Lottery.com Inc.

Previous wording

This Report is reflective of the Company’s commitment to transparency, integrity, and responsible corporate governance. The investment commitments from United Capital Investments London Limited and Generating Alpha outlined in this report are evidence of investor belief in Management’s capability to resume core lottery and gaming operations, launch additional international lottery operations, and expand operations in Mexico and offerings of sweepstakes, as well as successful monetization of Sports.com, entrance into the entertainment market, and expand all the Company’s brand across the globe.

Current wording

This Report is reflective of the Company’s commitment to transparency, integrity, and responsible corporate governance. The investment commitments from United Capital Investments London Limited and Generating Alpha outlined in this report are evidence of investor belief in Management’s capability to resume core lottery and gaming operations, launch additional international lottery operations, and expand operations in Mexico and offerings of sweepstakes, as well as successful monetization of Sports.com, entrance into the entertainment market, and expand the Company’s brand across the globe.

Previous wording

As reported on form 8-K filed on May 9, 2025, the Company received written notice from Nasdaq indicating that its bid price for its common stock had closed at less than $1 per share over the previous 30 consecutive business days, and as a result, the Company did not comply with Nasdaq Listing Rule 8510©(3)(A) (the “Bid Price Listing Rule”). However, under the Listing Rules, the Company was provided a 180-calendar day grace period to regain compliance

Current wording

As reported on form 8-K filed on May 9, 2025, the Company received written notice from Nasdaq indicating that its bid price for its common stock had closed at less than $1 per share over the previous 30 consecutive business days, and as a result, the Company did not comply with Nasdaq Listing Rule 8510 (c)(3)(A) (the “Bid Price Listing Rule”). However, under the Listing Rules, the Company was provided a 180-calendar day grace period to regain compliance

Previous wording

Amounts borrowed pursuant to the Woodford Loan Agreement are convertible, at Woodford’s option, into shares of the Company’s common stock, beginning 60 days after the first loan date at the rate of 80% of the lowest publicly available price per share of common stock within 10 business days of the date of the Loan Agreement (which was equal to $5.60 per share), subject to a 4.99% beneficial ownership limitation and a separate limitation preventing Woodford from holding more than 19.99% of the issued and outstanding common stock of the Company, without the Company obtaining shareholder approval for such issuance.

Current wording

Amounts borrowed pursuant to the Woodford Loan Agreement are convertible, at Woodford’s option, into shares of the Company’s common stock, beginning 60 days after the first loan date at the rate of 80% of the lowest publicly available price per share of common stock within 10 business days of the date of the Loan Agreement (which was equal to $56.00 per share), subject to a 4.99% beneficial ownership limitation and a separate limitation preventing Woodford from holding more than 19.99% of the issued and outstanding common stock of the Company, without the Company obtaining shareholder approval for such issuance.

Previous wording

The Company also agreed to grant warrants to purchase shares of common stock to Woodford (the “Woodford Warrants”) in an amount equal to 15% of the Company’s then issued and outstanding shares of common stock. Each Woodford Warrant has an exercise price equal to the average of the closing price of the Company’s common stock for each of the ten days prior to the first amount being debited from the bank account of Woodford, which equates to an exercise price of $5.60 per share. In the event the Company fails to repay the amounts borrowed when due or Woodford fails to convert the amount owed into shares, the exercise price of the warrants may be offset by amounts owed to Woodford, and in such case, the exercise price of the warrants will be subject to a further 25% discount.

Current wording

The Company also agreed to grant warrants to purchase shares of common stock to Woodford (the “Woodford Warrants”) in an amount equal to 15% of the Company’s then issued and outstanding shares of common stock. Each Woodford Warrant has an exercise price equal to the average of the closing price of the Company’s common stock for each of the ten days prior to the first amount being debited from the bank account of Woodford, which equates to an exercise price of $56.00 per share. In the event the Company fails to repay the amounts borrowed when due or Woodford fails to convert the amount owed into shares, the exercise price of the warrants may be offset by amounts owed to Woodford, and in such case, the exercise price of the warrants will be subject to a further 25% discount.

Previous wording

The Company entered into a credit facility (the “UCIL Credit Facility”), which is represented by a loan agreement, which was initially entered into on July 26, 2023, and was amended and restated on August 8, 2023, and subsequently amended on August 18, 2023 and amended and restated on February 16, 2024, the “UCIL Loan Agreement”). The UCIL Loan Agreement is with United Capital Investments London Limited (“UCIL”), an entity in which each of Matthew McGahan, the Company’s Chief Executive Officer and Chair of the Company’s Board, and Barney Battles, a former member of the Board, have a direct or indirect interest. The decision by the Company to enter into the UCIL Loan Agreement followed an acknowledgment by the Company that it had not received the requisite funding on a timely basis that it expected from Woodford, despite the Company making several requests to Woodford for said funding under the Woodford Loan Agreement. Moreover, the Board of Directors determined that it was in the best interest of the Company and its stockholders to enter into the UCIL Loan Agreement with UCIL, as an alternative lender to Woodford, upon receiving an event of default notice on July 21, 2023 (the “Default Notice”) and an event of default and crystallization notice on July 25, 2023 (the “Crystallization Notice”) from Woodford under the Woodford Loan Agreement. Neither McGahan or Battles participated in the vote on the UCIL agreement to ensure proper independence and correct corporate governance. On July 24, 2023, the Company responded to the Default Notice disputing that an event of default had occurred given the Company’s earlier announcement that UCIL had agreed to enter into a funding arrangement with the Company. On July 27, 2023, the Company replied to the Crystallization Notice denying that an event of default occurred or continued, and further asserted that Woodford’s attempt for crystallization was inappropriate and unlawful under the Woodford Loan Agreement. Given the uncertainty of the continued financing under the Woodford Loan Agreement, the Board of Directors sought to secure and formalize the Company’s alternative funding by entering into the UCIL Loan Agreement.

Current wording

The Company entered into a credit facility (the “UCIL Credit Facility”), which is represented by a loan agreement, which was initially entered into on July 26, 2023, and was amended and restated on August 8, 2023, and subsequently amended on August 18, 2023 and amended and restated on February 16, 2024, the “UCIL Loan Agreement”). The UCIL Loan Agreement is with United Capital Investments London Limited (“UCIL”), an entity in which each of Matthew McGahan, the Company’s Chief Executive Officer and Chair of the Company’s Board, and Barney Battles, a former member of the Board, have a direct or indirect interest. The decision by the Company to enter into the UCIL Loan Agreement followed an acknowledgment by the Company that it had not received the requisite funding that it expected from Woodford on a timely basis, despite the Company making several requests to Woodford for said funding under the Woodford Loan Agreement. Moreover, the Board of Directors determined that it was in the best interest of the Company and its stockholders to enter into the UCIL Loan Agreement with UCIL, as an alternative lender to Woodford, upon receiving an event of default notice on July 21, 2023 (the “Default Notice”) and an event of default and crystallization notice on July 25, 2023 (the “Crystallization Notice”) from Woodford under the Woodford Loan Agreement. Neither McGahan or Battles participated in the vote on the UCIL agreement to ensure proper independence and correct corporate governance. On July 24, 2023, the Company responded to the Default Notice disputing that an event of default had occurred given the Company’s earlier announcement that UCIL had agreed to enter into a funding arrangement with the Company. On July 27, 2023, the Company replied to the Crystallization Notice denying that an event of default occurred or continued, and further asserted that Woodford’s attempt for crystallization was inappropriate and unlawful under the Woodford Loan Agreement. Given the uncertainty of the continued financing under the Woodford Loan Agreement, the Board of Directors sought to secure and formalize the Company’s alternative funding by entering into the UCIL Loan Agreement.

Previous wording

On May 13, 2025, the Board of Directors of the Company appointed Mr. Marc Bircham as a member of its Board of Directors. Mr. Bircham will also serve as Executive Director of Sports.com. He is a seasoned executive, entrepreneur, and former international footballer with a dynamic career that spans professional sports, business development, and strategic leadership. In his career, Marc has spearheaded international growth, led complex acquisition projects, and forged high-value partnerships across the sports and entertainment industries.

Current wording

On May 13, 2025, the Board of Directors of the Company appointed Mr. Marc Bircham as a member of its Board of Directors. Mr. Bircham also serves as Executive Director of Sports.com. He is a seasoned executive, entrepreneur, and former international footballer with a dynamic career that spans professional sports, business development, and strategic leadership. In his career, Marc has spearheaded international growth, led complex acquisition projects, and forged high-value partnerships across the sports and entertainment industries.

Previous wording

On August 9, 2023, the Company amended its Charter to implement, effective at 5:30 p.m., Eastern time, a 1-for-20 Reverse Stock Split. At the effective time of the Reverse Stock Split, every 20 shares of common stock either issued and outstanding or held as treasury stock were automatically combined into one issued and outstanding share of common stock, without any change in the par value per share. Stockholders who would have otherwise been entitled to fractional shares of common stock as a result of the Reverse Stock Split received a cash payment in lieu of receiving fractional shares. In addition, as a result of the Reverse Stock Split, proportionate adjustments will be made to the number of shares of common stock underlying the Company’s outstanding equity awards, the number of shares issuable upon the exercise of the Company’s outstanding warrants and the number of shares issuable under the Company’s equity incentive plans and certain existing agreements, as well as the exercise, grant and acquisition prices of such equity awards and warrants, as applicable. The Reverse Stock Split was approved by the Company’s stockholders at the Company’s 2023 Annual Meeting of Stockholders on August 7, 2023 and was subsequently approved by the Board of Directors on August 7, 2023.

Current wording

Previously, on August 9, 2023, the Company amended its Charter to implement, effective at 5:30 p.m., Eastern time, a 1-for-20 Reverse Stock Split. At the effective time of the Reverse Stock Split, every 20 shares of common stock either issued and outstanding or held as treasury stock were automatically combined into one issued and outstanding share of common stock, without any change in the par value per share. Stockholders who would have otherwise been entitled to fractional shares of common stock as a result of the Reverse Stock Split received a cash payment in lieu of receiving fractional shares. In addition, as a result of the Reverse Stock Split, proportionate adjustments will be made to the number of shares of common stock underlying the Company’s outstanding equity awards, the number of shares issuable upon the exercise of the Company’s outstanding warrants and the number of shares issuable under the Company’s equity incentive plans and certain existing agreements, as well as the exercise, grant and acquisition prices of such equity awards and warrants, as applicable. The Reverse Stock Split was approved by the Company’s stockholders at the Company’s 2023 Annual Meeting of Stockholders on August 7, 2023, and was subsequently approved by the Board of Directors on August 7, 2023.

Previous wording

The Company completed the acquisition of Spektrum Ltd from PlusEvo Ltd through a Share Purchase Agreement (SPA) executed on March 13, 2025. This acquisition, valued at $1.5 million in common stock at $3 per share, supports Lottery.com’s strategic expansion and the development of Lottery.com International. The acquisition provides the Company with a compliant platform to support lottery, sweepstakes and social gaming operations in dozens of international jurisdictions.

Current wording

The Company completed the acquisition of Spektrum Ltd from PlusEvo Ltd through a Share Purchase Agreement (SPA) executed on March 13, 2025. This acquisition, valued at $1.5 million in common stock at $30.00 per share, supports Lottery.com’s strategic expansion and the development of Lottery.com International. The acquisition provides the Company with a compliant platform to support lottery, sweepstakes and social gaming operations in dozens of international jurisdictions.

Previous wording

Despite the Operational Cessation, the Company’s subsidiaries have continued to operate. While the operational activities of these subsidiaries vary, from the Operational Cessation through the date of this Report, each of TinBu, Aganar and JuegaLotto has decreased its expenses and has had its revenue decrease from pre-Operational Cessation levels.

Current wording

Despite the Operational Cessation, the Company’s subsidiaries have continued to operate. While the operational activities of these subsidiaries vary, from the Operational Cessation through the date of this Report, each of TinBu, Aganar and JuegaLotto has decreased its expenses and has had its revenue decrease from pre-Operational Cessation levels. Additionally, Sports.com Media Group Ltd is operational and generating revenue. Both Concerts.com and TicketStub.com remain operational while the Company invests in redesign the sites to better meet the demands of today’s live entertainment consumers.

Previous wording

On June 24, 2025, The Company appointed Tim Scoffham and CEO of Lottery.com International Limited,. In this role, Scoffham will oversee, the Company’s iGaming and international lottery division focused on delivering secure, compliant, and entertaining lottery experiences across key global markets. His leadership will focus on aligning commercial, media, and technology platforms, bolstering regulatory partnerships, and unlocking scalable, revenue-generating opportunities in high-growth jurisdictions.

Current wording

On June 24, 2025, The Company appointed Tim Scoffham CEO of Lottery.com International Limited. In this role, Scoffham will oversee, the Company’s iGaming and international lottery division focused on delivering secure, compliant, and entertaining lottery experiences across key global markets. His leadership will focus on aligning commercial, media, and technology platforms, bolstering permitted partnerships, and unlocking scalable, revenue-generating opportunities in high-growth jurisdictions.

Previous wording

On September 28, 2023, the Company entered into Stock Purchase Agreement with the shareholders of Nook Holdings Limited (“Nook”), a private limited Company incorporated and registered in the Abu Dhabi Global Market, Abu Dhabi, United Arab Emirates (“UAE”). The total purchase price is approximately $2.314 million. The Company made payments totaling $137,500 in the fourth quarter of 2023 and made additional deposits totaling $323,606 in the first six months of 2025 for a cumulative total of $461,002 as of June 30, 2025 and anticipates the transaction closing in the third quarter of 2025 or as otherwise agreed by the parties. Nook is known for its innovative approach to co-working in Dubai and has procured 200 licenses for individuals and companies in the sports, health and wellness sector seeking access to Dubai and the broader Middle Eastern market. With its exclusive partnership with the Dubai Multi-Commodities Centre Free Zone (DMCC), Nook offers a wide range of services, including business setup support, insurance, VAT registration, and networking opportunities for like-minded sports entrepreneurs. As part of the acquisition, Nook will be rebranded under the Sports.com umbrella.

Current wording

On September 28, 2023, the Company entered into Stock Purchase Agreement with the shareholders of Nook Holdings Limited (“Nook”), a private limited Company incorporated and registered in the Abu Dhabi Global Market, Abu Dhabi, United Arab Emirates (“UAE”). The total purchase price is approximately $2.314 million. The Company made payments totaling $137,500 in the fourth quarter of 2023 and made additional deposits totaling $1,157,391 in the first nine months of 2025 for a cumulative total of $1,294,788 as of September 30, 2025 and anticipates the transaction closing in the fourth quarter of 2025 or as otherwise agreed by the parties. Nook is known for its innovative approach to co-working in Dubai and has procured 200 licenses for individuals and companies in the sports, health and wellness sector seeking access to Dubai and the broader Middle Eastern market. With its exclusive partnership with the Dubai Multi-Commodities Centre Free Zone (DMCC), Nook offers a wide range of services, including business setup support, insurance, VAT registration, and networking opportunities for like-minded sports entrepreneurs. As part of the acquisition, Nook will be rebranded under the Sports.com umbrella.

Previous wording

In February 2025, the Company entered into a multi-year multi-year global partnership with Soccerex, the world’s leading soccer business event organizer. The Agreement makes Sports.com the title sponsor for six global events including Soccerex 2025 for MENA, Europe and USA to be held in Cairo, Amsterdam and Miami, respectively.

Current wording

In February 2025, the Company entered into a multi-year multi-year global partnership with Soccerex, the world’s leading soccer business event organizer. The Agreement makes Sports.com the title sponsor for six global events including Soccerex 2025 for MENA, Europe and USA which were held in Cairo, Amsterdam and Miami, respectively.

Previous wording

On June 24, 2025, The Company appointed Tim Scoffham and CEO of Sports.com Media Group, Ltd. In this role, Scoffham will oversee the strategic integration and international expansion of Sports.com Media, a premium digital sports content and engagement platform. His leadership will focus on aligning commercial, media, and technology platforms, bolstering regulatory partnerships, and unlocking scalable, revenue-generating opportunities in high-growth jurisdictions.

Current wording

On June 24, 2025, the Company appointed Tim Scoffham CEO of Sports.com Media Group, Ltd. In this role, Scoffham will oversee the strategic integration and international expansion of Sports.com Media, a premium digital sports content and engagement platform. His leadership will focus on aligning commercial, media, and technology platforms, bolstering regulatory partnerships, and unlocking scalable, revenue-generating opportunities in high-growth jurisdictions.

Previous wording

As noted above, since the Operational Cessation, the Company has had minimal day-to-day operations and has primarily focused on restarting certain of its core businesses. The Company has developed a three-phase plan to recommence its gaming operations, which plan is outlined below The sequence is subject to change.

Current wording

As noted above, since the Operational Cessation, the Company has had minimal day-to-day operations and has primarily focused on restarting certain of its core businesses. The Company is executing on a multi-phase to recommence its gaming operations, which plan is outlined below The sequence is subject to change.

Previous wording

*Phase 1 - Resume Sweepstakes Operations.*The Company resumed its sweepstakes operations in April 2025 in conjunction with the WinTogether trust. The event was marketed under the DonateTo.Win brand. The launch was limited to Florida residents and awarded a prize for a VIP experience at the 2025 Formula 1 Crypto.com Miami Grand Prix 2025. The launch confirmed that the core sweepstakes platform is fully operational and ready to scale for nationwide events. The Company is planning additional events in the remainder of 2025 offering pirzes related the Company’s business’ in the entertainment and sports markets.

Current wording

*Phase 1 - Resume Sweepstakes Operations.*The Company resumed its sweepstakes operations in April 2025 in conjunction with the WinTogether trust. The event was marketed under the DonateTo.Win brand. The launch was limited to Florida residents and awarded a prize for a VIP experience at the 2025 Formula 1 Crypto.com Miami Grand Prix 2025. The launch confirmed that the core sweepstakes platform is fully operational and ready to scale for nationwide events. The Company is planning additional events in the remainder of 2025 offering prizes related the Company’s business’ in the entertainment and sports markets.

Previous wording

*Phase 2 - Resume B2C Platform Operations.*The Company believes that it will be in a position to relaunch its B2C Platform by the end of 2025. As of the date of this Report, the Company expects that it will initially relaunch its B2C Platform to customers in international jurisdictions for a period of time before rolling it out to other jurisdictions, including the resumption of sales in the US. The Company plans to limit the rollout in order to give it additional time to properly vet and confirm compliance with local, state and federal rules related to ticket procurement and distribution. For more information, see “*Item 1A. Risk Factors.*The Company has also maintained various pre-paid media credits that it expects to use to launch and maintain promotional campaigns geared towards encouraging prior customers to return to the Platform and to acquire new customers.

Current wording

*Phase 2 - Resume B2C Platform Operations.*The Company believes that it will be in a position to relaunch its B2C Platform by the end of 2025. As of the date of this Report, the Company expects that it will initially relaunch its B2C Platform to customers in international jurisdictions for a period of time before rolling it out to other jurisdictions. The Company plans to limit the rollout in order to give it additional time to properly vet and confirm compliance with local, state and federal rules related to ticket procurement and distribution. For more information, see “Item 1A. Risk Factors. The Company has also maintained various pre-paid media credits that it expects to use to launch and maintain promotional campaigns geared towards encouraging prior customers to return to the Platform and to acquire new customers.

Previous wording

*Phase 3 - Other Business Lines and Projects.*The Company expects to monetize the Sports.com brand, offer TicketStub.com services in international jurisdictions, and expand the Concerts.com platform beyond ticket reselling, and partnering with licensed providers in international jurisdictions to supply digital lottery games, and reviving other products and services that were under development when the Operational Cessation occurred.

Current wording

*Phase 4 - Other Business Lines and Projects.*The Company expects to continue to monetize the Sports.com brand, offer TicketStub.com services in international jurisdictions, and expand the Concerts.com platform beyond ticket reselling, and partnering with licensed providers in international jurisdictions to supply digital lottery games, and reviving other products and services that were under development when the Operational Cessation occurred.

Previous wording

As of the date of this Report, the current estimated cash balance of the Company and subsidiaries is approximately $36,799. The Company believes that this cash on hand, along with future borrowings, will be sufficient for the Company to resume its core operations.

Current wording

As of the date of this Report, the current estimated cash balance of the Company and subsidiaries is approximately $320,000. The Company believes that this cash on hand, along with future borrowings, will be sufficient for the Company to resume its core operations.

Previous wording

As of the date of this Report, our common stock and warrants are traded on The Nasdaq Stock Market LLC (“Nasdaq”) under the ticker symbols “SEGG” and “LTRYW,” respectively. As of the date of this Report, we are not in compliance with Nasdaq’s continued listing requirements (the “Listing Rules”). Under its new management, the Company continues to work to improve its disclosure and reporting controls. Also, the Company plans to continue to strengthen and improve its systems of internal control over financial reporting and invest in additional legal, accounting, and financial resources.

Current wording

Our common stock and warrants are traded on The Nasdaq Stock Market LLC (“Nasdaq”) under the ticker symbols “SEGG” and “LTRYW,” respectively. As of the date of this Report, we are in compliance with Nasdaq’s continued listing requirements (the “Listing Rules”). Under its new management, the Company continues to work to improve its disclosure and reporting controls. Also, the Company plans to continue to strengthen and improve its systems of internal control over financial reporting and invest in additional legal, accounting, and financial resources.

Previous wording

*Our growth plans and the competitive landscape.*Our direct competitors operate in the global entertainment and gaming industries and, like us, seek to expand their product and service offerings with integrated products and solutions. Our short-to-medium term focus is on increasing our penetration in our existing U.S. jurisdictions by increasing direct to consumer marketing campaigns, introducing our B2C Platform into new U.S. and select foreign jurisdictions and acquiring synergistic regulated and sports betting enterprises domestically and abroad.

Current wording

*Our growth plans and the competitive landscape.*Our direct competitors operate in the global entertainment and gaming industries and, like us, seek to expand their product and service offerings with integrated products and solutions. Our short-to-medium term focus is on increasing our brand penetration in U.S. and international jurisdictions by increasing direct to consumer marketing campaigns, entering into affiliate partnerships in U.S. and select foreign jurisdictions and acquiring synergistic enterprises domestically and abroad.

Previous wording

As of the date of this Report, the Company’s primary revenue drivers are its data business and lottery ticket sales in Mexicoand describe the revenue from S&MI. It is anticipated that operational costs for the next 12 months through August 31, 2026 will be greater than revenues. It is anticipated that the liquidity gap will be satisfied by equity investment or debt incurred, of which there is no assurance.

Current wording

As of the date of this Report, the Company’s primary revenue drivers are its data business, lottery ticket sales in Mexico and sponsorship and licensing deals with Sports.com Media Group. It is anticipated that operational costs for the next 12 months through September 30, 2026 will be greater than revenues. It is anticipated that the liquidity gap will be satisfied by equity investment or debt incurred, of which there is no assurance.

Previous wording

Within the next 12 months, the Company plans to continue to resume domestic lottery operations and expand international operations. Moreover, the Company plans to enhance its mobile application to include pool plays, ticket subscriptions, loyalty programs and various gamification modules.

Current wording

Within the next 12 months, the Company plans to continue to reintroduce the Lottery.com brand to the domestic market and expand international operations in gaming, sports, and entertainment. Moreover, the Company plans to enhance its mobile application to include pool plays, ticket subscriptions, loyalty programs and various gamification modules.

Previous wording

Revenue. Revenue for the three months ended June 30, 2025 was $192,000, a decrease of $65,000, or 25%, compared to revenue of $257,000 for the three months ended June 30, 2024. The decrease is the net effect of decreases of $50,000 for Global Gaming and $62,000 for TinBu in 2025 vs 2024 offset by $47,000 in revenue for the S&MI subsidiary which was not present in the three months ended June 30, 2024.

Current wording

Revenue. Revenue for the three months ended September 30, 2025 was $138,000, a decrease of $63,000, or 31%, compared to revenue of $201,000 for the three months ended September 30, 2024. The decrease is the net effect of decreases of $38,000 for Global Gaming and $24,000 for TinBu in 2025 and 1,000 for S&MI vs 2024.

Previous wording

Cost of Revenue. Cost of revenue includes product costs, commission expense to affiliates and commercial partners, and merchant processing fees. Cost of revenue for the three months ended June 30, 2025 was $163,000 thousand, an increase of $117,000, or 257%, compared to cost of revenue of $46,000 for the three months ended June 30, 2024. The primary driver of the increase is $130,000 in cost of revenue for the S&MI subsidiary which was not present in the three months ended June 30, 2024 which was partially offset by a decrease of $13,000 for Global Gaming in the three months ended June 30, 2025.

Current wording

Cost of Revenue. Cost of revenue includes product costs, commission expense to affiliates and commercial partners, and merchant processing fees. Cost of revenue for the three months ended September 30, 2025 was $205,000 thousand, an increase of $119,000, or 137%, compared to cost of revenue of $86,000 for the three months ended September 30, 2024. For the three months ended September 30, 2025 there were increases of $63,000 in cost of revenue for the S&MI subsidiary and $59,000 for Global Gaming offset by minor decreases for the core Lottery business.

Previous wording

Gross Profit. Gross profit for the three months ended June 30, 2025 was $29,000 compared to $211,000 for the three months ended June 30, 2024, a decrease of $182,000, or 86%. The decrease in gross profit resulted from the decreases in revenue for Global Gaming and Tinbu and the net impact of costs and revenue for S&MI during the period which were not present in the three months ended June 30, 2025.

Current wording

Gross Profit. Gross profit for the three months ended September 30, 2025 was a loss of $67,000 compared to profit of $114,000 for the three months ended September 30, 2024, a decrease of $182,000, or 159%. Gross profit for Global Gaming decreased by: $97,000, Tinbu by $23,000 and S&MI by $62,000 in the three months ended September 30, 2025.

Previous wording

Operating expenses for the six months ended June 30, 2025 were $7.5 million, a decrease of $4.4 million, or 37%, compared to $11.9 million for the six months ended June 30, 2024. The decrease was primarily driven by a decrease of $1.6 million in personnel costs accompanied by an decreases in professional fees of $1.1million, a decrease in general and administrative expenses of $1.05 million and a decrease in depreciation and amortization by $515,000. Reasons for these decreases are described below.

Current wording

Operating expenses for the three months ended September 30, 2025 were $4.7 million, an increase of $766,000, or 23%, compared to $3.8 million for the three months ended September 30, 2024. The increase was primarily driven by increases of $817,000 in General and administrative costs and $407,000 in Professional fees offset by decreases in Personnel costs of $319,000 and Depreciation and amortization of $28,000. Reasons for these decreases are described below.

Previous wording

Professional Fees. Professional fees decreased by $205,000 or 13%, from $1.5 million for the three months ended June 30, 2024 to $1.3 million for the three months ended June 30, 2025. The increase was due to expenses incurred for outside attorneys, other consultants, and directors in the three months ended June 30, 2025. Activity levels for the business, and these types of expense were lower for the same period in 2024.

Current wording

Professional Fees. Professional fees increased by $407,000 or 34%, from $1.2 million for the three months ended September 30, 2024 to $1.6 million for the three months ended September 30, 2025. The increase was due to expenses incurred for outside attorneys in the three months ended September 30, 2025. Activity levels for outside attorneys were lower for the same period in 2024.

Previous wording

*Depreciation and Amortization.*Depreciation and amortization decreased $257,000, or 19%, from $1.33 million for the three months ended June 30, 2024 to $1.07 million for the three months ended June 30, 2025. The decrease was primarily driven by write-offs to intangible assets related to Global Gaming in 2023 and 2024 resulting in a decrease of approximately $112,000 for the three months ended June 30, 2025, a decrease of approximately $99,000 because Tinbu intangibles became fully amortized in the summer of 2024, and a decrease of approximately $46,000 related to other intangible assets becoming fully amortized at the end of 2024.

Current wording

*Depreciation and Amortization.*Depreciation and amortization decreased $28,000, or 2%, from $1.21 million for the three months ended September 30, 2024 to $1.18 million for the three months ended September 30, 2025. The decrease was primarily driven by write-offs to intangible assets related to Global Gaming in 2024 resulting in a decrease for the three months ended September 30, 2025, and because Tinbu intangibles became fully amortized in the summer of 2024.

Previous wording

Interest Expense. Interest expense for the three months ended June 30, 2025 was $64,000 vs interest expense of $122,000 for the three months ended June 30, 2024, a decrease of $57,000 or 47%. Interest expense relates to notes payable from the time of the business combination plus interest on more recent convertible notes from Woodford, UCIL, and Univest. Interest accrual for convertible debt was lower for the three months ended June 30, 2025 due to lower balances for convertible debt as a result of conversions to equity.

Current wording

Interest Expense. Interest expense for the three months ended September 30, 2025 was $68,000 vs interest expense of $127,000 for the three months ended September 30, 2024, a decrease of $59,000 or 46%. Interest expense relates to notes payable from the time of the business combination plus interest on more recent convertible notes from Woodford, UCIL, and Univest. Interest accrual for convertible debt was lower for the three months ended September 30, 2025 than for the three months ended September 30, 2024 due to lower balances for convertible debt as a result of conversions to equity.

Previous wording

The following table summarizes our results of operations for the six months ended June 30, 2025 and June 30, 2024, respectively.

Current wording

The following table summarizes our results of operations for the nine months ended June 30, 2025 and June 30, 2024, respectively.

Previous wording

Revenue. Revenue for the six months ended June 30, 2025 was $416,000, a decrease of $101,000, or 20%, compared to revenue of $516,000 for the six months ended June 30, 2024. The decrease is the net effect of decreases of $103,000 for Global Gaming and $86,000 for TinBu in 2025 vs 2024 offset by $88,000 in revenue for the S&MI subsidiary which was not present in the six months ended June 30, 2024.

Current wording

Revenue. Revenue for the nine months ended September 30, 2025 was $553,000, a decrease of $164,000, or 23%, compared to revenue of $717,000 for the nine months ended September 30, 2024. The decrease in revenue is the net effect of decreases of $141,000 for Global Gaming and $108,000 for TinBu in 2025 vs 2024 offset by an increase of $87,000 in revenue for the S&MI subsidiary which is because S&MI was present for nine months in 2025 and only for one month in 2024.

Previous wording

Cost of Revenue. Cost of revenue includes product costs, commission expense to affiliates and commercial partners, and merchant processing fees. Cost of revenue of $325,000 for the six months ended June 30, 2025 was an increase of $196,000 or 151% compared with $129,000 for the six months ended June 30, 2024. The primary driver of the increase is $239,000 in cost of revenue for the S&MI subsidiary which was not present in the six months ended June 30, 2024 which was partially offset by a decrease of $43,000 for Global Gaming in the six months ended June 30, 2025.

Current wording

Cost of Revenue. Cost of revenue includes product costs, commission expense to affiliates and commercial partners, and merchant processing fees. Cost of revenue of $530,000 for the nine months ended September 30, 2025 was an increase of $314,000 or 146% compared with $216,000 for the nine months ended September 30, 2024. The primary driver of the increase is because S&MI was present for nine months in 2025 and only for one month in 2024. Cost of revenue for TinBu was essentially flat and there was a small increase for Global Gaming.

Previous wording

Operating expenses for the three months ended June 30, 2025 were $3.9 million, a decrease of $2.1 million, or 35%, compared to $6.1 million for the three months ended June 30, 2024. The decrease was primarily driven by a decrease of $1.4 million in personnel costs accompanied by decreases in professional fees $205,000, along with decreases in general and administrative expenses by $312,000 and depreciation and amortization by $257,000. Reasons for these decreases are described below.

Current wording

Operating expenses for the nine months ended September 30, 2025 were $12.0 million, a decrease of $3.6 million, or 23%, compared to $15.6 million for the nine months ended September 30, 2024. The decrease was primarily driven by a decrease of $2.0 million in Personnel costs accompanied by decreases in: Professional fees of $891,000, General and administrative expenses of $237,000, Depreciation and amortization by $543,000. Reasons for these decreases are described below.

Previous wording

Personnel Costs. Personnel costs decreased by $1.6 million or 59% from $2.8 million for the six months ended June 30, 2024, to $1.1 million for the six months ended June 30, 2025. The decrease is because expenses recorded in the six months ended June 30, 2024 for shares of common stock and related payroll taxes granted to officers for retention and their contributions to the turnaround and accrual of wages related to the TinBu subsidiary did not reoccur during the six months ended June 30, 2025.

Current wording

Personnel Costs. Personnel costs decreased by $2.0 million or 57% from $3.4 million for the nine months ended September 30, 2024, to $1.5 million for the nine months ended September 30, 2025. The decrease is because there were changes in the composition of the team for the parent company and Tinbu subsidiary in 2025 and also expenses recorded in the nine months ended September 30, 2024 for shares of common stock and related payroll taxes granted to officers for retention and their contributions to the turnaround did not reoccur during the nine months ended September 30, 2025.

Previous wording

Depreciation and Amortization. Depreciation and amortization decreased $515,000 or 20%, from $2.62 million for the three months ended June 30, 2024 to $2.1 million for the six months ended June 30, 2025. The decrease was primarily driven by write-offs to intangible assets related to Global Gaming in 2023 and 2024 resulting in a decrease of approximately $225,000 for the six months ended June 30, 2025, a decrease of approximately $139,000 because Tinbu intangibles became fully amortized in the summer of 2024, and a decrease of approximately $146,000 related to other intangible assets becoming fully amortized at the end of 2024.

Current wording

Depreciation and Amortization. Depreciation and amortization decreased $543,000 or 14%, from $3.8 million for the nine months ended September 30, 2024 to $3.3 million for the nine months ended September 30, 2025. The decrease was primarily driven by write-offs to intangible assets related to Global Gaming in 2024 and because Tinbu intangibles became fully amortized in the summer of 2024 and there has been no amortization on them in the nine months ending September 30, 2025.

Previous wording

Interest Expense (Income). Interest income for the six months ended June 30, 2025 was $60,000 vs interest expense of $224,000 for the six months ended June 30, 2024, a decrease of $284,000 or 127%. Interest accrual for convertible debt was lower for the six months ended June 30, 2025 due to lower balances for convertible debt as a result of conversions to equity. Additionally, an accrual for $196,000 was recorded in the three months ended March 31, 2025 for accrued interest income on a note receivable.

Current wording

Interest Expense (Income). Interest expense for the nine months ended September 30, 2025 was $8,000 vs interest expense of $351,000 for the nine months ended September 30, 2024, a decrease of $344,000 or 98%. Interest accrual for convertible debt was lower for the nine months ended September 30, 2025 due to lower balances for convertible debt as a result of conversions to equity. Additionally, accruals for $227,000 were recorded in the nine months ended September 30, 2025 for accrued interest income on a note receivable.

Previous wording

Other Expense. Other income was $89,000 for the six months ended June 30, 2025 vs. $9,000 of other expense for the six months ended June 30, 2024.

Current wording

Other (Income) Expense. Other income was $108,000 for the nine months ended September 30, 2025 vs. $12,000 for the nine months ended September 30, 2024, an increase of $96,000 or 819%.

Previous wording

Net cash used in operating activities was $1.4 million for the three months ended June 30, 2025, compared to net cash used in operating activities of $1.4 million for the three months ended June 30, 2024.

Current wording

Net cash used in operating activities was $6.4 million for the nine months ended September 30, 2025, compared to net cash provided by operating activities of $953,000 for the nine months ended September 30, 2024 which was an increase of $7,4 million year over year.

Previous wording

Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in the Annual Report and the notes to the audited financial statements appearing elsewhere in the Annual Report. During the six months ended June 30, 2025, there were no material changes to our critical accounting policies from those discussed in our Amended 2024 Annual Report. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” This guidance requires recognition of most lease liabilities on the balance sheet to give investors, lenders, and other financial statement users a more comprehensive view of a company’s long-term financial obligations, as well as the assets it owns versus leases. ASU 2016-02 will be effective for fiscal years beginning after December 15, 2021, and for interim periods within annual periods after December 15, 2022. In July 2018, the FASB issued ASU 2018-11 making transition requirements less burdensome. The standard provides an option to apply the transition provisions of the new standard at its adoption date instead of at the earliest comparative period presented in the Company’s financial statements. We are currently evaluating the impact that this guidance will have on our financial statements as well as the expected adoption method. The adoption of this standard did not have a material impact on our financial statements.

Current wording

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” This guidance requires recognition of most lease liabilities on the balance sheet to give investors, lenders, and other financial statement users a more comprehensive view of a company’s long-term financial obligations, as well as the assets it owns versus leases. ASU 2016-02 will be effective for fiscal years beginning after December 15, 2021, and for interim periods within annual periods after December 15, 2022. In July 2018, the FASB issued ASU 2018-11 making transition requirements less burdensome. The standard provides an option to apply the transition provisions of the new standard at its adoption date instead of at the earliest comparative period presented in the Company’s financial statements. The adoption of this standard did not have a material impact on our financial statements.

Previous wording

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments”, as additional guidance on the measurement of credit losses on financial instruments. The new guidance requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. In addition, the guidance amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The new guidance is effective for all public companies for interim and annual periods beginning after December 15, 2019, with early adoption permitted for interim and annual periods beginning after December 15, 2018. In October 2019, the FASB approved a proposal which grants smaller reporting companies additional time to implement FASB standards on current expected credit losses (CECL) to January 2023. As a smaller reporting company, we will defer adoption of ASU No. 2016-13 until January 2023. We are currently evaluating the impact this guidance will have on our condensed consolidated financial statements.

Current wording

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments”, as additional guidance on the measurement of credit losses on financial instruments. The new guidance requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. In addition, the guidance amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The new guidance is effective for all public companies for interim and annual periods beginning after December 15, 2019, with early adoption permitted for interim and annual periods beginning after December 15, 2018. In October 2019, the FASB approved a proposal which grants smaller reporting companies additional time to implement FASB standards on current expected credit losses (CECL) to January 2023. As a smaller reporting company, we deferred adoption of ASU No. 2016-13 until January 2023.