Golden Matrix Group, Inc.

Consolidated Balance Sheets

Golden Matrix Group, Inc and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income

Consolidated Statement of Shareholders’ Equity

For the Six Months Ended June 30, 202****5

For the Three Months Ended June 30, 2025

For the Six Months Ended June 30, 2024

For the Three Months Ended June 30, 2024

Consolidated Statements of Cash Flow

Notes to the Consolidated Financial Statements

NOTE 1 - BASIS OF PRESENTATION AND ACCOUNTING POLICIES

Organization and Operations

Golden Matrix Group, Inc. (together with its consolidated subsidiaries, collectively, “GMGI” “we”, “our”, “us”, or the “Company”) is incorporated and registered in the State of Nevada, (i) operates online sports betting, online casino, and gaming operations in more than 15 jurisdictions across Europe, Africa and Central and South America, (ii) is an innovative provider of enterprise Software-as-a-Service (“SaaS”) solutions for online casino operators and online sports betting operators, commonly referred to as iGaming operators, and (iii) offers pay-to-enter prize competitions in the United Kingdom (UK) and leads trade promotions in Australia, providing members with free prizes.

The Company is a well-established brand and operator in the sports betting and gaming industry, spanning across over 15 markets in Europe, Central and South America, and Africa. The Company employs approximately 1,200 personnel, operating both online (mobile and web) and approximately 700 company-owned or franchised betting shops, with a primary focus (in those shops) on sports betting, online casino games, and virtual games. Of those 700 shops, approximately 250 are owned by the Company’s subsidiaries and approximately 450 shops are owned by franchisees. This is complemented by a variety of slot machines and online casinos, eSports, fixed odds games, and other entertainment options, contingent on the regulatory parameters of the specific jurisdictions. While sports betting is a primary focus, the Company’s online casino revenue has grown significantly over the past years. Following the closing of the Meridian Purchase (defined below) and effective April 1, 2024, the Company, through Golden Matrix (defined below), develops and owns online gaming intellectual property (IP) and builds configurable and scalable, turn-key, and white-label gaming platforms for international customers, located primarily in the Asia Pacific region. As part of the Meridian Purchase, the Company acquired a proprietary Internet gaming enterprise software system that provides for unique casino and live game operations on the platforms that include GM-X System (“GM-X”) and GM-Ag System, Turnkey Solution and White Label Solutions. These platforms are provided to Asia Pacific Internet-based and land-based casino operators as a turnkey technology solution for regulated real money Internet gaming (“RMiG”), Internet sports gaming, and virtual simulated gaming (“SIM”). In addition, following the Meridian Purchase, the Company broadened its operations in pay-to-enter prize competitions in the UK.

On April 9, 2024, GMGI completed the acquisition (the “Meridian Purchase”) of 100% of Meridian Serbia, MeridianBet Montenegro, Meridian Gaming Holdings Ltd., and Meridian Gaming (Cy) Ltd, (collectively, “MeridianBet Group”), from Aleksandar Milovanović, Zoran Milošević and Snežana Božović (collectively, the “Meridian Sellers”). The Meridian Purchase was completed pursuant to the terms of that certain Amended and Restated Sale and Meridian Purchase Agreement of Share Capital dated June 27, 2023, entered into between Golden Matrix and the Meridian Sellers (as amended from time to time, the “Meridian Purchase Agreement”), effective for all purposes as of April 1, 2024. References to “Golden Matrix” refer to the Company prior to the Meridian Purchase.

In connection with the Meridian Purchase, on April 9, 2024, the Company (A) issued 82,141,857 restricted shares of the Company’s common stock to the Meridian Sellers (the “Closing Shares”) and 1,000 shares of the Company’s Series C Preferred Stock (the “Series C Preferred Stock”); (B) paid the Meridian Sellers $12 million in cash; and (C) issued the Meridian Sellers $15 million in Promissory Notes (the “Notes”), payable $13,125,000 to Aleksandar Milovanović, $1,250,000 to Zoran Milošević and $625,000 to Snežana Božović.

The Meridian Purchase Agreement is described in greater detail below under “NOTE 22 – MERIDIANBET GROUP PURCHASE AGREEMENT”.

On August 16, 2024, the Company entered into a Share Exchange Agreement to acquire an 80% ownership interest in Classics Holdings Co. Pty Ltd., an Australian proprietary limited company (“Classics Holdings”). Classics Holdings, through its wholly-owned subsidiary, Classics For A Cause Pty Ltd (“Classics for a Cause”), is an independent online trade promotions company, located in Australia, which operates a well-established business-to-consumer (B2C) platform that offers paid members access to a wide range of discounts from retailers across Australia. Classics for a Cause rewards its members with free entries into promotional giveaways, which feature luxury and classic motor vehicles, exotic motor vehicles, caravans, jet skis, boats, and exclusive holiday experiences. On August 21, 2024, the Company closed the transactions contemplated by the Share Exchange Agreement, which was effective on August 1, 2024.

Change of Control

As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission (the “SEC”) on March 24, 2025 (the “2024 Annual Report”), a change of control occurred upon the closing of the Meridian Purchase Agreement on April 9, 2024. As a result, the Meridian Sellers, including Aleksandar Milovanović, Zoran Milošević, and Snežana Božović, collectively acquired majority voting control of the Company.

For a full description of the equity issued, the resulting changes in beneficial ownership, and voting rights following the closing, please refer to “Note 1 – Basis of Presentation and Accounting Policies” to the consolidated financial statements in our 2024 Annual Report.

Interim Financial Statements

These unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the consolidated financial statements do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These consolidated financial statements should be read in conjunction with the financial statements for the fiscal year ended December 31, 2024, and notes thereto, which are included in the 2024 Annual Report.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and its majority-owned subsidiaries. Intercompany balances and transactions have been eliminated.

The Company accounts for business combinations using the acquisition method of accounting in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 805, “Business Combinations”. Identifiable assets acquired, and liabilities assumed, in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. Any adjustments to the purchase price allocation are made during the measurement period, not exceeding one year from the acquisition date, in accordance with ASC 805. The Company recognizes any non-controlling interest in the acquired subsidiary at fair value. The excess of the purchase price and the fair value of non-controlling interest in the acquired subsidiary over the fair value of the identifiable net assets of the subsidiary is recognized as goodwill. Identifiable assets with finite lives are amortized over their useful lives. Acquisition-related costs are expensed as incurred.

There have been no material changes to the Company’s subsidiaries during the six months ended June 30, 2025. For a discussion of the Company’s subsidiaries, refer to the Company’s subsidiary disclosures set forth in Part I, Item 1, “Business” of the 2024 Annual Report.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include contingent liability, stock-based compensation, warrant valuation, accrued expenses and collectability of accounts receivable. The Company evaluates its estimates on an on-going basis and bases its estimates on historical experience and on various other assumptions the Company believes to be reasonable. Due to inherent uncertainties, actual results could differ from those estimates.

Fair Value of Financial Instruments

The Company has adopted the provisions of ASC Topic 820, “Fair Value Measurements”, which defines fair value, establishes a framework for measuring fair value in US GAAP, and expands disclosures about fair value measurements. ASC 820 does not require any new fair value measurements, but it does provide guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. The fair value hierarchy distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs).

The hierarchy consists of three levels:

The Company uses Level 3 inputs for its valuation methodology for its assets and liabilities.

Financial instruments consist principally of cash, accounts receivable, prepaid expenses, intangible assets, accounts payable, accrued liabilities, and customer deposits. The carrying amounts of such financial instruments in the accompanying balance sheets approximate their fair values due to their relatively short-term nature. It is management’s opinion that the Company is not exposed to any significant currency or credit risks arising from these financial instruments.

Foreign Currency Translation and Transactions

The functional currency of our foreign operations is generally the local currency. For these foreign entities, we translate their financial statements into U.S. dollars using average exchange rates for the period for income statement amounts and using end-of-period exchange rates for assets and liabilities. We record these translation adjustments in accumulated other comprehensive income (loss), a separate component of equity, in our consolidated balance sheets. During the three months ended June 30, 2025, and 2024, the Company had foreign currency translation adjustments of $4,198,530 and $(301,263), respectively. During the six months ended June 30, 2025, and 2024, the Company had foreign currency translation adjustments of $5,569,578 and $(2,105,943), respectively.

We record exchange gains and losses resulting from the conversion of transaction currency to functional currency as a component of other income (expense). The Company incurred foreign exchange gains and (losses) of $(63,455) and $(131,458) during the three months ended June 30, 2025, and 2024, respectively, and $370,213 and $(118,521) during the six months ended June 30, 2025 and 2024, respectively.

Cash

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company currently has no cash equivalents at June 30, 2025 and December 31, 2024.

Allowance for Doubtful Accounts

The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on known troubled accounts, historical experience, and other currently available evidence. As of June 30, 2025, and December 31, 2024, the allowance for doubtful accounts was $1,011,841 and $994,329, respectively. During the three months ended June 30, 2025, and 2024, there was $95,721 and $62,063, respectively, of bad debt expense recorded. During the six months ended June 30, 2025, and 2024, there was $168,929 and $86,786, respectively, of bad debt expense recorded.

Intangible Assets

Intangible assets are capitalized when a future benefit is determined. Intangible assets are amortized over the anticipated useful life of the intangible asset.

Software Development Costs

The Company capitalizes internal software development costs subsequent to establishing technological feasibility of a software application in accordance with guidelines established by ASC 985-20-25 “Costs of Software to Be Sold, Leased, or Marketed”, requiring certain software development costs to be capitalized upon the establishment of technological feasibility. The establishment of technological feasibility and the ongoing assessment of the recoverability of these costs require considerable judgment by management with respect to certain external factors such as anticipated future revenue, estimated economic life, and changes in software and hardware technologies. Amortization of the capitalized software development costs begins when the product is available for general release to customers. Capitalized costs are amortized based on the straight-line method over the remaining estimated economic life of the product.

Other intangible assets

Other intangible assets, including customer relationships, patents, and trademarks, that are acquired by the Company and have finite useful lives, are at a cost less accumulated amortization and any accumulated impairment losses. Costs incurred after the asset is placed in service are recognized in the income statement as incurred.

Impairment of Intangible Assets

In accordance with ASC 350-30-65 “Goodwill and Other Intangible Assets”, the Company assesses the impairment of identifiable intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers important, which could trigger an impairment review include the following:

When the Company determines that the carrying value of an intangible asset may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent to the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows. Intangible assets that have finite useful lives are amortized over their useful lives. The Company incurred amortization expenses of $2,465,380 and $1,913,047 during the three months ended June 30, 2025, and 2024, respectively, and $4,618,020 and $2,355,366 during the six months ended June 30, 2025 and 2024, respectively.

Goodwill

Goodwill is tested for impairment at the reporting unit level. In accordance with ASC Topic 350 Intangibles - Goodwill and Other (“ASC 350”), our business is classified into two reporting units: Golden Matrix and MeridianBet Group. Prior to April 1, 2024, the Company had one reporting unit to which goodwill was allocated. We review and evaluate our goodwill for potential impairment at a minimum annually, or more frequently if circumstances indicate that impairment is possible.

In testing goodwill for impairment, we have the option to begin with a qualitative assessment, commonly referred to as “Step 0”, to determine whether it is more likely than not that the fair value of a reporting unit containing goodwill is less than its carrying value. This qualitative assessment may include, but is not limited to, reviewing factors such as macroeconomic conditions, industry and market considerations, cost factors, entity-specific financial performance and other events, including changes in our management, strategy and primary user base. If we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then perform a quantitative goodwill impairment analysis by comparing the carrying amount to the fair value of the reporting unit. In estimating the fair value of the reporting unit, we may use key assumptions such as revenue growth rates, gross margin, and estimated costs for future periods and well as peer group market valuation multiples and discount rates. If the carrying amount exceeds the fair value, goodwill will be written down to the fair value and recorded as impairment expense in the consolidated statements of operations. We perform our impairment testing annually and when circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. We performed our annual impairment assessment of goodwill as of December 31, 2024, and concluded that goodwill was not impaired as the fair value of our reporting unit is in excess of our carrying value.

The changes in the carrying value of goodwill were as follows:

Inventories

Prizes

RKings and Classics for a Cause purchase prizes to be awarded to winners of prize competitions and giveaways; these prizes are recorded as inventory. Inventory is stated at the lower of cost or net realizable value, using the specific identification method. Costs include expenditures incurred in the normal course of business in bringing stocks to their present location and condition. Full provision is made for obsolete and slow-moving items. Net realizable value comprises actual or estimated selling price (net of discounts) less all costs to complete and costs incurred in marketing and selling of the prize inventory. The inventory of prizes was $4,635,605 and $3,812,659 at June 30, 2025 and December 31, 2024, respectively.

Retail Bar Goods

The Company’s inventory is composed of goods for retail bars. Inventory is stated at the lower of cost or net realizable value, using the first-in, first-out (“FIFO”) method. Costs include expenditures incurred in the normal course of business in bringing inventory to their present location and condition. Full provision is made for obsolete and slow-moving items. Net realizable value comprises actual or estimated selling price (net of discounts) less all costs to complete. Inventory of goods for retail bars was $125,878 and $125,195 at June 30, 2025, and December 31, 2024, respectively.

As of June 30, 2025, and December 31, 2024, total inventory was $4,761,483 and $3,937,854, respectively.

Property, Plant and Equipment

Plant and machinery, fixtures, fittings, and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed pursuant to the straight-line method over the useful life as follows:

The depreciable life of leasehold improvements is limited by the expected lease term. Those leases with an indefinite or undefined lease period are assigned a useful life of 5 years. Property, plant and equipment, net of depreciation, were $29,123,714 and $27,431,207, at June 30, 2025 and December 31, 2024, respectively.

Revenue Recognition

The Company recognizes revenue in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers. The Company’s revenue streams and related recognition policies are described in detail in Note 1 – Basis of Presentation and Accounting Policies – Revenue Recognition to the consolidated financial statements included in the Company’s 2024 Annual Report.

There have been no material changes to the Company’s revenue recognition policies or the nature of its performance obligations during the six months ended June 30, 2025.

Other Income

Other income is related to income from marketing services for third-party advertising in MeridianBet Group betting shops, sale of fixed assets, VAT refunds, income from compensation for damages, income from reduction of liabilities and other income that is not directly related to the Company’s core activity.

For the three months ended June 30, 2025, and 2024, other income amounted to $591,576 and $509,759, respectively.

For the six months ended June 30, 2025, and 2024, other income amounted to $1,097,079 and $1,002,909, respectively.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carry-forwards and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rules on deferred tax assets and liabilities is recognized in operations in the year of change. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.

The Company incurred current income tax expenses of $490,377 and $524,969 during the three months ended June 30, 2025, and 2024, respectively.

The Company incurred current income tax expenses of $154,324 and $806,666 during the six months ended June 30, 2025, and 2024, respectively, during the six months ended June 30, 2025, and 2024.

The Company accrued taxes payable of $3,644,543 and $3,774,418, each at June 30, 2025, and December 31, 2024, respectively.

The Company is subject to income taxes in various jurisdictions in which it operates. A summary of applicable statutory tax rates by jurisdiction is included in Note 20 – Income Taxes to the consolidated financial statements in the Company’s 2024 Annual Report.

There have been no material changes in statutory tax rates in the jurisdictions in which the Company operates during the six months ended June 30, 2025.

Earnings Per Common Share

Basic net earnings per share of common stock is computed by dividing net earnings available to common shareholders by the weighted-average number of common stock shares (Common Shares) outstanding during the period. Diluted net earnings per Common Share are determined using the weighted-average number of Common Shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

The dilutive effect of outstanding stock options and warrants is reflected in diluted earnings per share by application of the treasury stock method. The dilutive effect of outstanding convertible securities is reflected in diluted earnings per share by application of the if-converted method.

The following is a reconciliation of basic and diluted earnings per common share for the three months and six months ended June 30, 2025 and 2024:

Dividends

Dividends represent distributions made to the former owners of MeridianBet Group prior to the effective date of the Meridian Purchase Agreement (see “NOTE 22 - MERIDIANBET GROUP PURCHASE AGREEMENT” for details). No dividends were paid during the three months ended June 30, 2025 and 2024. For the six months ended June 30, 2025 and 2024, dividends paid amounted to $0 and $769,534, respectively.

The dividend distributions were paid in cash.

Treasury Stock

Treasury stock is carried at cost.

Stock-Based Compensation

The Stock-based compensation expense is recorded as a result of stock options, restricted stock units and restricted stock granted in return for services rendered. The share-based payment arrangements with employees were accounted for under Accounting Standards Update (ASU) 718, “Compensation - Stock Compensation”. In 2018, the FASB issued ASU 2018-07, which simplifies the accounting for share-based payments granted to non-employees for goods and services. Under the ASU, most of the guidance on such payments to non-employees would be aligned with the requirements for share-based payments granted to employees.

The expenses related to the stock-based compensation are recognized on each reporting date. The amount is calculated as the difference between total expenses incurred and the total expenses already recognized.

Stock-based compensation was $1,416,314 and $1,638,052 during the three months ended June 30, 2025 and 2024, respectively, and $2,456,639 and $1,638,052 during the six months ended June 30, 2025 and 2024, respectively.

Recent Issued Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, requiring public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis. The Company adopted ASU 2023-07 during the year ended December 31, 2024. See “NOTE 19 – SEGMENT REPORTING AND GEOGRAPHIC INFORMATION”, for further detail.

NOTE 2 – ACCOUNTS RECEIVABLE, NET

Accounts receivables are carried at their estimated collectible amounts. Trade accounts receivables are periodically evaluated for collectability based on past credit history with customers and their current financial condition.

Trade receivables are generated mostly from receivables from (i) resale of online gaming content, (ii) the franchise partners for business-to-business (B2B) services, (iii) Agents for unpaid retail revenue, and (iv) receivables from the payment providers.

Receivables related to resale of online gaming content and B2B services amount to $4,238,202 and $3,747,169 as of June 30, 2025, and December 31, 2024, respectively.

Receivables from payment providers in Bosnia amount to $1,577,677 and $1,517,840 as of June 30, 2025, and December 31, 2024, respectively. These receivables are settled regularly.

The Company has accounts receivable of $7,090,854 and $6,061,281 as of June 30, 2025, and December 31, 2024, respectively (net of allowance for bad debt of $1,011,841 and $994,329, respectively).

NOTE 3 – ACCOUNTS RECEIVABLE – RELATED PARTY

Accounts receivable from related party are carried at their estimated collectible amounts. Related party accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition. The Company has accounts receivable from several related parties including Top Level doo Serbia, Network System Development GMBH, Articulate Pty Ltd. (“Articulate”) and Elray Resources Inc. (“Elray”).

The accounts receivable from related parties amount to $556,789 and $666,545, as of June 30, 2025 and December 31, 2024, respectively.

NOTE 4 – TAXES RECEIVABLE

Taxes receivable mainly include stamps, duties, local taxes assets and corporate income taxes. Taxes receivable are $717,162 and $734,630 as of June 30, 2025, and December 31, 2024, respectively. The components of taxes receivable are as follows:

NOTE 5 – PREPAID EXPENSES

The balances of prepaid expenses are $1,190,083 and $955,456 as of June 30, 2025, and December 31, 2024, respectively. The components of prepaid expenses are as follows:

NOTE 6 – OTHER CURRENT ASSETS

As of June 30, 2025, and December 31, 2024, other current assets are $2,514,355 and $2,584,771, respectively. The components of other current assets are as follows:

Other current receivables include government refunds for maternity leave reimbursements, interest receivables, employee advances, and receivables for thefts and damages.

As of June 30, 2025, the total allowance for bad debt amounts to $532,196 and is primarily related to the impairment of other receivables recorded at My Best Odds Belgium in the amount of $383,028, as well as the impairment of Atlas Bank in bankruptcy at MeridianBet Montenegro in the amount of $140,142.

NOTE 7– ACQUISITIONS

Golden Matrix andAleksandar Milovanović; Zoran Milošević, and Snežana Božović* (MeridianBet Group) Meridian Purchase Agreement*

Please refer to “NOTE 22 – MERIDIANBET GROUP PURCHASE AGREEMENT”, for a discussion of the Meridian Purchase Agreement, pursuant to which effective April 1, 2024, Golden Matrix (legal acquirer/accounting acquiree) acquired MeridianBet Group (legal acquiree/accounting acquirer) from the Meridian Sellers.

Classics Holding Acquisition

As previously disclosed in Note 7 – Acquisitions to the consolidated financial statements included in the Company’s 2024 Annual Report, on August 16, 2024, the Company entered into a Share Exchange Agreement with NJF Exercise Physiologists Pty Ltd and Think Tank Enterprises Pty Ltd (the “Classics Sellers”) to acquire 80% of the outstanding equity of Classics Holdings, effective August 1, 2024. Classics for a Cause operates an established B2C trade promotions business in Australia.

The total consideration for the acquisition included a combination of restricted common stock, cash payments, a holdback amount, and a potential earnout. The transaction was accounted for as a business combination under FASB ASC 805, with the purchase price preliminarily allocated to the identifiable assets acquired and liabilities assumed, based on estimated fair values.

Goodwill of approximately $6.35 million was recognized, representing the excess of the total consideration (including the fair value of the noncontrolling interest) over the net fair value of the assets acquired. The noncontrolling interest was estimated at $1.42 million. The allocation included identifiable intangible assets such as trade names, customer relationships, and non-compete agreements.

As of June 30, 2025, the preliminary purchase price allocation remains unchanged. The earnout conditions for the period ended June 30, 2025 were not met, and no additional consideration was earned by the Classics Sellers. The shares of common stock issued as part of the acquisition of Classics Holdings were subject to a true-up equal to the difference, if negative, between the closing sales price of the Company’s common stock on the Nasdaq Capital Market on the date that was 180 days following the closing date (or if such date is not a business day, the last closing price of the Company’s common stock prior to such day) and the closing price of the Company’s common stock on the Nasdaq Capital Market on the closing date (or if such date is not a business day, the last closing price of the Company’s common stock prior to such day) (the “True-Up Amount”). At the Company’s option, the True-Up Amount could be paid in cash or shares of common stock of the Company, or any combination thereof. On February 17, 2025, the True-Up Amount was determined to be $518,650 and on April 28, 2025, the Company issued 206,634 shares to satisfy this obligation.

Classics for a Cause’s results of operations have been included in our consolidated financial statements beginning on August 1, 2024. Classics for a Cause contributed revenues of $2,029,926 and net income attributable to GMGI of $66,829 for the three months ended June 30, 2025. Classics for a Cause contributed revenues of $4,334,642 and net income attributable to GMGI of $273,260 for the six months ended June 30, 2025.

Media Games Malta Acquisition

As previously disclosed in Note 7 – Acquisitions to the consolidated financial statements included in the Company’s 2024 Annual Report, on July 11, 2024, the Company entered into a Share Purchase Agreement (“SPA”) to acquire 100% of the issued share capital of Media Games Malta (EU) Limited for a total purchase price of approximately $487,647 (€435,555). The consideration was paid in part at signing and the balance in four equal monthly instalments through November 2024.

The transaction was accounted for as a business combination in accordance with ASC 805 – Business Combinations. The acquisition resulted in recognition of approximately $537,184 of goodwill and $162,626 in identifiable intangible assets (trademark/name).

Media Games Malta’s results have been included in the consolidated financial statements effective August 1, 2024. For the three and six months ended June 30, 2025, the entity contributed $97,457 and $205,296 in revenues, respectively, and net losses attributable to GMGI of $68,359 and $104,079, respectively.

Acquisition of Minority Interest in Meridian Gaming S.A.C. Peru and Meridian Worldwide Ltd. Cyprus.

The Meridian Purchase Agreement required the purchase of the minority shares of certain subsidiaries of the MeridianBet Group.

Based on this, on September 3, 2024, asales-purchase agreement was signed between the buyer – Meridian Gaming Ltd. Malta and the seller of a 24.5% minority share in the company Meridian Gaming Peru S.A.C., Mr. Juan Jose Mantese.

The purchase price is $3,098,797, of which, in accordance with the agreement, a portion will be paid by way of the issuance of 814,768 shares of restricted common stock of the Company, each with an individual value of $3.00, while the remainder will be paid in cash, totaling $654,493. On January 1, 2025,814,768 shares of restricted common stock were issued to one individual as consideration to acquire a 24.5% minority interest in Meridian Gaming Peru S.A.C., as discussed above. As of June 30, 2025, a cash consideration of $479,166 remains outstanding and is recorded as a consideration payable on the balance sheet.

Additionally, on October 3 and November 8, 2024, share purchase agreements were signed between the buyer – Meridian Gaming Ltd. Malta and the sellers of a 15.5% minority share in the company Meridian Worldwide Ltd. Cyprus, which consisted of the following shareholders: Costas Joannides, Marko Pejovic, Jelena Sarenac, Vladimir Lenger and Marija Teodosic.

The purchase price is $4,073,707, of which, in accordance with the agreement, a portion will be paid in restricted shares of common stock of the Company, totaling 1,071,101 shares, each with an individual value of $3.00, while the remainder will be paid in cash, totaling $860,404. On January 1, 2025,1,071,101 shares of restricted common stock were issued to five individuals as consideration to acquire a 15.5% minority interest in Meridian Worldwide CY Limited. As of June 30, 2025, a cash consideration of $646,781 remains outstanding and is recorded as a consideration payable on the balance sheet.

Pro Forma Financial Information

The following unaudited pro forma consolidated results of operations for the three months ended June 30, 2024 assume the acquisitions of Golden Matrix, Classics Holdings, Media Games Malta and the Meridian Gaming S.A.C. Peru and Meridian Worldwide Ltd. Cyprus were completed on January 1, 2024:

The following unaudited pro forma consolidated results of operations for the six months ended June 30, 2024 assume the acquisitions of Golden Matrix, Classics Holdings, Media Games Malta and the Meridian Gaming S.A.C. Peru and Meridian Worldwide Ltd. Cyprus were completed on January 1, 2024:

The unaudited pro-forma consolidated results above are based on the historical financial statements of MeridianBet Group, Golden Matrix, Classics Holdings, Media Games Malta, and Meridian Gaming S.A.C. Peru and Meridian Worldwide Ltd. Cyprus, are not necessarily indicative of the results of operations that would have been achieved if the acquisitions were completed at January 1, 2024, and are not indicative of the future operating results of the combined company. The pro-forma consolidated results of operations also include the effects of purchase accounting adjustments, including amortization charges related to the finite-lived intangible assets acquired, assuming that the business combination occurred on January 1, 2024.

NOTE 8 – INTANGIBLE ASSETS – SOFTWARE, LICENSES, TRADEMARKS, DEVELOPED TECHNOLOGY, CUSTOMER RELATIONSHIPS, AND NON-COMPETE AGREEMENTS

Software represents software licenses as well as the costs of internally developed gaming software (e.g., a new sports betting platform which is classified as intangible construction in process). Capitalized software costs are amortized based on the straight-line method over the remaining estimated economic life of the product.

During the six months ended June 30, 2025, and 2024, respectively, software development costs of $1,146,753 and $3,993,875, were incurred and capitalized.

Intangible construction in process mainly represents the development of new software in Montenegro and Malta for a sports betting platform. During the six months ended June 30, 2025, and 2024, respectively, costs of $4,830,127 and $3,908,881 were incurred and capitalized, while a total of $3,442,266 was placed in service in 2025.

We anticipate that the majority of intangible construction in process will be placed in service in stages during the 2025, depending on the progress of the software development.

Licenses relate to operational gaming licenses issued in Bosnia, Cyprus and Brazil. During the six months ended June 30, 2025, and 2024, respectively, costs of $767,679 and $84,993, were incurred and capitalized. The licenses are amortized over the life of the licenses.

Other intangible assets relate to retail agent partner relationships and online customer relationships identified during the acquisition of Bit Tech Tanzania in the amount of $1,591,047, as well as the purchase of the domain magicbet777.com by Meridianbet Brazil LTDA in the amount of $2,312,837. Other intangible assets are amortized over 5 years.

Intangible assets related to software and website are amortized on a straight-line basis over their expected useful lives, estimated to be 5 years.

Amortization expenses related to intangible assets were $2,465,380 and $1,913,047 for the three months ended June 30, 2025, and 2024, respectively and $4,618,020 and $2,355,366 for the six months ended June 30, 2025, and 2024, respectively.

The following table details the carrying values of the Company’s intangible assets:

The table below shows expected amortization expenses for the next five years of intangible assets recorded as of June 30, 2025:

The following table identifies the intangible assets resulting from the Meridian Purchase, as described in greater detail in “NOTE 22 – MERIDIANBET GROUP PURCHASE AGREEMENT”:

The fair value estimate for all identifiable intangible assets is based on assumptions that market participants would use in pricing an asset, based on the most advantageous market for the asset (i.e., its highest and best use).

NOTE 9 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, net, consists of the following for the periods indicated:

Investment in third party property represents leasehold improvements that are in rented premises for retail betting.

Advances for property, plant and equipment represent the purchase of the premises in Montenegro. These premises are still in the process of construction.

Depreciation expenses were $1,344,024 and $826,664, for the three months ended June 30, 2025, and 2024, respectively, and $2,780,271 and $2,028,263, for the six months ended June 30, 2025, and 2024, respectively.

NOTE 10 – DEPOSITS AND NON-CURRENT PREPAID ASSETS

As of June 30, 2025 and December 31, 2024, deposits and prepaid assets are $6,189,912 and $5,706,319, respectively. The components of deposits and prepaid assets are as follows:

Betting and casino deposits are long term deposits held with the following banks: NLB Komercijalna bank, EFG-Direktna bank, Halk bank, Bank Postanska Stedionica, and Fibank, as security for the permission granted to operate in a particular region.

Other deposits are long-term deposits with EFG Direktna bank and Nova bank for open credit lines and e-commerce services.

The deposits with NLB Komercijalna bank accrue interest at the rates of 1.0% and 1.9% per annum.

NOTE 11 – INVESTMENTS

The Company has investments in unconsolidated entities. The investments are accounted for under the equity method whereby the initial investment is recognized at cost and the entities’ profits or losses are recorded in proportion to the Company’s percentage of ownership. As of June 30, 2025, and December 31, 2024, the Company had investments of $244,465 and $218,147, respectively, representing investments in capital of Lottery RS (657 shares), Telekom Srpske (169,921 shares), and BH Telekom (15,228 shares).

NOTE 12 – OPERATING LEASE RIGHT OF USE ASSETS AND LIABILITIES

Under ASU No. 2016-02, Leases (Topic 842), lessees are required to recognize all leases (with the exception of short-term leases) on the balance sheet as a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The standard was adopted using a modified retrospective approach.

The Company (through its subsidiaries and affiliates) has entered into operating leases, the Company also has several financing lease agreements. As the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate based on information available at commencement to determine the present value of the lease payments. Right-of-use assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease term is typically assessed at 5 years.

The lease cost for the three months ended June 30, 2025, and 2024, was $912,357 and $823,264, respectively.

The lease cost for the six months ended June 30, 2025, and 2024, was $1,839,612 and $1,674,651, respectively.

As of June 30, 2025, and December 31, 2024, the right-of-use assets were $6,719,981 and $7,643,504, respectively, and there was also a current lease liability of $2,428,729 and $2,378,896, respectively, and a non-current lease liability of $4,266,105 and $5,193,847, respectively.

Maturities of lease liabilities as of June 30, 2025, were as follows:

NOTE 13 – ACCOUNTS PAYABLE – RELATED PARTIES

The accounts payable to related parties includes management salaries, superannuation liabilities and accrued bonuses totaling $440,720 and $19,655, as of June 30, 2025, and December 31, 2024, respectively.

NOTE 14 – TAXES PAYABLE

The taxes payable include tax amounts due for stamps, duties, corporate income tax and deferred tax liabilities as noted below:

As of June 30, 2025, and December 31, 2024, taxes payable are $3,644,543 and $3,774,418, respectively. The components of taxes payable are as follows:

NOTE 15 – LONG TERM LIABILITIES

Unicredit Bank Facility

On May 1, 2024, effective May 16, 2024, Meridian Serbia entered into a Facility Agreement dated as of April 30, 2024 (the “Facility Agreement”) with Unicredit Bank Serbia JSC Belgrade (“Unicredit Bank”). UniCredit Bank agreed to loan Meridian Serbia up to 2,350,000,000 Serbian dinars (approximately $22,400,000), pursuant to the terms of the Facility Agreement (the “Loan”).

A total of $11 million of the proceeds from the Loan was paid to the Meridian Sellers pursuant to the terms of the Meridian Purchase Agreement.

The Loan is secured by a mortgage on substantially all of Meridian Serbian’s real estate; a pledge by Golden Matrix Serbia of all the outstanding capital stock of Meridian Serbia; a pledge by the Company of all of its ownership in Golden Matrix Serbia; and an assignment of Meridian Serbia’s insurance policies.

On May 16, 2024, the Company entered into a Guaranty Agreement in favor of Unicredit Bank to guarantee in full the repayment of the Loan.

The Loan bears interest at the one-month BELIBOR rate, plus 3.15% per annum (currently approximately 8.75%), payable monthly in arrears.

The Loan is repayable in installments, beginning six months after May 16, 2024, and payable in full by the maturity date, May 17, 2027. The first installment was paid on November 16, 2024.

The Company recorded a debt discount of $908,037 related to the Unicredit Bank facility in connection with advisory services provided by Citigroup Global Markets Limited. The debt discount was amortized to interest expense. As of June 30, 2025, the unamortized debt discount was $554,911.

For the six months ended June 30, 2025, the Company paid $5,134,487 to Unicredit Bank against the loan, including the principal amount of $4,374,407 and interest accrued of $760,080. As of June 30, 2025, and December 31, 2024, the principal balance of the loan was $18,037,572 and $20,203,619.

The contract defines a Financial Covenant stipulating that the financial ratio (Net Debt/Ebitda) must be less than or equal to 3x, with compliance monitored by the bank. As of June 30, 2025, the requirement under the Financial Covenant has been met.

On April 9, 2025, Meridian Serbia entered into a short-term credit line agreement, in the amount of RSD 117,182,900 (equivalent to EUR 1,000,000; approximately $1,173,560) from UniCredit Bank for working capital financing of the Company. The term of using the funds is 12 months ending on April 8, 2026. The Bank charges interest at the nominal interest rate equal to one month BELIBOR plus 2.00% p.a.

For the six months ended June 30, 2025, the Company paid $12,439 to Unicredit Bank against the loan, including the principal amount of $0 and interest accrued of $12,439. As of June 30, 2025, and December 31, 2024, the principal balance of the loan was $1,173,560 and $0.

Hipotekarna Bank Facility

On March 21, 2024, MeridianBet Montenegro entered into a long-term loan, in the amount of EUR 2,000,000 (approximately $2,141,000) from Hipotekarna Bank for financing working capital and liquidity of the Company. The term of using the funds is 24 months ending in April 2026. The Bank charges effective interest at the annual rate of 5.63% (nominal interest rate 5.3%).

For the six months ended June 30, 2025, the Company paid $581,488 to Hipotekarna Bank against the loan, including the principal amount of $546,387, and interest accrued of $35,101. As of June 30, 2025, and December 31, 2024, the principal balance of the loan was $907,994 and $1,324,361.

On December 9, 2024, MeridianBet Montenegro entered into a short-term loan, in the amount of EUR 1,000,000 (approximately $1,039,000) from Hipotekarna Bank for financing working capital and liquidity of the Company. The term of using the funds is 12 months ending on December 31, 2025. The Bank charges effective interest at the annual rate of 5.79% (nominal interest rate 5.3%).

For the six months ended June 30, 2025, the Company paid $562,994 to Hipotekarna Bank against the loan, including the principal amount of $539,339, and interest accrued of $23,655. As of June 30, 2025, and December 31, 2024, the principal balance of the loan was $593,519 and $1,038,900.

Igor Salindrija Facility

On April 1, 2024, Meridian Malta entered into a long-term loan, in the amount of EUR 2,000,000 (approximately $2,240,000) from Igor Salindrija, for financing working capital and liquidity of the Company. The term of using the funds is the 24 months ending on April 1, 2026, when the entire loan amount becomes due. The effective interest is at the annual rate of 7%. As of June 30, 2025, and December 31, 2024, the principal balance of the loan was $2,334,000 and $2,065,680.

Lind Global Asset Management VIII LLC Securities SPA / Promissory Note

On July 2, 2024, the Company entered into a Securities Purchase Agreement (the “SPA”) with Lind Global Asset Management VIII LLC, a Delaware limited partnership (the “Investor”), pursuant to which the Company issued to the Investor a secured, two-year, interest free convertible promissory note in theprincipal amount of $12,000,000 (the “Secured Convertible Note”) and a common stock purchase warrant (the “Lind Warrant”) to acquire 750,000 shares of common stock of the Company, at an exercise price of $4.00 per share. The Lind Warrant expires on July 2, 2029. A total of $10,000,000 was funded under the Secured Convertible Note (representing the principal amount less an original issue discount of 20%) on July 3, 2024 (the “Funding Date”). In connection with the issuance of the Secured Convertible Note and the Lind Warrant, the Company paid a $250,000 commitment fee to the Investor. The Secured Convertible Note is convertible into shares of common stock of the Company by the Investor at any time at a conversion price of $4.00 per share.

The Company recorded a debt discount of $3,754,575 related to the issuance of the Secured Convertible Note. The total debt discount was comprised of the relative fair value of the Lind Warrant, the $2,000,000 issue discount, the commitment fee, $432,398 of advisory fees in connection with the debt issuance to Citigroup Global Markets Limited, and other issuance costs. The relative fair value of the Lind Warrant was $1,007,482 and was calculated using the Black-Scholes option pricing model. As of June 30, 2025, the unamortized debt discount was $0.

Second Amendment to Senior Secured Convertible Note

On October 30, 2024, the Company and the Investor entered into a Second Amendment to Senior Secured Convertible Promissory Note (the “Amendment”), which amended the Secured Convertible Note. Pursuant to the Amendment, the Company and the Investor agreed (a) that the October 2024 amortization payment due on October 20, 2024, pursuant to the terms of the Secured Convertible Note, would be paid $100,000 in shares of common stock of the Company, as determined pursuant to the terms of the Secured Convertible Note, and $515,000 in cash; and (b) to amend the events of default set forth in the Secured Convertible Note to provide that it will be an event of default if the Company’s market capitalization is below $250 million for ten consecutive days at any time after March 3, 2025 (previously such applicable starting date for that covenant was December 3, 2024).

For the six months ended June 30, 2025, the Company paid a total of $9,600,000 to the Investor against the loan through cash payments. As of June 30, 2025, the Secured Convertible Note was paid off.

As of June 30, 2025 and December 31, 2024, long term liabilities amount to $22,506,255 and $31,655,487, respectively, which are attributable to Unicredit Bank facility, Hipotekarna Bank facility, and the Igor Salindrija facility.

Maturities of long-term loan as of June 30, 2025 and December 31, 2024, are as follows:

NOTE 16 – OTHER LIABILITIES

Other Current Liabilities

As of June 30, 2025, and December 31, 2024, other current liabilities were $1,230,606 and $1,090,063, respectively. The components of other current liabilities are as follows:

Other current payables include any amounts due to parties that do not meet the requirements to be classified as accounts payable, such as interest payable, fines, penalties, employee receivables, fees, etc.

Other Non-Current Liabilities

As of June 30, 2025, and December 31, 2024, other non-current liabilities were $6,132,222 and $6,658,377, respectively. The components of other non-current liabilities are as follows:

The deferred tax liabilities resulted from the Meridian Purchase and Classics Holdings acquisition, which led to the recognition of intangible assets and corresponding deferred tax liabilities. These deferred tax liabilities will be amortized in line with the amortization of the related intangible assets.

NOTE 17 – RELATED PARTY TRANSACTIONS

All related-party transactions have been recorded at the amount of consideration established and agreed to by the related parties.

Dividends Paid to the Meridian Sellers

For the three months ended June 30, 2025, and 2024, dividends paid to the former owners of MeridianBet Group are as follows:

For the six months ended June 30, 2025, and 2024, dividends paid to the owners are as follows:

Articulate Pty Ltd, 50% owned by Marla Goodman (wife of the Company’s Chief Executive Officer) and 50% owned by Mr. Goodman, the Company’s Chief Executive Officer

On April 1, 2024, following the Meridian Purchase, the Company assumed the License Agreement with Articulate, in which Articulate received a license from the Company to use the GM2 Asset technology and agreed to pay Golden Matrix a usage fee calculated as a certain percentage of the monthly content and software usage within the GM2 Asset system.

The License Agreement was mutually terminated, effective January 1, 2025.As of June 30, 2025, the amount receivable from Articulate was $132,072.

Elray Resources Inc., Mr. Goodman, the Company’s CEO, serves as CEO & Director of Elray, and Ms. Feng, the Company’s COO, serves as Treasurer and Director of Elray.

On April 1, 2024, the Company assumed the Software License Agreement with Elray Resources, Inc. (“Elray”), in which the Company granted Elray a license for the use and further distribution of certain of Golden Matrix’s online games. The license provides Elray the right to use the online games solely for the purpose of running an online blockchain casino enterprise.

During the six months ended June 30, 2025, revenues from Elray were $13,907. As of June 30, 2025, the amount receivable from Elray was $13,648. There were no revenues received from Elray before April 1, 2024.

Top Level doo Serbia* *and Network System Development GMBH

The accounts receivable-related party from Top Level doo Serbia* *and Network System Development GMBH, amount to $298,979 and $317,125 as of June 30, 2025, and December 31, 2024, respectively with the largest amount due from Top Level d.o.o. Serbia in the amount of $294,341 and $288,157, separately. MeridianBet Group has no ownership interest or control in Top Level d.o.o. Serbia, but it does have common individual shareholders.

NOTE 18 - EQUITY

The historical shareholders’ equity of MeridianBet Group (the accounting acquirer /legal acquiree) prior to the reverse merger (the Meridian Purchase) has been retrospectively adjusted (a recapitalization) for the equivalent number of shares received by the former owners of MeridianBet Group as required under ASC 805.

Preferred Stock

The Company has 20,000,000 shares of $0.00001 par value preferred stock authorized.

As of June 30, 2025, and December 31, 2024,1,000 and 1,000 Series B preferred shares of par value $0.00001 were outstanding, respectively.

As of June 30, 2025, and December 31, 2024,1,000 and 1,000 Series C Preferred Stock shares of par value $0.00001 were outstanding, respectively.

As of June 30, 2025, and December 31, 2024,19,998,000 and 19,998,000 shares of preferred stock remained undesignated, respectively.

Common Stock

As of June 30, 2025, and December 31, 2024,300,000,000 and 300,000,000 shares of common stock, par value $0.00001 per share, were authorized, of which 139,117,131 and 129,242,993 shares were issued and outstanding, respectively.

Common Stock Transactions

On January 1, 2025,1,071,101 shares of restricted common stock were issued to five individuals as consideration to acquire a 15.5% minority interest in Meridian Worldwide CY Limited.

On January 1, 2025,814,768 shares of restricted common stock were issued to one individual as consideration to acquire a 24.5% minority interest in Meridian Gaming Peru S.A.C.

On January 13, 2025, Aleksandar Milovanović (“Milovanović”), one of the Meridian Sellers agreed to convert the $501,591 remaining due under the Deferred Cash Convertible Promissory Note (defined and discussed below in “NOTE 22 – MERIDIANBET GROUP PURCHASE AGREEMENT”) into 250,796 shares of common stock of the Company at a conversion price of $2.00 per share. The Deferred Cash Convertible Promissory Note was convertible into shares of common stock of the Company, at any time, from time to time, at the option of Milovanović, based on a conversion price, determined at the option of Milovanović of either (A)(i) the average closing sales price of the Company’s common stock on the Nasdaq market over the thirty trading day period ending on the trading day immediately preceding the date of the conversion notice; (ii) minus a discount of 15%; or (B) $3.00, subject to a floor of $2.00 per share.

As of February 23, 2025, a total of $1,165,358 of the $5,000,000 due to the Meridian Sellers as contingent cash consideration, which was due six months following the acquisition of MeridianBet Group remained due to Milovanović (the “Remaining Contingent Cash”). On February 23, 2025, the Company and Milovanović entered into a Debt Conversion Agreement dated February 18, 2025 (the “February 2025 Debt Conversion Agreement”), pursuant to which the Company and Milovanović agreed to convert the Remaining Contingent Cash into 647,422 shares of common stock of the Company, based on a conversion price of $1.80 per share.

On April 9, 2025, we entered into the Sixth Amendment to the Meridian Purchase Agreement with the Meridian Sellers. The amendment confirmed that $179,540 of the $10 million of non-contingent consideration which was due to the Sellers 12 months after the closing date of the acquisition of MeridianBet Group had already been paid and provided that the remaining amounts would be partially converted into common stock. Specifically, $9,445,460 owed to Milovanović was converted into 4,843,826 shares at $1.95 per share; $100,000 owed to Milošević and $25,000 owed to Božović was converted into 50,000 and 12,500 shares, respectively, at $2.00 per share. The remaining $150,000 owed to Milošević and $100,000 owed to Božović is payable by October 9, 2025.

On April 28, 2025, the Company issued 206,634 shares of its common stock to the Classics Sellers to fully satisfy the True-Up Amount of $518,650, which had been determined on February 17, 2025. The shares were issued in accordance with the terms of the Classic Holding’s Share Exchange Agreement, pursuant to which the Company had the option to settle the True-Up Amount in cash, shares, or a combination thereof. The shares were valued based on the US$ Agreed Value as defined in the agreement.

The Company owes quarterly salaries of $392,158 to Zoran Milošević and Snežana Božović which are expected to be settled in shares.

During the six months ended June 30, 2025,185,000 unregistered shares of restricted common stock, with a value of $431,700, were issued for services.

Equity Distribution Agreement

On November 22, 2024, we entered into an Equity Distribution Agreement with Craig-Hallum Capital Group LLC. Pursuant to the Distribution Agreement, the Company may sell, at its option, up to an aggregate of $14.7 million in shares of its common stock through Craig-Hallum, as sales agent. Sales of the common stock made pursuant to the Distribution Agreement, if any, will be made under a Registration Statement on Form S-3. Subject to the terms and conditions of the Distribution Agreement, Craig-Hallum may sell the shares, if any, only by methods deemed to be an “at the market” offering as defined in Rule 415 promulgated under the Securities Act, including without limitation sales made directly through The Nasdaq Capital Market, by means of ordinary brokers’ transactions, in negotiated transactions, to or through a market maker other than on an exchange or otherwise, at market prices prevailing at the time of sale, at prices related to such prevailing market prices, or at negotiated prices and/or any other method permitted by law. The Company is not obligated to sell, and Craig-Hallum is not obligated to buy or sell, any shares of common stock under the Distribution Agreement.

The Company will pay Craig-Hallum a commission equal to 3.00% of any gross proceeds from the sale of shares of the Company’s common stock under the Distribution Agreement. Pursuant to the terms of the Distribution Agreement, the Company also provided Craig-Hallum with customary indemnification rights and has agreed to reimburse Craig-Hallum forcertain specified expenses up to $50,000, plus up to $5,000 for each future quarterly period that the Distribution Agreement remains in place. The offering of common stock pursuant to the Distribution Agreement will terminate upon the earlier of (i) the sale of all of the common stock subject to the Distribution Agreement and (ii) the termination of the Distribution Agreement by the Company or Craig-Hallum. Either party may terminate the agreement in its sole discretion at any time upon written notice to the other party.

No assurance can be given that the Company will sell any shares of common stock under the Distribution Agreement, or, if it does, as to the price or amount of shares of common stock that it sells or the dates when such sales will take place.

During the six months ended June 30, 2025, we sold an aggregate of 374,919 shares of our common stock under the ATM Program for net proceeds of approximately $662,600, after deducting commissions. Of this amount, $29,787 is expected to be received in July.

2018 Equity Incentive Plan

On April 1, 2024, the Company assumed Golden Matrix’s 2018 Equity Incentive Plan following the Meridian Purchase. No options or warrants were outstanding prior to April 1, 2024.

The following table represents the stock option activity for the six months ended June 30, 2025:

The fair value of stock options was measured using the Black-Scholes option pricing model. The Black-Scholes valuation model takes into consideration the share price of the Company, the exercise price of the options, the amount of time before the option expires, and the volatility of share price. Compensation expense is charged to operations through the vesting period. The amount of cost is calculated based on the accounting standard ASU 2018-07.

On June 16, 2025, the Company agreed to extend the exercise period of certain stock options by one year, which covered options granted to one employee and one consultant to purchase 180,000 shares of common stock at an exercise price of $1.74 per share and options granted to one director to purchase 100,000 shares of common stock at an exercise price of $2.67 per share. The Company recorded a total of $118,741 in expense due to the option extension.

The total compensation cost related to stock options granted including the option extension as discussed above was $118,741 and $91,696, for the six months ended June 30, 2025 and 2024, respectively.

2022 Equity Incentive Plan

On April 1, 2024, the Company assumed Golden Matrix’s 2022 Equity Incentive Plan (the “2022 Plan”) following the Meridian Purchase. The 2022 Plan provides an opportunity for any employee, officer, director or consultant of the Company, subject to limitations provided by federal or state securities laws, to receive (i) incentive stock options (to eligible employees only); (ii) nonqualified stock options; (iii) restricted stock; (iv) restricted stock units, (v) stock awards; (vi) shares in performance of services; (vii) other stock-based awards; or (viii) any combination of the foregoing. In making such determinations, the Board of Directors may take into account the nature of the services rendered by such person, his or her present and potential contribution to the Company’s success, and such other factors as the Board of Directors of the Company in its discretion shall deem relevant.

The following table represents the RSUs activity under the 2022 Plan for the six months ended June 30, 2025:

2023 Equity Incentive Plan

On April 1, 2024, the Company assumed Golden Matrix’s 2023 Equity Incentive Plan (the “2023 Plan”) following the Meridian Purchase. The 2023 Plan provides an opportunity for any employee, officer, director or consultant of the Company, subject to limitations provided by federal or state securities laws, to receive (i) incentive stock options (to eligible employees only); (ii) nonqualified stock options; (iii) restricted stock; (iv) restricted stock units, (v) stock awards; (vi) shares in performance of services; (vii) other stock-based awards; or (viii) any combination of the foregoing. In making such determinations, the Board of Directors may take into account the nature of the services rendered by such person, his or her present and potential contribution to the Company’s success, and such other factors as the Board of Directors of the Company in its discretion shall deem relevant. Subject to adjustment in connection with the payment of a stock dividend, a stock split or subdivision or combination of the shares of common stock, or a reorganization or reclassification of the Company’s common stock, the aggregate number of shares of common stock which may be issued pursuant to awards under the 2023 Plan is the sum of (i) five million (5,000,000) shares, and (ii) an automatic increase on April 1st of each year for a period of nine years commencing on April 1, 2024 and ending on (and including) April 1, 2033, in an amount equal to the lesser of (A) five percent (5%) of the total shares of common stock of the Company outstanding on the last day of the immediately preceding fiscal year (the “Evergreen Measurement Date”); and (B) five million (5,000,000) shares of common stock; provided, however, that the Board may act prior to April 1st of a given year to provide that the increase for such year will be a lesser number of shares of common stock. Notwithstanding the foregoing, no more than a total of 50,000,000 shares of common stock (or awards) may be issued or granted under the 2023 Plan in aggregate, and no more than 50,000,000 shares of common stock may be issued pursuant to the exercise of Incentive Stock Options. On April 1, 2024, the number of shares eligible for issuance under the 2023 Plan increased automatically by 1,808,146 shares and on April 1, 2025, the number of shares eligible for issuance under the 2023 Plan increased by 3,632,000 shares (the Board of Directors took action prior to April 1, 2025, to limit the automatic increase under the 2023 Plan, which would have increased by 5,000,000 shares, to 3,632,000 shares, to take into account a total of 1,368,000 of awards made under the 2022 Plan, after the adoption of the 2023 Plan).

The following table represents the RSUs activity under the 2023 Plan for the six months ended June 30, 2025:

The total compensation cost related to RSUs was $1,779,402 and $1,216,190 for the six months ended June 30, 2025 and June 30, 2024.

NOTE 19 – SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

The Company operates its business through three operating segments – MeridianBet Group, GMAG, RKings & CFAC (discussed in greater detail below), which are based on its business activities and organization. The reportable segments are segments of the Company for which separate financial information is available and for which operating results are evaluated regularly by the Company’s chief operating decision maker (“CODM”) in deciding how to allocate resources as well as in assessing performance.

The Company’s chief operating decision maker is a management function comprised of two individuals. These two individuals are the Company’s Chief Executive Officer and MeridianBet Group’s Chief Executive Officer. The Company’s chief operating decision makers and management utilize revenues and operating income as the primary profit measures for its reportable segments.

The Company’s three reportable segments are as follows:

In addition to these reportable segments, the Company has certain corporate costs that are not directly attributable to its brands and, therefore, are not allocated to its segments. Such costs primarily include certain share-based compensation, and holding company expenses including administrative, legal fees, audit fees, and filing fees. In addition, certain other costs are not allocated to segments, including impairment costs, and restructuring costs which include charges or expenses attributable to acquisition-related costs. The segment structure is consistent with how the Company’s CODM plans and allocates resources, manages the business and assesses performance. All intercompany revenues are eliminated in consolidation and are not reviewed when evaluating segment performance.

The following table presents the key performance information of the Company’s reportable segments:

Total revenues by geographic region are as follows:

Assets and liabilities are not separately analyzed or reported to the CODM and are not used to assist in decisions surrounding resource allocation and assessment of segment performance. As such, an analysis of segment assets and liabilities has not been included in this financial information.

**NOTE 20 –**EFFECTIVE TAX RATE

Our effective tax rate was (16.3)% and 97.1% for the three months ended June 30, 2025 and June 30, 2024, and (4.0)% and 16.9% for the six months ended June 30, 2025 and June 30, 2024, respectively. The decrease in the effective income tax rate for the three and six months ended June 30, 2025 compared to the same periods in 2024 is primarily due to changes in the mix of our earnings and tax expenses between the U.S. and foreign countries.

NOTE 21 - COMMITMENTS AND CONTINGENCIES

Legal Matters

The Company may be involved, from time to time, in litigation or other legal claims and proceedings involving matters associated with or incidental to our business, including, among other things, matters involving breach of contract claims, and other related claims and vendor matters; however, none of the aforementioned matters are currently pending, except as discussed below. The Company believes that we are not exposed to matters that will individually, or in the aggregate, have a material adverse effect on our financial condition or results of operations.

Notwithstanding the above, the outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting period for amounts in excess of management’s expectations, the Company’s financial condition and operating results for that reporting period could be materially adversely affected.

The Company is involved in a dispute with one of its Cyprus subsidiaries’ minority owners. Meridian Malta owns 51% of the Cypriot company, Fair Champions Meridian Ltd. (“Fair Champions”). Meridian Malta and the minority shareholders of Fair Champions are engaged in four related court actions, two of which (one from each side) seek the liquidation of that company. The proceedings are pending in the District Court of Limassol, cases General Application No. 378/2016; General Application No. 542/2020; Case No. 1080/2017; and Case No. 418/2017. The actions were initiated between September and February 2020. Given the parties’ petitions for relief, the ultimate liquidation of that entity is likely, though it is also possible the Court will engineer one set of parties buyout of the other. In the third action, the minority shareholders are asserting derivative claims on behalf of Fair Champions. In the fourth, Meridian Serbia has sued certain minority shareholders for misrepresentations made at the time of the Company Parties’ acquisition of its majority interest in Fair Champions. The MeridianBet Group is seeking reimbursement of the sum it paid for that interest. The Company is vigorously defending this dispute and believes that dispute will be resolved in the Company's favor and as such, a reserve has not been accrued.

Meridian Malta is participating in a dispute with the Greek tax authorities (acting through the Audit Centre for Large Enterprises). The MeridianBet Group has conducted business remotely (i.e., via internet) in Greece through Meridian Malta. Meridian Malta—like two dozen other remote betting entities—is locked in a tax dispute with the Greek tax authorities relating to tax years 2012 through 2014. The Greek authorities filed initial assessments, which Meridian Malta then appealed. The bases of the appeals included arguments that (i) Greece incorrectly assessed Meridian Malta’s tax liability; and (ii) Meridian Malta paid taxes on its Greek revenues in Malta, so it is exempt from further taxes under the two countries’ double taxation treaty. The appeals are at various stages of adjudication. These actions, instituted in December 2018 and April 2019, are pending in the Administrative Court of Appeal of Athens and the Supreme Court of Greece, respectively. The Company is vigorously defending this dispute and believes that dispute will be resolved in the Company's favor, but out of prudence, for the twelve months ended December 31, 2024, the Company had accrued a tax expense of $1,468,472 as an accrued liability for the said dispute. There is no change to the amount as of June 30, 2025.

The Company is in a dispute with Mr. Paul Hardman (one of the former owners of RKings) with regards to a certain consideration totaling approximately $626,450 (GBP 500,000) that he has alleged is still owed to him pursuant to the RKings Purchase Agreement, and which we allege was forfeited. That amount is accrued and included in the Company’s liabilities as of June 30, 2025. The Company’s dispute and claims against Mr. Hardman stem from breaches of the terms of the RKings Purchase Agreement by Mr. Hardman. The Company is vigorously pursuing the claim of breach of the acquisition agreement related to the purchase of RKings against Mr. Hardman; however, no formal legal action has been initiated by either party to date.

The Company is involved in various labor and tax-related disputes in the ordinary course of business. These matters include, but are not limited to, employee claims, wage and hour disputes, and tax assessments by regulatory authorities. The majority of disputes relate to labor disputes with former employees of the Meridian Group, which represents more than 90% of all disputes. While the outcomes of such matters are inherently uncertain, based on current information and management’s assessment, none of these disputes are expected to have a material impact on the Company’s financial position, results of operations, or cash flows. The Company continues to monitor these matters and will update its disclosures as necessary should any material developments arise.

NOTE 22 - MERIDIANBET GROUP PURCHASE AGREEMENT

As previously disclosed in Note 22 – MeridianBet Group Purchase Agreement to the consolidated financial statements included in the 2024 Annual Report, Golden Matrix Group, Inc. (“GMGI”) completed its acquisition of 100% of the outstanding share capital of MeridianBet Group on April 9, 2024 (effective as of April 1, 2024), pursuant to the Amended and Restated Sale and Purchase Agreement of Share Capital dated June 27, 2023, as amended.

The total preliminary purchase consideration was approximately $107.9 million, which included the issuance of 82,141,857 shares of common stock,1,000 shares of Series C Convertible Preferred Stock, $12 million in closing cash, and $15 million in promissory notes, as well as additional contingent and deferred cash consideration. The transaction was accounted for using the acquisition method in accordance with ASC 805, with MeridianBet Group identified as the accounting acquirer and GMGI as the accounting acquiree.

The fair value of the net assets acquired included approximately $30.2 million in intangible assets, $13.4 million in net tangible assets, and approximately $64.4 million of goodwill.

As a result of the transaction, the Meridian Sellers became the majority shareholders of GMGI, holding approximately 69.2% of the outstanding common stock and 67.0% of the voting power as of the closing date.

Additional terms and governance arrangements, including the Series C Preferred Stock, Voting Agreement, Day-to-Day Management Agreement, and details on a Deferred Cash Convertible Promissory Note, are described in Note 22 to the 2024 Annual Report and have not materially changed as of June 30, 2025, other than repayments and conversions previously disclosed.

NOTE 23 – SUBSEQUENT EVENTS

Shares Issued for Services

Subsequent to June 30, 2025, and through the date of this report,45,000 unregistered shares of restricted common stock, with a value of $83,700, were issued for services.

At-The-Market Offering

Subsequent to June 30, 2025, and through the date of this report, the Company sold an aggregate of 320,934 shares of its common stock under the Distribution Agreement at an average price of $1.72 per share, resulting in net proceeds of approximately $535,560 after deducting commissions. The shares were sold pursuant to the Company’s shelf registration statement on Form S-3, and the related prospectus supplement filed with the Securities and Exchange Commission.