such forward-looking statements. See the section, “Risk Factors and Uncertainties”,
below noting that these factors are not intended to represent a complete list of the factors that could affect the Corporation.

 

Shareholders and investors should not place undue
reliance on forward-looking statements as the plans, assumptions, intentions or expectations upon which they are based might not occur.
The forward-looking statements contained in this MD&A are expressly qualified by this cautionary statement. Unless otherwise indicated
by the Corporation, forward-looking statements in this MD&A describe the Corporation’s expectations as of May 13, 2021
and, accordingly, are subject to change after such date. The Corporation does not undertake to update or revise any forward-looking statements,
except in accordance with applicable securities laws.

 

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	3

     

    

 

		3.	LIMITATIONS OF KEY METRICS AND OTHER DATA

 

The Corporation’s key metrics are calculated
using internal Corporation data. While these numbers are based on what the Corporation believes to be reasonable judgments and estimates
of customer numbers for the applicable period of measurement, there are certain challenges and limitations in measuring the usage of its
product offerings across its customer base. In addition, the Corporation’s key metrics and related estimates may differ from estimates
published by third parties or from similarly titled metrics of its competitors due to differences in methodology and access to information.

 

For important information on the Corporation’s
non-IFRS measures, see the information presented in “Key metrics” and “Selected financial information” below.
The Corporation continually seeks to improve its estimates of its active customer base and the level of customer activity, and such estimates
may change due to improvements or changes in the Corporation’s methodology.

 

Bragg Gaming: Overview and Strategy

 

Bragg is an innovative B2B online gaming technology
and content provider. Leveraging its industry-leading technology, it offers a turnkey solution, including a proprietary omni-channel retail,
online and mobile iGaming platform, as well as advanced casino content aggregator, sportsbook, lottery, marketing, and operational services.
Renowned for its rapid and seamless integration, its content aggregator combines casino, slots, live dealer, lottery, virtual sports and
instant-win game content from top tier gaming content providers, along with proprietary content, and is fully compliant with major regulated
jurisdictions, allowing operators to access over 13,000 world-class games through a single account.

 

Bragg’s vision is to become the leading
online gaming solution provider and distributer of online casino games via its in-house studio, its exclusive partners and via third parties,
and to capture an increasing proportion of the online gaming value chain. It focuses on three key pillars in order to achieve this goal:
investment in its proprietary platforms, diversification of its revenues and expansion into new geographies, and engagement with key strategic
partners in the industry. Bragg has heavily invested in its platform technology since the Corporation’s inception, introducing new
key features and capabilities each year that distinguishes it from competitors. In addition, Bragg continues to invest in its gaming content,
partnering with top-tier names in the space and consistently supplementing its portfolio of games, all available via a single integration.

 

Bragg has nearly tripled its customer base in
the last two years and continues to win large, notable clients with its popular and exclusive gaming content. Bragg’s content partners
include some of the most reputable companies in the space including Evolution, NetEnt, Golden Hero and Gamomat. Its primary operations
are provided through its wholly owned subsidiaries in Malta, Slovenia, and Cyprus. Bragg is compliant in Malta, Schleswig-Holstein Germany,
Romania, Croatia, Czech Republic, Serbia, Colombia, Sweden, and Denmark and anticipates further new licences during this year. The Corporation
is particularly focused on expanding into potentially lucrative geographies such as the United States, Canada, the UK and Latin America
and has made significant strides engaging with partners in some of these areas.

 

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	4

     

    

 

Bragg continues to invest in building a
strong, experienced management team to drive these strategic initiatives. Effective May 1, 2021, the Corporation introduced a
new Chief Executive Officer, Richard Carter, an industry veteran and the previous CEO of SBTech, which he led through their merger
with DraftKings. Mr. Carter joined in early October 2020 and acted as the chairman. Together with Adam Arviv, the founder,
a shareholder of Bragg who brings over 30 years of experience in the gaming industry, Matevz Mazij, the founder of Oryx Group, and
Bragg’s experienced management team, we believe the Corporation is well prepared to achieve its mission and create value to
shareholders.

 

The Corporation was incorporated by Articles
of Incorporation pursuant to the provisions of the Canada Business Corporations Act on March 17, 2004.

 

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	5

     

    

 

		4.	OVERVIEW OF Q1 2021

 

		4.1	EXECUTIVE SUMMARY

 

Financial performance in the first quarter
of 2021

 

The Corporation is pleased to report continued
improvement in revenue and performance during the three months ended March 31, 2021. The Corporation has continued to deliver against
its strategic objectives and accelerated growth while achieving revenue diversification and geographic expansion.

 

The Corporation’s revenue1 increased
from the same period in the previous year by 62% to EUR 14.2m (Q1 2020: EUR 8.8m) and by 3% from the prior quarter (Q4 2020: EUR 13.8m)
keeping its quarterly growth momentum since Q1 2019. The Corporation’s positive revenue growth compared to the same period in the
previous year was derived from organic growth from its existing customer base alongside new customers onboarded in the period.

 

The Corporation’s revenue growth was mainly
derived from the games and content services which accounted for 86% (Q1 2020: 89%) of total revenues as demand for the Corporation’s
unique games and content and technology proposition continues to grow. The Corporation’s growth has been underpinned by continued
investment and innovation in its technology and product offering with the main focus on the Oryx Hub, data analytics and customer engagement
platform and new in-house content, demonstrating the potential of Bragg to further leverage its technology to accelerate growth with the
goal of achieving profitability.

 

The Corporation saw continued growth in game play,
unique player numbers and increased engagement levels throughout its network. Total wagering generated by our customers in the period
was up by 52% from the same period in the previous year to EUR 3.5 billion (Q1 2020: EUR 2.3 billion) and the number of unique players2
using our games and content increased by 54% to 2.4m (Q1 2020: 1.6m). These strong numbers are a result of significant improvements to
our core content offering including the recent technical developments which enhance the user-experience.

 

Gross profit increased compared to the same period
in the previous year by 68% to EUR 6.6m (Q1 2020: EUR 4.0m) with gross margins increasing by 2% to 47% (Q1 2020: 45%), mainly attributable
to the shift in proportion of revenue from games and content to iGaming and turnkey services, the latter of which have lower associated
cost of sales.

 

Selling, general and administrative expenses increased
from the same period in the previous year by 75% to EUR 7.2m (Q1 2020: EUR 4.1m) amounting to 50% of total revenue (Q1 2020: 46%). Main
movements in the year were driven by the following:

 

 

1 Revenue
includes the Corporation’s share in game and content, platform fees and management and turnkey solutions.

 

2 Unique
players individuals who made a real money wagers at least once during the period

 

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	6

     

    

 

		A.	Salaries and subcontractors increased by 25% to EUR 2.6m (Q1 2020: EUR 2.1m) as the Corporation continued to invest in expanding
its technology and product teams including software developers, product, analytics professionals and executive team to support new customers,
growth from its existing customer base, expansion into new markets, adjustments to regulatory requirements and enhancement of its technology
offering.

 

Share based payment costs increased
by EUR 1.2m to EUR 1.3m (Q1 2020: EUR 0.1m) predominantly due to vesting related to the share-based incentive plan awards to new directors
and management on January 29, 2021 in an aggregate amount of EUR 1.1m composed of DSUs and RSUs.

 

Total employee costs (including share
based payments charge) increased by 82% to EUR 3.9m (Q1 2021: EUR 2.2m) primarily due to increased headcount and share based payment costs.

 

		B.	IT hosting cost increased by 21% to EUR 0.4m (Q1 2020: EUR 0.3m) mainly due to increase of traffic and servers cost, which
was in line with the revenue growth.

 

		C.	Professional fees increased by EUR 0.3m to EUR 0.5m (Q1 2020: EUR 0.2m) mainly due to the increase of audit, legal and corporate
costs to comply with quarterly reviews, additional filing, and corporate governance requirements to support the uplisting of the Corporation
to TSX.

 

		D.	Corporate costs increased by EUR 0.1m to EUR 0.2m (Q1 2020: EUR 0.1m) as a result of the Corporation’s increased investment
in corporate marketing and investor relation activities.

 

		E.	Bad debt expense increased by EUR 0.1m to EUR 0.2m (Q1 2020: EUR 0.1m) due to an expectancy of the risk of the aging and liquidity
of trade receivables alongside a general provision in light of the global pandemic and its effect on the global economy.

 

		F.	Transaction and acquisition costs amounted to EUR 0.6m (Q1 2020: EUR 0.0m) and relate to activities associated with the deployment
of the Corporation’s M&A strategy which includes legal, financial and technical processes in an aggregate amount of EUR 0.4m
(Q1 2020: EUR 0.0m) and corporate strategic marketing as part of the Nasdaq listing process of EUR 0.2m (Q1 2020: EUR Nil).

 

		G.	Other operational costs amounted to EUR 0.4m (Q1 2020: EUR 0.2m) and relate predominantly to an increase in the premium in
relation to the Corporation’s directors and officers insurance of EUR 0.1m (Q1 2020: EUR 0.0m) and a one-time financial compensation
to two customers in an aggregate amount of EUR 0.1m (Q1 2020: Nil).

 

Total net loss for the period decreased by EUR
4.6m from the same period in the previous year to net loss of 1.1m (Q1 2020: net loss EUR 5.7m) mainly due to the full settlement of the
Oryx earn-out on January 18, 2021 resulting in nil expenditure from remeasurement of deferred and contingent consideration and accretion
on liabilities in the current quarter (Q1 2020: EUR 5.0m).

 

The Corporation’s performance continues
to improve, with Adjusted EBITDA increasing from the same period in the previous year by EUR 1.6m to EUR 2.3m (Q1 2020: EUR 0.7m). Adjusted
EBITDA margins increased by 8% to 16% (Q1 2020: 8%) and were achieved as a result of reaching higher scale and tight cost control. A reconciliation
between the current quarter’s reported figures and the prior year quarter’s figures to Adjusted EBITDA is shown in Note 5.3.

 

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	7

     

    

 

Cash flow from operating activities for the three
months ended March 31, 2021 amounted to EUR 2.9m (Q1 2020: EUR 2.5m). The increase was primarily due to improvement in the performance
of the underlying business and in working capital movements.

 

Cash flow used in investing amounted to EUR 12.1m
(Q1 2020: EUR 0.4m) mainly attributable to deferred and contingent consideration payments of the Oryx cash earn-out in the value of EUR
11.5m (Q1 2020: Nil) and the additions of intangible assets in the value of EUR 0.6m (Q1 2020: EUR 0.4m).

 

Cash flow from (used in) financing activities
amounted to inflow of EUR 12.0m (Q1 2020: outflow EUR 0.0m) which is predominantly related to the net proceeds from exercise of warrants
and broker compensation options in the value of EUR 10.8m (Q1 2020: Nil) relating to the November 2020 Public Offering and EUR 1.3m
(Q1 2020: Nil) relating to the private placement in which the board of directors and officers participated on January 13, 2021.

 

Financial position:

 

Cash and cash equivalents as of March 31,
2021 increased to EUR 30.1m (December 31, 2020: EUR 26.1m) primarily due to a combination net proceeds from exercise of warrants
and broker compensation warrants, increased revenue from the Oryx business in the quarter, and net proceeds from the January 13,
2021 private placement offset by deferred and contingent consideration payments of the Oryx cash earn-out.

 

Trade and other receivables as of March 31,
2021 totalled EUR 8.4m (December 31, 2020: EUR 10.3m) due to improvements in cash collection offset by an increase in provision against
expected credit losses of EUR 0.3m.

 

Prepaid expenses and other assets as of March 31,
2021 increased by EUR 0.8m to EUR 1.1m (December 31, 2020: EUR 0.3m) due to increase in prepaid expenses in relation to the Corporation’s
M&A activities.

 

Trade payables and other liabilities as of March 31,
2021 decreased by EUR 0.1m to EUR 16.9m (December 31, 2020: EUR 17.0m) as result of a EUR 1.6m increase in trade payables and accrued
liabilities to EUR 14.1m (December 31, 2020: EUR 12.5m) offset by a decrease in sales tax payable of EUR 1.7m to EUR 2.7m (December 31,
2020: EUR 4.4m).

 

Deferred and contingent considerations as of March 31,
2021 was EUR Nil (December 31, 2020: EUR 11.5m) due to the full settlement of the Oryx earn-out on January 18, 2021. Upon extinguishment
of this liability the Corporation is no longer exposed, with the exception of lease commitments, to any long-term debts.

 

Other activities during Q1 2021

 

Settlement
of earn-out obligations

 

On January 18, 2021, the Corporation
satisfied its earnout obligations to the vendor of Oryx Gaming International LLC (K.A.V.O. Holdings Limited) via a combination of
cash and Common Shares of the Corporation. Settlement was comprised of cash of EUR 11.6m and a total of 4.7m Common Shares of the
Corporation issued to the vendor with a recorded fair-value of EUR 22m. The Common Shares are subject to a hold period expiring
May 19, 2021.

 

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	8

     

    

 

In the prospectus for the November 2020 Public
Offering the Corporation disclosed that it expected to use EUR 10.4m (CAD 16.0m) of the net proceeds to pay back the cash portion of the
earn-out obligations owed to K.A.V.O. Holdings Limited with the rest of the offering going towards increasing the Corporation's cash position.
The Corporation paid a total of EUR 11.6m to satisfy the cash portion of the earn-out obligation, the variance of EUR 1.2m is mostly due
to the additional receivables that were paid to K.A.V.O. Holdings Limited, and interest accrued on the outstanding balance of the earn-out
payment.

 

In connection with this transaction Matevž
Mazij became a “control person” of the Corporation in accordance with section 1(1) of the Ontario Securities Act, with
a total shareholding through K.A.V.O. Holdings Limited of 4,900,000 Common Shares representing over 27% of the outstanding Common Shares
of the Corporation as of the settlement date.

 

Warrant acceleration

 

On January 21, 2021, the Corporation announced
that it had elected to exercise its right under the terms of a warrant indenture dated November 18, 2020 governing the Public Offering
Warrants of the Corporation to accelerate the expiry date of the warrants. Accordingly, the Corporation gave notice to all registered
warrant holders that the expiry date for the warrants was accelerated to February 22, 2021.

 

During the period from January 1, 2021 to
February 22, 2021 a total of 1,554,082 Public Offering Warrants were exercised for cash receipts of EUR 10.1m and a total of 160,548
Broker Warrants were exercised for cash receipts of EUR 0.7m.

 

Graduation to the TSX

 

On January 27, 2021, the Corporation announced
that it had graduated to the Toronto Stock Exchange. At the market open at 09:30 am ET on the date of announcement, the Corporation began
trading on TSX under the symbol “BRAG”. Concurrent with the TSX listing, the Corporation’s Common Shares were delisted
from the TSX Venture Exchange.

 

Private placement

 

On January 13, 2021, the Corporation completed
a non-brokered private placement offering comprised of 247,934 Common Shares at a price of CAD 12.10 per share for aggregate gross proceeds
of EUR 1.9m. This offering was exclusively taken up by Corporation employees and board members. The Common Shares are subject to a hold
period expiring May 14, 2021. No commission or finder's fee was paid in connection with the offering.

 

Other:

 

		(1)	Share Capital: As at March 31, 2021, the number of issued and outstanding shares was 19,823,814 (March 31, 2020: 7,986,385),
the number of outstanding awards from equity incentive plans was 1,715,428 (March 31, 2020: 1,105,505), and the number of outstanding
warrants was 16,886 (March 31, 2020: 2,866,058).

 

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	9

     

    

 

		(2)	Employees: Excluding discontinued operations, as at March 31, 2021, the Corporation employed 249 employees (December 2020:
241) across Slovenia, UK and Canada. Approximately 146 are part of the product and technology team, 38 are part of business development,
sales and marketing, 35 are part of the platform service and turnkey solutions and 30 in corporate head- office and support services.

 

Subsequent events

 

		(1)	Reverse stock split: At the annual and special meeting of shareholders of the Corporation held on April 28, 2021, the shareholders
approved the Corporation to implement a consolidation (reverse stock split) of the Common Shares. The board of directors determined that
the consolidation would be on the basis of one post-consolidation Common Share for every ten pre-consolidation Common Shares (1-for-10).
The consolidation became effective as of April 30, 2021, and the Common Shares commenced trading on the Toronto Stock Exchange on
a post-consolidation basis at the open of trading on May 5, 2021. In accordance with IFRS accounting principles, the change has been
applied retroactively in this MD&A.

 

		(2)	Amendment and restatement of omnibus equity incentive plan: The Corporation maintains an Omnibus Incentive Equity Plan ("OEIP")
for certain employees and consultants. At the annual and special meeting of shareholders of the Corporation held on April 28, 2021,
the shareholders approved the increase in the number of Common Shares available for issuance as awards under the plan from 3,180,000 to
3,965,000.

 

		(3)	Base shelf prospectus: In order to support future growth initiatives, on May 4, 2021, the Corporation filed a short form base
shelf prospectus (the "Base Shelf Prospectus"), with securities regulators in each of the provinces and territories of Canada.
The Base Shelf Prospectus permits the Corporation to offer and sell Common Shares, unsecured debt securities, subscription receipts, warrants,
other securities convertible or exchange for Common Shares or other securities of the Corporation or any combination thereof in various
offerings having an aggregate value of up to CAD 500m during the 25-month period that the Base Shelf Prospectus remains effective.

 

		(4)	Nasdaq listing: At the annual and special meeting of shareholders on April 28, 2021, the Corporation announced that it had filed
an application to list its Common Shares on The Nasdaq Stock Market (“Nasdaq”).

 

		(5)	Appointment of Richard Carter to Chief Executive Officer: Effective May 1, 2021, Mr. Carter succeeded Adam Arviv, the Corporation’s
Chief Executive Officer. Mr. Arviv will continue to serve as an adviser to the new Chief Executive Officer and the Board.

 

		(6)	Acquisition of Spin Games LLC: On May 12, 2021, the Corporation announced it had entered into an agreement to acquire Spin Games
LLC (“Spin”) in a cash and stock transaction for a purchase price of approximately USD 30 million. Under the deal the sellers
of Spin will receive USD 10 million in cash and USD 20 million in Common Shares of the Corporation of which USD 5 million in Common Shares
will be issued on closing and the balance over the next three years. The transaction is expected to close following final approval
from state gaming regulators and satisfaction of other customary closing conditions.

 

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
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Strategic progress

 

Bragg Gaming has a strategy to become a leading
turnkey solution provider and distributor and provider of online casino games via its existing and new exclusive studio partnerships,
in-house studio and via third content providers and to capture an increasing proportion of the online gaming value chain.

 

The strategy is based on three primary pillars
of growth:

 

		(1)	Enhanced technology and product offering

 

The core of the Bragg Gaming product offering
is its technology.

 

Oryx I-gaming platform

 

The Oryx Player Account Management (PAM) offers
seamless access to iGaming, lottery and sports betting products in an integrated package. It is an omni-channel, cross-product solution
with real-time data processing and automated campaign, fraud and player management. It is complemented by industry-leading operational
support services including marketing and operational services.

 

During Q1 2021, the Corporation launched a new
platform customer in Croatia and invested in platform enhancements and improvements focused on the changes to the regulatory regimes in
Germany and the Netherlands.

 

Oryx Hub

 

The Hub is a fully customizable aggregator platform
solution available through a one-time, seamless contract with a single integration process and delivery function. It offers operators
access to an extensive library of over 13,000 games from over 100 of the industry’s leading content providers, such as Gamomat,
Red Tiger, Evolution, iSoftBet, NetEnt, Quickfire, PlayNGO, EGT, Gamesys, Pragmatic Play, Kalamba, Peter & Sons and more. The
Corporation continues to licence content from emerging and unique gaming studios on a regular basis to offer its operators a new, rich
and diversified content offering.

 

Player Engagement Platform

 

The Player Engagement Platform consolidates a
number of functionalities that work together to increase player engagement and customer lifetime value. This includes a set of targeted
promotions, such as free spins, bonuses, leaderboards, and tournaments; a multi-channel communication platform which supports traditional
campaign channels such as SMS, email, social media; and a real-time campaign management system which takes the platform to the next level
by allowing operators to engage players onsite in real-time. During Q1 2021 improvements were made to the existing back office product,
adding further leaderboard features and improving automated player behaviour segmentation in order to offer in-game promotions which improve
player retention and lifetime value.

 

Further development is in progress to introduce
additional features such as quests, an achievements platform, a game recommendation engine, features to enable operators to automate their
promotions and notifications, and further advanced free rounds tools.

 

The Corporation’s player engagement tools
launched in 2020 continued to perform well throughout Q1 2021, which saw an increase in the use of leaderboards by operators on their
online sites. Furthermore, games played with leaderboards during the quarter resulted in increased total wagering, increased total rounds
and increased active players when compared to the performance of games operating without leaderboards.

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
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Data Analytics Platform

 

The Data Analytics Platform allows real-time collection
and analysis of data from internal as well as third- party systems, enabling operators to gain a better understanding of its customers
and effectively segment, target and engage them by triggering activities based on behaviour and preferences. Further development is underway
on the game recommendation engine and enhancements to responsible and safer gaming algorithms which identify in-play risky behaviour.
Developing these machine learning tools allows for automated segmentation based on user profile behaviour, enabling appropriate processes,
limits and protections to be put in place.

 

The Corporation continues to invest in its human
capital such as software developers, business analytics engineers, products, and legal and compliance to expand into new verticals and
geographies.

 

		(2)	Exclusive and proprietary content

 

The Corporation partners with various game studios
such as Gamomat, Kalamba, Peter & Sons providing unique casino game concepts which form a strong and diversified content offering
in the online casino market. During Q1 2021 we launched 11 new Casino games, fully certified and distributed successfully throughout the
entire network. In addition, the Corporation has signed a new partnership deal with slots studio Sakuragate, including exclusivity to
distribute their titles outside of Japan, as part of our continued drive to diversify our content offering and support its growth strategy
in different jurisdictions.

 

In addition, Bragg set up its own proprietary
studio of leading industry game developers and game producers, mathematicians and game artists who use the extensive analytical and learnings
information developed in Oryx over the years. The Corporation is planning to introduce at least 5 new games to be launched in 2021 to
address predominantly European operators and new anticipated US markets.

 

		(3)	Revenue diversification and expansion into new geographies

 

The Corporation maintains its existing customer
base with a high level of revenue retention and continues to on-board new operators and diversify its customer base. During Q1 2021, the
Corporation successfully launched 9 operators, including PAF, a state operator based on the Aland Islands in Finland, iGaming platform
Senator (Croatia), Swiss market leader Casino Luzern and Maxbet (Romania).

 

Consequently, customer concentration from the
top 10 customers was 62.4% of total revenues for the quarter, down from 65.4% of total revenues for the same period in the previous year.
As of March 31, 2021, the Corporation’s total customer base exceeded 100 customers, an increase of 61% from March 31,
2020.

 

The Corporation is constantly exploring strategic
partnership opportunities in new markets and seeking to leverage the strength of its technology and product offering, as well as the knowledge
and experience of its talented team.

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	12

     

    

 

Regulatory updates in various geographies

 

Germany

 

The Corporation has exposure to revenues derived
from customers who have predominantly German facing end-users. After the new interstate treaty was ratified by the last German states
in April 2021, Germany is to become one of Europe’s largest regulated gaming markets and the first licences are anticipated
to be issued to online casino operators after July 1, 2021 after the transition period effectively initiated on October 15,
2020. The near-term impact of the changing regulatory landscape in the German market is likely to have a negative impact on revenue mainly
due to the introduction of restrictions on game play, responsible gambling initiatives and gaming tax. However, our view is that, in the
medium and long-term, the introduction of more regulation, similar to other established regulated markets will over time offset these
negative headwinds as operators utilize more traditional marketing channels such as television and print media, which in turn is expected
to help increase participation and eventually the overall market size. The Corporation will continue to monitor how the German market
adjusts to the new regulatory framework and is already closely working with its German facing customers with a view to mitigating future
adverse conditions.

 

European regulated countries

 

The Dutch regulation permitting on-line gaming
will become effective in the fall of this year (Q3 2021) and the Corporation is seeking to onboard Dutch clients and partner with them
in the newly regulated Dutch market. In April, the Corporation applied for a Greek B2B license and is monitoring other EU (e.g., Bulgaria)
and non-EU markets for regulatory developments (e.g., Georgia and Ukraine).

 

The United Kingdom

 

The Corporation is in the process of applying for a UKGC game supply
and hosting license, which will enable it to extend its offer to the UK market and to some international clients already on board.

 

The United States

 

Further to our announcement on January 26,
2021 about our planned expansion into the US, we are in the process of applying for a supplier license in various US states (New York,
New Jersey, Michigan and others).

 

Other

 

We have also applied for a Bahamian supplier license.

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	13

     

    

 

Outlook

 

The Corporation continues to invest in new and
proprietary content, invest in its leading technology and grow and diversify its global footprint winning new customers in new jurisdictions.
Our North American (US and Canada) market expansion is progressing according to plan and the Corporation has filed an application to list
on the Nasdaq.

 

The global outbreak of COVID-19, has had, and
continues to have, a significant impact on the global economy. The Corporation derives the majority of its revenue from online casino
gaming. This sector has largely benefited from the various international “lock downs”, requiring people to stay at home. As
a result, such forms of entertainment have prevailed in a similar fashion to the various streaming businesses such as Netflix have. Management
continues to monitor the effects COVID-19 on the Corporation’s performance and will amend its outlook as, and if, it deems necessary.

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	14

     

    

 

	5.	FINANCIAL RESULTS

 

	5.1	BASIS OF FINANCIAL DISCUSSION

 

The financial information presented below has
been prepared to examine the results of operations from continuing activities. During the year ended December 31, 2019, the Corporation
decided to discontinue its online media business unit. As such, the performance of the online media division has been excluded.

 

The presentation currency of the Corporation is
the Euro, while the functional currencies of its subsidiaries are Euro, Canadian dollar, United States dollar, and British pound sterling
due to primary location of individual entities within our corporate group. The presentation currency of the Euro has been selected as
it best represents the majority of the Corporation’s economic inflows, outflows as well as its assets and liabilities.

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	15

     

    

 

	5.2	SELECTED INTERIM INFORMATION

 

The following is selected financial data of the
Corporation for the three months ended March 31, 2021 and 2020.

 

The primary non-IFRS financial measure which the
Corporation uses is Adjusted EBITDA3. When internally analyzing underlying operating performance, management excludes certain
items from EBITDA (earnings before interest, tax, depreciation, and amortization).

 

	 	 	Three Months Ended	 	 	Three Months Ended	 
	 	 	March 31,	 	 	March 31,	 
	EUR 000	 	2021	 	 	2020	 
	Revenue	 	 	14,196	 	 	 	8,784	 
	Net Loss from continuing operations	 	 	(1,074	)	 	 	(5,384	)
	EBITDA	 	 	337	 	 	 	(4,296	)
	Adjusted EBITDA	 	 	2,342	 	 	 	702	 
	 	 	 	 	 	 	 	 	 
	Basic and diluted loss per share- continuing operations	 	 	(0.06	)	 	 	(0.67	)

 

	 	 	As at	 	 	As at	 
	 	 	March 31,	 	 	December 31,	 
	 	 	2021	 	 	2020	 
	Total assets	 	 	74,776	 	 	 	72,094	 
	Total non-current financial liabilities	 	 	559	 	 	 	593	 
	 	 	 	 	 	 	 	 	 
	Dividends paid	 	 	nil	 	 	 	nil	 

 

Non-current financial liabilities consist of
lease obligations on right of use assets in relation to office leases.

 

With the exception of EBITDA and Adjusted EBITDA, the
financial data has been prepared to conform with International Financial Reporting Standards (“IFRS”) as issued by the
International Accounting Standards Board (“IASB”). These accounting principles have been applied consistently across for
all reporting periods.

 

 

3
Adjusted EBITDA excludes income or expenses that relate to exceptional items and non-cash share-based charges and includes deductions
for lease expenses that are recognized as part of depreciation and finance charges under IFRS 16.

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	16

     

    

 

	5.3	OTHER FINANCIAL INFORMATION

 

To supplement its March 31, 2021 interim
financial statements presented in accordance with IAS 34, Interim Financial Reporting, the Corporation considers certain financial
measures that are not prepared in accordance with IFRS. The Corporation uses such non-IFRS financial measures in evaluating its operating
results and for financial and operational decision-making purposes. The Corporation believes that such measures help identify underlying
trends in its business that could otherwise be masked by the effect of the expenses that it excludes in such measures.

 

The Corporation also believes that such measures
provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects
and allow for greater transparency with respect to key metrics used by management in its financial and operational decision- making. However,
these measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with IFRS.
There are a number of limitations related to the use of such non-IFRS measures as opposed to their nearest IFRS equivalents.

 

A reconciliation of operating loss to EBITDA and
Adjusted EBITDA is as follows:

 

	 	 	Three Months Ended March 31,	 
	EUR 000	 	2021	 	 	2020	 
	Operating loss	 	 	(499	)	 	 	(5,080	)
	Depreciation and amortization	 	 	836	 	 	 	784	 
	EBITDA	 	 	337	 	 	 	(4,296	)
	Depreciation of right-of-use assets	 	 	(38	)	 	 	(52	)
	Lease interest expense	 	 	(5	)	 	 	(6	)
	Share based payments	 	 	1,309	 	 	 	51	 
	Transaction and acquisition costs	 	 	563	 	 	 	37	 
	Exceptional costs	 	 	176	 	 	 	-	 
	Loss on remeasurement of contingent consideration	 	 	-	 	 	 	4,968	 
	Adjusted EBITDA	 	 	2,342	 	 	 	702	 

 

Exceptional costs include one-time costs for the
Corporation, of which EUR 0.1m (Q1 2020: Nil) is related to uplisting to TSX and potential listing on the Nasdaq.

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	17

     

    

 

	5.4	SELECTED FINANCIAL INFORMATION

 

Selected financial information is as follows:

 

	 	 	Three Months Ended March 31,	 
	EUR 000	 	2021	 	 	2020	 
	Revenue	 	 	14,196	 	 	 	8,784	 
	Operating loss	 	 	(499	)	 	 	(5,080	)
	EBITDA	 	 	337	 	 	 	(4,296	)
	Adjusted EBITDA	 	 	2,342	 	 	 	702	 

 

	 	 	 	As at	 	 	 	As at	 
	 	 	 	March 31,	 	 	 	December 31,	 
	 	 	 	2021	 	 	 	2020	 
	Total assets	 	 	74,776	 	 	 	72,094	 
	Total liabilities	 	 	21,392	 	 	 	32,197	 

 

TRADE AND OTHER RECEIVABLES

 

	 	 	As at	 	 	As at	 
	 	 	March 31,	 	 	December 31,	 
	EUR 000	 	2021	 	 	2020	 
	Less than one month	 	 	8,007	 	 	 	9,563	 
	Between two and three months	 	 	763	 	 	 	1,193	 
	Greater than three months	 	 	1,656	 	 	 	1,296	 
	 	 	 	 	 	 	 	 	 
	 	 	 	10,426	 	 	 	12,052	 
	Provision for expected credit losses	 	 	(2,019	)	 	 	(1,755	)
	Trade and Other Receivables	 	 	8,407	 	 	 	10,297	 

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	18

     

    

 

TRADE PAYABLES AND OTHER LIABILITIES

 

	 	 	As at	 	 	As at	 
	 	 	March 31,	 	 	December 31,	 
	 	 	2021	 	 	2020	 
	Trade payables	 	 	4,871	 	 	 	6,406	 
	Accrued liabilities	 	 	9,195	 	 	 	6,099	 
	Sales tax payable	 	 	2,734	 	 	 	4,356	 
	Other payables	 	 	90	 	 	 	107	 
	Trade Payables and Other Liabilities	 	 	16,890	 	 	 	16,968	 

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	19

     

    

 

 

	5.5	SUMMARY
                                            OF QUARTERLY RESULTS

 

The following table presents the selected financial
data for continuing operations for each of the past eight quarters of the Corporation.

 

	 	 	2Q19	 	 	3Q19	 	 	4Q19	 	 	1Q20	 	 	2Q20	 	 	3Q20	 	 	4Q20	 	 	1Q21	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	2019	 	 	2020	 	2021	 
	EUR 000	 	Q2	 	 	Q3	 	 	Q4	 	 	Q1	 	 	Q2	 	 	Q3	 	 	Q4	 	 	Q1	 
	Revenue	 	 	5,875	 	 	 	6,740	 	 	 	7,841	 	 	 	8,784	 	 	 	12,145	 	 	 	11,714	 	 	 	13,778	 	 	 	14,196	 
	Operating income (loss)	 	 	(4,973	)	 	 	(77	)	 	 	(2,895	)	 	 	(5,080	)	 	 	762	 	 	 	(2,282	)	 	 	(5,296	)	 	 	(499	)
	EBITDA	 	 	(4,427	)	 	 	456	 	 	 	(2,376	)	 	 	(4,296	)	 	 	1,429	 	 	 	(1,533	)	 	 	(4,623	)	 	 	337	 
	Adjusted EBITDA	 	 	(279	)	 	 	204	 	 	 	737	 	 	 	702	 	 	 	1,751	 	 	 	1,834	 	 	 	1,259	 	 	 	2,342	 
	Loss per share (EUR)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	- Basic and diluted	 	 	(0.65	)	 	 	(0.00	)	 	 	(0.70	)	 	 	(0.67	)	 	 	(0.08	)	 	 	(0.40	)	 	 	(0.52	)	 	 	(0.06	)

 

	5.6	LIQUIDITY AND CAPITAL RESOURCES

 

The Corporation’s principal sources of liquidity
are its cash generated from operations. Currently available funds consist primarily of cash on deposit with banks. The Corporation calculates
its working capital requirements from continuing operations as follows:

 

	 	 	As at	 	 	As at	 
	 	 	March 31,	 	 	December 31,	 
	EUR 000	 	2021	 	 	2020	 
	Cash and cash equivalents	 	 	30,112	 	 	 	26,102	 
	Trade and other receivables	 	 	8,407	 	 	 	10,297	 
	Prepaid expenses and other assets	 	 	1,096	 	 	 	263	 
	Consideration receivable	 	 	160	 	 	 	148	 
	Current liabilities excluding deferred and contingent consideration	 	 	(19,442	)	 	 	(18,521	)
	Net working capital	 	 	20,333	 	 	 	18,289	 
	Deferred and contingent consideration	 	 	-	 	 	 	(11,521	)
	Net current assets from continuing operations	 	 	20,333	 	 	 	6,768	 

 

All contingent liabilities were settled in full
to the Oryx vendor on January 18, 2021 following shareholder approval on November 27, 2020. On January 18, 2021, the Corporation
satisfied its earn-out obligations to K.A.V.O. Holdings Limited via a combination of cash and Common Shares. Cash paid totalled EUR 11.6m,
of which EUR 11.5m fully settled deferred and contingent consideration payable and EUR 0.1m settled interest payable and legal fees.

 

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	20

     

    

 

The undiscounted contractual maturities of significant
financial liabilities and the total contractual obligations of the Corporation as at March 31, 2021 for each of the next five years
and thereafter are below:

 

	 	 	2021	 	 	2022	 	 	2023	 	 	2024	 	 	Thereafter	 	 	Total	 
	Trade payables and other liabilities	 	 	16,890	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	16,890	 
	Lease obligations on right of use
    assets	 	 	118	 	 	 	157	 	 	 	157	 	 	 	157	 	 	 	157	 	 	 	746	 
	 	 	 	17,008	 	 	 	157	 	 	 	157	 	 	 	157	 	 	 	157	 	 	 	17,636	 

 

MARKET RISK

 

The Corporation is exposed to market risks, including
changes to foreign currency exchange rates and interest rates.

 

FOREIGN CURRENCY EXCHANGE RISK

 

The Corporation is exposed to foreign currency
risk, which includes risks related to its revenue and operating expenses denominated in currencies other than EUR, which is both the reporting
currency and primary contracting currency of the Corporation’s customers. Accordingly, changes in exchange rates may in the future
reduce the purchasing power of the Corporation’s customers thereby potentially negatively affecting the Corporation’s revenue
and other operating results.

 

The Corporation has experienced and will continue
to experience fluctuations in its net income (loss) as a result of translation gains or losses related to revaluing certain current asset
and current liability balances that are denominated in currencies other than the functional currency of the entities in which they are
recorded.

 

LIQUIDITY RISK

 

The Corporation is also exposed to liquidity risk
with respect to its contractual obligations and financial liabilities. The Corporation manages liquidity risk by continuously monitoring
its forecasted and actual cash flows, and matching maturity profiles of financial assets and liabilities.

 

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	21

     

    

 

	5.7	CASH FLOW SUMMARY

 

The cash flow from continuing operations may be
summarized as follows:

 

	 	 	 	Three Months Ended March 31,	 
	EUR 000	 	 	2021	 	 	 	2020	 
	Operating activities	 	 	2,930	 	 	 	2,540	 
	Investing activities	 	 	(12,117	)	 	 	(362	)
	Financing activities	 	 	12,030	 	 	 	(43	)
	Effect of foreign exchange	 	 	1,167	 	 	 	(14	)
	Net cash flow from continuing operations	 	 	4,010	 	 	 	2,121	 

 

Cash flows used in investing activities is primarily
due to final settlement of the Oryx earn out on January 18, 2021 of EUR 11.5m (three months ended March 31, 2020: Nil) and additions
to intangible assets of EUR 0.6m (three months ended March 31, 2020: EUR 0.4m):

 

	 	 	Three Months Ended March 31,	 
	EUR 000	 	2021	 	 	2020	 
	Purchases of property and equipment	 	 	(15	)	 	 	(11	)
	Additions in intangible assets	 	 	(581	)	 	 	(351	)
	Deferred and contingent consideration payments	 	 	(11,521	)	 	 	-	 
	Cash Flows Used in Investing Activities	 	 	(12,117	)	 	 	(362	)

 

Cash flows from (used in) financing activities
comprises EUR 10.8m of net proceeds from the exercise of warrants and broker warrants issued as part of the November 2020 equity
raise and EUR 1.3m of net proceeds from shares issued to directors and officers of the Corporation in connection with a private placement
(three months ended March 31, 2020: Nil):

 

	 	 	Three Months Ended March 31,	 
	EUR 000	 	2021	 	 	2020	 
	Proceeds from exercise of warrants and broker warrants	 	 	10,817	 	 	 	-	 
	Proceeds from shares to be issued upon private placement, net of issuance costs	 	 	1,310	 	 	 	-	 
	Repayment of lease liability	 	 	(29	)	 	 	(36	)
	Interest income	 	 	15	 	 	 	8	 
	Interest and financing fees	 	 	(83	)	 	 	(15	)
	Cash Flows From (Used in) Financing Activities	 	 	12,030	 	 	 	(43	)

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	22

     

    

 

		6	TRANSACTIONS BETWEEN RELATED PARTIES

 

The Corporation’s policy is to conduct all
transactions and settle all balances with related parties on market terms and conditions for those in the normal course of business. Transactions
between the Corporation and its consolidated entities have been eliminated on consolidation and are not disclosed in this note.

 

The Corporation’s key management personnel
are comprised of members of the Board and the executive team which consists of the Interim Chief Executive Officer (“CEO”),
Chief Financial Officer (“CFO”), Chief Strategy Officer (“CSO”) and Managing Director of Oryx. Three key management
employees are also shareholders in the Corporation. Transactions and balances between the Corporation and its key management personnel
are as follows:

 

		·	Revenues for the three months ended March 31, 2021 to a shareholder
of the Corporation totalled EUR 21 (three months ended March 31, 2020: EUR 4).

		·	Total compensation for salaries, director fees, share-based payments and
short-term employee benefits of key management personnel of the Corporation for the three months ended March 31, 2021 totalled EUR
1,668 (three months ended March 31, 2020: EUR 438).

		·	Loss on remeasurement of deferred and contingent consideration payable to
the Managing Director of Oryx for the three months ended March 31, 2021 was nil (three months ended March 31, 2020: EUR 4,968).

		·	Interest expense on deferred and contingent consideration payable to the
Managing Director of Oryx for the three months ended March 31, 2021 totalled EUR 52 (three months ended March 31, 2020: nil).

		·	During the three months ended March 31, 2021, legal fees of EUR 25 payable
to the Managing Director of Oryx in relation to the Oryx earn-out we recognized in the interim unaudited condensed consolidated statements
of loss and comprehensive income (loss) (three months ended March 31, 2020: nil).

		·	During the three months ended March 31, 2021, a total of EUR 11,521
in payments were made to the Managing Director of Oryx for deferred consideration (three months ended March 31, 2020: nil).

		·	During the three months ended March 31, 2021, a total of EUR 140 in
payments were made to the Managing Director of Oryx for interest on deferred and contingent consideration payable (three months ended
March 31, 2020: nil).

		·	As at March 31, 2021, EUR 5 of trade and other receivables was receivable
from the Managing Director of Oryx and other shareholders (December 31, 2020: EUR 4).

		·	As at March 31, 2021, EUR 172 of trade payables and other liabilities
was due to the CEO, CFO, the Managing Director of Oryx and member of Board (December 31, 2020: EUR 166).

		·	As at March 31, 2021, nil of deferred and contingent consideration was
payable to the Managing Director of Oryx (December 31, 2020: EUR 11,521).

		·	During the three months ended March 31, 2021, EUR 22,000 of share capital
(three months ended March 31, 2020: EUR nil) was issued to the Managing Director of Oryx upon completion of the earn-out. A corresponding
decrease in shares to be issued was recognized in the interim unaudited condensed consolidated statements of changes in equity.

		·	During the three months ended March 31, 2021, EUR 267 additional
                                                                                                                               share capital was recognized in the interim unaudited condensed consolidated statements of changes in equity with a corresponding reduction in contributed surplus for exercise
of RSUs by key management personnel of the Corporation (three months ended March 31, 2020: nil).

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	23

     

    

 

		7	DISCLOSURE OF OUTSTANDING SHARE DATA

 

The number of equity-based instruments granted or issued may be summarized
as follows:

 

	 	 	March 31,	 	 	May 13,	 
	 	 	2021	 	 	2021	 
	Common Shares	 	 	19,823,814	 	 	 	19,823,814	 
	Broker Warrants	 	 	16,886	 	 	 	16,886	 
	Fixed Stock Options	 	 	1,226,628	 	 	 	1,225,271	 
	Restricted Share Units	 	 	235,000	 	 	 	235,000	 
	Deferred Share Units	 	 	253,800	 	 	 	253,800	 
	 	 	 	21,556,128	 	 	 	21,554,771	 

 

Fixed stock options decreased by 1,357 options as a result of forfeitures
from employee terminations.

 

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	24

     

    

 

		8	CRITICAL ACCOUNTING ESTIMATES

 

The preparation of the interim unaudited condensed
consolidated financial statements requires management to make estimates and judgments in applying the Corporation’s accounting policies
that affect the reported amounts and disclosures made in the consolidated financial statements and accompanying notes.

 

Within the context of the interim unaudited condensed
consolidated financial statements, a judgment is a decision made by management in respect of the application of an accounting policy,
a recognized or unrecognized financial statement amount and/or note disclosure, following an analysis of relevant information that may
include estimates and assumptions. Estimates and assumptions are used mainly in determining the measurement of balances recognized or
disclosed in the consolidated financial statements and are based on a set of underlying data that may include management’s historical
experience, knowledge of current events and conditions and other factors that are believed to be reasonable under the circumstances.

 

Management continually evaluates the estimates
and judgments it uses.

 

The following are the accounting policies subject
to judgments and key sources of estimation uncertainty that the Corporation believes could have the most significant impact on the amounts
recognized in the interim unaudited condensed consolidated financial statements.

 

Impairment of non-financial assets (property
and equipment, right-of-use assets, intangible assets and goodwill)

 

		-	Judgments made in relation to accounting policies applied

 

Management is required to use judgment in determining
the grouping of assets to identify their CGUs for the purposes of testing property and equipment, intangible assets and right-of-use assets
for impairment. Judgment is further required to determine appropriate groupings of CGUs for the level at which goodwill and intangible
assets are tested for impairment.

 

The Corporation has determined that B2B Online
Gaming and Online Media, part of discontinued operations, are two separate CGUs for the purposes of property and equipment, intangible
assets and right-of-use asset impairment testing. For the purpose of goodwill impairment testing, CGUs are grouped at the lowest level
at which goodwill is monitored for internal management purposes. In addition, judgment is used to determine whether a triggering event
has occurred requiring an impairment test to be completed.

 

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	25

     

    

 

		-	Key sources of estimation

 

In determining the recoverable amount of a CGU
or a group of CGUs, various estimates are employed. The Corporation determines fair value less costs to sell using such estimates as market
rental rates for comparable properties, recoverable operating costs for leases with tenants, non-recoverable operating costs, discount
rates, capitalization rates and terminal capitalization rates. The Corporation determines value in use by using estimates including projected
future revenues, earnings and capital investment consistent with strategic plans presented to the Board. Discount rates are consistent
with external industry information reflecting the risk associated with the specific cash flows.

 

Impairment of accounts receivable

 

In each stage of the expected credit loss (“ECL”)
impairment model, impairment is determined based on the probability of default, loss given default, and expected exposures at default.
The application of the ECL model requires management to apply the following significant judgments, assumptions, and estimations:

 

		-	movement of impairment measurement between the three stages of the ECL model, based on the assessment
of the increase in credit risks on accounts receivables. The assessment of changes in credit risks includes qualitative and quantitative
factors of the accounts, such as historical credit loss experience and external credit scores;

 

		-	thresholds for significant increase in credit risks based on changes in probability of default over the
expected life of the instrument relative to initial recognition; and

 

		-	forecasts of future economic conditions.

 

Leases

 

		-	Judgments made in relation to accounting policies applied

 

Management exercises judgment in determining the
appropriate lease term on a lease-by-lease basis. Management considers all facts and circumstances that create an economic incentive to
exercise a renewal option or to not exercise a termination option including investments in major leaseholds and past business practice
and the length of time remaining before the option is exercisable. The periods covered by renewal options are only included in the lease
term if management is reasonably certain to renew. Management considers reasonably certain to be a high threshold. Changes in the economic
environment or changes in the office rental industry may impact management’s assessment of lease term, and any changes in management’s
estimate of lease terms may have a material impact on the Corporation’s interim unaudited condensed consolidated statements of financial
position and interim unaudited condensed consolidated statements of loss and comprehensive income (loss).

 

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	26

     

    

 

		-	Key sources of estimation

 

In determining the carrying amount of right-of-use
assets and lease liabilities, the Corporation is required to estimate the incremental borrowing rate specific to each leased asset or
portfolio of leased assets if the interest rate implicit in the lease is not readily determined. Management determines the incremental
borrowing rate using a base risk-free interest rate estimated by reference to the bond yield with an adjustment that reflects the Corporation’s
credit rating, the security, lease term and value of the underlying leased asset, and the economic environment in which the leased asset
operates. The incremental borrowing rates are subject to change due to changes in the business and macroeconomic environment.

 

Warrants and share options

 

		-	Judgments made in relation to accounting policies applied

 

Management exercises judgment in determining the
model used and the inputs therein to valuate the value of share option grants and issued warrants. Management considers all facts and
circumstances for each grant issuance on an individual basis.

 

		-	Key sources of estimation

 

In determining the fair value of warrants and
share options, the Corporation is required to estimate the future volatility of the market value of the Corporation’s shares by
reference to its historical volatility or comparable companies over the previous years, a risk-free interest rate estimated by reference
to the Government of Canada bond yield, and a dividend yield of nil.

 

Contingent consideration

 

		-	Judgments made in relation to accounting policies applied

 

Management exercises judgment in determining the
appropriate fair value of contingent consideration and considers all facts and circumstances relevant to the acquisition’s future
earnings upon which the liability is calculated. Any changes in the economic environment or operational activity of the acquisition may
impact management’s assessment of the liability and may have a material impact on the Corporation’s interim unaudited condensed
consolidated statements of financial position and interim unaudited condensed consolidated statements of loss and comprehensive income
(loss).

 

		-	Key sources of estimation

 

In determining the fair value of contingent consideration,
the Corporation is required to estimate the future earnings generated by the acquisition over an agreed period after the acquisition and
apply defined and fixed rules in order to calculate the expected future payment. The Corporation determines fair value by using estimates
including projected future earnings of the acquisition consistent with strategic plans presented to the Board. Discount rates are consistent
with external industry information reflecting the risk associated with the specific cash flows.

 

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	27

     

    

 

		9	CHANGES IN ACCOUNTING POLICY

 

There have been no changes in the Corporation’s
accounting policies in any of the reporting periods discussed in this MD&A.

 

		10	RISK FACTORS AND UNCERTAINTIES

 

Certain factors, listed below, may have a material
adverse effect on the Corporation’s business, financial condition, and results of operations. Current and prospective investors
should carefully consider the risks and uncertainties and other information contained in this MD&A and the corresponding financial
statements.

 

The risks and uncertainties described herein and
therein are not the only ones the Corporation may face. Additional risks and uncertainties that the Corporation is unaware of, or that
the Corporation currently believes are not material, may also become important factors that could adversely affect the Corporation’s
business. If any of such risks actually occur, the Corporation’s business, financial condition, results of operations, and future
prospects could be materially and adversely affected.

 

LIMITED OPERATING HISTORY

 

The Corporation has a limited operational history.
The Corporation has never paid dividends and has no present intention to pay dividends. The Corporation is subject to the risks including
uncertainty of revenues, markets and profitability and the need to obtain additional funding. The Corporation will be committing, and
for the foreseeable future will continue to commit, significant financial resources to marketing, product development and research. The
Corporation's business and prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies
in the early stage of development. Such risks include the evolving and unpredictable nature of the Corporation's business, the Corporation's
ability to anticipate and adapt to a developing market and the ability to identify, attract and retain qualified personnel. There can
be no assurance that the Corporation will be successful in doing what is necessary to address these risks.

 

KEY PERSONNEL

 

The success of the Corporation may be dependent
on the services of its senior management and consultants. The experience of these individuals may be a factor contributing to the Corporation's
continued success and growth. The loss of one or more of its key employees or consultants could have a material adverse effect on the
Corporation's operations and business prospects. In addition, the Corporation's future success will depend in large part on its ability
to attract and retain additional highly skilled technical, management, sales and marketing personnel. There can be no assurance that the
Corporation will be successful in attracting and retaining such personnel and the failure to do so could have a material adverse effect
on the Corporation's business, operating results, and financial condition.

 

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	28

     

    

 

ADDITIONAL FINANCING REQUIREMENTS

 

In order to accelerate the Corporation's
growth objectives, it may need to raise additional funds from lenders and equity markets in the future. There can be no assurance
that the Corporation will be able to raise additional capital on commercially reasonable terms to finance its growth objectives. The
ability of the Corporation to arrange such financing in the future will depend in part upon the prevailing capital market conditions
as well as the business performance of the Corporation. There can be no assurance that the Corporation will be successful in its
efforts to arrange additional financing on terms satisfactory to the Corporation. If additional financing is raised by the issuance
of Common Shares from the treasury of the Corporation, control of the Corporation may change, and shareholders may suffer additional
dilution to current levels as a result of shares under option and broker warrants.

 

COMPETITION

 

The Corporation may not be able to compete successfully
against current and future competitors, and the competitive pressures the Corporation faces could harm its business and prospects. Broadly
speaking, the market for gambling businesses and media companies is highly competitive. The level of competition is likely to increase
as current competitors improve their product offerings and as new participants enter the market. Some of the Corporation's current and
potential competitors have longer operating histories, larger customer bases, greater name and brand recognition and significantly greater
financial, sales, marketing, technical and other resources than the Corporation. Additionally, these competitors have research and development
capabilities that may allow them to develop new or improved products that may compete with products the Corporation markets and distributes.

 

New technologies and the expansion of existing
technologies may also increase competitive pressures on the Corporation. Increased competition may result in reduced operating margins
as well as loss of market share.

 

MANAGEMENT OF GROWTH

 

The Corporation may be subject to growth-related
risks including capacity constraints and pressure on its operating systems and systems of internal controls. The Corporation's ability
to manage its growth effectively will require it to continue to implement and improve its operational and financial systems and to expand,
train and manage its employee base.

 

The inability of the Corporation to deal with
this growth could have a material adverse impact on its business, operations, and prospects. While management believes that it will have
made the necessary investments in infrastructure to process anticipated volume increases in the short term, the Corporation may experience
growth in the number of its employees and the scope of its operating and financial systems, resulting in increased responsibilities for
the Corporation's personnel, the hiring of additional personnel and, in general, higher levels of operating expenses. In order to manage
its current operations and any future growth effectively, the Corporation will also need to continue to implement and improve its operational,
financial and management information systems and to hire, train, motivate, manage and retain its employees. There can be no assurance
that the Corporation will be able to manage such growth effectively, that its management, personnel or systems will be adequate to support
the Corporation's operations or that the Corporation will be able to achieve the increased levels of revenue commensurate with the increased
levels of operating expenses associated with this growth.

 

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	29

     

    

 

 

ABSENCE OF PROFITS

 

The Corporation has not earned any profits to
date and there is no assurance that it will earn any profits in the future, or that profitability, if achieved, will be sustained. A significant
portion of the Corporation's financial resources will continue to be directed to the development of its products and to marketing activities.
The success of the Corporation will ultimately depend on its ability to generate revenues such that the business development and marketing
activities may be financed by revenues from operations instead of external financing. There is no assurance that future revenues will
be sufficient to generate the required funds to continue such business development and marketing activities.

 

CONFLICTS OF INTEREST

 

Certain proposed directors and officers of the
Corporation may become associated with other reporting issuers or other Companies which may give rise to conflicts of interest. In accordance
with the Canada Business Corporations Act, directors who have a material interest or any person who is a party to a material contract
or a proposed material contract with the Corporation are required, subject to certain exceptions, to disclose that interest and generally
abstain from voting on any resolution to approve the contract. In addition, the directors are required to act honestly and in good faith
with a view to the best interests of the Corporation, as the case may be. Certain of the directors have either other employment or other
business or time restrictions placed on them and accordingly, these directors will only be able to devote part of their time to the affairs
of the Corporation.

 

COVID-19

 

In December 2019 there was a global
outbreak of COVID-19 (coronavirus), which has had a significant impact on businesses through the restrictions put in place by the national,
provincial and municipal governments around the world regarding travel, business operations and isolation/quarantine orders.

 

At this time, it is unknown the extent
of the impact the COVID-19 outbreak may have on the Corporation as this will depend on future developments that are highly uncertain and
that cannot be predicted with confidence. These uncertainties arise from the inability to predict the ultimate duration of the outbreak,
including the duration of travel restrictions, business closures or disruptions, and quarantine/isolation measures that are currently,
or may be put, in place by Canada and other countries to fight the virus.

 

Our main priorities in dealing with
the COVID-19 situation are to minimize the risk of spreading the virus and to create a safe workplace for our employees as well as to
maintain the operation for our operators. We continue to comply with all the requirements from the authorities in the countries we operate
in, and in many instances, we have taken more far-reaching initiatives. Thanks to the measures that have been implemented in terms of
social distancing, changed working processes and routines for our employees, our operations have been able to continue without any large
negative effects.

 

However, the Corporation derives the
majority of its revenue from online casino gaming. This sector has largely benefited from the various international “lock downs”,
requiring people to stay at home. As a result, such forms of entertainment have prevailed in a similar fashion to the various streaming
businesses such as Netflix have. Furthermore, the Corporation has limited exposure to sports betting revenues that have obviously been
impacted by the lack of professional sports.

 

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	30

     

    

 

As at the time of publishing, the Corporation’s
financial performance, financial position and cash flow has been positively impacted as a result of people staying at home. Management
will continue to monitor events and effects to the Corporation closely and will amend its forecasts as and when it deems necessary.

 

		11	ADDITIONAL INFORMATION

 

Additional information relating to the Corporation,
including the Corporation’s annual information form, quarterly and annual reports and supplementary
information is available on SEDAR at www.sedar.com.

 

Press releases and other information are also available in the Investor
section of the Corporation’s website at www.bragg.games.

 

    	 	Bragg Gaming Group Inc
Management Discussion & Analysis
March 31, 2021
	31

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