Inspired Entertainment, Inc. Files 10-K/A Amendment

TL;DR

<b>Inspired Entertainment, Inc. has filed an amendment to its 2022 10-K filing.</b>

AI Summary

Inspired Entertainment, Inc. (INSE) filed a Amended Annual Report (10-K/A) with the SEC on February 27, 2024. This filing is an amendment to the 10-K for the fiscal year ended December 31, 2022. The company was formerly known as Hydra Industries Acquisition Corp. and changed its name on July 28, 2014. Inspired Entertainment, Inc. is incorporated in Delaware. The company's primary business address is 250 West 57th Street, Suite 415, New York, NY 10107. The filing includes data for fiscal years 2020, 2021, and 2022.

Why It Matters

For investors and stakeholders tracking Inspired Entertainment, Inc., this filing contains several important signals. This amendment provides updated or corrected information for the 2022 fiscal year, which is crucial for investors to have the most accurate financial picture. The filing details financial data across multiple years (2020-2022), allowing for trend analysis and comparison of the company's performance.

Risk Assessment

Risk Level: — Inspired Entertainment, Inc. shows moderate risk based on this filing. The filing is an amendment to a previous 10-K, indicating potential corrections or updates rather than new material events, thus posing a low immediate risk.

Analyst Insight

Review the specific changes and additions in this 10-K/A filing to understand any updated financial or operational disclosures from Inspired Entertainment, Inc.

Key Numbers

• 2022-12-31 — Fiscal Year End (Conformed period of report)
• 2024-02-27 — Filing Date (As of date)
• 2020, 2021, 2022 — Fiscal Years Reported (Data spans these years)

Key Players & Entities

• Inspired Entertainment, Inc. (company) — Filer name
• Hydra Industries Acquisition Corp. (company) — Former company name
• 2022-12-31 (date) — Fiscal year end
• 2024-02-27 (date) — Filing date
• 250 West 57th Street, Suite 415, New York, NY 10107 (address) — Business address

FAQ

Industry Context

Inspired Entertainment, Inc. operates in the software and services sector, specifically prepackaged software (SIC 7372).

Regulatory Implications

The filing is a 10-K/A, an amendment to an annual report filed under the Securities Exchange Act of 1934.

What Investors Should Do

1. Analyze the specific amendments made in this 10-K/A filing to understand any changes to previously reported information.
2. Compare the financial data presented for 2020, 2021, and 2022 to identify trends and performance.
3. Note the company's former name and incorporation details for historical context.

Key Dates

• 2022-12-31: Fiscal Year End — Period for which the 10-K/A amendment is filed.
• 2024-02-27: Filing Date — Date the amendment was submitted to the SEC.

Year-Over-Year Comparison

This is an amended filing (10-K/A) for the fiscal year ended December 31, 2022, indicating updates or corrections to the original 10-K.

Key Financial Figures

• $0.0001 — ch registered Common Stock, par value $0.0001 per share INSE The Nasdaq Stock Mar
• $281.6 million — ull-time. We generated total revenue of $281.6 million and Adjusted EBITDA of $99.0 million fo
• $99.0 million — f $281.6 million and Adjusted EBITDA of $99.0 million for the year ended December 31, 2022.
• $328.27 million — market capitalization of approximately $328.27 million as of December 31, 2022 (based upon a c
• $12.67 — 22 (based upon a closing stock price of $12.67 on December 30, 2022). Certain produc
• $2.0 million — recurring in nature in 2022 (excluding $2.0 million of performance bonus revenue and $1.0 m
• $1.0 million — illion of performance bonus revenue and $1.0 million of VAT-related revenue) and derived und
• $111.3 million — enerated revenue and Adjusted EBITDA of $111.3 million and $43.7 million, respectively (exclud
• $43.7 m — d Adjusted EBITDA of $111.3 million and $43.7 million, respectively (excluding VAT rela
• $81.4 million — ber 31, 2021, during which we generated $81.4 million and $26.7 million in revenue and Adjust
• $26.7 million — ng which we generated $81.4 million and $26.7 million in revenue and Adjusted EBITDA, respect

Filing Documents

• form10-ka.htm (10-K/A) — 4317KB
• ex23-1.htm (EX-23.1) — 7KB
• ex31-1.htm (EX-31.1) — 12KB
• ex31-2.htm (EX-31.2) — 12KB
• ex32-1.htm (EX-32.1) — 7KB
• ex32-2.htm (EX-32.2) — 7KB
• form10-ka_001.jpg (GRAPHIC) — 14KB
• 0001493152-24-007973.txt (&nbsp;) — 20034KB
• inse-20221231.xsd (EX-101.SCH) — 107KB
• inse-20221231_cal.xml (EX-101.CAL) — 158KB
• inse-20221231_def.xml (EX-101.DEF) — 454KB
• inse-20221231_lab.xml (EX-101.LAB) — 766KB
• inse-20221231_pre.xml (EX-101.PRE) — 689KB
• form10-ka_htm.xml (XML) — 4584KB

Business

Business 1 ITEM 1A.

Risk Factors

Risk Factors 16 ITEM 1B. Unresolved Staff Comments 35 ITEM 2.

Properties

Properties 36 ITEM 3.

Legal Proceedings

Legal Proceedings 36 ITEM 4. Mine Safety Disclosures 36 PART II ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 37 ITEM 6. Reserved 37 ITEM 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 37 ITEM 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 63 ITEM 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data F-1 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 64 ITEM 9A.

Controls and Procedures

Controls and Procedures 64 ITEM 9B. Other Information 68 ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 68 PART III ITEM 10. Directors, Executive Officers and Corporate Governance 69 ITEM 11.

Executive Compensation

Executive Compensation 69 ITEM 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 69 ITEM 13. Certain Relationships and Related Transactions, and Director Independence 69 ITEM 14. Principal Accounting Fees and Services 69 PART IV ITEM 15. Exhibits, Financial Statement Schedules 69 ITEM 16. Form 10-K Summary 73

SIGNATURES

SIGNATURES 74 i CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain Financial Condition and Results of Operations" and elsewhere herein, may relate to future events and expectations, and as such constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Section 27A of the Securities Act of 1933, as amended (the "Securities Act"). Our forward-looking future operations, results, financial condition, beliefs and intentions. In addition, any statements that refer to projections, forecasts or other characterizations or predictions of future events or circumstances, including any underlying assumptions on which such statements are expressly or implicitly based, are forward-looking statements. The words "anticipate", "believe", "continue", "can", "could", "estimate", "expect", "intend", "may", "might", "plan", "possible", "potential", "predict", "project", "scheduled", "seek", "should", "would" and similar expressions, among others, and negatives expressions including such words, may identify forward-looking statements. Our forward-looking statements reflect our current expectations about our future results, performance, liquidity, financial condition, prospects and opportunities, and are based upon information currently available to us, our interpretation of what we believe to be significant factors affecting our business and many assumptions regarding future events. Actual results, performance, liquidity, financial condition, prospects and opportunities could differ materially from those expressed in, or implied by, our forward-looking statements. This could occur as a result of various risks and uncerta

- Item 1 – Business;

Part I- Item 1 – Business;

- Item 1A Risk Factors;

Part I - Item 1A Risk Factors;

- Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations;

Part II - Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations;

- Item 8 – Report of Independent Registered Public Accounting Firm;

Part II - Item 8 – Report of Independent Registered Public Accounting Firm;

- Item 8 - Financial Statements;

Part II - Item 8 - Financial Statements;

- Item 9A – Controls

Part II - Item 9A – Controls and Procedures;

- Item 9A - Report of Independent

Part II - Item 9A - Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting; and

- Item 15 – Exhibits,

Part IV - Item 15 – Exhibits, Certifications. This Amendment has been signed as of the date hereof and all certifications of our Principal Executive Officer and Principal Financial Officer are given as the date hereof. Accordingly, this Amendment should be read in conjunction with our filings made with the Securities and Exchange Commission subsequent to the filing of the Original Filing, including any amendments to those filings. iii Restatement Background As previously reported by the Company on a Current Report on Form 8-K filed with the SEC on March 23, 2023, on March 17, 2023, the Company dismissed Marcum as its independent registered public accounting firm and engaged KPMG LLP ("KPMG") as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2023 and the related interim periods. In connection with the preparation of the financial statements of the Company for the quarterly period ended September 30, 2023, KPMG identified certain accounting errors relating to compliance with U.S. GAAP in connection with the Company's accounting policies for capitalizing software development costs. The errors related primarily to the application of the relevant accounting standards to projects, including the timing of capitalization with respect to software development projects and the nature of costs eligible for capitalization. As previously reported by the Company on Form 8-K filed with the SEC on November 8, 2023, on November 2, 2023, the Audit Committee, in consultation with the Company's management, determined that (i) the Company's previously issued audited consolidated

financial statements as of December 31, 2021 and 2022 and for the years ended December 31, 2020, 2021

financial statements as of December 31, 2021 and 2022 and for the years ended December 31, 2020, 2021 and 2022 included in the Company's Annual Report on Form 10-K, (ii) associated reports of the Company's independent registered public accounting firm, and (iii) the Company's previously issued unaudited condensed consolidated financial statements during those years, and for the first and second quarters of 2023 included in the Company's Quarterly Reports on Form 10-Q contained the accounting errors set forth above. Following the determination by the Audit Committee, the Company retained independent accounting consultants and undertook an investigation with respect to the appropriate accounting treatment of its software development costs and other matters. As previously reported by the Company on a Current Report on Form 8-K filed with the SEC on November 29, 2023, on November 22, 2023, the Company dismissed KPMG as its independent registered public accounting firm and re-engaged Marcum as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2023 and the related interim periods. Other Adjustments In addition to the material software development matters described above, various other material and immaterial prior period errors or misstatements have been identified including in the areas of revenue, inventory, leasing, pension, earnings per share and other reclassification and minor items. For additional information regarding the revision of prior annual periods see Part II, Item 8 "Financial Statements and Supplementary Data-Note 2 to the Consolidated Financial Statements – Restatement of Previously Issued Financial Statements." Internal Control Over Financial Reporting Management has reassessed its evaluation of the effectiveness of its internal control over financial reporting as of December 31, 2022, based on the framework established in Internal Control-Integrated Framework (2013) issued by the Committee of

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View this 10-K/A filing on SEC EDGAR