Super League Enterprise, Inc.

Previous wording

All references to “common stock” refer to the Company’s common stock, par value $0.001 per share.

Current wording

All references to“common stock”* refer to the Company*’s common stock, par value $0.001 per share.

Previous wording

In October 2025, the Company entered into Securities Purchase Agreements (the“PIPE Purchase Agreement”) with certain accredited investors (the“Purchasers”), relating to the Company’s offering of an aggregate of (a) 332,084 shares (the“PIPE Shares”) of the Company’s common stock, at a price per share equal to $12.00 and (b) Pre-Funded Warrants to purchase 1,334,584 shares of common stock (the“PIPE Pre-Funded Warrants”) at a price per PIPE Pre-Funded Warrant equal to same price as that for PIPE Shares minus $0.00001, and the remaining exercise price of each PIPE Pre-Funded Warrant will equal $0.00001 per share, for gross proceeds to the Company of approximately $20,000,000, before deducting offering costs and expenses (as referenced herein,“October 2025 PIPE”)

Current wording

In October 2025, the Company entered into Securities Purchase Agreements (the“PIPE Purchase Agreement”) with certain accredited investors**), relating to the Company’s offering of an aggregate of (a) 332,084 shares (the“PIPE Shares”) of the Company’s common stock, at a price per share equal to $12.00 and (b) Pre-Funded Warrants to purchase 1,334,584 shares of common stock (the“PIPE Pre-Funded Warrants”) at a price per PIPE Pre-Funded Warrant equal to same price as that for PIPE Shares minus $0.00001, and the remaining exercise price of each PIPE Pre-Funded Warrant will equal $0.00001 per share, for gross proceeds to the Company of approximately $20,000,000, before deducting offering costs and expenses (as referenced herein,“October 2025 PIPE”)

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our condensed financial statements and the related notes included elsewhere in this interim report. Our condensed financial statements have been prepared in accordance with U.S. GAAP. The following discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the“Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the“Exchange Act”), including, without limitation, statements regarding our expectations, beliefs, intentions or future strategies that are signified by the words“expect,”* “anticipate,” “intend,” “believe,” or similar language. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Our business and financial performance are subject to substantial risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements. In evaluating our business, you should carefully consider the information set forth under the heading*“Risk Factors”* included Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, as well as in Item II, Part 1A of this Quarterly Report on Form 10-Q (this*“Report”). Readers are cautioned not to place undue reliance on these forward-looking statements.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our condensed financial statements and the related notes included elsewhere in this interim report. Our condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The following discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the“Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the“Exchange Act”), including, without limitation, statements regarding our expectations, beliefs, intentions or future strategies that are signified by the words“expect,”* “anticipate,” “intend,” “believe,” or similar language. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Our business and financial performance are subject to substantial risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements. In evaluating our business, you should carefully consider the information set forth under the heading*“Risk Factors”* included Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, as well as in Item II, Part 1A of this Quarterly Report on Form 10-Q (this*“Report”). Readers are cautioned not to place undue reliance on these forward-looking statements.

Previous wording

On March 16, 2026, the Company entered into an asset purchase agreement (the “Misfits Purchase Agreement”) with Esports Now, LLC (“Misfits”), pursuant to which Misfits agreed to sell certain assets strictly constituting the Misfits Ads Business (the “Misfits Purchased Assets”) to the Company, and the Company agreed to assume certain liabilities related to the Misfits Purchased Assets (the “Misfits Acquisition”).

Current wording

On March 16, 2026, the Company entered into an asset purchase agreement (the “Misfits Asset Purchase Agreement”) with Esports Now, LLC (“Misfits”), pursuant to which Misfits agreed to sell certain assets strictly constituting the Misfits Ads assets (the “Misfits Purchased Assets”) to the Company (the “Misfits Transaction”).

Previous wording

On March 20, 2026, the Company filed a preliminary proxy statement with the Securities and Exchange Commission (“SEC”), followed by the filing of a definitive proxy statement with the SEC on April 2, 2026 (the “Misfits Proxy Statement”). The Misfits Proxy Statement solicited the approval of the issuance of an aggregate of 1,161,813 shares of common stock to be issued as consideration in connection with the Misfits Acquisition (the “Issuance Proposal”) by the affirmative vote of a majority of the voting power of the Company’s shares present at a special meeting of the Company’s stockholders, scheduled for April 30, 2026 (the “Special Meeting”).

Current wording

On March 20, 2026, the Company filed a preliminary proxy statement with the SEC, followed by the filing of a definitive proxy statement with the SEC on April 2, 2026 (the “Misfits Proxy Statement”). The Misfits Proxy Statement solicited the approval of the issuance of an aggregate of 1,161,813 shares of common stock to be issued as consideration in connection with the Misfits Transaction (the “Issuance Proposal”) by the affirmative vote of a majority of the voting power of the Company’s shares present at a special meeting of the Company’s stockholders, scheduled for April 30, 2026 (the “Special Meeting”).

Previous wording

On April 30, 2026, at the Special Meeting, the Company’s stockholders approved the Issuance Proposal. On May 1, 2026 (the “Misfits Closing Date”), the Company and Misfits consummated the Misfits Acquisition (the “Misfits Closing”).

Current wording

On April 30, 2026, at the Special Meeting, the Company’s stockholders approved the Issuance Proposal. On May 1, 2026 (the “Misfits Closing Date”), the Company and Misfits consummated the Misfits Transaction (the “Misfits Closing”).

Previous wording

In addition, pursuant to the terms and subject to the conditions of the Misfits Purchase Agreement, on the one-year anniversary of the Misfits Closing, the Company may pay up to an aggregate of (i) $1.2 million in cash (the “Misfits Earnout Cash”), and (ii) 105,571 shares of common stock, or, upon the election of Misfits, Misfits Pre-Funded Warrants to purchase 105,571 shares of common stock (the “MisfitsEarnout Shares”, and collectively with the Misfits Earnout Cash, the “Misfits Earnout Consideration”). The Misfits Earnout Consideration will be payable to Misfits in connection with: (i) the achievement of certain gross profit milestones for the period beginning on the Misfits Closing Date until the date that is one year from the date of the Misfits Closing; and (ii) the Company’s market capitalization as of the one and two year anniversary of the Misfits Closing Date.

Current wording

In addition, pursuant to the terms and subject to the conditions of the Misfits Asset Purchase Agreement, on the one-year anniversary of the Misfits Closing, the Company may pay up to an aggregate of (i) $1.2 million in cash (the “Misfits Earnout Cash”), and (ii) 105,571 shares of common stock, or, upon the election of Misfits, Misfits Pre-Funded Warrants to purchase 105,571 shares of common stock (the “Misfits Earnout Shares”, and collectively with the Misfits Earnout Cash, the “Misfits Earnout Consideration”). The Misfits Earnout Consideration will be payable to Misfits in connection with: (i) the achievement of certain gross profit milestones for the period beginning on the Misfits Closing Date until the date that is one year from the date of the Misfits Closing; and (ii) the Company’s market capitalization as of the one and two year anniversary of the Misfits Closing Date.

Previous wording

Brand Partnership Agreement. **In connection with the Misfits Closing and the entrance into the Misfits Purchase Agreement, the Company and Misfits entered into an exclusive brand partnership agreement dated May 1, 2026 (the “Brand Partnership Agreement”), pursuant to which Misfits agreed to grant certain preferred rights (the “MisfitsPreferred Rights”) to the Company for purposes of selling brand partnerships where a third-party brand may be advertised (via sponsorships, marketing, brand endorsements, product placements, brand integrations and other similar associations) (collectively, “Partnerships”) in certain games in the Misfits Roblox game portfolio (the “Misfits Games”). The initial term of the Brand Partnership Agreement is one year, subject to extension by mutual agreement. The Brand Partnership Agreement may be terminated upon written notice by the parties.

Current wording

Brand Partnership Agreement. **In connection with the Misfits Closing and the entrance into the Misfits Purchase Agreement, the Company and Misfits entered into an exclusive brand partnership agreement dated May 1, 2026 (the “Brand Partnership Agreement”), pursuant to which Misfits agreed to grant certain preferred rights to the Company for purposes of selling brand partnerships where a third-party brand may be advertised (via sponsorships, marketing, brand endorsements, product placements, brand integrations and other similar associations) in certain games in the Misfits Roblox game portfolio. The initial term of the Brand Partnership Agreement is one year, subject to extension by mutual agreement. The Brand Partnership Agreement may be terminated upon written notice by the parties.

Previous wording

Misfits Director Designee. **Pursuant to the terms and conditions of the Misfits Purchase Agreement, at the Misfits Closing, Misfits was granted the right to appoint a designee to the Board of Directors of the Company (“MisfitsBoard Designee”); provided, however, the Misfits Board Designee must be qualified to serve on a public company’s board of directors and meet the requirements of an “independent director” pursuant to the rules and regulations of Nasdaq.

Current wording

Misfits Director Designee. **Pursuant to the terms and conditions of the Misfits Purchase Agreement, at the Misfits Closing, Misfits was granted the right to appoint a designee to the Board of Directors of the Company (“Misfits Board Designee”); provided, however, the Misfits Board Designee must be qualified to serve on a public company’s board of directors and meet the requirements of an “independent director” pursuant to the rules and regulations of Nasdaq.

Previous wording

Registration Rights Agreement. **In connection with the closing of the Misfits Acquisition and the entrance into the Misfits Purchase Agreement, the Company and Misfits entered into a registration rights agreement dated May 1, 2026 (the “Registration Rights Agreement”), pursuant to which the Company agreed to file a registration statement with the SEC on or prior to the 90th calendar day following the Misfits Closing Date, for purposes of registering the Misfits Closing Shares, the Misfits Warrant Shares, and the Misfits PFW Shares (the “MisfitsRegistration Statement”). The Company agreed to use commercially reasonable efforts to have such Registration Statement declared effective within the time period set forth in the Registration Rights Agreement, and to keep the Registration Statement effective until the date that all registrable securities covered by the Registration Statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144.

Current wording

Registration Rights Agreement. **In connection with the closing of the Misfits Transaction and the entrance into the Misfits Purchase Agreement, the Company and Misfits entered into a registration rights agreement dated May 1, 2026 (the “Registration Rights Agreement”), pursuant to which the Company agreed to file a registration statement with the SEC on or prior to the 90th calendar day following the Misfits Closing Date, for purposes of registering the Misfits Closing Shares, the Misfits Warrant Shares, and the Misfits PFW Shares (the “Misfits Registration Statement”). The Company agreed to use commercially reasonable efforts to have such Registration Statement declared effective within the time period set forth in the Registration Rights Agreement, and to keep the Registration Statement effective until the date that all registrable securities covered by the Registration Statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144.

Previous wording

The closing of the Misfits Acquisition and the integration of the Misfits Purchased Assets involves certain risks and uncertainties, including, among other things, risks related to our ability to successfully integrate the Misfits Purchased Assets into our operations; our ability to implement plans, forecasts and other expectations with respect to the Misfits Purchased Assets; our ability to realize the anticipated benefits of the Misfits Acquisition, including the possibility that the expected benefits from the Misfits Acquisition will not be realized or will not be realized within the expected time period; the achievement of the revenue milestones and payment of the Misfits Earnout Consideration; the outcome of any legal or governmental proceedings related to the Misfits Acquisition or otherwise; the negative effects of the announcement of the Misfits Acquisition on the market price of our common stock or on our operating results; significant Misfits Acquisition costs; unknown liabilities; attracting new customers and maintaining and expanding our existing customer base; our ability to scale and update our platform to respond to customers’ needs and rapid technological change; increased competition on our market and our ability to compete effectively; and expansion of our operations and increased adoption of our platform internationally.

Current wording

Other. The closing of the Misfits Transaction and the integration of the Misfits Purchased Assets involves certain risks and uncertainties, including, among other things, risks related to our ability to successfully integrate the Misfits Purchased Assets into our operations; our ability to implement plans, forecasts and other expectations with respect to the Misfits Purchased Assets; our ability to realize the anticipated benefits of the Misfits Transaction, including the possibility that the expected benefits from the Misfits Transaction will not be realized or will not be realized within the expected time period; the achievement of the revenue milestones and payment of the Misfits Earnout Consideration; the outcome of any legal or governmental proceedings related to the Misfits Transaction or otherwise; the negative effects of the announcement of the Misfits Transaction on the market price of our common stock or on our operating results; significant Misfits Transaction costs; unknown liabilities; attracting new customers and maintaining and expanding our existing customer base; our ability to scale and update our platform to respond to customers’ needs and rapid technological change; increased competition on our market and our ability to compete effectively; and expansion of our operations and increased adoption of our platform internationally.

Previous wording

Other. In connection with the closing of the Misfits Acquisition, pursuant to the terms of the applicable underlying common stock warrant agreements, the exercise price on certain of the common stock purchase warrants issued in connection with the October 2025 PIPE, representing the right to purchase an aggregate 2.7 million shares of common stock, was reset to the floor price, as defined in the underlying common stock purchase agreements, or $6.84 per share ($5.14 for placement agent warrants issued for the purchase of 71,000 shares of common stock), from $12.00 per share.

Current wording

In connection with the closing of the Misfits Transaction, pursuant to the terms of the applicable underlying common stock warrant agreements, the exercise price on certain of the common stock purchase warrants issued in connection with the October 2025 PIPE, representing the right to purchase an aggregate 2.7 million shares of common stock, was reset to the floor price, as defined in the underlying common stock purchase agreements, ranging from $4.99 to $6.84 per share, from $12.00 per share.

Previous wording

On January 5, 2026 (“Bounce Effective Date”) the Company acquired Let’s Bounce, Inc. (“Bounce”), a marketing technology company focused on enabling scalable, measurable brand engagement inside gaming and UGC environments. The total purchase price for Bounce, which was structured as an asset acquisition, was $200,000, payable as follows: (a) $75,000 at closing; (b) $25,000 on the three-month anniversary of closing; and (c) $100,000 on the six-month anniversary of closing. In addition, pursuant to the terms and subject to the conditions of the Bounce Asset Purchase Agreement, up to $325,000 is contingently payable in connection with the achievement of certain net revenue milestones for the Bounce assets acquired during the year ended December 31, 2026 (“Bounce Contingent Consideration”) (the “Bounce Acquisition”). The Bounce Acquisition provides the Company with an existing pipeline of opportunities, enabling more efficient in-game marketing programs, the addition of turnkey loyalty solutions to drive advertiser outcomes, and a roadmap to more automated campaign measurement. Refer to Note 4 for additional information.

Current wording

In January 2026 (“Bounce Effective Date”) the Company acquired Let’s Bounce, Inc. (“Bounce”), a marketing technology company focused on enabling scalable, measurable brand engagement inside gaming and UGC environments. The total purchase price for Bounce, which was structured as an asset acquisition, was $200,000, payable as follows: (a) $75,000 at closing; (b) $25,000 on the three-month anniversary of closing; and (c) $100,000 on the six-month anniversary of closing. In addition, pursuant to the terms and subject to the conditions of the asset purchase agreement (“Bounce Asset Purchase Agreement”), up to $325,000 is contingently payable in connection with the achievement of certain net revenue milestones for the Bounce assets acquired during the year ended December 31, 2026 (“Bounce Contingent Consideration”) (the “Bounce Acquisition”). The Bounce Acquisition provides the Company with an existing pipeline of opportunities, enabling more efficient in-game marketing programs, the addition of turnkey loyalty solutions to drive advertiser outcomes, and a roadmap to more automated campaign measurement. Refer to Note 4 for additional information.

Previous wording

In January 2026, the Company acquired economic and contractual interests in the Roblox digital property commonly referred to as “Hide or Die!,” (“HOD”) pursuant to an Investment and Brand Partnership Agreement (“HOD Agreement”) dated January 5, 2026 (“HOD Effective Date”). HOD is a Top 100 Roblox game (source: Rotrends) that has been visited more than 570 million times in 16 months. The investment reflects a transition from strategy to execution as the Company begins securing ownership positions in cash-generating assets within the gaming content and media economy, establishing a foundation for future digital-asset-based initiatives aligned with owned revenue streams.

Current wording

In January 2026, the Company acquired economic and contractual interests in the Roblox digital property commonly referred to as “Hide or OOF!,” (“HOO”) (formerly known as Hide or Die!) pursuant to an Investment and Brand Partnership Agreement (“HOO Agreement”) dated January 5, 2026 (“HOO Effective Date”). HOO is a Top 100 Roblox game (source: Rotrends) that has been visited more than 570 million times in 16 months. The investment reflects a transition from strategy to execution as the Company begins securing ownership positions in cash-generating assets within the gaming content and media economy, establishing a foundation for future digital-asset-based initiatives aligned with owned revenue streams.

Previous wording

Pursuant to the HOD Agreement, the Company transferred total consideration of $202,000 in exchange for certain rights associated with the Hide or Die! digital property. The consideration consisted of $165,000 in cash and 4,326 shares of the Company’s restricted common stock valued at $37,000. In connection with the investment, the Company obtained (i) a fifteen percent (15.0%) equity ownership interest in Hide or Die!, (ii) a contractual right to receive fifteen percent (15.0%) of Hide or Die!’s gross revenue, as paid in Robux, post-Roblox split, for the existence of the game, (iii) a contractual right to receive a twelve percent (12.0%) fee on certain direct brand transactions, and (iv) exclusive rights with respect to certain brand partnership opportunities and related placement economics. The agreement also contains a right of first refusal with respect to future sales of equity ownership interests and economic interests in the property.

Current wording

Pursuant to the HOO Agreement, the Company transferred total consideration of $202,000 in exchange for certain rights associated with the Hide or OOF! digital property. The consideration consisted of $165,000 in cash and 4,326 shares of the Company’s restricted common stock valued at $37,000. In connection with the investment, the Company obtained (i) a fifteen percent (15.0%) equity ownership interest in Hide or OOF!, (ii) a contractual right to receive fifteen percent (15.0%) of Hide or OOF!’s gross revenue, as paid in Robux, post-Roblox split, for the existence of the game, (iii) a contractual right to receive a twelve percent (12.0%) fee on certain direct brand transactions, and (iv) exclusive rights with respect to certain brand partnership opportunities and related placement economics. The agreement also contains a right of first refusal with respect to future sales of equity ownership interests and economic interests in the property.

Previous wording

Total operating expense for the three months ended March 31, 2026 increased $409,000, or 8% to $5.2 million, compared to $4.8 million in the comparable prior year quarter. Excluding noncash stock compensation expense, intangible asset amortization expense, mark to market related fair value adjustments, and other noncash charges (collectively, “noncash charges and credits”), totaling $1.7 million and $817,000, respectively, operating expense for the three months ended March 31, 2026 and 2025 was $3.6 million and $4.0 million, respectively, reflecting a $436,000, or 11% decrease compared to the prior year quarter, reflecting the impact of our ongoing focus on cost reductions and operating efficiencies. Net loss for the three months ended March 31, 2026, which includes the impact of net noncash charges and credits totaling $1.6 million, was $4.1 million or $(1.77) per share, compared to a net loss of $4.2 million, or $(119.79) per share, in the comparable prior year quarter. Excluding net noncash charges and credits, net loss for the three months ended March 31, 2026 was $2.4 million, compared to a net loss of $3.7 million in the comparable prior year quarter.

Current wording

Total operating expense for the three months ended June 30, 2026 increased $436,000, or 10% to $4.9 million, compared to $4.5 million in the comparable prior year quarter. Excluding noncash stock compensation expense, intangible asset amortization expense, mark to market related fair value adjustments, and other noncash charges (collectively, “noncash charges and credits”), totaling $2.0 million and $1.0 million, respectively, operating expense for the three months ended June 30, 2026 and 2025 was $2.9 million and $3.4 million, respectively, reflecting a $499,000, or 15% decrease compared to the prior year quarter, reflecting the impact of our ongoing focus on cost reductions and operating efficiencies. Net loss for the three months ended June 30, 2026, which includes the impact of net noncash charges and credits totaling $2.5 million, was $4.4 million or $(2.70) per share, compared to a net loss of $2.8 million, or $(54.24) per share, in the comparable prior year quarter. Excluding net noncash charges and credits, net loss for the three months ended June 30, 2026 was $1.8 million, compared to a net loss of $2.0 million in the comparable prior year quarter. The calculation of net loss per share for the three months ended June 30, 2026 included net noncash common stock dividend and deemed dividend related direct charges to accumulated deficit totaling ($575,000) as described at Note 6.

Previous wording

Revenue for the three months ended March 31, 2026 totaled $3.0 million, an increase of $285,000 or 10%, compared to $2.7 million for the comparable prior year quarter. Cost of revenue for the three months ended March 31, 2026 increased $427,000, or 28% to $1.9 million, compared to $1.5 million in the comparable prior year quarter, driven primarily by the 10% increase in quarterly revenues for the same periods. As a percentage of revenue, gross profit for the three months ended March 31, 2026 was 36%, compared to 44% for the comparable prior year quarter.

Current wording

Revenue for the six months ended June 30, 2026 totaled $6.0 million, an increase of $293,000 or 5%, compared to $5.7 million for the comparable prior year period. Cost of revenue for the six months ended June 30, 2026 increased $477,000, or 15% to $3.7 million, compared to $3.2 million in the comparable prior year period, driven partially by the 5% increase in revenues for the same periods. As a percentage of revenue, gross profit for the six months ended June 30, 2026 was 39%, compared to 44% for the comparable prior year period.

Previous wording

The following table sets forth a summary of our results of operations for the three months ended March 31, 2026 and 2025 (dollars in thousands) (Unaudited):

Current wording

The following table sets forth a summary of our results of operations for the three and six months ended June 30, 2026 and 2025 (dollars in thousands) (Unaudited):

Previous wording

Comparison of the Results of Operations for the Three Months Ended March 31, 2026 and 2025

Current wording

Comparison of the Results of Operations for the Three and Six Months Ended June 30, 2026 and 2025

Previous wording

Refer to the table summarizing our results of operations for the three months ended March 31, 2026 and 2025 above.

Current wording

Refer to the table summarizing our results of operations for the three and six months ended June 30, 2026 and 2025 above.

Previous wording

The increase in noncash stock compensation expense was primarily due to shareholder approval of the 2025 Omnibus Stock Incentive Plan in June 2025, and shareholder approval of the increase in the number of shares authorized for issuance under the 2025 Plan to 580,667 shares in October 2025. Prior to June and October 2025, the Company granted minimal equity awards due to a lack of availability of authorized shares under the prior 2014 Stock Incentive Plan. As a result of the increase in the available authorized shares for issuance, in June, November and December 2025 the Company’s Board issued an aggregate of 529,000 equity incentive awards to employees and contractors under the 2025 Plan, as part of Board approved equity incentive programs, with in general, two year vesting periods and a weighted average grant date fair value of $10.98, resulting in an increase in noncash stock compensation expense in the first quarter of 2026, compared to the prior year comparable quarter.

Current wording

The increase in noncash stock compensation expense for the periods presented was primarily due to shareholder approval of the 2025 Omnibus Stock Incentive Plan in June 2025, and shareholder approval of the increase in the number of shares authorized for issuance under the 2025 Plan to 580,667 shares in October 2025. Prior to June and October 2025, the Company granted minimal equity awards due to a lack of availability of authorized shares under the prior 2014 Stock Incentive Plan. As a result of the increase in the available authorized shares for issuance, in June, November and December 2025 the Company’s Board issued an aggregate of 529,000 equity incentive awards to employees and contractors under the 2025 Plan, as part of Board approved equity incentive programs, with in general, two year vesting periods and a weighted average grant date fair value of $10.98, resulting in an increase in noncash stock compensation expense in the three and six months ended June 30, 2026, compared to the prior year comparable periods.

Previous wording

Selling, marketing and advertising expense increased $401,000, or 17%. The change was primarily due to a $910,000 reduction in selling, marketing and advertising personnel costs reflecting the impact of fiscal year 2025 headcount reductions in connection with ongoing cost reduction and optimization activities. The decrease was partially offset by a $308,000 increase in noncash stock compensation expense in connection with fiscal year 2025 equity incentive award grants as described above, and a $180,000 reduction in selling, marketing and advertising personnel costs allocated to cost of revenue due to an increase in the mix of revenue generating programs utilizing external resources.

Current wording

Selling, marketing and advertising expense decreased $771,000, or 17%. The change was primarily due to a $1.3 million reduction in selling, marketing and advertising personnel costs reflecting the impact of fiscal year 2025 headcount reductions in connection with ongoing cost reduction and optimization activities, and an $139,000 decrease in amortization related to sale of our Mineville digital assets in May 2025 and the fourth quarter 2025 write down of advertiser and agency related intangibles acquired in connection with the fiscal year 2021 acquisition of Mobcrush. The decrease was partially offset by a $507,000 increase in noncash stock compensation expense in connection with fiscal year 2025 equity incentive award grants, as described above, and a $243,000 reduction in selling, marketing and advertising personnel costs allocated to cost of revenue due to an increase in the mix of revenue generating programs utilizing external resources.

Previous wording

Engineering, technology and development expense decreased $261,000, or 28%, driven primarily by the following:

Current wording

Engineering, technology and development expense increased $520,000, or 75%, driven primarily by the following:

Previous wording

The September 2024 Series AAA Junior Investor Warrants do not meet the requirements for equity classification, and therefore, the fair value of the September 2024 Series AAA Junior Investor Warrants are recorded as a liability on the balance sheet and re-valued at each reporting date, with changes in the fair value reported in the statements of comprehensive income (loss). The change in fair value for the September 2024 Series AAA Junior Investor Warrants for the three months ended March 31, 2026 and 2025 totaled $0 and $(270,000), respectively.

Current wording

The fair value of the September 2024 Series AAA Junior Investor Warrants are recorded as a liability on the balance sheet and re-valued at each reporting date, with changes in the fair value reported in the statements of comprehensive income (loss). The change in fair value for the September 2024 Series AAA Junior Investor Warrants for the three and six months ended June 30, 2026 totaled $0 and $0, respectively. The change in fair value for the September 2024 Series AAA Junior Investor Warrants for the three and six months ended June 30, 2025 totaled ($58,000) and $(328,000), respectively.

Previous wording

The Placement Agent Warrants issued in connection with the Series A Preferred Stock, Series AA Preferred Stock and Series AAA Preferred Stock (including the Exchange) are not eligible for the scope exception under ASC 815, and therefore, the fair value of the Placement Agent Warrants are recorded as a liability on the balance sheet and re-valued at each reporting date, with changes in the fair value reported in the statements of comprehensive income (loss). The change in fair value for the Placement Agent Warrants for the three months ended March 31, 2026 and 2025 totaled $(4,000) and $(447,000), respectively.

Current wording

The fair value of the Placement Agent Warrants are recorded as a liability on the balance sheet and re-valued at each reporting date, with changes in the fair value reported in the statements of comprehensive income (loss). The change in fair value for the Placement Agent Warrants for the three and six months ended June 30, 2026 totaled $0 and $(4,000), respectively. The change in fair value for the Placement Agent Warrants for the three and six months ended June 30, 2025 totaled $(86,000) and $(533,000), respectively.

Previous wording

Interest expense for the periods presented was comprised of the following (Unaudited):

Current wording

Interest expense, including change in fair value of promissory notes carried at fair value, primarily reflects the change in fair value of debt accounted for under the fair value option (“FVO”) as described at Note 2. Interest expense for the periods presented was comprised of the following (Unaudited):

Previous wording

The Company paid debt issuance costs totaling $132,000 in connection with the issuance of the Agile II Note and Diagonal Note, as described at Note 5, which is included in “Other” in Other Income and expense in the condensed statements of comprehensive income (loss) for the three months ended March 31, 2025.

Current wording

The Company paid debt issuance costs totaling $7,000 and $139,000 for the three and six months ended June 30, 2025 in connection with the issuance of the Agile II Note and the Diagonal I & II Notes, as described at Note 5, which is included in “Other” in Other Income and expense in the condensed statements of comprehensive income (loss) for the three and six months ended June 30, 2025.

Previous wording

Cash and cash equivalents totaled $4.2 million and $14.4 million at March 31, 2026 and December 31, 2025, respectively. As of March 31, 2026 and December 31, 2025, short term investments, which were comprised of direct investments in highly liquid, AA and A-1+ rated, U.S. government securities with a weighted average maturity of three years, totaled $7,124,000 and $0, respectively. The change in cash and cash equivalents for the periods presented reflects the impact of operating, investing and financing cash flow related activities as described below.

Current wording

Cash and cash equivalents totaled $1.1 million and $14.4 million at June 30, 2026 and December 31, 2025, respectively. As of June 30, 2026 and December 31, 2025, short term investments, which were comprised of direct investments in highly liquid, AA and A-1+ rated, U.S. government securities with a weighted average maturity of three years, totaled $5.5 million and $0, respectively. The change in cash and cash equivalents for the periods presented reflects the impact of operating, investing and financing cash flow related activities as described below.

Previous wording

Cash Flows for the Three Months Ended March 31, 2026 and 2025

Current wording

Cash Flows for the Six Months Ended June 30, 2026 and 2025

Previous wording

The following table summarizes the change in cash balances for the periods presented (dollars in thousands) (Unaudited):

Current wording

The following table summarizes the change in cash and cash equivalents balances for the periods presented (dollars in thousands) (Unaudited):

Previous wording

Net cash used in operating activities during the three months ended March 31, 2026, primarily reflected our GAAP net loss, net of adjustments to reconcile net GAAP loss to net cash used in operating activities, which included noncash stock compensation charges of $1,115,000, depreciation and amortization charges of $547,000, change in fair value of warrant liabilities of ($4,000), amortization/accretion of premium/discount on marketable securities of ($11,000), and net changes in working capital of ($119,000). Changes in working capital primarily reflected the impact of the management and settlement of receivables and payables in the ordinary course.

Current wording

Net cash used in operating activities during the six months ended June 30, 2026, primarily reflected our GAAP net loss, net of adjustments to reconcile net GAAP loss to net cash used in operating activities, which included noncash stock compensation charges of $2.1 million, depreciation and amortization charges of $1.5 million, change in fair value of warrant liabilities of ($4,000), amortization/accretion of premium/discount on marketable securities of ($21,000), the noncash write off of deferred financing costs of $600,000, and net changes in working capital of ($476,000). Changes in working capital primarily reflected the impact of the management and settlement of receivables and payables in the ordinary course.

Previous wording

Net cash used in operating activities during the three months ended March 31, 2025, primarily reflected our GAAP net loss, net of adjustments to reconcile net GAAP loss to net cash used in operating activities, which included noncash stock compensation charges of $284,000, depreciation and amortization charges of $547,000, net changes in fair value of certain liabilities of ($281,000) and net changes in working capital of 1,720,000. Changes in working capital primarily reflected the impact of the management and settlement of receivables and payables in the ordinary course.

Current wording

Net cash used in operating activities during the six months ended June 30, 2025, primarily reflected our GAAP net loss, net of adjustments to reconcile net GAAP loss to net cash used in operating activities, which included noncash stock compensation charges of $759,000, depreciation and amortization charges of $1.1 million, net changes in fair value of certain liabilities of ($560,000), noncash gain on sale of Minehut assets of ($152,000) and net changes in working capital of $1.9 million. Changes in working capital primarily reflected the impact of the management and settlement of receivables and payables in the ordinary course.

Previous wording

Misfits Acquisition Consideration. * At the Misfits Closing, the Company paid the following consideration for the Misfits Purchased Assets: (i) a cash payment in the amount of $1.5 million (the “Misfits Closing Cash Consideration”), (ii) 26,768 shares of common stock (the “Misfits Closing Shares”), (iii) a pre-funded common stock purchase warrant to purchase 509,682 shares of common stock (the “Misfits Pre-Funded Warrant,” and the shares issuable upon exercise of the Misfits Pre-Funded Warrant, the “Misfits PFW Shares”), and (iv) a common stock purchase warrant to purchase 536,450 shares of common stock, with an exercise price of $18.00 (the “MisfitsWarrant*”, and the shares issuable upon exercise of the Misfits Warrant, the “Misfits Warrant Shares”)(the Misfits Closing Shares, the Misfits PFW Shares, and the Misfits Warrant Shares collectively, the “Misfits Closing Share Consideration”). Pursuant to the terms and subject to the conditions of the Misfits Purchase Agreement, on the one-year anniversary of the Misfits Closing, the Company will pay an additional cash payment in the amount of $300,000 (the “Delayed Cash Payment”).

Current wording

At the Misfits Closing, the Company paid the following consideration for the Misfits Purchased Assets: (i) a cash payment in the amount of $1.5 million (the “Misfits Closing Cash Consideration”), (ii) 26,768 shares of common stock (the “Misfits Closing Shares”), (iii) a pre-funded common stock purchase warrant to purchase 509,682 shares of common stock (the “Misfits Pre-Funded Warrant,” and the shares issuable upon exercise of the Misfits Pre-Funded Warrant, the “Misfits PFW Shares”), and (iv) a common stock purchase warrant to purchase 536,450 shares of common stock, with an exercise price of $18.00 (the “MisfitsWarrant”, and the shares issuable upon exercise of the Misfits Warrant, the “Misfits Warrant Shares”)(the Misfits Closing Shares, the Misfits PFW Shares, and the Misfits Warrant Shares collectively, the “Misfits Closing Share Consideration”). Pursuant to the terms and subject to the conditions of the Misfits Purchase Agreement, on the one-year anniversary of the Misfits Closing, the Company will pay an additional cash payment in the amount of $300,000 (the “Delayed Cash Payment”).

Previous wording

In January 2026 the Company acquired Let’s Bounce, Inc. (“Bounce”), a marketing technology company focused on enabling scalable, measurable brand engagement inside gaming and UGC environments. The total purchase price for Bounce, which was structured as an asset acquisition, was $200,000, payable as follows: (a) $75,000 at closing; (b) $25,000 on the three-month anniversary of closing; and (c) $100,000 on the six-month anniversary of closing. In addition, pursuant to the terms and subject to the conditions of the Bounce Asset Purchase Agreement, up to $325,000 is contingently payable in connection with the achievement of certain net revenue milestones for the Bounce assets acquired during the year ended December 31, 2026. The Bounce acquisition provides the Company with an existing pipeline of opportunities, enabling more efficient in-game marketing programs, the addition of turnkey loyalty solutions to drive advertiser outcomes, and a roadmap to more automated campaign measurement. Refer to Note 4 for additional information.

Current wording

On the Bounce Effective Date, the Company acquired Bounce, a marketing technology company focused on enabling scalable, measurable brand engagement inside gaming and UGC environments. The total purchase price for Bounce, which was structured as an asset acquisition, was $200,000, payable as follows: (a) $75,000 at closing; (b) $25,000 on the three-month anniversary of closing; and (c) $100,000 on the six-month anniversary of closing. In addition, pursuant to the terms and subject to the conditions of the Bounce Asset Purchase Agreement, up to $325,000 is contingently payable in connection with the achievement of certain net revenue milestones for the Bounce assets acquired during the year ended December 31, 2026. The Bounce Acquisition provides the Company with an existing pipeline of opportunities, enabling more efficient in-game marketing programs, the addition of turnkey loyalty solutions to drive advertiser outcomes, and a roadmap to more automated campaign measurement. Refer to Note 4 for additional information.

Previous wording

In January 2026, the Company acquired economic and contractual interests in the Roblox digital property commonly referred to as “Hide or Die!,” (“HOD”) pursuant to an Investment and Brand Partnership Agreement (“HOD Agreement”) dated January 5, 2026.

Current wording

In January 2026, the Company acquired economic and contractual interests in the Roblox digital property HOO (formerly known as Hide or Die!) pursuant to the HOO Agreement.

Previous wording

Pursuant to the HOD Agreement, the Company transferred total consideration of $202,000 in exchange for certain rights associated with the Hide or Die! digital property. The consideration consisted of $165,000 in cash and 4,326 shares of the Company’s restricted common stock valued at $37,000. In connection with the investment, the Company obtained (i) a fifteen percent (15.0%) equity ownership interest in Hide or Die!, (ii) a contractual right to receive fifteen percent (15.0%) of Hide or Die!’s gross revenue, as paid in Robux post-Roblox split, for the existence of the game, (iii) a contractual right to receive a twelve percent (12.0%) fee on certain direct brand transactions, and (iv) exclusive rights with respect to certain brand partnership opportunities and related placement economics. The agreement also contains a right of first refusal with respect to future sales of equity ownership interests and economic interests in the property. Management evaluated these rights to determine which elements represent distinct assets and how the total consideration should be allocated to the assets acquired. The Company utilized the relative fair value method to allocate total consideration to the identifiable elements based on their relative standalone fair values as of the HOD Effective Date. Refer to Note 4 for additional information.

Current wording

Pursuant to the HOO Agreement, the Company transferred total consideration of $202,000 in exchange for certain rights associated with the Hide or OOF! digital property. The consideration consisted of $165,000 in cash and 4,326 shares of the Company’s restricted common stock valued at $37,000. In connection with the investment, the Company obtained (i) a fifteen percent (15.0%) equity ownership interest in Hide or OOF!, (ii) a contractual right to receive fifteen percent (15.0%) of Hide or OOF!’s gross revenue, as paid in Robux post-Roblox split, for the existence of the game, (iii) a contractual right to receive a twelve percent (12.0%) fee on certain direct brand transactions, and (iv) exclusive rights with respect to certain brand partnership opportunities and related placement economics. The agreement also contains a right of first refusal with respect to future sales of equity ownership interests and economic interests in the property. Management evaluated these rights to determine which elements represent distinct assets and how the total consideration should be allocated to the assets acquired. The Company utilized the relative fair value method to allocate total consideration to the identifiable elements based on their relative standalone fair values as of the HOO Effective Date. Refer to Note 4 for additional information.

Previous wording

In January 2026, the Company invested $200,000 in Solsten, Inc (“Solsten”) an AI-driven audience intelligence company specializing in psychology-based consumer insights, through a Simple Agreement for Future Equity (“SAFE”), which provides the Company with the right to receive equity in a future financing event, subject to the terms and conditions of the SAFE agreement. The SAFE does not represent a current equity ownership interest but rather a forward contract to acquire equity upon the occurrence of specified events, including a qualifying equity financing or liquidity event, at which point the instrument will either convert into preferred stock or entitle the Company to receive the greater of its invested amount or the value of the underlying equity on an as-converted basis. The investment is included in other noncurrent assets in the accompanying balance sheets. Refer to Note 4 for additional information.

Current wording

In January 2026, the Company invested $200,000 in Solsten, an AI-driven audience intelligence company specializing in psychology-based consumer insights, through a SAFE, which provides the Company with the right to receive equity in a future financing event, subject to the terms and conditions of the SAFE agreement. The SAFE does not represent a current equity ownership interest but rather a forward contract to acquire equity upon the occurrence of specified events, including a qualifying equity financing or liquidity event, at which point the instrument will either convert into preferred stock or entitle the Company to receive the greater of its invested amount or the value of the underlying equity on an as-converted basis. The investment is included in other noncurrent assets in the accompanying balance sheets. Refer to Note 4 for additional information.

Previous wording

On February 10, 2025 (the “Agile II Effective Date”), the Company entered into a Business Loan and Security Agreement (the “Agile II Loan Agreement”), with Agile Capital Funding, LLC as collateral agent (“Collateral Agent”), and Agile Lending, LLC (collectively, “Agile”), pursuant to which the Company issued to Agile a Confessed Judgment Secured Promissory Note for an aggregate value of $2.5 million (the “Agile II Note”). Pursuant to the Agile II Loan Agreement, (i) the Agile II Note matures 32 weeks from the Agile II Effective Date; (ii) carried an aggregate total interest payment of approximately $1.05 million, and (iii) immediately upon the occurrence and during the continuance of an Event of Default (as defined in the Agile II Loan Agreement), interest would accrue at a fixed per annum rate equal to the applicable rate plus five percent, or 42%. The Company was required to repay all the obligations due under the Agile II Loan Agreement and the Agile II Note in 32 equal payments of $110,937, with the first payment being made to Agile on February 17, 2025, and every seven days thereafter until the maturity date. The proceeds received from the Agile II Note will be used to fund general working capital needs.

Current wording

On February 10, 2025 (the “Agile II Effective Date”), the Company entered into a Business Loan and Security Agreement (the “Agile II Loan Agreement”), with Agile Capital Funding, LLC as collateral agent (“Collateral Agent”), and, pursuant to which the Company issued to Agile a Confessed Judgment Secured Promissory Note for an aggregate value of $2.5 million (the “Agile II Note”). Pursuant to the Agile II Loan Agreement, (i) the Agile II Note matures 32 weeks from the Agile II Effective Date; (ii) carried an aggregate total interest payment of approximately $1.05 million, and (iii) immediately upon the occurrence and during the continuance of an Event of Default (as defined in the Agile II Loan Agreement), interest would accrue at a fixed per annum rate equal to the applicable rate plus five percent, or 42%. The Company was required to repay all the obligations due under the Agile II Loan Agreement and the Agile II Note in 32 equal payments of $110,937, with the first payment being made to Agile on February 17, 2025, and every seven days thereafter until the maturity date. The proceeds received from the Agile II Note will be used to fund general working capital needs.

Previous wording

In connection with entering into the Agile II Loan Agreement, the Company was required to pay an administrative fee of $125,000 to the Collateral Agent, which was paid at the closing out of proceeds of the issuance of the Agile II Note and expensed in “other income (expense)” in the statements of comprehensive income (loss) for the three months ended March 31, 2025. $1.5 million of the Agile II Note was used to repay the remaining balance of principal and interest under the Agile I Note, with net proceeds to the Company of approximately $875,000.

Current wording

In connection with entering into the Agile II Loan Agreement, the Company was required to pay an administrative fee of $125,000 to the Collateral Agent, which was paid at the closing out of proceeds of the issuance of the Agile II Note and expensed in “other income (expense)” in the statements of comprehensive income (loss) for the six months ended June 30, 2025. $1.5 million of the Agile II Note was used to repay the remaining balance of principal and interest under the Agile I Note, with net proceeds to the Company of approximately $875,000.

Previous wording

On March 26, 2025 (the “Diagonal Effective Date”), the Company and 1800 Diagonal Lending, LLC, a Virginia limited liability company, or registered assignees (“Diagonal”) entered into a Securities Purchase Agreement (the “Diagonal Agreement”), pursuant to which the Company issued a Convertible Promissory Note (the “Diagonal Note”) in the principal amount of $300,000 (the “Diagonal Principal”), for which the Diagonal Note, among other things, (a) matured on December 30, 2025 (unless otherwise accelerated upon an Event of Default (as defined below)) (the “Diagonal Maturity Date”), (b) accrued interest at a rate of 10% per annum on the unpaid principal balance from the date the Diagonal Note was issued (the “Diagonal Issuance Date”) until the principal and interest became due and payable, whether on the Maturity Date or upon acceleration by prepayment or otherwise, (c) began to accrue interest on the Diagonal Issuance Date but would not be payable until the Diagonal Note became payable, and (d) interest accrued at a rate of 22% per annum for any amount of principal or interest which was not paid as required under the Diagonal Note, or during an Event of Default.

Current wording

On March 26, 2025 (the “Diagonal Effective Date”), the Company and 1800 Diagonal Lending, LLC, a Virginia limited liability company, or registered assignees entered into a Securities Purchase Agreement, pursuant to which the Company issued a Convertible Promissory Note in the principal amount of $300,000, for which the Diagonal Note, among other things, (a) matured on December 30, 2025 (unless otherwise accelerated upon an Event of Default (as defined below)) (the “Diagonal Maturity Date”), (b) accrued interest at a rate of 10% per annum on the unpaid principal balance from the date the Diagonal Note was issued (the “Diagonal Issuance Date”) until the principal and interest became due and payable, whether on the Maturity Date or upon acceleration by prepayment or otherwise, (c) began to accrue interest on the Diagonal Issuance Date but would not be payable until the Diagonal Note became payable, and (d) interest accrued at a rate of 22% per annum for any amount of principal or interest which was not paid as required under the Diagonal Note, or during an Event of Default.