Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes appearing in this Annual Report. This discussion and other parts of this Annual Report contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Annual Report, our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis, and elsewhere in this Annual Report.
Objective
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide information necessary to understand our audited consolidated financial statements for the years ended December 31, 2025 and 2024 and highlight certain other information which, in the opinion of management, will enhance a reader’s understanding of our financial condition, changes in financial condition and results of operations. In particular, the discussion is intended to provide an analysis of significant trends and material changes in our financial position and the operating results of our business during the year ended December 31, 2025, as compared to the year ended December 31, 2024. This discussion should be read in conjunction with our consolidated financial statements for the years ended December 31, 2025 and 2024 and the related information included elsewhere in this Annual Report.
Business Overview
We are a technology and intellectual-property-driven gaming and digital entertainment company developing proprietary platforms that deliver skill-based, data-supported, and highly personalized interactive experiences. The Company’s focus is on creating curated engagement products that blend fantasy sports frameworks, predictive modeling, gamification mechanics, and behavioral personalization to drive user participation through direct team ownership across underserved and emerging segments of the sports entertainment marketplace.
MGAM’s current strategy emphasizes the development and commercialization of technology assets, data-driven scoring engines, mobile-first user interfaces, and proprietary behavioral-logic systems designed to support next-generation fantasy formats. These products are intended to offer users deeper strategic optionality and more immersive experiences than conventional fantasy sports models, which often rely on simplified scoring systems and limited personalization.
Components of Consolidated Statements of Operations
Revenue and Cost of Revenue
During 2025, the Company established a beta league for fantasy baseball utilizing its Dominus Sports product, which provides customers with the opportunity to create and own a team with three different tier pricing options. Ownership fees paid provide the customer with ownership rights over a five-year period; these ownership fees are recorded as a liability and paid out as prize money (“Team Prize Payout”) over the five-year ownership period. Customers also have the ability to buy additional micro transactions, which provide various additional rights or improvements to their teams; these micro transactions are generally recognized as revenue when billed. As of December 31, 2025, the amount of Team Prize Payout was approximately $11,600. Revenue from the beta league for the year ended December 31, 2025 was approximately $4,000. Cost of revenue for the year ended December 31, 2025 was immaterial.
Selling, General and Administrative Expenses
Selling, general and administrative costs are expensed as incurred and primarily include personnel costs in the U.S., public filing fees, travel expenses, contractor fees, and professional fees.
Comparison of the Year Ended December 31, 2025 to the Year Ended December 31, 2024
The following table summarizes the results of our operations:
Change
Change
Revenue
Operating expenses:
Selling, general and administrative
Total operating expenses
Loss from operations
Interest income (expense), net
Change in fair value of convertible notes payable
Loss from continuing operations
Loss from operation of discontinued MOGO Pvt Ltd
Gain on classification as held for sale
Net loss
Not meaningful
Change is more than 100%
Selling, General and Administrative Expenses
Selling, general and administrative expenses were approximately $2,162,000 for the year ended December 31, 2025, compared to approximately $1,632,000 for the year ended December 31, 2024. The increase in general and administrative expenses was primarily driven by an increase of approximately $810,000 in consulting expense, $44,000 in marketing expense, $36,000 in non-income tax expense, $15,000 in travel expense and $45,000 in amortization expense. This increase was offset by decreases of approximately $217,000 in accounting, legal, and regulatory expense, $69,000 in payroll expense, $13,000 in insurance expense and $119,000 in board compensation expense.
Discontinued Operations
In a strategic shift to focus on its flagship product, Dominus Sports, the Company decided to discontinue operations at its India subsidiary, MOGO Pvt Ltd. Because the Company will no longer work with universities to promote and establish sports leagues on college campuses, the Company has determined that the disposal of this subsidiary qualifies for reporting as a discontinued operation.
As a result of this strategic shift, the India subsidiary’s revenue decreased by approximately $24,000 from 2025 to 2024. Additionally, selling, general and administrative expenses also decreased by approximately $494,000 from 2025 to 2024. During 2024 the India subsidiary recorded a write-off of equipment and furniture of approximately $80,000 as it was no longer in use. During 2025 the India subsidiary recorded a $13,000 gain on classification as held for sale.
Liquidity and Capital Resources
As of December 31, 2025 and December 31, 2024, we had cash and restricted cash of approximately $573,000 and $837,000, respectively. We have financed operations through the issuance of common stock with warrants; notes payable; and convertible notes payable; and convertible notes payable with restricted common stock. In 2025 the Company issued 500,000 shares of common stock with warrants to purchase up to 500,000 shares of common stock (“2025 Warrants”) at an exercise price of $0.26 per share through a private stock offering. The total purchase price was $0.25 per share and warrant for total gross proceeds of $125,000. In 2025, we also issued several note payable agreements totaling $125,000 and issued several convertible promissory notes for total gross proceeds of $610,500. We also issued $325,000 in convertible notes payable, whereby the holders of these notes were entitled to receive 1,300,000 in restricted common stock.
Funding Requirements
We believe we may need to raise additional funding to meet our cash, operational and liquidity requirements for at least 12 months after the date of the filing of this Annual Report.
See “Risk Factors” for additional risks associated with our substantial capital requirements.
Cash Flows
The following table summarizes our sources and uses of cash:
Year Ended
December 31,
Net cash provided by (used in):
Operating activities
Investing activities
Financing activities
Effect of exchange rate changes on cash
Net decrease in cash
Operating Activities
Net cash used in operating activities for 2025 was approximately $1,066,000 compared to $2,107,000 for 2024. The approximate $1,041,000 decrease was primarily due to a $66,000 decrease in net loss; a $28,000 increase in depreciation and amortization; a $701,000 increase in non-cash expenses for stock and warrants issued for services; an $18,000 increase in amortization of debt discount; and a $398,000 change in operating assets and liabilities, offset by a $50,000 decrease in the change in fair value of convertible notes payable; an $80,000 decrease in impairment expense; and a $41,000 decrease in a change in operating right-of-use assets.
Investing Activities
Net cash used in investing activities for 2025 was approximately $418,000 compared to $68,000 for 2024. The increase of approximately $351,000 was primarily due to a $418,000 increase in software costs, including the asset acquisition of RSO; this increase was offset by a $68,000 decrease in property and equipment purchases.
Financing activities
Net cash provided by financing activities for 2025 was approximately $1,131,000. Net cash used in investing activities was approximately $65,000 for 2024. This increase in cash of approximately $1,196,000 was primarily due to a $125,000 increase in the issuance of common stock; a $125,000 increase in the issuance of notes payable with common stock; a $936,000 increase in the issuance of convertible notes payable; and a $65,000 decrease in the repayment of notes payable. This increase was offset by payments of approximately $5,000 for stock issuance costs and $50,000 for deferred financing costs.
Contractual Obligations and Commitments
From time to time, we may be involved in various litigation matters which arise in the ordinary course of business. There is currently no litigation that we believe will have a material impact on the financial position of the Company.
Critical Accounting Policies and Estimates
We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). The preparation of these consolidated financial statements requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date the consolidated financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates and assumptions. Note 2, Summary of Significant Accounting Policies , to the consolidated financial statements includes a summary of the significant accounting policies we used to prepare our consolidated financial statements. We have discussed the selection and disclosure of our critical accounting policies and estimates with our Audit Committee. The following is a review of our most significant policies and estimates.
Liquidity and Going Concern
The Company’s operations are subject to certain risks and uncertainties, including, among others, the Company’s need for additional financing, the ability to attract users and viewers to the Company’s offerings, the challenges of developing and commercializing our proprietary technology platform, the inability to retain or convert RSO users to our platform, and reliance on key members of management.
The accompanying financial statements have been prepared on the basis that assumes that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has a limited operating history, has incurred operating losses to date, and expects to incur operating losses for the foreseeable future. In addition, the Company has shut down its operational activity in India and is launching a different business model, which could negatively impact the Company’s ability to achieve its strategic direction. Furthermore, the Company may be unable to generate significant revenue within the next year or generate sufficient cash flows to continue its operations. The Company has a new Chief Executive Officer and is working with other consultants and its board of directors to operate the Company. Management believes the current team has the necessary experience to achieve its goals.
The Company has approximately $573,000 of cash as of December 31, 2025 and an accumulated deficit of approximately $12,903,000 and $10,643,000 as of December 31, 2025 and 2024, respectively. Management believes that the Company will need to raise additional capital to continue to operate for the next 12 months from the date of the issuance of the consolidated financial statements. The failure of the Company to raise additional capital and achieve its business objectives could have a material adverse effect on the Company’s results of operations. These conditions, among other factors, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
Capitalized Software
The Company capitalizes internal-use software based on the guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350-40, Intangibles-Goodwill and Other-Internal-Use Software . The Company expenses costs during the preliminary project stage and capitalizes costs incurred during the application development stage until the software is substantially complete and ready for its intended use. Once the internal-use software is ready for its intended use, costs associated with training and routine maintenance are expensed as incurred. Significant enhancements and upgrades to the software are capitalized provided it is probable that these expenditures will result in additional functionality.
Long-Lived Assets
The Company reviews long-lived assets for realizability on an ongoing basis. Changes in depreciation and amortization, generally accelerated depreciation and variable amortization, are determined and recorded when estimates of the remaining useful lives or residual values of long-term assets change. The Company also reviews for impairment when conditions exist that indicate the carrying amount of the assets may not be fully recoverable. In those circumstances, the Company performs undiscounted operating cash flow analyses to determine if an impairment exists. When testing for asset impairment, the Company groups assets and liabilities at the lowest level for which cash flows are separately identifiable. Any impairment loss is calculated as the excess of the asset’s carrying value over its estimated fair value. Fair value is estimated based on the discounted cash flows for the asset group over the remaining useful life or based on the expected cash proceeds for the asset less costs of disposal. Any impairment losses would be recorded in the consolidated statements of operations. During 2025 and 2024, the Company recorded an impairment of approximately nil and $80,000, respectively.
Fair Value of Financial Instruments
The Company is required to disclose information on all assets and liabilities reported at fair value that enables the assessment of the inputs used in determining the reported fair values. ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), establishes a hierarchy of inputs used when available. Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.
The fair value hierarchy prioritizes inputs used to measure fair value into three levels as follows:
Level 1 – Inputs are based on quoted prices in active markets for identical assets or liabilities.
Level 2 – Inputs are based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions, or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the related assets or liabilities.
Level 3 – Inputs are based on unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities and typically reflect management’s estimates or assumptions that market participants would use in pricing the asset or liability.
Convertible Notes Payable
Fair Value Option (“FVO”) Election . The Company elected to account for the convertible notes issued, as described at Note 8 under the fair value option election pursuant to ASC Topic 825, Financial Instruments (“ASC 825”), as discussed below. The election was made to simplify the accounting for the instrument by avoiding the requirement to separately account for the embedded conversion feature as a derivative or to bifurcate the instrument into debt and equity components under ASC 470-20, Debt with Conversion and Other Options . The convertible note accounted for under the FVO election is a debt host financial instrument. ASC 825 provides for the “fair value option” election, to the extent, to be afforded to in scope financial instruments, wherein bifurcation of an embedded derivative is not necessary, and the financial instrument is initially measured at its issue-date fair value and then subsequently remeasured at fair value on a recurring basis at each reporting period date. The fair value adjustment, as required by ASC 825, is recognized as a component of other comprehensive income (“OCI”) with respect to the portion of the fair value adjustment attributed to a change in the instrument-specific credit risk, with the remaining amount of the fair value adjustment recognized as interest expense in the accompanying consolidated statements of operations and comprehensive loss. With respect to the note described at Note 8, as provided for by ASC 825, the estimated fair value adjustment is presented within the accompanying statement of operations, since the change in fair value of the convertible notes payable was not attributable to instrument specific credit risk.
Other Current Liabilities
The Company evaluates future equity shares to be issued in accordance with the guidance of ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”). Equity shares to be issued for which the Company does not have sufficient legally authorized shares to be issued are recorded as a liability and is only remeasured to fair value each reporting period if the underlying ASC requires it. During 2025, the Company incurred an obligation to issue 5,300,000 shares of restricted common stock related to the asset acquisition of RSO (see Note 3) and another 1,300,000 shares of restricted common stock in conjunction with the Convertible Bridge Notes (see Note 8). The obligation to issue the 5,300,000 shares of restricted common stock related to the RSO acquisition did not require remeasurement as the number of shares was fixed and temporarily classified as a liability due to an insufficient number of authorized shares; whereas, the obligation to issue the 1,300,000 shares of restricted common stock in conjunction with the Convertible Bridge Notes did require remeasurement at December 31, 2025, as the Company elected the fair value option to account for these convertible notes.
Revenue
The Company records revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of ASC 606 is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:
Step 1: Identify the contract with the customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when the company satisfies a performance obligation
In order to identify the performance obligations in a contract with a customer, the Company assesses the promised goods or services in the contract and identifies each distinct promised good or service.
If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified as distinct.
The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both.
Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company evaluates any noncash consideration, consideration payable to the customer, potential returns and refunds, and whether consideration contains a significant financing element in determining the transaction price.
Revenue is measured based on consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a service to its customer.
During 2025, the Company established a beta league for fantasy baseball utilizing its Dominus Sports product, which provides customers the opportunity to create and own a team with three different tier pricing options. Ownership fees paid provide the customer with ownership rights over a five-year period; these ownership fees are recorded as a liability and paid out as prize money (“Team Prize Payout”) over the five-year ownership period. Customers also have the ability to buy additional micro transactions, which provide various additional rights or improvements to their teams. Micro transactions are generally recognized as revenue when billed. Revenue for the year ended December 31, 2025 from the beta league was approximately $4,000. During 2024, the Company received approximately $25,000 of revenue from prize money earned from teams that it sponsored for certain Esports competitions.
Income Taxes
The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes . ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented.
JOBS Act
As an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), we can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected to “opt out” of this provision and, as a result, we will comply with new or revised accounting standards when they are required to be adopted by public companies that are not emerging growth companies.
Subject to certain conditions, as an emerging growth company, we rely on certain of these exemptions, including without limitation:
reduced disclosure about our executive compensation arrangements;
no advisory votes on executive compensation or golden parachute arrangements; and
exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting.
We may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) the last day of 2027; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC. We may choose to take advantage of some but not all of these exemptions. Accordingly, the information contained herein may be different from the information you receive from other public companies in which you hold stock.
Smaller Reporting Company
As a “smaller reporting company,” as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in addition to providing reduced disclosure about our executive compensation arrangements and business developments, among other reduced disclosure requirements available to smaller reporting companies, we present only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure. Accordingly, the information contained herein may be different from the information you receive from other public companies in which you hold stock.
Off-Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
