{"url_path":"/sec/vipz/10-q/2026/item-1","section_key":"item-1","section_title":"Item 1 Financial Statements**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1832161/0001493152-26-023219-index.html","accession_number":"0001493152-26-023219","cik":"0001832161","ticker":"VIPZ","issuer_name":"VIP Play, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1832161/0001493152-26-023219-index.html","primary_entity_key":"0001832161","primary_entity_name":"VIP Play, Inc."},"word_count":14684,"has_tables":true,"body_markdown":"**Item\n1. Financial Statements**\n\n \n\nOur\nfinancial statements included in this Form 10-Q are as follows:\n\n \n\nF-1\n[Unaudited Condensed Consolidated Balance Sheets as of March 31, 2026 and June 30, 2025;](#JA_001)\n\n \n \n\nF-3\n[Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended March 31, 2026 and 2025;](#JA_002)\n\n \n \n\nF-4\n[Unaudited Condensed Consolidated Statements of Stockholders’ Deficit for the three and nine month periods ended March 31, 2026 and 2025;](#JA_003)\n\n \n \n\nF-6\n[Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended March 31, 2026 and 2025;](#JA_004)\n\n \n \n\nF-7\n[Notes to Unaudited Condensed Consolidated Financial Statements.](#JA_005)\n\n \n\n1\n\n \n\n \n\n**VIP\nPLAY, INC.**\n\n**CONDENSED\nCONSOLIDATED BALANCE SHEETS**\n\n**(unaudited)**\n\n*(in\nthousands, except number of shares and par value)*\n\n \n\n  \nMarch 31, 2026  \nJune 30, 2025 \n\n  \n   \n  \n\nASSETS \n    \n   \n\n  \n    \n   \n\nCurrent assets: \n    \n   \n\nCash \n$23  \n$163 \n\nCash reserved for users \n 60  \n 277 \n\nRelated party receivables \n 722  \n - \n\nPrepaid expenses and other current assets \n 1,981  \n 2,419 \n\nTotal current assets \n 2,786  \n 2,859 \n\n  \n    \n   \n\nOther assets: \n    \n   \n\nIntangible assets, net \n 976  \n 883 \n\nDeposits and other assets \n 4  \n 4 \n\nTotal other assets \n 980  \n 887 \n\n  \n    \n   \n\nTotal assets \n$3,766  \n$3,746 \n\n  \n    \n   \n\nLIABILITIES AND STOCKHOLDERS’ DEFICIT \n    \n   \n\n  \n    \n   \n\nCurrent liabilities: \n    \n   \n\nAccounts payable and accrued expenses \n$1,317  \n$1,073 \n\nAccrued expenses - related party \n 4,003  \n 1,678 \n\nPlayers liabilities \n 80  \n 336 \n\nNotes payable \n 59  \n 764 \n\nNotes payable - related party, net of discount \n 30  \n 30 \n\nNotes payable \n 30  \n 30 \n\nConvertible notes, net of discount \n 423  \n 827 \n\nLine of credit - related party \n 28,075  \n 19,586 \n\nDerivative liability \n 8,335  \n 11,226 \n\nTotal current liabilities \n 42,322  \n 35,520 \n\n  \n    \n   \n\nTotal liabilities \n 42,322  \n 35,520 \n\n  \n    \n   \n\nCommitments and contingencies \n -  \n - \n\n \n\nThe\naccompanying notes are an integral part of these unaudited condensed consolidated financial statements.\n\n \n\nF-1\n\n \n\n \n\n**VIP\nPLAY, INC.**\n\n**CONDENSED\nCONSOLIDATED BALANCE SHEETS – Continued**\n\n**(unaudited)**\n\n \n\n  \nMarch 31, 2026  \nJune 30, 2025 \n\n  \n   \n  \n\nStockholders’ deficit: \n    \n   \n\nPreferred stock, 25,000,000 shares authorized \n    \n   \n\nSeries A preferred stock, $0.001 par value, 2,000,000 shares designated, 0 and 0 shares issued and outstanding as of March 31, 2026, and June 30, 2025, respectively \n -  \n - \n\nSeries B preferred stock, $1.00 par value, 12,000 shares designated, 11,693 and 11,693 shares issued and outstanding as of March 31, 2026, and June 30, 2025, respectively \n 12  \n 12 \n\nSeries C preferred stock, $0.001 par value, 6,700,000 shares designated, 0 and 0 shares issued and outstanding as of March 31, 2026, and June 30, 2025, respectively \n -  \n - \n\nPreferred stock value \n -  \n - \n\n  \n    \n   \n\nCommon stock, $0.001 par value, 475,000,000 shares authorized, 73,457,857 and 73,457,857 shares issued and outstanding as of March 31, 2026, and June 30, 2025, respectively \n 73  \n 73 \n\nAdditional paid-in capital \n 31,624  \n 31,269 \n\nAccumulated deficit \n (70,265) \n (63,128)\n\nTotal stockholders’ deficit \n (38,556) \n (31,774)\n\n  \n    \n   \n\nTotal liabilities and stockholders’ deficit \n$3,766  \n$3,746 \n\n \n\nThe\naccompanying notes are an integral part of these unaudited condensed consolidated financial statements.\n\n \n\nF-2\n\n \n\n \n\n**VIP\nPLAY, INC.**\n\n**CONDENSED\nCONSOLIDATED STATEMENTS OF OPERATIONS**\n\n**(unaudited)**\n\n*(in\nthousands except number of shares and per share data)*\n\n \n\n  \n2026  \n2025  \n2026  \n2025 \n\n ** **\n\n**For\nthe three months ended****March 31,**\n  \n\n**For the nine months ended**\n\n**March 31,**\n \n\n  \n2026  \n2025  \n2026  \n2025 \n\n  \n   \n   \n   \n  \n\nGaming revenues \n$102  \n 1  \n 178  \n 18 \n\n  \n    \n    \n    \n   \n\nCosts of gaming revenue \n 415  \n 143  \n 874  \n 347 \n\n  \n    \n    \n    \n   \n\nNet gaming loss \n (313) \n (142) \n (696) \n (329)\n\n  \n    \n    \n    \n   \n\nOperating expenses: \n    \n    \n    \n   \n\nSalaries and wages \n 1,341  \n 956  \n 4,201  \n 2,958 \n\nDepreciation and amortization \n 125  \n 1  \n 313  \n 955 \n\nSales and marketing \n 124  \n 412  \n 561  \n 920 \n\nGeneral and administrative \n 503  \n 456  \n 1,900  \n 2,096 \n\nImpairment of developed technology and tradename \n -  \n -  \n -  \n 5,909 \n\n  \n    \n    \n    \n   \n\nTotal operating expenses \n 2,093  \n 1,825  \n 6,975  \n 12,838 \n\nLoss from operations \n (2,406) \n (1,967) \n (7,671) \n (13,167)\n\nOther income (expense): \n    \n    \n    \n   \n\nGain (loss) on change in fair value of derivative \n (8,148) \n (2,442) \n 2,945  \n (415)\n\nInterest expense \n (34) \n (112) \n (144) \n (367)\n\nInterest expense - related party \n (835) \n (632) \n (2,267) \n (2,475)\n\nInterest expense \n (835) \n (632) \n (2,267) \n (2,475)\n\n  \n    \n    \n    \n   \n\nTotal other income (expense) \n (9,017) \n (3,186) \n 534  \n (3,257)\n\n  \n    \n    \n    \n   \n\nNet loss \n$(11,423) \n (5,153) \n (7,137) \n (16,424)\n\n**Net loss per common share**\n\n- basic\n \n$(0.16) \n (0.07) \n (0.10) \n (0.23)\n\n**Net loss per common share**\n\n- diluted\n \n$(0.16) \n (0.07) \n (0.10) \n (0.23)\n\n**Weighted average number of common shares outstanding**\n\n**- basic**\n \n 73,457,857  \n 72,804,377  \n 73,457,857  \n 72,414,740 \n\nWeighted average number of common shares outstanding - diluted \n 73,457,857  \n 72,804,377  \n 73,457,857  \n 72,414,740 \n\n \n\nThe\naccompanying notes are an integral part of these unaudited condensed consolidated financial statements.\n\n \n\nF-3\n\n \n\n \n\n**VIP\nPLAY, INC.**\n\n**CONDENSED\nCONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT**\n\n**(unaudited)**\n\n*(in\nthousands except share data)*\n\n \n\n** **** **\n**Shares**** **** **\n**Amount**** **** **\n**Shares**** **** **\n**Amount**** **** **\n**Shares**** **** **\n**Amount**** **** **\n**Shares**** **** **\n**Amount**** **** **\n**Capital**** **** **\n**Deficit**** **** **\n**(Deficit)**** **\n\n** **** **\n**Preferred Shares**** **** **\n**Preferred Shares**** **** **\n**Preferred Shares**** **** **\n** **** **** **\n** **** **** **\n** **** **** **\n** **** **** **\n**Total**** **\n\n** **** **\n**Series A**** **** **\n**Series B**** **** **\n**Series C**** **** **\n**Common Shares**** **** **\n**Additional**** **** **\n** **** **** **\n**Stockholder’**** **\n\n** **** **\n**$0.001 Par Value**** **** **\n**$1.00 Par Value**** **** **\n**$0.001 Par Value**** **** **\n**$0.001 Par Value**** **** **\n**Paid-In**** **** **\n**Accumulated**** **** **\n**Equity**** **\n\n** **** **\n**Shares**** **** **\n**Amount**** **** **\n**Shares**** **** **\n**Amount**** **** **\n**Shares**** **** **\n**Amount**** **** **\n**Shares**** **** **\n**Amount**** **** **\n**Capital**** **** **\n**Deficit**** **** **\n**(Deficit)**** **\n\nBalance, June 30, 2025 \n           -  \n$           - \n  \n 11,693  \n$12  \n            -  \n$           -\n  \n 73,457,857  \n$      73  \n$31,269  \n$(63,128) \n$           (31,774)\n\nFair Value of vested incentive stock options \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n 63  \n -  \n 63 \n\nNet loss \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n (3,481) \n (3,481)\n\nBalance, September 30, 2025 \n -  \n -  \n 11,693  \n 12  \n -  \n -  \n 73,457,857  \n 73  \n 31,322  \n (66,609) \n (35,192)\n\nFair value of vested incentive stock options & RSUs \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n 141  \n -  \n 141 \n\nNet income \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n 7,767  \n 7,767 \n\nBalance, December 31, 2025 \n -  \n -  \n 11,693  \n 12  \n -  \n -  \n 73,457,857  \n 73  \n 31,473  \n (58,842) \n (27,284)\n\nWarrants granted for services \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n 10  \n -  \n 10 \n\nFair value of vested incentive stock options & RSUs \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n 141  \n -  \n 141 \n\nNet Loss \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n (11,423) \n (11,423)\n\nBalance, March 31, 2026 \n -  \n$-  \n 11,693  \n$12  \n -  \n$-  \n 73,457,857  \n$73  \n$31,624  \n$(70,265) \n$(38,556)\n\n \n\nThe\naccompanying notes are an integral part of these unaudited condensed consolidated financial statements.\n\n \n\nF-4\n\n \n\n \n\n**VIP\nPLAY, INC.**\n\n**CONDENSED\nCONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT - continued**\n\n**(unaudited)**\n\n \n\n** **** **\n**Preferred Shares**** **** **\n**Preferred Shares**** **** **\n**Preferred Shares**** **** **\n** **** **** **\n** **** **** **\n** **** **** **\n** **** **** **\n**Total**** **\n\n** **** **\n**Series A**** **** **\n**Series B**** **** **\n**Series C**** **** **\n**Common Shares**** **** **\n**Additional**** **** **\n** **** **** **\n**Stockholders’**** **\n\n** **** **\n**$0.001 Par Value**** **** **\n**$1.00 Par Value**** **** **\n**$0.001 Par Value**** **** **\n**$0.001 Par Value**** **** **\n**Paid-In**** **** **\n**Accumulated**** **** **\n**Equity**** **\n\n** **** **\n**Shares**** **** **\n**Amount**** **** **\n**Shares**** **** **\n**Amount**** **** **\n**Shares**** **** **\n**Amount**** **** **\n**Shares**** **** **\n**Amount**** **** **\n**Capital**** **** **\n**Deficit**** **** **\n**(Deficit)**** **\n\nBalance June 30, 2024 \n            -  \n$            -  \n 11,693  \n$        12  \n      -  \n$       -  \n 71,994,990  \n$       7  \n$30,295  \n$(43,969) \n$    (13,655)\n\nFair value of vested incentive stock options \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n 48  \n -  \n 48 \n\nChange in par value of common stock \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n 65  \n (65) \n -  \n - \n\nNet loss \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n (5,338) \n (5,338)\n\nBalance, September 30, 2024 \n -  \n -  \n 11,693  \n 12  \n -  \n -  \n 71,994,990  \n 72  \n 30,278  \n (49,307) \n (18,945)\n\nFair value of vested incentive stock options \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n 45  \n -  \n 45 \n\nIssuance of common stock for cash, net of offering costs \n -  \n -  \n -  \n -  \n -  \n -  \n 766,668  \n 1  \n 446  \n -  \n 447 \n\nNet loss \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n (5,933) \n (5,933)\n\nBalance December 31, 2024 \n -  \n -  \n 11,693  \n 12  \n -  \n -  \n 72,761,658  \n 73  \n 30,769  \n (55,240) \n (24,386)\n\nFair value of vested incentive stock options \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n 39  \n -  \n 39 \n\nIssuance of common stock for accrued offering costs \n -  \n -  \n -  \n -  \n -  \n -  \n 71,199  \n -  \n 53  \n -  \n 53 \n\nNet loss \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n (5,153) \n (5,153)\n\nNet\nincome (loss) \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n (5,153) \n (5,153)\n\nBalance March 31, 2025 \n -  \n$-  \n 11,693  \n$12  \n -  \n$-  \n 72,832,857  \n$73  \n$30,861  \n$(60,393) \n$(29,447)\n\n \n\nThe\naccompanying notes are an integral part of these unaudited condensed consolidated financial statements.\n\n \n\nF-5\n\n \n\n** **\n\n**VIP\nPLAY, INC.**\n\n**CONDENSED\nCONSOLIDATED STATEMENTS OF CASH FLOWS**\n\n(unaudited)\n\n*(in\nthousands)*\n\n \n\n  \n2026  \n2025 \n\n  \nFor the Nine Months Ended March 31, \n\n  \n2026  \n2025 \n\nCASH FLOWS FROM OPERATING ACTIVITIES \n    \n   \n\nNet loss \n$(7,137) \n (16,424)\n\nAdjustments to reconcile net loss to net cash used in operating activities: \n    \n   \n\nAmortization of debt issuance costs – related party \n -  \n 1,330 \n\nAmortization of debt discount \n 50  \n 208 \n\nDepreciation and amortization \n 313  \n 955 \n\nIncentive stock option and RSU expense \n 345  \n 132 \n\nWarrants granted for services \n 10  \n - \n\nImpairment of developed technology and tradename \n -  \n 5,909 \n\n(Gain) loss on change in fair value of derivative \n (2,945) \n 415 \n\nChanges in operating assets and liabilities: \n    \n   \n\nPrepaid expenses and other current assets \n 553  \n (644)\n\nRelated party receivables \n (722) \n - \n\nAccounts payable and accrued expenses \n 245  \n (306)\n\nAccrued expenses - related party \n 2,324  \n 738 \n\nPlayers liabilities \n (256) \n (132)\n\nNet cash used in operating activities \n (7,220) \n (7,819)\n\n  \n    \n   \n\nCASH FLOWS FROM INVESTING ACTIVITIES \n    \n   \n\nCash paid for licenses and capitalized software \n (361) \n (628)\n\nCash paid for non-gaming development \n (45) \n - \n\nNet cash used in investing activities \n (406) \n (628)\n\n  \n    \n   \n\nCASH FLOWS FROM FINANCING ACTIVITIES \n    \n   \n\nProceeds from issuance of common stock, net of issuance costs \n -  \n 447 \n\nProceeds from line of credit - related party \n 8,489  \n 8,537 \n\nProceeds from convertible notes \n 100  \n - \n\nRepayment of convertible note \n (500) \n - \n\nRepayments of notes payable \n (820) \n (762)\n\nNet cash provided by financing activities \n 7,269  \n 8,222 \n\n  \n    \n   \n\nNET CHANGE IN CASH AND CASH RESERVED FOR USERS \n (357) \n (225)\n\n  \n    \n   \n\nCASH AND CASH RESERVED FOR USERS AT BEGINNING OF PERIOD \n 440  \n 450 \n\n  \n    \n   \n\nCASH AND CASH RESERVED FOR USERS AT END OF PERIOD \n$83  \n 225 \n\n  \n    \n   \n\nDISCLOSURE OF CASH AND CASH RESERVED FOR USERS: \n    \n   \n\n  \n    \n   \n\nCASH \n 23  \n 91 \n\n  \n    \n   \n\nCASH RESERVED FOR USERS \n 60  \n 134 \n\n  \n    \n   \n\nCASH AND CASH RESERVED FOR USERS AT END OF PERIOD \n$83  \n 225 \n\n  \n    \n   \n\nSUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: \n    \n   \n\nInterest paid \n$78  \n 562 \n\n  \n    \n   \n\nNON-CASH FINANCING AND INVESTING ACTIVITIES: \n    \n   \n\nInsurance financing \n$115  \n 96 \n\nCommon stock and warrants issued for offering costs \n$-  \n 147 \n\n \n\nThe\naccompanying notes are an integral part of these unaudited condensed consolidated financial statements.\n\n \n\nF-6\n\n \n\n \n\n**VIP\nPLAY, INC.**\n\n**NOTES\nTO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**NOTE\n1 – OVERVIEW AND ORGANIZATION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**\n\n \n\n**Overview\nand Organization**\n\n \n\nVIP\nPlay, Inc. (the “Company,” “we”, “us” and “our”), formerly known as KeyStar Corp. prior\nto September 20, 2024, was incorporated on April 16, 2020, under the laws of the State of Nevada. On December 21, 2021, the Company formed\nUG Acquisition Sub, Inc. as a wholly-owned subsidiary under the state of Nevada. On December 9, 2022, the Company formed VIP Play TN,\nLLC (formerly known as KeyStar TN, LLC) as a wholly-owned subsidiary under the state of Nevada. On March 4, 2025, the Company formed\nVIP Play WV, LLC as a wholly owned subsidiary under the state of Nevada. On August 5, 2024, the Board of Directors approved the winding\ndown and dissolution of UG Acquisition Sub, Inc.\n\n \n\nIn\nMay 2023, the Company received approval on its Tennessee Sports Gaming Operator license. The Company officially launched its Sports Betting\noperation in Tennessee in June 2023. On December 10, 2024, the Company entered into a Casino and Sportsbook Online Operations Agreement\nwith a license holder in West Virginia. This agreement granted the Company the right to seek and obtain licenses from the appropriate\ngoverning authority to offer and operate interactive online gaming services in West Virginia via the Internet, mobile or other remote\nor electronic device or data network. On March 31, 2025, the Company received interim approval on its West Virginia i-Gaming and Sports\nWagering Management Service Provider License. The Company did not commence operations in West Virginia. In October 2025,\nthe Company received a notice of termination related to its West Virginia market access agreement and is currently involved in an ongoing\ndispute regarding the validity of the termination and related fee claims. See Note 12 – Commitments and Contingencies.\n\n \n\n**Basis\nof Presentation**\n\n \n\nThe\nforegoing unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles\nin the United States of America (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and\nRegulation S-X as promulgated by the United States Securities and Exchange Commission (“SEC”). Accordingly, these unaudited\ncondensed consolidated financial statements do not include all of the disclosures required by U.S. GAAP for complete annual audited consolidated\nfinancial statements. These unaudited condensed consolidated interim financial statements should be read in conjunction with the audited\nconsolidated financial statements and the notes thereto included on Form 10-K for the year ended June 30, 2025. In the opinion of management,\nthe unaudited condensed consolidated financial statements furnished herein include all adjustments, all of which are of a normal recurring\nnature, necessary for a fair statement of the results for the interim period presented.\n\n \n\nOperating\nresults for the three and nine month periods ended March 31, 2026, are not necessarily indicative of the results that may be expected\nfor the year ending June 30, 2026. The condensed consolidated balance sheet at June 30, 2025, has been derived from the annual audited\nconsolidated financial statements included in our Annual Report on Form 10-K at that date but does not include all of the information\nand footnotes required by U.S. GAAP for complete annual audited consolidated financial statements.\n\n \n\n**Principles\nof Consolidation**\n\n \n\nThe\nunaudited condensed consolidated financial statements represent the results of VIP Play, Inc. and its wholly owned subsidiaries (collectively,\nthe “Company”). All intercompany transactions and balances have been eliminated upon consolidation of these entities.\n\n \n\nF-7\n\n \n\n \n\n**Segment\nReporting**\n\n \n\nOur\nchief operating decision maker (“CODM”), Les Ottolenghi, Chief Executive Officer, reviews operating results on a consolidated\nbasis and has determined that we have one reportable segment.\n\n \n\nThe\nfollowing tables present selected financial information with respect to the Company’s single operating segment for the three and\nnine months ended March 31, 2026 and 2025 *(in thousands)*:\n\nSCHEDULE\nOF SEGMENT REPORTING \n\n  \n2026  \n2025 \n\n  \n\n**For\nthe three months ended****March 31,**\n \n\n  \n2026  \n2025 \n\n  \n   \n  \n\nGaming revenues \n$102  \n$1 \n\n  \n    \n   \n\nCosts of gaming revenue \n 415  \n 143 \n\n  \n    \n   \n\nNet gaming loss \n (313) \n (142)\n\n  \n    \n   \n\nOperating expenses: \n    \n   \n\nSalaries and wages \n 1,341  \n 956 \n\nDepreciation and amortization \n 125  \n 1 \n\nSales and marketing \n 124  \n 412 \n\nGeneral and administrative \n 503  \n 456 \n\n  \n    \n   \n\nTotal operating expenses \n 2,093  \n 1,825 \n\nLoss from Operations \n (2,406) \n (1,967)\n\n  \n    \n   \n\nOther income (expenses): \n    \n   \n\nLoss on change in fair value of derivative \n (8,148) \n (2,442)\n\nInterest expense \n (34) \n (112)\n\nInterest expense - related party \n (835) \n (632)\n\nInterest expense \n (835) \n (632)\n\n  \n    \n   \n\nTotal other expense, net \n (9,017) \n (3,186)\n\n  \n    \n   \n\nNet loss \n$(11,423) \n$(5,153)\n\n \n\n  \n2026  \n2025 \n\n  \n\n**For\nthe nine months ended****March 31,**\n \n\n  \n2026  \n2025 \n\n  \n   \n  \n\nGaming revenues \n$178  \n$18 \n\n  \n    \n   \n\nCosts of gaming revenue \n 874  \n 347 \n\n  \n    \n   \n\nNet gaming loss \n (696) \n (329)\n\n  \n    \n   \n\nOperating expenses: \n    \n   \n\nSalaries and wages \n 4,201  \n 2,958 \n\nDepreciation and amortization \n 313  \n 955 \n\nSales and marketing \n 561  \n 920 \n\nGeneral and administrative \n 1,900  \n 2,096 \n\nImpairment of developed technology and tradename \n -  \n 5,909 \n\nTotal operating expenses \n 6,975  \n 12,838 \n\nLoss from Operations \n (7,671) \n (13,167)\n\n  \n    \n   \n\nOther income (expenses): \n    \n   \n\nGain (loss) on change in fair value of derivative \n 2,945  \n (415)\n\nInterest expense \n (144) \n (367)\n\nInterest expense - related party \n (2,267) \n (2,475)\n\nInterest expense \n (2,267) \n (2,475)\n\n  \n    \n   \n\nTotal other income (expense), net \n 534  \n (3,257)\n\n  \n    \n   \n\nNet loss \n$(7,137) \n$(16,424)\n\n \n\nF-8\n\n \n\n \n\nDuring\nthe nine months ended March 31, 2026, the Company evaluated initiatives outside of its core sports wagering operations, including non-gaming\ndigital entertainment opportunities. These initiatives have not generated revenue and were not material to the Company’s financial\nposition or results of operations. Accordingly, the Company continues to report as one operating segment.\n\n \n\n**Use\nof Estimates**\n\n \n\nThe\npreparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates\nand assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the\nunaudited condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results\ncould differ from those estimates. Significant estimates and assumptions reflected in the unaudited condensed consolidated financial\nstatements relate to and include, but are not limited to, the valuation of debt and equity instruments, the valuation and expensing of\nequity awards, accounting for contingencies and uncertainties, purchase price allocations, including fair value estimates of intangible\nassets, the estimated useful lives of fixed assets and intangible assets, internally developed software costs and accrued expenses.\n\n \n\n**Going\nConcern**\n\n \n\nThe\nCompany’s unaudited condensed consolidated financial statements are prepared using the accrual method of accounting in accordance\nwith U.S. GAAP and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities\nin the normal course of business. The Company has an accumulated deficit of $70.3 million as of March 31, 2026, a loss from operations\nof $7.7 million and had negative cash flows of $7.2 million for the nine months ended March 31, 2026. These conditions raise substantial\ndoubt about the entity’s ability to continue as a going concern for a period of one year from the issuance of these unaudited condensed\nconsolidated financial statements.\n\n \n\nThe\nCompany is dependent upon, among other things, achieving a level of profitable operations and receiving additional cash infusions including\nsecuring additional lines of credit and raising additional capital through placement of preferred and/or common stock in order to implement\nits business plan. There can be no assurance that the Company will be successful in order to continue as a going concern. The Company\nhas historically funded its operations by securing a related party line of credit, a related party note payable, a note payable, issuing\npreferred stock, and issuing common stock through private placements.\n\n \n\nWe\ncannot be certain that capital will be provided when it is required or in amounts sufficient to meet our operating requirements. Management\nbelieves the existing shareholders, the prospective new investors, and future sales will provide the additional cash needed to meet the\nCompany’s obligations as they become due and will allow the Company to execute its business strategy. No assurance can be given\nthat any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if\nthe Company is able to obtain additional financing, it may contain restrictions on our operations, in the case of debt financing, or\ncause substantial dilution for our stockholders, in the case of equity financing.\n\n \n\n**Cash\nand Equivalents**\n\n \n\nThe\nCompany considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash includes\namounts deposited in financial institutions in excess of insurable Federal Deposit Insurance Company (FDIC) limits. At times throughout\nthe year, the Company may maintain cash balances in certain bank accounts in excess of FDIC limits. As of March 31, 2026, the Company’s\ncash balances were below the FDIC limits. The Company has not experienced any losses in such accounts and believes it is not exposed\nto any significant credit risk in these accounts.\n\n \n\nF-9\n\n \n\n \n\n**Cash\nReserved for Users**\n\n \n\nThe\nCompany maintains separate bank accounts to segregate users’ funds from operational funds. User funds are held by VIP Play TN,\nLLC, which was organized for the purpose of protecting users’ funds in the event of creditor claims. As of March 31, 2026 and June\n30, 2025, approximately $60 thousand and $277 thousand was reserved for users.\n\n \n\n**Equipment**\n\n \n\nEquipment\nis stated at cost, less accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the\nasset’s estimated useful life. Expenditures for maintenance and repairs are expensed as incurred. When retired or otherwise disposed\nof, the related carrying value and accumulated depreciation are removed from the respective accounts, and the net difference less any\namount realized from the disposition is reflected in earnings. Estimated useful lives are as follows:\n\nSUMMARY\nOF PLANT AND EQUIPMENT ESTIMATED USEFUL LIVES \n\nEquipment \n3 to 5 years\n\n \n\n**Intangible\nassets include internally developed software and website development costs, software licenses and gaming licenses**\n\n \n\nInternally\ndeveloped software and website development and software licenses are stated at cost, less accumulated amortization on the condensed consolidated\nbalance sheets. Amortization is calculated using the straight-line method over the asset’s estimated useful life. The capitalization\npolicy for the company is to capitalize intangible assets greater than $5 thousand. Expenditures for maintenance and repairs are expensed\nas incurred. When retired or otherwise disposed of, the related carrying value and accumulated depreciation are removed from the respective\naccounts and the net difference less any amount realized from the disposition is reflected in earnings.\n\n \n\nEstimated\nuseful lives are as follows:\n\nSUMMARY\nOF ESTIMATED LIVES OF INTANGIBLE ASSETS \n\nInternally developed software and website development \n 3 years \n\nSoftware licenses \n 3 years \n\nGaming licenses \n Indefinite \n\n \n\n**Internally\nDeveloped Software and website development**\n\n \n\nInternally\ndeveloped software and website development primarily relates to the design and development of sports betting software for online sportsbook\nand for our customer engagement platform. Software that is developed for internal use is accounted for pursuant to the Financial Accounting\nStandards Board (“FASB”) Accounting Standards Codification (“ASC”) Sub-topic 350-40, Intangibles, Goodwill and\nOther—Internal-Use Software. Qualifying costs incurred to develop internal-use software are capitalized when (i) the preliminary\nproject stage is completed, (ii) management has authorized further funding for the completion of the project and (iii) it is probable\nthat the project will be completed and perform as intended. These capitalized costs include compensation for employees who develop internal-use\nsoftware and external costs related to development of internal use software. Capitalization of these costs ceases once the project is\nsubstantially complete and the software is ready for its intended purpose. Internally developed software is amortized using the straight-line\nmethod over the estimated useful life of the software. Significant upgrades or enhancements are amortized over the remaining useful life\nof the software upon implementation unless the significant upgrade or enhancement separately results in a distinctly new functionality\nthat would extend the life of the asset. All other expenditures, including those incurred in order to maintain an intangible asset’s\ncurrent level of performance, are expensed as incurred. When intangible assets are retired or disposed of, the cost and accumulated amortization\nthereon are removed, and any resulting gain or losses are included in the condensed consolidated statements of operations.\n\n \n\nDuring\nthe nine months ended March 31, 2026, the Company paid $23 thousand to acquire non-gaming intangible assets. None of the assets had been\nplaced into service at March 31, 2026, and accordingly, no amortization had been recorded.\n\n \n\nF-10\n\n \n\n \n\n**Gaming\nlicenses**\n\n \n\nCertain\ncosts, generally legal and professional fees, are required to attain jurisdictional gaming licenses in order to legally operate our core\nsports betting business. Gaming licenses, with indefinite useful lives, are tested at least on an annual basis as to the assets that\nhave been impaired. Intangible assets determined to have an indefinite useful life are not amortized. Gaming licenses are assets that\nare determined to have an indefinite useful life are not amortized and are included in intangible assets on the condensed consolidated\nbalance sheets. Annual gaming license fees and legal and professional fees required to maintain the licenses are recorded as period costs\nin the condensed consolidated statement of operations.\n\n \n\n**Software\nlicense**\n\n \n\nDuring\nthe nine months ended March 31, 2026, the Company paid $45 thousand related to a non-gaming perpetual license to utilize a third-party\ncustomer engagement digital application, which was recorded as an intangible asset. Although the license is perpetual in contractual\nterm, management is assessing whether the asset has a finite or indefinite useful life. Management currently believes the asset may have\na finite useful life because the underlying technology could become obsolete or replaced by newer platforms over time. The Company will\nfinalize its useful life determination upon completion of its assessment and will amortize the asset if a finite life is determined,\nor test it for impairment annually if deemed to have an indefinite life.\n\n \n\n**Impairment\nof Long-Lived Assets**\n\n \n\nIntangible\nassets are amortized utilizing the straight-line method over their remaining economic useful lives. The Company reviews long-lived assets\nand intangible assets for potential impairment annually and when events or changes in circumstances indicate the carrying amount of an\nasset may not be recoverable. In the event the expected undiscounted future cash flows resulting from the use of the asset is less than\nthe carrying amount of the asset, an impairment loss is recorded equal to the excess of the asset’s carrying value over its fair\nvalue. If an asset is determined to be impaired, the loss is measured based on quoted market prices in active markets, if available.\nIf quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including a discounted\nvalue of estimated future cash flows. In the event that management decides to no longer allocate resources to an asset, an impairment\nloss equal to the remaining carrying value of the asset is recorded. The Company did not record any impairment charges related to intangible\nassets during the three and nine months ended March 31, 2026 and 2025.\n\n \n\n**Lease\nCommitments**\n\n \n\nASC\nTopic 842 provides for certain practical expedients when adopting the guidance. The Company elected to apply the short-term lease exception;\ntherefore, the Company will not record a right of use (“ROU”) asset or corresponding lease liability for leases with an initial\nterm of twelve months or less that are not reasonably certain of being renewed and instead will recognize a single lease cost allocated\nover the lease term, generally on a straight-line basis.\n\n \n\nOn\nFebruary 4, 2024, the Company entered into a lease for office space in Sarasota, Florida. The lease expired on February 1, 2025 and was\ncontinued on a month-to-month basis until June 2025.\n\n \n\nOn\nJune 18, 2025, the Company entered into a month-to-month lease for office space in Las Vegas, Nevada.\n\n \n\nTotal\nrental expense for the three months ended March 31, 2026 and 2025 was $1 thousand and $4 thousand, respectively. Total rental expense\nfor the nine months ended March 31, 2026 and 2025 was $6 thousand and $43 thousand, respectively.\n\n \n\nF-11\n\n \n\n \n\n**Fair\nValue of Financial Instruments**\n\n \n\nThe\nCompany recognized the fair value of financial instruments in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures,\n“Fair Value Measurements”, which provides a framework for measuring fair value under U.S. GAAP. Fair value is defined as\nthe exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous\nmarket for the asset or liability in an orderly transaction between market participants on the measurement date. The standard also expands\ndisclosures about instruments measured at fair value and establishes a fair value hierarchy, which requires an entity to maximize the\nuse of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of\ninputs that may be used to measure fair value:\n\n \n\nLevel\n1 - Quoted prices for identical assets and liabilities in active markets;\n\n \n\nLevel\n2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly,\nsuch as quoted market prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are\nobservable or can be corroborated by observable market data for substantially the full term of the asset or liability.\n\n \n\nLevel\n3 - Unobservable inputs that are supported by little to no market activity.\n\n \n\nThe\nCompany’s derivative liabilities are carried at fair value and are classified as Level 3 liabilities.\n\n \n\nThe\nCompany’s financial instruments consist principally of cash, prepaid expenses, accounts payable, accrued expenses, related party\nnotes payable, related party line of credit, and notes payable approximate the fair value because of their short maturities.\n\n \n\nThe\nCompany’s Derivative liabilities are determined based on Level 3 inputs, which are significant and unobservable and have the lowest\npriority. There were no transfers into or out of Level 3 during the three or nine months ended March 31 2026, or 2025.\n\n \n\n*(in\nthousands)*\n\nSCHEDULE\nOF DERIVATIVE LIABILITIES \n\nDescription \nTotal fair\nvalue at\nMarch 31, 2026  \nQuoted prices\nin Active\nmarkets (level 1)  \nSignificant other\nobservable inputs\n(level 2)  \nSignificant\nunobservable\ninputs (level 3) \n\nDerivative liability (1) \n$8,335  \n$-  \n$-  \n$8,335 \n\n \n\nDescription \nTotal fair\nvalue at\nJune 30, 2025  \nQuoted prices\nin Active\nmarkets (level 1)  \nSignificant other\n\nobservable inputs\n\n(level 2)  \nSignificant\n\nunobservable\n\ninputs (level 3) \n\nDerivative liability (1) \n$11,226  \n$-  \n$-  \n$11,226 \n\n \n\n(1)\nThe\nCompany has estimated the fair value of these derivatives using the Monte-Carlo simulation model.\n\n \n\nFair\nvalue estimates are made at a specific measurement date based on market conditions and information available to market participants at\nthat time. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot\nbe determined with precision. Changes in assumptions could transfer a liability in an orderly transaction between willing and able maker\nparticipants. In general, the Company’s policy in estimating fair values is to first look at observable market prices for the identical\nassets and liabilities in active markets, where available. When these are not available other inputs used to model fair value such as\nprices of similar instruments, yield curves, volatilities., prepayment speeds, default rates credit spreads, rely first on observable\ndata from active markets. Depending on the availability of observable inputs and prices, different valuation models could produce materially\ndifferent fair value estimates. The values presented may not represent future fair value as discussed above.\n\n \n\nF-12\n\n \n\n \n\n**Derivative\nLiabilities**\n\n \n\nThe\nCompany accounts for derivative instruments in accordance with FASB ASC Topic 815, “*Derivatives and Hedging*” and all\nderivative instruments are reflected as either assets or liabilities at fair value in the balance sheet. The Company uses estimates of\nfair value to value its derivative instruments. Fair value is defined as the price to sell an asset or transfer a liability in an orderly\ntransaction between willing and able market participants. In general, the Company’s policy in estimating fair values is to first\nlook at observable market prices for identical assets and liabilities in active markets, where available. When these are not available,\nother inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default\nrates, and credit spreads, relying first on observable data from active markets. Depending on the availability of observable inputs and\nprices, different valuation models could produce materially different fair value estimates. The values presented may not represent future\nfair values and may not be realizable. The Company categorizes its fair value estimates in accordance with FASB ASC Topic 820 based on\nthe hierarchical framework associated with the three levels of price transparency utilized in measuring financial instruments at fair\nvalue as discussed above. As of March 31, 2026, and June 30, 2025, the Company had a derivative liability of $8.3 million and $11.2 million,\nrespectively.\n\n \n\n**Players\nLiabilities**\n\n \n\nPlayers\nliabilities were comprised of players betting deposits and contestant prize winnings for promotional events. During the nine months ended\nMarch 31, 2026, the Company retitled the balance sheet caption previously labeled “players balances” to “players liabilities”\nto better reflect the nature of the amounts presented. This change in caption did not affect the recognition, measurement, or classification\nof any amounts in the unaudited condensed consolidated financial statements.\n\n \n\nAs\nper the Tennessee Sports Wagering Council, the Company is required to maintain a reserve in the form of cash, cash equivalents and/or\nirrevocable letter of credit along with a required $500 thousand Surety Bond (see Note 12) of not less than the players liabilities balance\nat any given day. As of March 31, 2026, the Company had sufficient coverage for these liabilities as per the requirements of the state\nof Tennessee.\n\n \n\n**Revenue\nRecognition**\n\n \n\nThe\nCompany records revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”). ASC Topic\n606 requires companies to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount\nthat reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the\nstandard requires more detailed disclosures to enable readers of the unaudited condensed consolidated financial statements to understand\nthe nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.\n\n \n\nThe\nCompany determines revenue recognition through the following steps:\n\n \n\n \n●\nIdentify\nthe contract, or contracts, with the customer;\n\n \n●\nIdentify\nthe performance obligations in the contract;\n\n \n●\nDetermine\nthe transaction price;\n\n \n●\nAllocate\nthe transaction price to performance obligations in the contract; and\n\n \n●\nRecognize\nrevenue when, or as, the Company satisfies performance obligations by transferring the promised good or services.\n\n \n\nThe\nCompany provides online sportsbook betting services with its technical infrastructure to its direct customers. Sportsbook or sports betting\ninvolves a user wagering money on an outcome or series of outcomes occurring. When a user’s wager wins, the Company pays the user\na pre-determined amount known as fixed odds. Sportsbook revenue is generated by setting odds such that there is a built-in theoretical\nmargin in each sports wagering opportunity offered to users. Sportsbook revenue is generated from users’ wagers net of payouts\nmade on users’ winning wagers and incentives awarded to users. Each wager placed by a user creates a single performance obligation\nfor the Company. The performance obligation is satisfied once the event wagered on has been completed. Any unsettled wagers are recorded\nas players liabilities. Any gaming or gaming related incentives are recorded as a reduction of the transaction price prior to any allocation\nto the performance obligations. Net gaming revenue is the aggregate of gaming wins and losses based on results of each event that customers\nwager bets on as well as gaming and gaming related incentives.\n\n \n\nF-13\n\n \n\n \n\n**Cost\nof Revenue**\n\n \n\nCost\nof revenue consists primarily of variable costs, principally recurring online platform costs directly associated with revenue-generating\nactivities including payment processing and supporting technology costs, web hosting, regulatory compliance software, Sports Betting\nprivilege taxes and federal excise taxes on wagers.\n\n \n\n**Stock-based\nCompensation**\n\n \n\nThe\nCompany records stock-based compensation in accordance with FASB ASC Topic 718 “Compensation-Stock Compensation”, using the\nfair value method. All transactions in which services are the consideration received for the issuance of equity instruments are accounted\nfor based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably\nmeasurable.\n\n \n\nThe\nCompany accounts for Stock-based compensation awards issued to non-employees for services as prescribed by ASC Topic 718, at either the\nfair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable,\nusing the measurement date guidelines enumerated in Accounting Standards Update (“ASU”) 2018-07, Nonemployee Share-Based\nPayments.\n\n \n\nThe\nCompany uses the Black Scholes pricing model to calculate the fair value of stock-based awards. This model is affected by the Company’s\nstock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited\nto, the Company’s expected stock price volatility over the term of the awards, and actual projected employee stock option exercise\nbehaviors. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the condensed consolidated\nstatement of operations over the requisite service period.\n\n \n\n**Sales\nand Marketing**\n\n \n\nSales\nand marketing expenses consist primarily of expenses associated with advertising and costs related to free to play contests. Advertising\ncosts are expensed as incurred and are included in sales and marketing expense in our unaudited condensed consolidated statements of\noperations. Advertising costs include those costs associated with communicating with potential customers and generally use some form\nof media, such as internet, radio, print, television, or billboards. Advertising costs also include costs associated with strategic league\nand team partnerships. During the three months ended March 31, 2026 and 2025, advertising costs were $124 thousand and $412 thousand,\nrespectively. During the nine months ended March 31, 2026 and 2025, advertising costs were $561 thousand and $920 thousand, respectively.\n\n \n\n**General\nand Administrative**\n\n \n\nGeneral\nand administrative expenses consist of costs not related to sales and marketing, product and technology or revenue. General and administrative\ncosts include professional services (including legal, regulatory, audit and accounting), rent and facilities maintenance, contingencies\nand insurance.\n\n \n\n**Income\nTaxes**\n\n \n\nThe\nCompany accounts for income taxes under an asset and liability approach. This process involves calculating the temporary and permanent\ndifferences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income\ntax purposes. The temporary differences result in deferred tax assets and liabilities, which would be recorded on the Company’s\ncondensed consolidated balance sheet in accordance with ASC Topic 740, which established financial accounting and reporting standards\nfor the effect of income taxes. The Company must assess the likelihood that its deferred tax assets will be recovered from future taxable\nincome, and, to the extent the Company believes that recovery is not likely, the Company must establish a valuation allowance. Changes\nin the Company’s valuation allowance in a period are recorded through the income tax provision on the condensed consolidated statements\nof operations.\n\n \n\nF-14\n\n \n\n \n\nASC\nSub-topic 740-10 clarifies the accounting for uncertainty in income taxes recognized in an entity’s unaudited condensed consolidated\nfinancial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions\ntaken or expected to be taken on a tax return.\n\n \n\nUnder\nASC Sub-topic 740-10, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount\nthat is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be\nrecognized if it has less than a 50% likelihood of being sustained. Additionally, ASC Sub-topic 740-10 provides guidance on derecognition,\nclassification, interest, and penalties, accounting in interim periods, disclosure, and transition. As a result of the implementation\nof ASC Sub-topic 740-10, the Company recognized no material adjustment in the liability for unrecognized income tax benefits.\n\n \n\nBased\non the uncertainty of future pre-tax income, we fully reserved our net deferred tax assets as of March 31, 2026 and June 30, 2025. In\nthe event we were to determine that we would be able to realize our deferred tax assets in the future, an adjustment to the deferred\ntax asset would increase income in the period such determination was made. The provision for income taxes represents the net change in\ndeferred tax amounts, plus income taxes paid or payable for the current period.\n\n \n\nWe\nfollow U.S. GAAP related accounting for uncertainty in income taxes, which provisions include a two-step approach to recognizing, de-recognizing\nand measuring uncertainty in income taxes. As a result, we did not recognize a liability for unrecognized tax benefits. As of March 31,\n2026 and June 30, 2025, we had no unrecognized tax benefits.\n\n \n\n**Earnings\n(Loss) per Share**\n\n \n\nBasic\nnet earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of vested common shares\noutstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number\nvested of common shares, plus the net impact of common shares (computed using the treasury stock method for warrants and stock options\nand the if-converted method for convertible instruments), if dilutive, resulting from the exercise of dilutive securities. In periods\nwhen losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion\nwould be anti-dilutive. As of March 31, 2026 and June 30, 2025, the Company excluded the common stock equivalents summarized below, which\nentitle the holders thereof to ultimately acquire shares of common stock, from its calculation of earnings per share, as their effect\nwould have been anti-dilutive.\n\nSCHEDULE OF EARNINGS (LOSS) PER SHARE ANTI-DILUTIVE \n\n  \nFor the nine\nmonths ended\nMarch 31, 2026  \nFor the year\nended\nJune 30, 2025 \n\nStock Options \n 2,580,063  \n 6,039,740 \n\nSeries B Preferred Shares \n 1,169,300  \n 1,169,300 \n\nWarrants \n 10,101,283  \n 10,050,000 \n\nShares issuable upon conversion of convertible notes \n 750,000  \n 1,416,667 \n\nShares issuable upon conversion of line of credit \n 75,326,632  \n 35,409,543 \n\nTotal potentially dilutive shares \n 89,927,278  \n 54,085,250 \n\n \n\n**Recent\nAccounting Pronouncements**\n\n \n\nIn\nDecember 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures” (“ASU 2023-09”) to enhance\nthe transparency and decision-usefulness of income tax disclosures, particularly in the rate reconciliation table and disclosures about\nincome taxes paid. ASU 2023-009 applies to all entities subject to income taxes. The Company adopted the standard on July 1, 2025. The\nadoption of this standard did not have a material impact on its unaudited condensed consolidated financial statements other than enhanced\ndisclosures.\n\n \n\nIn\nNovember 2024, the FASB issued ASU 2024-03, “Income Statement: Reporting Comprehensive Income— Expense Disaggregation Disclosures,”\nASU 2024-03 requires more detailed information about specified categories of expenses (purchases of inventory, employee compensation,\ndepreciation, amortization, and depletion) included in certain expense captions presented on the face of the income statement, as well\nas disclosures about selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and for interim periods\nwithin fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively\nto unaudited condensed consolidated financial statements issued for reporting periods after the effective date of ASU 2024-03 or (2)\nretrospectively to all prior periods presented in the unaudited condensed consolidated financial statements. The Company is currently\nevaluating this guidance to determine the impact it may have on its unaudited condensed consolidated financial statements disclosures.\n\n \n\nF-15\n\n \n\n \n\nIn\nJuly 2025, the FASB issued ASU 2025-05, “Measurement of Credit Losses for Accounts Receivable and Contract Assets” to provide\na practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets\nthat arise from transactions accounted for under ASC Topic 606. For all entities, the amendments in ASU 2025-05 are effective for annual\nreporting periods beginning after December 15, 2025 and interim periods within those annual reporting periods. Early adoption is permitted. The\nCompany is currently evaluating the impact of this new guidance on its unaudited condensed consolidated financial statements. The adoption\nof ASU 2025-05 is not expected to have a significant impact on the Company’s annual audited consolidated financial statements.\n\n \n\nIn\nSeptember 2025, the FASB issued ASU 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software” to modernize the\naccounting for software costs. For all entities, the amendments in ASU 2025-06 are effective for annual reporting periods beginning after\nDecember 15, 2027 and interim periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual\nreporting period. The Company is currently evaluating the impact of this new guidance on its unaudited condensed consolidated financial\nstatements. The adoption of ASU 2025-06 is not expected to have a significant impact on the Company’s annual audited consolidated\nfinancial statements.* *\n\n \n\nManagement\ndoes not believe that any other recently issued, but not yet effective, accounting standard if currently adopted would have a material\neffect on the accompanying unaudited condensed consolidated financial statements.\n\n \n\n**Correction\nof Prior Period Error**\n\n \n\nSee\nNote 2 – Correction of Immaterial Error Related to Prior Periods for a discussion of the correction of a prior period error and\nthe revision of comparative financial information presented in these unaudited condensed consolidated financial statements.\n\n \n\n**NOTE\n2 — CORRECTION OF IMMATERIAL ERROR RELATED TO PRIOR PERIODS**\n\n \n\nDuring\nthe quarter ended December 31, 2025, management identified an error related to the accounting for convertible promissory notes issued\nin September 2023. Specifically, while the embedded conversion features were appropriately bifurcated and recorded as derivative liabilities\nat issuance, the related debt discount was not amortized to interest expense over the contractual term of the notes as required under\nU.S. GAAP.\n\n \n\nThe\nerror resulted in an understatement of non-cash interest expense and an understatement of convertible notes, net in previously issued\ninterim and annual financial statements beginning with the quarter ended September 30, 2023.\n\n \n\nManagement\nevaluated the error in accordance with SEC Staff Accounting Bulletin No. 99 (“SAB 99”) and SEC Staff Accounting Bulletin\nNo. 108 (“SAB 108”). Although the error was determined to be immaterial to each previously issued reporting period, management\nconcluded that correcting the error solely through a cumulative catch-up adjustment in the current period would result in significant\nfluctuations in comparative period amounts and materially affect the comparability of the current period financial statements. Accordingly,\nprior period comparative financial information presented herein has been revised.\n\n \n\nF-16\n\n \n\n \n\nImpact\non Consolidated Statements of Operations\n\n \n\nThe\nfollowing tables present the impact of the correction on the Company’s previously reported consolidated statements of operations:\n\nSCHEDULE\nOF IMPACT ON CONSOLIDATED STATEMENTS OF OPERATIONS \n\nThree\nMonths Ended March 31, 2025\n\n \n\n(in thousands except share data) \nAs Previously Reported  \nAdjustment  \nAs Revised \n\nInterest Expense \n 43  \n 69  \n 112 \n\nNet Loss \n (5,084) \n (69) \n (5,153)\n\nLoss per Share (Basic) \n (0.07) \n -  \n (0.07)\n\nLoss per Share (Diluted) \n (0.07) \n -  \n (0.07)\n\n \n\nNine\nMonths Ended March 31, 2025\n\n \n\n(in thousands except share data) \nAs Previously Reported  \nAdjustment  \nAs Revised \n\nInterest Expense \n 160  \n 207  \n 367 \n\nNet Loss \n (16,217) \n (207) \n (16,424)\n\nLoss per Share (Basic) \n (0.22) \n (0.01) \n (0.23)\n\nLoss per Share (Diluted) \n (0.22) \n (0.01) \n (0.23)\n\n \n\nImpact\non Consolidated Balance Sheet\n\n \n\nThe\nfollowing table presents the impact of the correction on the Company’s consolidated balance sheet as of June 30, 2025:\n\nSCHEDULE\nOF IMPACT ON CONSOLIDATED BALANCE SHEET \n\n(in thousands) \nAs Previously Reported  \nAdjustment  \nAs Revised \n\nConvertible Notes, Net \n 85  \n 742  \n 827 \n\nAccumulated Deficit \n (62,386) \n (742) \n (63,128)\n\nTotal Liabilities \n (34,778) \n (742) \n (35,520)\n\n \n\nImpact\non Consolidated Statement of Cash Flows\n\n \n\nThe\nfollowing tables present the impact of the correction on the Company’s previously reported consolidated statement of cash flows:\n\n \n\nNine\nMonths Ended March 31, 2025\n\nSCHEDULE\nOF IMPACT ON CONSOLIDATED STATEMENT OF CASH FLOWS \n\n(in thousands except share data) \nAs Previously Reported  \nAdjustment  \nAs Revised \n\nNet Loss \n (16,217) \n (207) \n (16,424)\n\nAmortization of Debt Discount (Non-Cash) \n -  \n 207  \n 207 \n\nNet Cash Used in Operating Activities \n (7,819) \n -  \n (7,819)\n\n \n\nF-17\n\n \n\n** **\n\n**NOTE\n3 - INTANGIBLE ASSETS**\n\n \n\nAs\nof March 31, 2026, intangible assets consisted of the following:\n\n \n\n*(in\nthousands)*\n\nSCHEDULE OF INTANGIBLE ASSETS \n\n  \nEstimated\nUseful \nRemaining\nWeighted Average \n  \n   \n   \n \n\n  \nLife \nUseful Life \nJune 30, 2025  \nAdditions  \nImpairments  \nMarch 31, 2026 \n\nDeveloped technology – Gaming – gross carrying value \n3 years \n2.10 years \n$785  \n$338  \n$-  \n$1,123 \n\nDeveloped Technology – Non Gaming – gross carrying value \n3 years \n3 years \n$-  \n$23  \n$-  \n$23 \n\nLicense – Non Gaming \n3 years \n3 years \n -  \n$45  \n$-  \n$45 \n\nAccumulated amortization \n  \n  \n$(38) \n$(313) \n$-  \n$(351)\n\nTotal definite lived intangible assets \n  \n  \n$747  \n$93  \n$-  \n$840 \n\nGaming license \nIndefinite \n- \n$136  \n$-  \n$-  \n$136 \n\nTotal net intangibles \n  \n  \n$883  \n$93  \n$-  \n$976 \n\n \n\nSubsequent\nto the filing of our fiscal year 2025 Form 10-K, in September 2025, we identified that the previously reported Developed technology –\nGaming – gross carrying value and related Accumulated amortization as of June 30, 2025 had each been overstated by $954 thousand\ndue to assets that had been disposed of during fiscal year 2025.\n\n \n\nWe\nevaluated the error, both qualitatively and quantitatively, and determined that no prior interim or annual periods were materially misstated.\nWe also evaluated whether the cumulative amount of the overstatement was material to our fiscal year 2026 results and concluded that\nit was not qualitatively or quantitatively material.\n\n \n\nAccordingly,\nwe recorded an out-of-period adjustment of $954 thousand in the first quarter of fiscal year 2026 to reduce Developed technology –\nGaming – gross carrying value and the related Accumulated amortization. The June 30, 2025 amounts presented in the table above\ninclude this adjustment.\n\n \n\nBecause\nthe adjustment affected gross carrying value and accumulated amortization in equal and offsetting amounts, it had no impact on total\nnet intangible assets, total assets, total liabilities, stockholders’ deficit, net loss, or cash flows for fiscal years 2025 or\n2026.\n\n \n\nAmortization\nexpense of intangible assets for the three months ended March 31, 2026, and 2025, was $125 thousand and $0, respectively. Amortization\nexpense is included in the unaudited condensed consolidated statement of operations.\n\n \n\nAmortization\nexpense of intangible assets for the nine months ended March 31, 2026, and 2025, was $313 thousand and $954 thousand, respectively. Amortization\nexpense is included in the condensed consolidated statement of operations.\n\n \n\nF-18\n\n \n\n \n\nThe\nestimated future amortization of intangibles subject to amortization at March 31, 2026 was as follows:\n\n \n\n*(in\nthousands)*\n\nSCHEDULE OF FUTURE AMORTIZATION OF INTANGIBLE \n\nFor the Years Ended June 30, \nAmount \n\n2026 \n$100 \n\n2027 \n 399 \n\n2028 \n 341 \n\nTotal \n$840 \n\n \n\n**NOTE\n4 - PLAYERS LIABILITIES**\n\n \n\nThe\nplayers liabilities were comprised of players betting deposits and contestant prize winnings for promotional events. Players liabilities\nwere $80 thousand and $336 thousand as of March 31, 2026 and June 30, 2025, respectively.\n\n \n\n**NOTE\n5 - CONVERTIBLE DEBT**\n\n \n\nOn\nAugust 23, 2023, the Company entered into a Convertible Note Purchase Agreement and a Convertible Promissory Note with an unrelated party\nin the principal amount of $200 thousand (“note A”). On August 28, 2023, the Company entered into a Convertible Note Purchase\nAgreement and a Convertible Promissory Note with another unrelated party in the principal amount of $500 thousand (“note B”).\nOn September 1, 2023, the Company entered into a Convertible Note Purchase Agreement and a Convertible Promissory Note with a third unrelated\nparty in the principal amount of $150 thousand (note “C”). Notes A, B, and C (collectively, the “Notes”) are\npart of a private convertible debt offering of up to $2.0 million the Company is undertaking to raise additional reserve funds required\nto cover increases in wagers. The outstanding principal under the Notes, which will accrue interest at a rate equal to twelve percent\n(12%) per annum, is due and payable in a single balloon payment by the Company on the date that is one year following the date of issuance\nof each of the Notes. Accrued interest is to be paid monthly in cash beginning the first month after the issuance of each of the Notes.\nThe Company has no right to prepay all or any portion of the outstanding principal under the Notes prior to their maturity dates. The\noutstanding principal under the Notes and accrued and unpaid interest are convertible, at the sole discretion of the holders of the Notes,\ninto shares of the Company’s common stock, par value $.001 per share, at a conversion price equal to 80% of the lowest price per\nshare that the Company sells shares of its common stock during the period beginning with the date of issuance of each of the Notes until\ntheir respective maturity dates, and if no shares are sold in such period, at a conversion price equal to $1.00 per share. The number\nof conversion shares issuable upon the conversion of the Notes is subject to adjustment from time to time upon the occurrence of certain\nevents such as stock splits or combinations and stock or other distributions of assets to equity holders.\n\n \n\nIn\nAugust 2024, the Notes were extended for an additional year from their respective maturity dates.\n\n \n\nIn\nAugust 2025, Note A and Note C were amended and were extended through August 31, 2026 and Note B was amended and extended through October\n1, 2025. The conversion options were amended on all of the Notes whereas the outstanding principal under the Notes and accrued and unpaid\ninterest is convertible, at the sole discretion of the holders of the Notes, into shares of the Company’s common stock, par value\n$.001 per share, at a conversion price equal to the lower of $0.60 per share or an amount equal to 80% of the lowest price per share\nthat the Company has sold shares of common stock in the last twelve-month period before the maturity date, provided, however that if\nno shares were sold during such twelve-month period, the conversion price shall be $0.60.\n\n \n\nOn\nSeptember 9, 2025, in connection with the Amended Convertible Note Purchase Agreements dated August 23, 2025, the Company entered into\na Convertible Promissory Note with an unrelated party in the principal amount of $100 thousand (“Note D”). The outstanding\nprincipal under Note D, which will accrue interest at a rate equal to twelve percent (12%) per annum, is due and payable in a single\nballoon payment by the Company on September 8, 2026, the maturity date of Note D. Accrued interest is to be paid monthly in cash beginning\nOctober 23, 2025. The Company has no right to prepay all or any portion of the outstanding principal under Note D prior to the Maturity\nDate. The outstanding principal under Note D and accrued and unpaid interest is convertible, at the sole discretion of the holders of\nNote D, into shares of the Company’s common stock, par value $.001 per share, at a conversion price equal to the lower of $0.60\nper share or an amount equal to 80% of the lowest price per share that the Company has sold shares of common stock in the last twelve-month\nperiod before the maturity date, provided, however that if no shares were sold during such twelve-month period, the Conversion price\nshall be $0.60. The number of Conversion Shares issuable upon the conversion of Note D is subject to adjustment from time to time upon\nthe occurrence of certain events such as stock splits or combinations and stock or other distributions of assets to equity holders.\n\n \n\nOn\nOctober 1, 2025, the principal balance of Note B ($500 thousand) was repaid.\n\n \n\nF-19\n\n \n\n \n\nAt\nMarch 31, 2026 and June 30, 2025, total principal, net of debt discount, of $423 thousand and $827 thousand was outstanding, respectively.\nTotal interest expense of $14 thousand and $95 thousand was recognized for the three months ended March 31, 2026 and 2025, respectively.\nTotal interest expense of $53 thousand and $284 thousand was recognized for the nine months ended March 31, 2026 and 2025, respectively\n\n \n\nThe\nfair value of the embedded conversion features associated with the Notes upon issuance was approximately $765 thousand. In accordance\nwith ASC Topic 815, the embedded conversion options were required to be bifurcated from the debt host contracts and accounted for as\nderivative liabilities, with a corresponding debt discount recorded and amortized to interest expense over the applicable contractual\nterms of the Notes.\n\n \n\nAs\ndiscussed in Note 2 – Correction of Immaterial Error Related to Prior Periods, the debt discount associated with the bifurcation\nof the conversion features was not properly amortized to interest expense in prior periods. During the nine months ended March 31, 2026,\nthe Company corrected this error through a revision of prior-period comparative financial information, with the resulting adjustments\nreflected in interest expense for the applicable periods presented.\n\n \n\nThe\nfair value of the conversion feature at March 31, 2026 and June 30, 2025 was $12 thousand and $509 thousand, respectively. The derivative\nliabilities are classified as Level 3 financial instruments. The conversion options were valued by the Company using a Monte Carlo model.\n\n \n\nThe\nfollowing were the significant assumptions used in the Monte-Carlo model.\n\nSCHEDULE OF SIGNIFICANT ASSUMPTIONS CONVERTIBLE DEBT \n\n  \nExpected\nvolatility  \nRisk-free\ninterest rate  \nExpected\ndividend  yield  \n\nExpected life\n\n(in years)\n \n\nAt\nSeptember 1, 2023 \n 68.2% \n 4.87% \n 0% \n 2.00 \n\n \n\nThe\nCompany performed a debt modification analysis as per ASC Sub-topic 470-50 at September 30, 2025, for the amendments to the Notes in\nSeptember and concluded that the change in conversion terms did not result in a substantial modification, therefore the total amount\nof the modification noted above was not considered a debt extinguishment. As per ASC Sub-topic 470-50, the modification was recognized\nas a part of the change in fair value of the derivative liability. See Note 8. The new fair value of the derivative liability was recorded\nas a level 3 financial instrument. See Note 1. The conversion option was valued by the Company using the Monte-Carlo model in September\n2025 as follows:\n\n \n\n  \nExpected volatility  \nRisk-free interest rate  \nExpected dividend yield  \nExpected life\n(in years) \n\nAt September 30, 2025 \n 60.4% \n 3.71% \n 0% \n .92 \n\n \n\n**NOTE\n6 – NOTES PAYABLE AND NOTES PAYABLE - RELATED PARTY**\n\n \n\nAs\nof March 31, 2026, and June 30, 2025, a principal amount of $30 thousand and $30 thousand, and accrued interest of $16 thousand and $13\nthousand, respectively, is owed to Eagle Investment Group, LLC, a company controlled by Bruce Cassidy, as per a promissory note entered\ninto on December 17, 2021. The interest expense for the three months ended March 31, 2026 and 2025, was $1 thousand and $1 thousand,\nrespectively. The interest expense for the nine months ended March 31, 2026 and 2025, was $2 thousand and $2 thousand, respectively.\n\n \n\nOn\nFebruary 27, 2023, the Company entered into Stock Redemption and Purchase Agreement with John Linss, our former Chief Executive Officer\nand former member of the board of directors, and his wholly owned Corespeed, LLC for the purchase of Series C Convertible Preferred Stock\nowned by Linss’ Corespeed, LLC. See Note 8. The Company paid $300 thousand at the closing and entered into a promissory note (“Promissory\nNote”) with Mr. Linss for the remaining $1.7 million of the purchase price. The Promissory Note bears interest at a rate of 5%\nper annum, and requires the following payments: (i) no less than $850 thousand, in aggregate, of one or more payments is due by the 12-month\nanniversary of the Promissory Note; and (ii) a balloon payment for the balance of the Promissory Note is due by the earlier of the 24-month\nanniversary of the Promissory Note or five days after the Company’s common stock is listed for public trading on either the Nasdaq\nStock Market, the New York Stock Exchange, or the NYSE American. On February 19, 2024, the Company entered into a first amendment to\nthe $1.7 million Promissory Note with John Linss. As per the amendment, $425 thousand was paid on February 27, 2024 and equal monthly\npayments of principal and interest of $60 thousand shall be paid to Mr. Linss monthly, beginning on April 1, 2024 for a period of twenty-four\nmonths. The amended maturity date of the Promissory Note is the earliest of (a) April 1, 2026, (b) upon the occurrence of an uplisting,\nthe fifth day after the occurrence of the uplisting, or (c) upon the occurrence of a change of control. All other terms of the original\nPromissory Note remain the same. The Company has evaluated this amendment and has deemed it a debt modification in accordance with the\nASC Topic 470 guidance.\n\n \n\nF-20\n\n \n\n \n\nThe\noutstanding principal balance at March 31, 2026, is $0, with the principal balance being paid in full during the three months ended March\n31, 2026. The outstanding principal balance at June 30, 2025, was $511 thousand, with the full balance being classified as Note Payable\non the balance sheet. The interest expense for the three months ended March 31, 2026 and 2025 is $3 thousand and $22 thousand respectively.\nThe interest expense for the nine months ended March 31, 2026 and 2025 is $24 thousand and $79 thousand respectively.\n\n \n\nOn\nMay 24, 2025, the Company renewed a short-term note payable with the premium finance company to fund their technology services and cyber\nliability insurance. The total premiums, taxes and fees financed was $296\nthousand at an annual percentage rate of 9.20%.\nAfter a down payment of $44\nthousand was made upon execution of the Note, ten monthly payments remained in the amount of $26\nthousand each. The balance of this Note was $0\nas of March 31, 2026.\n\n \n\nOn\nNovember 6, 2025, the Company entered into a short-term note payable with a premium finance company to fund their excess and surplus\ninsurance. The total premiums, taxes and fees financed was $115 thousand at an annual percentage rate of 9.50%. After a down payment\nof $17 thousand was made upon execution of the Note, ten monthly payments remained in the amount of $10 thousand each. The balance of\nthis Note was $59 thousand as of March 31, 2026 and six monthly payments remain.\n\n \n\n**NOTE\n7- LINE OF CREDIT - RELATED PARTY**\n\n \n\nOn\nFebruary 22, 2022, the Company entered into a discretionary non-revolving line of credit demand note with Excel Family Partners, LLLP\n(“Excel”), a related party controlled by our former Chief Executive Officer, initially for $250 thousand and later amended\non multiple occasions. On February 24, 2023, the note was amended and restated to provide up to $4.0 million, bearing interest at 15%\nper annum, with Excel retaining sole discretion over advances and no reborrowing permitted. The amendment included a conversion option\nallowing Excel to convert all or part of the debt into common stock at 80% of the lowest recent issuance price (not less than $0.50),\nand warrants to purchase 4 million shares at $0.25 per share. The conversion option and warrants were valued using Monte Carlo and Black-Scholes\nmodels, respectively, and recorded as debt issuance costs.\n\n \n\nSubsequent\namendments increased the facility to $5.0 million on July 18, 2023 and $10 million on September 14, 2023. Each amendment included warrants\nwith similar terms and conversion features.\n\n \n\nOn\nDecember 27, 2023, $10.4 million of indebtedness was converted into 25,916,632 shares of common stock at $0.40 per share. Subsequent\nto the conversion, on December 29, 2023, a new amendment was entered into to adjust the borrowing capacity to $2.0 million. This amendment\nalso included warrants and conversion features.\n\n \n\nIn\nAugust 2024, the facility was split into a $5.0 million discretionary revolving note (bearing interest at 12%) and a $4.1 million non-revolving\nnote, both with conversion features.\n\n \n\nOn\nMarch 31, 2025, the revolving note was amended to increase the borrowing capacity to $14.0 million, continuing under the same discretionary\nand conversion terms.\n\n \n\nAs\nof March 31, 2026, outstanding borrowings under these notes totaled $28.1 million (June 30, 2025 – $19.6 million), with accrued\ninterest of $3.9 million (June 30, 2025 – $1.7 million). Debt issuance costs of $7.6 million were recorded related to the conversion\noptions and warrants, and were fully amortized by June 30, 2025.\n\n \n\nF-21\n\n \n\n** **\n\n**NOTE\n8 – DERIVATIVE LIABILITIES**\n\n \n\nThe\nAmended and Restated Discretionary Non-revolving Line of Credit Demand Notes and Convertible Promissory Notes contain conversion options\nthat qualify for embedded derivative classification. The fair value of the liability is re-measured at the end of every reporting period\nand the change in fair value is reported in the condensed consolidated statement of operations as a gain or loss on change in fair value\nof derivatives.\n\n \n\nThe\ntable below sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities for the nine months\nended March 31, 2026:\n\nSCHEDULE OF FAIR VALUE OF FINANCIAL LIABILITIES \n\n*(in\nthousands)*\n\n \n\nBalance at June 30, 2025 \n$11,226 \n\nEmbedded conversion feature on new convertible note issued during the period \n 54 \n\nChange in the fair value of the embedded conversion option \n (2,945)\n\nBalance at March 31, 2026 \n$8,335 \n\n \n\nThe\nCompany uses Level 3 inputs for its valuation methodology for the embedded conversion option liabilities as their fair values were determined\nby using Monte-Carlo model based on various assumptions.\n\n \n\nSignificant\nchanges in any of these inputs in isolation would result in a significant change in the fair value measurement. As required, these are\nclassified based on the lowest level of input that is significant to the fair value measurement. The following table shows the assumptions\nused in the calculations:\n\n \n\nSCHEDULE OF FAIR VALUE MEASUREMENT ASSUMPTIONS\n\n  \n \nExpected\n\nvolatility\n  \n \nRisk-free\n\ninterest\nrate\n  \n \nExpected\n\ndividend\nyield\n  \n \nExpected\nlife\n\n(in\nyears)\n \n\nAt June 30, 2025 \n 55.40-56.40\n% \n 3.92-4.07\n% \n 0% \n 0.84-1.17\n \n\nAt March 31, 2026 \n 59.50-70.60\n% \n 3.71-3.71\n% \n 0% \n 0.42-1.00\n \n\n \n\n**NOTE\n9 - STOCKHOLDERS’ DEFICIT**\n\n \n\nThe\nCompany is authorized to issue 475,000,000 shares of common stock, par value $0.001 per share, and 25,000,000 shares of preferred stock,\nof which 2,000,000 shares (par value $.001) have been designated as Series A Convertible Preferred Stock, 12,000 shares (par value $1.00)\nhave been designated as Series B Convertible Preferred Stock and 6,700,000 shares (par value $.001) have been designated as Series C\nConvertible Preferred Stock.\n\n \n\nThe\nSeries A Convertible Preferred Stock has a liquidation preference of $0.10 per share, has super-voting rights of 100 votes per share.\nEach share of Series A may be converted into 100 shares of common stock at the option of the Holder thereof and without the payment of\nadditional consideration by the Holder thereof, at any time, into shares of Common Stock at a conversion rate of one hundred (100) shares\nof Common Stock for every one (1) share of Series A Convertible Preferred Stock.\n\n \n\nThe\nSeries B Convertible Preferred Stock has a liquidation preference of $1.00 per share, has super-voting rights, and votes are determined\nby multiplying (a) the number of Series B shares held by such holder and (b) the conversion ratio, and each Series B share may be converted\ninto 100 shares of common stock. Each Holder shall have the right to convert any of all of such Holder’s shares of Series B Preferred\nStock into shares of common stock at the conversion ratio. Upon the closing of an underwritten, follow-on public offering of shares of\nthe Company’s common stock with gross offering proceeds of not less than $6.0 million, each then-outstanding share of Series B\nConvertible Preferred Stock shall be automatically converted into shares of common stock at the conversion ratio without any affirmative\naction required of the Holder.\n\n \n\nThe\nSeries C Convertible Preferred Stock has a liquidation preference of $0.30 per share, plus a 6% per annum liquidation coupon compounded\nannually since the date of issuance paid only upon a liquidation event, have the right to vote for all matters submitted, including the\nelection of directors, and all other matters as required by law. The Series C shares shall automatically convert into common stock by\nmultiplying the number of Series C shares to be converted by the quotient obtained by dividing (x) the liquidation value by (y) the conversion\nvalue upon the date that is the earlier of (a) the closing date of an underwritten, follow-on public offering of shares of the Company’s\ncommon stock with gross offering proceeds of not less than $6.0 million; (b) the date the Company receives written notice from a holder\nof Series C shares of such holder’s desire and intention to convert all or some of such holder’s Series C shares; and (c)\nJune 15, 2024.\n\n \n\nF-22\n\n \n\n \n\nSeries\nA Convertible Preferred Stock\n\n \n\nDuring\nthe nine months ended March 31, 2026 and 2025, there were no issuances of Series A Convertible Preferred Stock and as at March 31, 2026\nand June 30, 2025, no shares were outstanding.\n\n \n\nSeries\nB Convertible Preferred Stock\n\n \n\nDuring\nthe nine months ended March 31, 2026 and 2025, there were no issuances of Series B Convertible Preferred Stock. As of March 31, 2026\nand June 30, 2025, 11,693 shares were outstanding.\n\n \n\nSeries\nC Convertible Preferred Stock\n\n \n\nOn\nFebruary 27, 2023, the Company entered into Stock Redemption and Purchase Agreement with John Linss, our former Chief Executive Officer\nand former member of the board of directors, and his wholly owned Corespeed, LLC for the purchase of the 3,313,333 shares of Series C\nConvertible Preferred Stock owned by Linss and Corespeed, LLC. The Company paid $300 thousand at the closing and entered into a promissory\nnote with Mr. Linss for the remaining $1.7 million of the purchase price.\n\n \n\nOn\nJune 15, 2024, the board of directors approved the issuance of common shares upon conversion of all outstanding Series C Preferred Stock.\nA total of 2,799,443 shares of common stock was issued upon the conversion of 2,499,998 shares of Series C Preferred stock.\n\n \n\nAs\nof March 31, 2026 and June 30, 2025, no shares were outstanding.\n\n \n\nCommon\nStock\n\n \n\nDuring\nthe nine months ended March 31, 2026 and 2025, there were no issuances of Common Stock and at March 31, 2026 and June 30, 2025, 73,457,857\nand 73,457,857 shares were outstanding, respectively.\n\n \n\nOn\nSeptember 20, 2024, the Company changed the par value of its common stock from $0.0001 to $0.001. This change did not affect the number\nof shares issued and outstanding. A $65 thousand reclassification was recorded between common stock and additional paid-in capital, with\nno impact on total equity or earnings.\n\n \n\n**NOTE\n10 - STOCK OPTIONS AND WARRANTS**\n\n \n\nOn\nApril 10, 2023, the board of directors (the “Board”) approved the 2023 stock option plan (“2023 Plan”).\n\n \n\nThe\n2023 Plan provides eligible participants with benefits consisting of one or more of the following: ISOs, NSOs, and bonuses in the form\nof our common stock (“Stock Bonuses”). The Board or a committee of directors will administer the 2023 Plan and determine\nwhat employees or officers will receive an award under the 2023 Plan. ISOs, which are intended to be compliant with Section 422 of the\nInternal Revenue Code, may be awarded only to our employees. NSOs and Stock Bonuses are not subject to Section 422 of the Internal Revenue\nCode and can be awarded to employees and non-employees.\n\n \n\nThe\naggregate number of shares of our authorized but unissued common stock that can be awarded under the 2023 Plan is 5,960,000, whether\nin the form ISOs, NSOs, or Stock Bonuses (or a combination thereof). Awards can be issued under the 2023 Plan for ten years from the\ndate the Board approved the 2023 Plan. ISOs may be exercised during a period no longer than ten years from the date of the award (five\nyears for individuals who own more than 10% of the combined voting power of the Company). NSOs may be exercised for a maximum period\nof ten years from the date of the award.\n\n \n\nF-23\n\n \n\n \n\nIn\nApril 2023, the Board granted Incentive Stock Options (“ISOs”) and Non statutory Stock Options (“NSOs”) under\nthe 2023 Plan to employees and advisors of the Company to purchase a total of 3,250,000 shares of our common stock at an exercise price\nof $0.50 per share (the “Awards”).\n\n \n\nIn\nApril 2025, the Board granted Incentive Stock Options (“ISOs”) and Non statutory Stock Options (“NSOs”) under\nthe 2023 Plan to employees and advisors of the Company to purchase a total of 2,090,000 shares of our common stock at an exercise price\nof $0.62 per share (the “Awards”).\n\n \n\nOn\nOctober 3, 2025, the Board approved an amendment to the 2023 Stock Option Plan to increase the aggregate number of shares of the Company’s\nauthorized but unissued common stock that can be awarded under the plan from 5,960,000 shares to 18,250,000 shares. The share increase\nis subject to approval of stockholders within 12 months from the date of the Board’s approval.\n\n \n\nOn\nFebruary 13, 2026, the Board approved the grant of 3.7 million Incentive Stock Options (“ISOs”) and Non statutory Stock Options\n(“NSOs”) under the 2023 Plan with an exercise price of $0.37 per share (the “Awards”). These ISOs have not yet\nbeen granted as of March 31, 2026.\n\n \n\nBelow\nis a table summarizing the changes in stock options outstanding for the nine months ended March 31, 2026:\n\nSCHEDULE OF CHANGES IN STOCK OPTIONS OUTSTANDING \n\n  \n\n**Number of**\n\n**Shares**\n\n**Underlying**\n\n**Outstanding**\n\n**Options**\n  \n\n**Weighted**\n\n**Average**\n\n**Remaining**\n\n**Contractual**\n\n**Life**\n  \n\n**Weighted**\n\n**Average**\n\n**Exercise**\n\n**Price**\n  \n\n**Intrinsic**\n\n**Value**\n \n\nOptions outstanding as of June 30, 2025 \n 3,372,639  \n 7.59 years  \n$0.56  \n$     - \n\nOptions exercisable as of June 30, 2025 \n 1,366,042  \n 5.22 years  \n$0.51  \n$- \n\nGranted \n -  \n -  \n -  \n - \n\nExercised \n -  \n -  \n -  \n - \n\nForfeited or expired \n (1,905,000) \n -  \n -  \n$- \n\nOptions outstanding as of March 31, 2026 \n 1,467,639  \n 8.05 years  \n$0.58  \n$- \n\nOptions exercisable as of March 31, 2026 \n 716,667  \n 7.10 years  \n$0.53  \n$- \n\n \n\nThe\nCompany utilized the Black-Scholes valuation model for estimating fair value of the options. Each grant was evaluated based upon assumptions\nat the time of the grant.\n\n \n\nAs\nof March 31, 2026, all outstanding stock options were issued according to the Company’s 2023 Plan. There are 16,782,361 unissued\nshares of common stock available for future issuance under the 2023 Plan.\n\n \n\nDuring\nthe three months ended March 31, 2026, the Company issued warrants to a third-party advisor as compensation for services pursuant to\nan advisory agreement. Under the agreement, the advisor is entitled to a monthly cash retainer of $10,000; however, the Company may elect\nto settle the monthly advisory fee through the issuance of warrants in lieu of cash compensation. For any month in which the Company\nelects equity settlement, the advisor receives warrants for such number of shares having a gross dollar value equal to $20,000, determined\nbased on the closing market price of the Company’s common stock on the applicable grant date.\n\n \n\nDuring\nthe three months ended March 31, 2026, the Company elected to compensate the advisor through issuance of warrants rather than cash payments.\nEach monthly warrant tranche represents compensation for advisory services to be provided during the applicable monthly service period\nand vests independently on a month-by-month basis. The warrants are exercisable immediately upon vesting, expire five years from issuance,\nand contain provisions related to cashless exercise, anti-dilution adjustments, down-round protection, fractional share settlement, and\nbeneficial ownership limitations.\n\n \n\nDuring\nthe three months ended March 31, 2026, the Company issued warrants to purchase an aggregate of 51,283 shares of common stock with exercise\nprices determined based on the closing market price of the Company’s common stock on the applicable grant date. The Company recognized\nshare-based compensation expense of approximately $10 thousand related to the warrants during the period, which was recorded within operating\nexpenses with a corresponding increase to additional paid-in capital.\n\n \n\nThe\nCompany evaluated the warrants under ASC 718, Compensation—Stock Compensation, ASC 480, Distinguishing Liabilities from Equity,\nand ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and concluded the warrants qualify for equity classification.\nThe Company determined that the warrants are indexed to the Company’s own stock and do not require or permit net cash settlement\nby the Company, other than de minimis cash settlement related to fractional shares. Additionally, the down-round protection feature qualifies\nfor the scope exception under ASU 2017-11 and therefore does not preclude equity classification. As the warrants are classified as equity\ninstruments, the awards are not subsequently remeasured after the applicable grant date.\n\n \n\nThe\nCompany measures each monthly warrant tranche at grant-date fair value using the Black-Scholes option pricing model. Significant assumptions\nutilized in the valuation include expected volatility, expected term, risk-free interest rate, expected dividend yield, and the market\nprice of the Company’s common stock on the grant date. Expected volatility was estimated using the historical volatility of comparable\npublicly traded gaming and sports wagering companies over a period consistent with the expected term of the warrants. The weighted-average\nassumptions utilized in the Black-Scholes valuation model were as follows: expected volatility of 53.7%, expected term of 5.0 years,\nrisk-free interest rate of 3.72%, and expected dividend yield of 0%.\n\n \n\nThe\nfollowing table summarizes warrant activity for the three months ended March 31, 2026:\n\nSCHEDULE OF WARRANT ACTIVITY \n\n  \nNumber of Warrants  \nWeighted Average Exercise Price \n\nOutstanding – beginning of period \n 10,050,000  \n$0.25 \n\nGranted \n 51,283  \n$0.39 \n\nExercised \n —  \n — \n\nExpired / Cancelled \n —  \n — \n\nOutstanding – end of period \n 10,101,283  \n$0.25 \n\n \n\nAs\nof March 31, 2026, all outstanding warrants were exercisable and had a weighted average remaining contractual life of approximately 2.5\nyears.\n\n \n\n**NOTE\n11 – RESTRICTED STOCK UNITS**\n\n** **\n\nOn\nOctober 3, 2025, the Board approved an amendment to the 2023 Stock Option Plan which adds the ability to issue Participants a new type\nof award called Restricted Stock Units (“RSUs”) that represent the right to receive shares of the Company’s common\nstock upon the satisfaction of vesting or other specified conditions. The addition of the ability to issue RSUs under the 2023 Plan is\nnot subject to the approval of our stockholders.\n\n \n\nIn\nconnection with approval of the amendment the Board awarded Mr. Les Ottolenghi, Chief Executive Officer, Principal Executive Officer\nand President, 7,284,464 RSUs and Mr. John Dermody, VP of Operations, 500,000 RSUs.\n\n \n\nThe\nRestricted Stock Unit Agreement for Mr. Ottolenghi’s RSUs contains the following vesting schedule and conditions: (1) a four-year\nvesting schedule, whereby 1/16th of the 7,284,464 RSUs (i.e., 455,279 RSUs) will vest on the first day of each quarter, commencing on\nJanuary 1, 2026; (2) 455,279 RSUs will be deemed to have vested immediately; and (3) acceleration of all vesting upon (A) a Sale Event,\n(B) a termination of Mr. Ottolenghi’s employment by us other than for Cause, death or Disability, or (C) Mr. Ottolenghi’s\nresignation with Good Reason; provided that the definitions of “Sale Event,” “Cause,” “Disability,”\nand “Good Reason” will use the meanings ascribed to such terms in Mr. Ottolenghi’s Employment Agreement with us.\n\n \n\nF-24\n\n \n\n \n\nThe\nRestricted Stock Unit Agreement for Mr. Dermody RSUs contains the following vesting schedule and conditions: (1) a four-year vesting\nschedule, whereby 1/16th of the 500,000 RSUs (i.e., 31,250 RSUs) will vest on the first day of each quarter, commencing on January 1,\n2026; (2) 31,250 RSUs will be deemed to have vested immediately; and (3) acceleration of all vesting upon a Sale Event.\n\n \n\nThe\nCompany accounts for stock-based compensation in accordance with ASC 718. Stock-based compensation expense is recognized over the requisite\nservice period of the awards.\n\n \n\nOn\nOctober 3, 2025, the Company granted 973,058 RSUs. Stock-based compensation expense related to RSUs was approximately $204 thousand for\nthe nine months ended March 31, 2026 and is included in general and administrative expenses. As of March 31, 2026, unrecognized compensation\ncost related to unvested RSUs was approximately $1.4 million, which is expected to be recognized over a weighted-average period of 3.3\nyears.\n\n** **\n\n**NOTE\n12 - COMMITMENTS AND CONTINGENCIES**\n\n \n\nCommitments\nand Contingencies are as follows:\n\n \n\nSurety\nBond\n\n \n\nDuring\nMay 2023, the Company was issued $0.5 million in an annual surety bond and during May 2024 and May 2025, this surety bond was renewed\nwith the same terms. The surety bond is held for Tennessee Sports Wagering Council for use and benefit in order for the Company to satisfy\nstate license requirements. There have been no claims against such bonds through March 31, 2026.\n\n \n\nAgreement\nwith sport betting services provider\n\n \n\nOn\nNovember 1, 2024 (and then amended on January 8, 2025), the Company entered into an agreement with a sports betting services provider.\nPursuant to the terms of the Agreement, the provider has agreed to provide certain services to the Company to use through their software\nplatform over which gaming and betting transactions with their customers are conducted, including back-office software, player account\nmanagement software, geo-location software and/or services, e-wallet software and/or services, websites and mobile applications, any\nunderlying operating software, mobile platforms, or other means of remote communication. The Services are to be provided on a non-transferable,\nnon-sub-licensable and non-exclusive basis for a term of five years after the first live launch in respect of the business to consumer\nsports betting activities that we intend to carry out in certain states, countries or territories. The terms of the agreement call for\ntwo lump sum payments, as well as ongoing business fees calculated as a percentage of net gaming revenue that will vary based upon yearly\ngross gaming revenues commencing with the first live launch.\n\n \n\nOperating\nagreement\n\n \n\nOn\nDecember 10, 2024, the Company entered into a Casino and Sportsbook Online Operations Agreement (“Operations Agreement”)\ndated as of December 9, 2024 with Wheeling Island Gaming, Inc., a Delaware corporation (“Operator”), that is the duly licensed\nowner and operator of the casino commonly referred to as Wheeling Island Hotel Casino Racetrack located near Wheeling, West Virginia.\n\n \n\nThe\nOperator is the holder of a license from the West Virginia Lottery Commission which permits Operator to operate, manage, administer,\nand make available online gaming services in West Virginia. Operator does not directly operate online gaming services in West Virginia,\nsuch as sports wagering and interactive wagering. Pursuant to the terms and conditions of the Operations Agreement, Operator has granted\nthe Company the right to seek and obtain licenses from the appropriate governing authority to offer and operate interactive online gaming\nservices in West Virginia via the Internet, mobile or other remote or electronic device or data network. Interactive gaming services\ncovered by the Operations Agreement include online poker games, online casino games and online sports wagering.\n\n \n\nF-25\n\n \n\n \n\nThe\ninitial term of the Operations Agreement is for ten years from the date on which the Company’s online gaming services are approved\nfor users to play in accordance with West Virginia gaming laws. Provided that there is not a material breach then continuing by the Company\nunder the Operations Agreement beyond any applicable notice and cure period, and the Operations Agreement has not otherwise been terminated\nin accordance with its terms, the Company has the right to renew the Operations Agreement.\n\n \n\nThe\nterms of the Operations Agreement call for a non-refundable fee to be paid in two equal installments, one within 30 business days from\nthe Signing Date and the second within 90 business days from the Signing Date. The Operations Agreement also requires the Company to\npay Operator a percentage of their annual net gaming revenue, minus a minimum annual revenue guarantee payment to be paid in equal quarterly\ninstallments.\n\n \n\nOn\nMarch 31, 2025, the Company’s online gaming services were approved for users to play in the state of West Virginia, however, as\nof March 31, 2026, the West Virginia Lottery Commission had not yet approved the Operations Agreement.\n\n \n\nOn\nOctober 24, 2025, the Company received a notice of termination under its West Virginia market access Agreement and a demand for an\nearly termination fee. The Company disputes the validity of the termination and the associated fee demand. The Company completed\nmediation with the counterparty; however, the parties did not reach a resolution, and settlement discussions remain ongoing. As of\nthe date of this filing, the outcome of the matter is not determinable, and no liability has been recorded. The Company cannot\nreasonably estimate the likelihood or amount of any potential loss at this time.\n\n \n\nPlayer\nAccount Management Services Agreement\n\n \n\nOn\nFebruary 7, 2025, the Company entered into a Player Account Management Services Agreement for a term of four years to enhance its online\ngaming platform offerings. The terms of the agreement call for a combination of upfront fees as well as monthly platform fees that will\nvary based upon monthly net gaming revenues.\n\n \n\nSoftware\ndefect\n\n \n\nIn\nAugust, 2025, the Company encountered a software defect (the “Defect”) impacting its internal information technology (“IT”)\ninfrastructure and applications. Upon detecting the Defect, the Company promptly took steps to contain and remediate the Defect and initiated\nan investigation. The Defect has been addressed and corrected. Based on the Company’s investigation findings to date, the Defect\nresulted in unauthorized player withdrawals that were processed by the Company’s external payment processor vendor in the amount\nof approximately $200 thousand. The Company has notified applicable regulators as required and is in the process of recouping these funds\nfrom the implicated individuals in accordance with applicable law. As of the date of this filing, the Company has recouped approximately\n$30 thousand of these unauthorized withdrawals. The Company remains committed to pursuing recovery through\navailable legal channels and continues to evaluate and pursue claims against the individuals involved. Due to the uncertainty inherent\nin these efforts, the Company cannot reasonably estimate the timing or amount of any additional recoveries that may ultimately be realized.\n\n \n\nAs\nof March 31, 2026, the Company has recorded player receivables related to this matter totaling approximately $84\nthousand, net of a 50%\ncollection allowance, within other current assets on the condensed consolidated balance sheet.\n\n \n\nLegal\nmatter contingencies\n\n \n\nThe\nCompany believes, based on current knowledge and after consultation with counsel, that it is not currently party to any material pending\nproceedings, individually or in the aggregate, the resolution of which would have a material effect on the Company. Provisions for losses\nare established in accordance with ASC Topic 450, “Contingencies” when warranted. Once established, such provisions are adjusted\nwhen there is more information available about an event that occurs requiring a change.\n\n \n\nF-26\n\n \n\n** **\n\n**NOTE\n13 - RELATED PARTY TRANSACTIONS**\n\n \n\n*Former\nChief Financial Officer:*\n\n \n\nOn\nFebruary 19, 2024, the Company amended its $1.7 million promissory note with John Linss (former CFO and board member) and his wholly\nowned Corespeed, LLC. The amendment required a $425 thousand payment on February 27, 2024, with the remaining balance payable in 24 equal\nmonthly installments of $60 thousand beginning April 1, 2024. The amended maturity date is the earlier of April 1, 2026, five days following\nan uplisting, or upon a change of control. The principal balance of this note was repaid in full during the three months ended March\n31, 2026.\n\n \n\n*Excel\nFamily Partners (Bruce Cassidy – related party):*\n\n \n\nThe\nCompany maintains a series of discretionary non-revolving and revolving line of credit demand notes with Excel Family Partners, LLLP\n(“Excel”), a related party controlled by Bruce Cassidy (former CEO and current Chairman/Secretary). These notes have been\namended and restated multiple times, increasing borrowing capacity from $2.0 million to $14.0 million. Each note is discretionary, non-committed,\naccrues interest at 12–15% per annum, and does not permit reborrowing once amounts are repaid.\n\n \n\nThe\nnotes include (i) conversion options permitting Excel to convert outstanding balances into common stock at 80% of the lowest issuance\nprice in the preceding 24 months (not less than $0.50 per share), and (ii) warrants issued in connection with certain amendments ranging\nfrom 1.0 million to 4.0 million shares at $0.25 per share.\n\n \n\nOn\nDecember 28, 2023, $10.4 million of indebtedness was converted into 25.9 million shares of common stock at $0.40 per share.\n\n \n\nDuring\nthe nine months ended March 31, 2026 and 2025, the Company borrowed approximately $8.5 million and $8.5 million under the revolving facility,\nrespectively.\n\n \n\n*Transactions\nwith Entities Under Common Control:*\n\n \n\nIn\nOctober 2025, the Company entered into arrangements with entities under common control, FuzeBox AI, Inc. and Eagle II, LLC, dba Loop\nTV, each of which is controlled by the Company’s majority shareholder and the Company’s CEO, to provide administrative,\ntechnology and operational support services. The Company recorded related-party receivables totaling $722\nthousand, of which $595\nthousand related to services provided to FuzeBox AI, Inc. and $127\nthousand related to services provided to Loop TV. As of March 31, 2026, these amounts\nremained outstanding and are included in related-party receivables on the accompanying unaudited condensed consolidated balance\nsheet.\n\n** **\n\n**NOTE\n14 - SUBSEQUENT EVENTS**\n\n \n\nIn\naccordance with ASC Sub-topic 855-10, the Company has analyzed its operations subsequent to March 31, 2026, to the date these unaudited\ncondensed consolidated financial statements were issued, and as of May 14, 2026, there were no other material subsequent events to disclose\nin these unaudited condensed consolidated financial statements with the exception of the events below.\n\n \n\n*Additional\nborrowings:*\n\n \n\nSubsequent\nto the period end, and through May 14, 2026, the Company borrowed an additional $944 thousand under the new Discretionary Non-Revolving\nLine of Credit Demand Note with Excel Family Partners, LLLP.\n\n \n\n*Warrants:*\n\n \n\nOn\nApril 6, 2026, the Company issued a warrant to a third-party advisor in connection with an advisory agreement. The warrant is exercisable\nfor up to 66,667 shares of the Company’s common stock at an exercise price of $0.30 per share and has a term of five years from\nthe date of issuance. On May 6, 2026, the Company issued a warrant to a third-party advisor in connection with an advisory agreement.\nThe warrant is exercisable for up to 50,000 shares of the Company’s common stock at an exercise price of $0.40 per share and has\na term of five years from the date of issuance. The warrants include customary provisions, including cashless exercise and anti-dilution\nadjustments, including a down-round feature.\n\n \n\nThe\nCompany evaluated the warrants under ASC 480 and ASC 815-40 and concluded the warrants qualify for equity classification. Accordingly,\nthe warrants will be accounted for as equity-classified share-based payment awards under ASC 718 and measured at grant-date fair value,\nwith compensation expense recognized over the applicable service periods.\n\n* *\n\n*Discontinuance\nof sports wagering operations:*\n\n \n\nSubsequent\nto March 31, 2026, the Company made the decision to discontinue its sports wagering operations. As of March 31, 2026, the Company’s\nwagering operations remained active, no formal plan of disposal had been implemented, and the Company had not notified the Tennessee\nSports Wagering Council (“SWC”), which approval is required prior to initiating a wind-down of operations.\n\n \n\nOn\nApril 6, 2026, the Company formally notified SWC of its intent to discontinue wagering operations. Following receipt of regulatory approval\nin mid-April 2026, the Company initiated wind-down activities, including the cessation of wagering operations and communication with\ncustomers and vendors.\n\n \n\nAs\npart of the wind-down process, the Company implemented a player withdrawal program requiring customers to withdraw account balances by\nMay 10, 2026. The Company is in the process of settling remaining player liabilities and vendor obligations in connection with the wind-down.\n\n \n\nIn\naddition, the Company has begun transitioning certain operational activities and vendor relationships to affiliated entities under common\ncontrol.\n\n \n\nThe\ndecision to discontinue wagering operations represents a significant strategic shift and is expected to impact the Company’s future\noperations. However, because these events occurred subsequent to March 31, 2026, no adjustments have been made to the accompanying financial\nstatements.\n\n \n\nThe\nCompany is continuing to evaluate the financial reporting implications of the wind-down, including potential classification as discontinued\noperations in future periods.\n\n \n\nFollowing the wind-down of our sportsbook operations,\nwe intend to transition our business model toward enterprise-focused offerings, including artificial intelligence consulting services,\ndevelopment of a fan engagement and data intelligence platform, and data analytics and marketing optimization solutions\n\n \n\nF-27"}