MGAM Mobile Global Esports, Inc. - 10-K

Item 1A. Risk Factors

RISK FACTORS

Investing in our common stock involves a high degree of risk. Before deciding whether to invest in our common stock, you should consider carefully the risks and uncertainties and assumptions discussed under the heading “Risk Factors” and elsewhere in this document. There may be other unknown or unpredictable economic, business, competitive, regulatory or other factors that could have material adverse effects on our future results. If any of these risks occur, our business, business prospects, financial condition or results of operations could be seriously harmed, and this could cause the trading price of our common stock to decline, resulting in a loss of all or part of your investment. Please also read carefully the section entitled “Cautionary Note Regarding Forward-Looking Statements.”

Risks Related to Our Business

We may not be successful in creating a sustainable or profitable business based on our proprietary fantasy entertainment technology platforms, which could adversely affect our financial condition and results of operations.

Our business plan contemplates the development and commercialization of proprietary technology platforms offering skill-based fantasy entertainment products, and we may not be successful in creating a sustainable or profitable business.

If our proprietary data-driven scoring engines, behavioral-logic systems, and simulated fantasy outputs fail to function as intended or achieve market acceptance, our business, operating results, and prospects could be materially harmed.

Our Company is developing proprietary data-driven scoring engines, behavioral-logic systems, and simulated fantasy outputs designed to personalize user engagement while giving owners the opportunities to directly own and run their organization. These products remain in active development, and there is no assurance that they will function as intended, achieve regulatory qualification, produce meaningful user adoption, or generate material revenues. The fantasy sports and digital entertainment sectors are intensely competitive, subject to shifting consumer trends, rapidly evolving technology standards, data-licensing limitations, and significant marketing costs. We may not be able to acquire or retain users at commercially viable costs, and there can be no assurance that we will generate substantial revenues or profits from our technology, platforms, or associated engagement models.

If we are unable to successfully generate audience traffic or monetize content through advertising-supported channels and partnerships, our efforts to diversify revenue streams may not yield the anticipated results and could negatively impact our financial performance.

The Company intends to evaluate advertising-supported and content-monetization channels beginning in 2026. These channels depend on the ability to generate audience traffic, secure advertising participation, negotiate access to distribution, and comply with applicable regulations. There can be no assurance that consumer traffic will scale, that advertisers or distribution partners will engage, that the economics of content monetization will prove viable, or that these efforts will produce material revenues within anticipated timeframes, if at all.

If development of our Dominus scoring engine for additional sports applications is delayed or unsuccessful, or fails to achieve acceptance in the marketplace, our business expansion opportunities may be limited, and our operating results could suffer.

The Company is adapting its Dominus scoring engine for potential use in additional sports-based applications, including college and professional football. These initiatives remain subject to development, data availability, product-integration challenges, regulatory considerations, technology dependencies, and funding constraints. The Company’s internal expectations for beta evaluation in 2026 are inherently uncertain, and there can be no assurance that such products will be completed, released, or accepted by the market.

If our PUHZL behavioral-logic and personalization engine does not operate effectively or fails to enhance user engagement, our product adoption and competitiveness could be materially and adversely affected.

Our PUHZL behavioral-logic and personalization engine may not operate effectively or deliver meaningful results. PUHZL is intended to support personalization, preference modeling, and engagement optimization; however, the system relies on data inputs, predictive models, and algorithmic outputs that may prove inaccurate, unreliable, or commercially unimportant. Errors, biases, system failures, privacy restrictions, or data-licensing limitations could materially impair PUHZL’s functionality, reduce user satisfaction, and adversely affect the adoption of the Company’s products.

If our acquisition of Reality Sports Online’s (“RSO”) assets does not result in the anticipated benefits or user migration, our user-acquisition assumptions, growth prospects, and financial results may be adversely impacted.

Our acquisition of substantially all of RSO’s assets may not generate the expected benefits. Although the seller reported a historical audience of more than 7,500 active seasonal fantasy participants and a database exceeding 40,000 email records, there can be no assurance that RSO users will migrate to MGAM products, that integration will proceed efficiently, or that historical retention patterns will continue. Failure to retain or convert RSO users could adversely affect our user-acquisition assumptions, product commercialization, and anticipated growth plans.

If our access to third-party data sources, technology partners, and cloud infrastructure is interrupted or compromised, or if we experience cybersecurity incidents, product reliability and user engagement may be materially impaired, which could adversely affect our business and reputation.

We depend on third-party data sources, software partners, cloud infrastructure, and licensed content to support product functionality. Disruptions, failures, outages, cost escalations, or loss of access to data inputs could materially impair product reliability and user engagement. Unauthorized access, cybersecurity breaches, data-loss events, or manipulation of predictive-model outputs could adversely affect our business, operating results, or reputation.

Economic downturns and political and market conditions beyond our control could adversely affect our business, financial condition and results of operations.

Our financial performance is subject to global and U.S. economic conditions and their impact on levels of spending by users and advertisers. Economic recessions have had, and may continue to have, far reaching adverse consequences across many industries, including the global entertainment and gaming industries, which may adversely affect our business and financial condition.

The global and U.S. economies experienced tepid growth immediately following the global financial crisis in 2008 – 2009 and more recently experienced a period of increased volatility during the global COVID-19 pandemic. Ongoing or intensifying economic weakness, including recessions, economic slowdowns, uncertainties in the global financial markets and other adverse economic conditions, including inflation, changes in monetary policy and increased interest rates, actual or perceived instability in the global banking sector, changes in the labor market, supply chain disruptions or other changes in economic and political conditions may result in a material adverse effect on our business, financial condition, results of operations or prospects.

In addition, changes in general market, economic and political conditions in domestic and foreign economies or financial markets, including fluctuation in stock markets resulting from, among other things, trends in the economy as a whole may reduce users’ disposable income and advertisers’ budgets. Any one of these changes could have a material adverse effect on our business, financial condition, results of operations or prospects.

Reductions in discretionary consumer spending could have an adverse effect on our business, financial condition, results of operations and prospects.

Our business is particularly sensitive to reductions from time to time in discretionary consumer spending. Demand for entertainment and leisure activities, including gaming, can be affected by changes in the economy and consumer tastes, both of which are difficult to predict and beyond our control. Unfavorable changes in general economic conditions, including recessions, economic slowdowns, sustained high levels of unemployment, and rising prices or the perception by consumers of weak or weakening economic conditions, may reduce our users’ disposable income or result in fewer individuals engaging in entertainment and leisure activities, such as sports betting and online gaming. As a result, we cannot ensure that the demand for our product offerings will remain consistent. Adverse developments affecting economies throughout the world, and particularly in the United States, including a general tightening of availability of credit, decreased liquidity in certain financial markets, inflation, increased interest rates, foreign exchange fluctuations, increased energy costs, the impact of higher tariffs or escalating trade disputes, acts of war or terrorism, transportation disruptions, natural disasters, declining consumer confidence, sustained high levels of unemployment or significant declines in stock markets, as well as concerns regarding pandemics, epidemics and the spread of contagious diseases, could lead to a reduction in discretionary spending on leisure activities, such as our product offerings.

We will require additional financing in order to implement and execute our business plan, and we cannot be certain that such additional financing will be available on reasonable terms when required, or at all.

As of December 31, 2025, we had a cash balance of approximately $573,000. We may need to raise additional funding to meet our cash, operational and liquidity requirements to continue operating.

We have obtained some additional financing during the year ended December 31, 2025. However, we continue to seek additional financing and there can be no assurance that such additional capital will be available on a timely basis, or on terms acceptable to the Company. If adequate funds are not available or are not available on acceptable terms when needed, the Company may not be able to fund its business or its expansion, take advantage of strategic acquisitions or investment opportunities or respond to competitive pressures. Such inability to obtain additional financing when needed could have a material adverse effect on the Company’s business, results of operations, cash flow, financial condition and prospects. Any future equity financing may involve substantial dilution to existing stockholders.

If we raise additional funds by issuing equity or convertible debt securities, we will reduce the percentage ownership of our then-existing stockholders, and the holders of those newly-issued equity or convertible debt securities may have rights, preferences, or privileges senior to those possessed by our then-existing stockholders and/or note holders. Additionally, future sales of a substantial number of shares of our common stock or other equity-related securities could depress the market price of our common stock in the public market and could impair our current or future ability to raise capital through the sale of additional equity or equity-linked securities or the sale of debt. We cannot predict the effect that future sales of our common stock or other equity-related securities would have on the market price of our common stock.

Litigation costs and the outcome of litigation could have a material adverse effect on the Company’s business.

From time to time, the Company may be subject to litigation claims through the ordinary course of its business operations regarding, but not limited to, employment matters, security of consumer and employee personal information, contractual relations with suppliers, marketing and infringement of trademarks and other intellectual property rights, and other matters. Litigation to defend the Company against claims by third parties, or to enforce any rights that we may have against third parties, may be necessary, which could result in substantial costs and diversion of our resources, causing a material adverse effect on our business, financial condition and results of operations.

The Company is not aware of any current material legal proceedings outstanding, threatened or pending as of the date hereof by or against the Company.

Changing laws, rules and regulations and legal uncertainties, including adverse application of tax laws and regulations, may adversely affect our business and financial performance.

Our business and financial performance could be adversely affected by unfavorable changes in or interpretations of existing, or the promulgation of new laws, rules and regulations applicable to us and our business, including those relating to the internet, e-commerce, consumer protection and privacy. Such unfavorable changes could decrease demand for our services and products, increase costs and/or subject us to additional liabilities. Furthermore, the growth and development of e-commerce may result in more stringent consumer protection laws that may impose additional burdens on online businesses generally.

Our business is subject to online security risk, and loss or misuse of our stored information, including the exposure of customers’ personal information, could lead to government enforcement action or other litigation, potential liability, or otherwise harm our business.

We receive, process, store and use personal information and other customer data as a part of our business. There are numerous federal, state and local laws regarding privacy and the storing, sharing, use, processing, disclosure and protection of personal information and other data. Any failure or perceived failure by us to comply with our privacy policies, our privacy-related obligations to customers or other third parties, or our privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of personally identifiable information or other player data, may result in governmental enforcement actions, litigation or public statements against us by consumer advocacy groups or others and could cause our customers to lose trust in us which could have an adverse impact on our business. In the area of information security and data protection, many jurisdictions have passed laws requiring notification to customers when there is a security breach for personal data or requiring the adoption of minimum information security standards that are often vaguely defined and difficult to implement. The costs of compliance with these types of laws may increase in the future as a result of changes in interpretation or changes in law. Any failure on our part to comply with these types of laws may subject us to significant liabilities.

Risks Related to Our Common Stock

Our officers, directors and 5% stockholders may exert significant influence over our affairs, including the outcome of matters requiring stockholder approval.

As of March 30, 2026, our officers, directors and more than 5% stockholders own in the aggregate approximately 23.3% of our outstanding common stock. As a result, when acting together, although such individuals will not have a controlling interest in our Company, they still will have a significant impact on the election of our directors and in determining the outcome of any corporate action, including corporate actions requiring stockholder approval, such as: (i) a merger or a sale of our company, (ii) a sale of all or substantially all of our assets, and (iii) amendments to our articles of incorporation and bylaws. This concentration of voting power and influence could have a significant effect in delaying, deferring or preventing an action that might otherwise be beneficial to our other stockholders and be disadvantageous to our stockholders with interests different from those individuals. Certain of these individuals also have significant control over our business, policies and affairs as officers or directors of our company. Therefore, you should not invest in reliance on your ability to have any control over our company.

We currently do not intend to pay dividends on our common stock. As a result, your only opportunity to achieve a return on your investment is if the price of our common stock appreciates.

We currently do not expect to declare or pay dividends on our common stock. In addition, in the future we may enter into agreements that prohibit or restrict our ability to declare or pay dividends on our common stock. As a result, your only opportunity to achieve a return on your investment will be if we are able to establish a public market for our stock, the market price of our common stock appreciates and you sell your shares.

Stockholders will likely experience dilution of their ownership interest due to the future issuance of additional shares of our common stock.

We are in a capital-intensive business, and we do not have sufficient funds to finance the growth of our business without issuing additional securities beyond the shares to be sold in this offering, resulting in the dilution of the ownership interests of holders of our common stock. We are currently authorized to issue 300,000,000 shares of common stock and 10,000,000 shares of preferred stock. Additionally, our board of directors may subsequently approve increases in authorized common stock or preferred stock. The potential issuance of such additional shares of common or preferred stock or convertible debt may create downward pressure on the trading price of our common stock in public markets. We may also issue additional shares of common stock or other securities that are convertible into or exercisable for common stock in future public offerings or private placements for capital-raising purposes or for other business purposes. The future issuance of a substantial number of shares of common shares into the public market, or the perception that such issuance could occur, could adversely affect the prevailing market price of our common stock. A decline in the price of our common stock could make it more difficult to raise funds through future offerings of our common stock or securities convertible into common stock.

Our certificate of incorporation allows for our board of directors to create new series of preferred stock without further approval by our stockholders, which could have an anti-takeover effect and could adversely affect holders of our common stock.

Our authorized capital includes preferred stock issuable in one or more series. We currently have no preferred stock outstanding. However, our board has the authority to issue preferred stock and determine the price, designation, rights, preferences, privileges, restrictions and conditions, including voting and dividend rights, of those shares without any further vote or action by stockholders. The rights of the holders of common stock will be subject to, and may be adversely affected by, the rights of holders of any preferred stock that may be issued in the future. The issuance of additional preferred stock, while providing desirable flexibility in connection with possible financings and acquisitions and other corporate purposes, could make it more difficult for a third party to acquire a majority of the voting power of our outstanding voting securities, which could deprive our holders of common stock of a premium that they might otherwise realize in connection with a proposed acquisition of our company.

The market price of such securities has been and is likely to remain highly volatile and subject to wide fluctuations, and you may be unable to sell your securities at or above the price at which you acquired them.

The stock market in general and the markets for smaller companies in particular have experienced extreme volatility that may be unrelated to the operating performance of particular companies. The market price for our securities may be influenced by many factors that are beyond our control.

The trading price of our shares may also decline in reaction to events that affect other companies in our industry, even if these events do not directly affect us. These factors, among others, could harm the value of your investment in our securities. In the past, following periods of volatility in the market, securities class-action litigation has often been instituted against companies. Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention and resources, which could materially and adversely affect our business, operating results and financial condition.

Anti-takeover provisions in our charter documents and Delaware law could discourage, delay or prevent a change in control of our company and may affect the trading price of our common stock and warrants.

We are a Delaware corporation and the anti-takeover provisions of Delaware law may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the person becomes an interested stockholder, even if a change in control would be beneficial to our existing stockholders. In addition, our certificate of incorporation and bylaws may discourage, delay or prevent a change in our management or control over us that some stockholders may consider favorable.

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 loss 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.