What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-10 compared with 2025-03-26 · 1116 added, 1148 removed, 1130 unchanged (67% of the section changed)

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OF DECEMBER 31, 2025 AND 2024

Report of Independent Registered Public Accounting Firm PCAOB ID # 688

Report of Independent Registered Public Accounting Firm – CBIZ CPAs P.C.

PCAOB ID # 199

Report of Independent Registered Public Accounting Firm – Marcum LLP.

Consolidated Balance Sheets

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Notes to the Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

REPORT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

the Stockholders and Board of Directors of

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on the Financial Statements

have audited the accompanying consolidated balance sheets of Inspired Entertainment, Inc.

and Subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated

statements of operations and comprehensive income (loss), stockholders’ deficit and cash flows for each of the three years in the

period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion,

based on our audit results, the financial statements present fairly, in all material respects, the financial position of the Company as

of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December

31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the

Company’s internal control over financial reporting as of December 31, 2024, based on the criteria established in Internal Control –

Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March

26, 2025, expressed an adverse opinion on the effectiveness of the Company’s internal control over financial reporting because of

the existence of material weaknesses.

These financial statements are the responsibility of the Company’s management.

have audited the accompanying consolidated balance sheets of Inspired Entertainment, Inc, and Subsidiaries (the “Company”)

as of December 31, 2025, the related consolidated statements of operations and comprehensive (loss) income, stockholders’ deficit

and cash flows for the year ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”).

In our opinion, based on our audit results, the financial statements present fairly, in all material respects, the financial position

of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in

conformity with accounting principles generally accepted in the United States of America.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent

with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities

and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to

obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or

financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or

fraud, and performing procedures that respond to those risks.

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the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

Our audit also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide

We believe that our audit provides

a reasonable basis for our opinion.

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Examples include:

Gaming revenue includes delivery of gaming terminals preloaded with proprietary gaming software, sever-based content, as well as services

Gaming revenue includes delivery of gaming terminals preloaded with proprietary gaming software, server-based content, as well as services

such as terminal repairs, maintenance, software updates and upgrades, and content development;

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on the Company’s remote gaming servers platform, and services such as customer support, platform maintenance, updates and upgrades;

and (d) Leisure revenue is generated by jointly or wholly operating arcades, proving managed service solutions, and more.

recognized revenue of $297.1 million for the year ended December 31, 2024.

and (d) Leisure revenue is generated by supplying and operating gaming terminals and amusement machines within arcades, motorway service

areas, and pubs, providing managed service solutions.

The Company recognized revenue of $304.1 million for the year ended December 31,

of the Company’s revenue contracts with customers include multiple promises, the nature of which can vary for each segment and

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estimated to be two to five years.

Company capitalized $11.8 million of software development costs, with the majority of the costs being employee wages, during the year

ended December 31, 2024.

Total capitalized software development costs are $22.4 million as of December 31, 2024.

Company capitalized $12.1 million of software development costs, with the majority of the costs being employee wages and the remaining

as external vendor costs, during the year ended December 31, 2025.

Total capitalized software development costs are $22.7 million as

of December 31, 2025.

identified software development costs as a critical audit matter because of the judgment exercised by management in determining whether

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and the nature of software development costs capitalized.

assessed management’s methodology utilized in calculating capitalized software development

costs which is based on the allocation of capitalized labor costs.

We made certain inquiries

of project members to further assess the reasonableness of time allocated to the selected

inspected underlying documentation for a sample of projects to evaluate whether the costs

were capitalizable under the applicable accounting standards.

tested individual payroll-related costs, on a sample basis, and assessed whether such costs

were properly capitalized based upon the nature and stage of work performed and whether the

requisite capitalization criteria were met.

tested individual payroll and non payroll related costs, on a sample basis, and assessed

whether such costs were properly capitalized based upon the nature and stage of work performed

and whether the requisite capitalization criteria were met.

conducted corroborative interviews with Company personnel involved in software development

regarding the nature and functionality of costs incurred related to capitalized software

have served as the Company’s auditor since 2016.

CBIZ CPAs P.C.

have served as the Company’s auditor since 2016 (such date takes into account the acquisition of the attest business of Marcum

llp by CBIZ CPAs P.C.

effective November 1, 2024).

York, New York

March 10, 2026

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Shareholders and Board of Directors of

Entertainment, Inc.

and Subsidiaries

on the Financial Statements

have audited the accompanying consolidated balance sheets of Inspired Entertainment, Inc.

and Subsidiaries (the “Company”)

as of December 31, 2024, the related consolidated statements of operations and comprehensive income (loss), stockholders’ deficit

and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, based on our audit results, the financial statements present fairly, in all material respects, the financial position

of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in

conformity with accounting principles generally accepted in the United States of America.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud,

and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts

and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates

made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a

reasonable basis for our opinion.

/s/ Marcum LLP

have served as the Company’s auditor from 2016 through 2025.

ENTERTAINMENT, INC.

AND SUBSIDIARIES

BALANCE SHEETS

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December 31, 2024

Current assets

Restricted cash

Accounts receivable, net

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AND SUBSIDIARIES

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

millions, except share and per share data)

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Total revenue

Cost of sales:

Cost of sales, excluding depreciation and amortization:

Cost of service (1)

Cost of product sales (1)

Cost of sales

Selling, general and administrative expenses

Acquisition and integration related transaction expenses

Depreciation and amortization

Loss on sale of business

Net operating income

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Interest expense, net

Gain on disposal of business

Other finance income

Total other expense, net

Net income before income taxes

Income tax benefit (expense)

Net (loss) income before income taxes

Income tax (expense) benefit

Net (loss) income

Other comprehensive (loss) income:

Foreign currency translation gain (loss)

Deferred tax on foreign currency translation gain (loss)

Reclassification of loss on hedging instrument to comprehensive income

Actuarial gains (losses) on pension plan

Deferred tax on actuarial gains (losses) on pension plan

Other comprehensive income (loss)

Comprehensive

income (loss)

Net income per common share – basic

Net income per common share – diluted

Foreign currency translation (loss) gain

Deferred tax on foreign currency translation (loss) gain

Change in fair value of hedging instrument

Reclassification of gain on hedging instrument to comprehensive income

Deferred tax on movement in hedging instrument

Actuarial gains on pension plan

Deferred tax on actuarial gains on pension plan

Other comprehensive (loss) income

Comprehensive (loss) income

Net (loss) income per common share – basic

Net (loss) income per common share - diluted

Weighted average number of shares outstanding during the year – basic

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Foreign currency translation adjustments

Actuarial losses on pension plan

Reclassification of loss on hedging instrument to comprehensive income

Issuances under stock plans

Repurchases of common stock

( 1,067,340 )

Stock-based compensation expense

Balance as of December 31, 2022

Foreign currency translation adjustments

Actuarial losses on pension plan

Reclassification of loss on hedging instrument to comprehensive income

Deferred tax on foreign currency translation adjustments

Actuarial gains on pension plan

Deferred tax on actuarial gains on pension plan

Issuances under stock plans

Repurchases of common stock

Stock-based compensation expense

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Deferred tax on foreign currency translation adjustments

Change in fair value of hedging instrument

Reclassification of gain on hedging instrument to comprehensive income

Deferred tax on movement in hedging instrument

Actuarial gains on pension plan

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Issuances under stock plans

Repurchase of common stock

Stock-based compensation expense

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Cash flows from operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Net (loss) income

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

Amortization of right of use asset

Profit on disposal of trade and assets

Amortization of finance lease right of use asset

Amortization of operating lease right of use asset

Loss on sale of business

Stock-based compensation expense

Reclassification of loss on hedging instrument to comprehensive income

Amortization of deferred financing fees relating to senior debt

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Purchases of property and equipment

Acquisition of subsidiary company assets

Acquisition of third-party company trade and assets

Disposal of trade and assets

Purchases of capital software and internally developed costs

Contract cost expense

Net cash on sale of business

Contract cost expenditures

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from issuance of revolver

Proceeds from long-term debt

Repayments of long-term debt and short-term debt

Debt fees incurred

Repurchase of common stock

Repayments of finance leases

Net cash (used in) provided by financing activities

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash

Net (decrease) increase in cash

Net increase (decrease) in cash

Cash, beginning of period

Cash, end of period

Cash and restricted cash, end of period

Components of cash and restricted cash

Restricted cash

Total cash and restricted cash, end of period

Supplemental cash flow disclosures

Cash paid during the period for interest

Cash paid during the period for income taxes

Cash paid during the period for operating leases

Supplemental disclosure of noncash investing and financing activities

Additional paid in capital from net settlement of RSUs

Right of use property and equipment acquired through finance lease

Lease liabilities arising from obtaining finance lease right of use assets

Lease liabilities arising from obtaining operating lease

right of use assets

Adjustment to customer relationships intangible asset arising from adjustment to fair value of assets acquired

Right of use property and equipment assets acquired through

finance lease

Property and equipment transferred to inventory

Lease liabilities arising from obtaining operating lease right of use assets

Additional paid in capital from net settlement of RSUs

accompanying notes are an integral part of these consolidated financial statements.

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TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Nature of Operations, Management’s Plans and Summary of Significant Accounting Policies

Description and Nature of Operations

are a global gaming technology company, supplying content, platform, gaming terminals and other products and services to online and land-based

regulated lottery, betting and gaming operators worldwide through a broad range of distribution channels, predominantly on a business-to-business

We provide end-to-end digital gaming solutions (i) on our own proprietary and secure network, which accommodates a wide range

of devices, including land-based gaming machine terminals, mobile devices and online computer applications and (ii) through third party

Our content and other products can be found through the consumer-facing portals of our interactive customers and, through our

land-based customers, in licensed betting offices, adult gaming centers, pubs, bingo halls, airports, motorway service areas and leisure

Inspired Entertainment, Inc.

(the “Company”, “Inspired”,

“we” or “us”) is a global gaming technology company, supplying content, platform and other products and services

to licensed online and land-based lottery, betting and gaming operators worldwide through a broad range of distribution channels, on a

business-to-business basis.

We provide end-to-end digital gaming solutions (i) on our own proprietary and secure network, which accommodates

a wide range of devices, including land-based gaming machine terminals, mobile devices and online computer applications and (ii) through

third party networks.

Our content and other products can be found through the consumer-facing portals of our customers operating digital

channels, on aggregator platforms, and in licensed betting offices, adult gaming centers, pubs, bingo halls and motorway service areas

for our customers operating land-based venues.

Liquidity Plans

of December 31, 2024, the Company’s cash on hand was $ 29.3 million,

and the Company had working capital in addition to cash of $ 26.6 million.

The Company recorded net income of $ 64.8

million, $ 6.9 million

and $ 21.2 million

for the years ended December 31, 2024, 2023 and 2022, respectively.

Net income includes non-cash stock-based compensation of $ 7.6 million,

$ 11.2 million

and $ 10.8 million

for the years ended December 31, 2024, 2023 and 2022, respectively.

of December 31, 2025, the Company’s cash on hand, excluding restricted cash, was $ 42.0 million, and the Company had working capital

in addition to cash and unrestricted cash of $ 43.9 million.

The Company recorded a net loss of $ 17.0 million and net income of $ 64.8

million for the years ended December 31, 2025 and December 31, 2024, respectively.

Net loss/income includes non-cash stock-based compensation

of $ 6.7 million and $ 7.6 million for the years ended December 31, 2025 and December 31, 2024, respectively.

Historically,

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Cash flows provided by operations

amounted to $ 31.7

million, $ 54.7

million and $ 29.6

million for the years ended December 31, 2024,

2023 and 2022 respectively.

amounted to $ 52.0 million and $ 31.7 million for the years ended December 31, 2025 and December 31, 2024, respectively.

currently believes that the Company’s cash balances on hand, cash flows expected to be generated from operations, ability to control

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TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

of Presentation

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of Consolidation

monetary values set forth in these consolidated financial statements are in US Dollars (“USD”) unless otherwise stated herein.

monetary values set forth in these consolidated financial statements are in U.S.

Dollars (“USD”) unless otherwise stated

The accompanying consolidated financial statements include the results of the Company and its wholly owned subsidiaries.

All intercompany

balances and transactions have been eliminated in consolidation.

intercompany balances and transactions have been eliminated in consolidation.

Currency Translation

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Aggregate foreign currency losses

included in net income amounted to $ 2.4 million, $ 1.1 million and $ 0.1 million for the years ended December 31, 2024, December 31, 2023

and December 31, 2022, respectively.

included in net income amounted to $ 0.1 million and $ 2.4 million for the years ended December 31, 2025 and December 31, 2024, respectively.

preparation of consolidated financial statements in conformity with U.S.

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these estimates, including those related to the revenue recognition for contracts involving software and non-software elements, allowance

for credit losses, inventory reserve for net realizable value, currency swaps, goodwill and intangible

assets, useful lives of long-lived assets, stock-based compensation, valuation allowances on deferred taxes, pension liability, commitments

and contingencies and litigation, among others.

Management bases its estimates on historical experience and on various other assumptions

that are believed to be reasonable under the circumstances.

We regularly evaluate these significant factors and make adjustments when

facts and circumstances dictate.

Actual results may differ from these estimates.

for credit losses, inventory reserve for net realizable value, currency swaps, goodwill and intangible assets, useful lives of long-lived

assets, stock-based compensation, valuation allowances on deferred taxes, pension liability, commitments and contingencies and litigation,

among others.

Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable

under the circumstances.

We regularly evaluate these significant factors and make adjustments when facts and circumstances dictate.

results may differ from these estimates.

ENTERTAINMENT, INC.

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TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

and Restricted Cash

deposit cash with financial institutions that management believes are of high credit quality.

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cash is held outside of the U.S.

Included within the cash balance of $ 29.3 million at December 31, 2024 is $ 2.9 million of cash floats

held on site at holiday parks.

cash consists of escrowed funds from the sale of UK holiday parks business and certain associated leisure assets.

The funds are

restricted for a period of 12 months from the sale completion date and therefore not available for general corporate purposes until

November 2026.

In the absence of any claims against the standard warranties provided as part of merger & acquisition

transactions, the restriction is time-based only and will lapse automatically upon expiration of the escrow period.

receivable are recorded at the invoiced amount and do not bear interest.

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remained outstanding.

In estimating

expected credit losses, management considers all available relevant information, including details about past events, current conditions,

and reasonable and supportable forecasts.

estimating expected credit losses, management considers all available relevant information, including details about past events, current

conditions, asset-specific risk characteristics and reasonable and supportable forecasts.

credit loss data is utilized as the basis of the estimation.

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31, 2025 and December 31, 2024, respectively.

consist primarily of component parts and related parts used in gaming terminals.

Inventories are stated at the lower of cost or net realizable

value, using the first-in-first-out method.

We determine the lower of cost or net realizable value of our inventory based on estimates

of potentially excess and obsolete inventories after considering historical and forecasted demand and average selling prices.

for gaming terminals and parts inventory is also subject to technological obsolescence.

Cost includes all direct costs and an appropriate

proportion of fixed and variable overheads.

consist primarily of gaming terminals and related parts and other component parts.

Inventories are stated at the lower of cost or net realizable value, using the first-in-first-out method.

We determine the lower of

cost or net realizable value of our inventory based on estimates of potentially excess and obsolete inventories after considering

historical and forecasted demand and average selling prices.

Demand for gaming terminals and parts inventory is also subject to

technological obsolescence.

Cost includes all direct costs and an appropriate proportion of fixed and variable overheads.

and Equipment

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not be recoverable.

Where operating leases include an obligation

for repairs and dilapidations costs associated with the retirement of the right-of-use asset, amounts are capitalized at the point at

which a liability for an asset retirement obligation is recognized.

operating leases include an obligation for repairs and dilapidations costs associated with the retirement of the right-of-use asset,

amounts are capitalized at the point at which a liability for an asset retirement obligation is recognized.

and maintenance costs are expensed as incurred.

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TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Development and Research and Development Costs

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absence, are expensed as incurred, except for software product development costs that are eligible for capitalization, as described below.

Total research and development costs amounted to $ 22.7 million, $ 20.3 million and $ 18.3 million in the years ended December 31, 2024,

2023 and 2022, respectively.

Software development costs amounting to $ 7.8 million, $ 7.5 million and $ 6.9 million were capitalized during

the years ended December 31, 2024, 2023 and 2022, respectively.

In addition, amounts relating to Costs of obtaining and fulfilling customer

contracts, net, of $ 4.2 million, $ 3.9 million and $ 2.9 million were capitalized during the years ended December 31, 2024, 2023 and 2022,

Total research and development costs amounted to $ 19.4 million and $ 22.7 million in the years ended December 31, 2025 and 2024, respectively.

Research and development costs amounting to $ 8.4 million and $ 7.8 million were capitalized during the years ended December 31, 2025 and

2024, respectively.

We expensed $ 10.7 million, $ 8.9 million and $ 8.5 million during the years ended December 31, 2024, 2023 and 2022, respectively

as they related to maintenance, research or support costs.

Employee related costs associated with these activities are included in Selling,

general and administrative expenses in the Consolidated Statement of Operations and Comprehensive Income (Loss).

In addition, amounts relating to Costs of obtaining and fulfilling customer contracts, net, of $ 5.5 million and $ 4.2

million were capitalized during the years ended December 31, 2025 and 2024, respectively.

We expensed $ 5.5 million and $ 10.7 million

during the years ended December 31, 2025 and 2024, respectively as they related to maintenance, research or support costs.

Employee related

costs associated with these activities are included in Selling, general and administrative expenses in the Consolidated Statement of

Operations and Comprehensive Income (Loss).

capitalize certain eligible costs incurred to develop internal-use software as well as external use software to be used in the products

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We capitalize the payments made for software

that we purchase or license for use in our products that has previously met the technological feasibility criteria prior to our purchase

that we purchase or license for use in our products that have previously met the technological feasibility criteria prior to our purchase

Once available for general release, capitalized external use software development costs are amortized over the estimated

economic life, which ranges from two to five years.

economic life, which ranges from two to four years.

Amortization of such costs is included in Depreciation and amortization in the Consolidated

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of Goodwill and Long-Lived Assets

to 2024, we performed our annual goodwill impairment assessment as of December 31, the last day of our fiscal period, and whenever other

facts and circumstances indicate that the carrying value may not be recoverable.

During the fourth quarter of fiscal year 2024, we voluntarily

made the decision to change the date of our annual impairment assessment from December 31 to December 1.

The change was made to align

the annual goodwill impairment assessment date more closely with the timing of our annual and long-term budgeting cycles.

determined this change in accounting principle is preferable and will not affect our consolidated financial statements.

This change is

not applied retrospectively, as we believe the change in goodwill impairment testing date does not represent a material change to our

method of applying an accounting principle in light of our internal controls over financial reporting and requirements to assess goodwill

impairment upon certain triggering events, and does not delay, accelerate or avoid any impairment charges.

Accordingly, the change will

be applied prospectively.

fiscal year 2024, we performed our annual goodwill impairment assessment as of December 1, 2024 on each of our reporting units and as

of December 31, 2023 in fiscal year 2023.

As such, no more than 12 months will have elapsed between our previous assessment.

goodwill impairment evaluations, we first make a qualitative assessment to determine if goodwill is may be impaired.

If it is more-likely-than-not

that a reporting unit’s fair value is less than its carrying value, we then compare the fair value of the reporting unit to its

respective carrying amount.

Goodwill is carried, and therefore tested, at the reporting unit level.

As of December 31, 2024 we have five

reporting units, Virtual Sports, Interactive, Leisure, and two reporting units within our Gaming segment.

If the fair value of the reporting

unit is less than its carrying amount, the amount of the impairment loss, if any, will be measured by comparing the implied fair value

of goodwill to its carrying amount and would be charged to operations as an impairment loss.

As of December 31, 2024, 2023, and 2022

management determined there were no indicators of impairment and concluded that no impairment was required at any of these dates.

test for goodwill impairment at least annually as of December 1, and whenever other facts and circumstances indicate that the carrying

value may not be recoverable.

For goodwill impairment evaluations, we first make a qualitative assessment to determine if goodwill is

may be impaired.

If it is more-likely-than-not that a reporting unit’s fair value is less than its carrying value, we then compare

the fair value of the reporting unit to its respective carrying amount.

Goodwill is carried, and therefore tested, at the reporting unit

As of December 31, 2025 we have five reporting units, Virtual Sports, Interactive, Leisure, and two reporting units within our

Gaming segment.

If the fair value of the reporting unit is less than its carrying amount, the amount of the impairment loss, if any,

will be measured by comparing the implied fair value of goodwill to its carrying amount and would be charged to operations as an impairment

of December 1, 2025 we determined that it was more-likely-than-not that the fair value of the Virtual Sports reporting unit was less

than its carrying value.

We carried out a quantitative goodwill impairment analysis and determined that the fair value of the Virtual

Sports reporting unit exceeded its carrying value, including goodwill.

As a result, it was concluded that there was no impairment of

the Virtual Sports goodwill.

It was not considered to be more-likely-than-not that the fair value of all other reporting units was less

than their carrying values as of December 1, 2025.

of December 31, 2025 and 2024 management determined there were no indicators of impairment and concluded that no impairment was required

at any of these dates.

assess the recoverability of long-lived assets and intangible assets with finite useful lives whenever events arise or circumstances

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the carrying amount of the asset exceeds the fair market value of the asset.

As of December 31, 2024, 2023, and 2022 management determined

there were no indicators of impairment and concluded that no impairment was required at any of these dates.

As of December 31, 2025 and 2024 management determined there

were no indicators of impairment and concluded that no impairment was required at any of these dates.

Refer to Note 8, “Intangible

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TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Revenue and Deferred Cost of Sales

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Statement of Operations and Comprehensive Income (Loss) as part of Acquisition and integration related transaction expenses.

Company is subject to Value Added Tax (“VAT”) in some locations.

The amount of VAT liability is determined by applying the

applicable tax rate to the invoiced amount of goods and services sold less VAT paid on purchases made with the relevant supporting invoices.

VAT is collected from customers by the Company on behalf of the tax authorities and is therefore not charged to the Consolidated Statement

of Operations and Comprehensive Income (Loss).

Financial Instruments

Company is subject to indirect taxes in some locations.

The amount of indirect tax liability is determined by applying the applicable

tax rate to the invoiced amount of goods and services sold less indirect tax paid on purchases made with the relevant supporting invoices.

Indirect tax is collected from customers by the Company on behalf of the tax authorities and is therefore not charged to the Consolidated

Statement of Operations and Comprehensive Income (Loss).

Financial Instruments and Hedging Activities

Company reviews any freestanding derivative financial instruments at each balance sheet date and classifies them on the consolidated

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TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

each reporting date, the Company determines whether a change in classification between assets and liabilities is required.

ASC 815, Derivatives and Hedging (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities

with the intent to provide users of financial statements with an enhanced understanding of:

(a) how and why an entity uses derivative

instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and

related hedged items affect an entity’s financial position, financial performance, and cash flows.

Further, qualitative disclosures

are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about

the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative

required by ASC 815, the Company records all derivatives on the balance sheet at fair value, with assets and liabilities presented on

a gross basis with the exception of where they are with the same counterparty in which case they are offset and presented on a net basis.

The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected

to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the

criteria necessary to apply hedge accounting.

Derivatives designated and qualifying as a hedge of the exposure to changes in the fair

value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value

Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types

of forecasted transactions, are considered cash flow hedges.

Derivatives may also be designated as hedges of the foreign currency exposure

of a net investment in a foreign operation.

Hedge accounting generally provides for the matching of the timing of gain or loss recognition

on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable

to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge.

may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not

apply or the Company elects not to apply hedge accounting.

accordance with the FASB’s fair value measurement guidance in ASU 2011-04, the Company made an accounting policy election to measure

the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty

Details of the Company’s interest rate swap are given in note

time to time we enter into foreign currency forward contracts to mitigate the risk associated with cash payments required to be made

in non-functional currencies or to mitigate the risk associated with cash to be received in non-functional currencies.

At December 31,

2025, there are no foreign currency forward contracts in place.

Company evaluates the recognition of revenue and rental income based on the criteria set forth in ASC 606 or ASC 842, as appropriate.

16 unchanged sentences

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

the transaction price;

34 unchanged sentences

that a significant reversal of any incremental revenue will not occur.

Additionally, customers with volume discounts in contracts with functional IP are not considered to have material

rights as royalty revenue is recognized when usage occurs.

Additionally, customers with volume discounts in contracts with

functional IP are not considered to have material rights as royalty revenue is recognized when usage occurs.

variable considerations relate to a performance obligation determined to be a series, variable consideration is not estimated upfront

15 unchanged sentences

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

4 – Allocate the transaction price

21 unchanged sentences

Company assesses usage-based royalties it receives as consideration in contracts that predominantly relate to licenses of its intellectual

property to determine if such royalties constitute a sales- or usage-based royalty, according to ASC 606-10-55-65, in which case the usage-based

royalties are recognized as revenue when the usage occurs, and is reported by the licensee.

property to determine if such royalties constitute a sales- or usage-based royalty, according to ASC 606-10-55-65, in which case the

usage-based royalties are recognized as revenue when the usage occurs, and is reported by the licensee.

as a Principal or an Agent

Company evaluates arrangements where they may be acting as a principal or an agent.

We may include subcontractor services or third-party

vendor services or products in certain arrangements.

In these arrangements, revenue from sales of third-party vendor services or products

are recorded net of our costs when we are acting as an agent between the customer and the vendor, and gross when we are the principal

for the transaction.

To determine whether we are an agent or principal, we consider whether we obtain control of the services or products

before they are transferred to the customer.

In making this evaluation, several factors are considered, most notably whether we have

primary responsibility for fulfillment to the customer, as well as inventory risk and pricing discretion.

Company evaluates arrangements where we may be acting as either principal or agent.

We may include:

subcontractor services, third-party

vendor services, products or Machine Gaming Duty in certain arrangements.

In these arrangements, revenue from sales are recorded gross

when we are the principal for the transaction and net of our costs when we are acting as an agent between the customer and the vendor.

To determine whether we are principal or agent, we consider whether we obtain control of the services or products before they are transferred

to the customer.

In making this evaluation, several factors are considered, most notably whether we have primary responsibility for fulfillment

to the end customer, as well as inventory risk and pricing discretion.

Company has detailed evaluation of segment specific revenue recognition requirements under ASC 606 or ASC 842, as appropriate.

contracts typically include multiple performance obligations such as delivery of our gaming terminals preloaded with proprietary gaming

software, sever-based content, as well as services such as terminal repairs, maintenance, software updates and upgrades on an when and

if available basis and content development.

software, server-based content, as well as services such as terminal repairs, maintenance, software updates and upgrades on a when-and-if available basis and content development.

Consideration with respect to these performance obligations typically takes the form of a

13 unchanged sentences

ASC 842 provides a practical expedient that permits lessors to aggregate non-lease

components (sever-based content, terminal repairs, maintenance, software updates and upgrades and content development) and the associated

components (server-based content, terminal repairs, maintenance, software updates and upgrades and content development) and the associated

lease components (terminals) if certain conditions are met and account for the combined unit of accounting under either ASC 606 or ASC

9 unchanged sentences

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Sports Revenue

5 unchanged sentences

that is fully hosted and operated by Inspired.

the on-premise solution, contracts typically include multiple performance obligations such as delivery of the software license,

games and the content in addition to certain services such as software maintenance, support, updates, upgrades on an when and if

available basis and content development.

Consideration with respect to these performance obligations is a royalty that typically

takes the form of a percentage of net winnings billed in arrears (usually monthly).

As the license of intellectual property is the

predominant item to which the royalty relates, the sales- and usage-based royalty is recognized in the period the sale or usage

occurs, and is reported by the licensee.

Services such as software maintenance, support, updates, upgrades on an when and if

available basis and content development are considered stand-ready obligations;

therefore, control transfers and revenue is

recognized over time over the term of the service period.

the on-premise solution, contracts typically include multiple performance obligations such as delivery of the software license, games

and the content in addition to certain services such as software maintenance, support, updates, upgrades on a when-and-if available

basis and content development.

Consideration with respect to these performance obligations is a royalty that typically takes the form

of a percentage of net winnings billed in arrears (usually monthly).

As the license of intellectual property is the predominant item

to which the royalty relates, the sales- and usage-based royalty is recognized in the period the sale or usage occurs and is reported

by the licensee.

Services such as software maintenance, support, updates, upgrades on a when-and-if available basis and content development

are considered stand-ready obligations;

therefore, control transfers and revenue is recognized over time over the term of the service

Occasionally,

10 unchanged sentences

Payment for bespoke games is typically due within a number of days after delivery.

the hosted solution, the Company provides daily access to the gaming platform as well as a stand ready obligation to deliver

customer support, platform maintenance, updates and upgrades.

Such arrangements are accounted for as a single performance obligation

composed of a series of distinct services that are substantially the same and have the same pattern of transfer (i.e., distinct days

Consideration with respect to these

arrangements typically takes the form of usage based fees (percentage of net winnings) which is recognized as usage is incurred.

the hosted solution, the Company provides daily access to the gaming platform as well as a stand ready obligation to deliver customer

support, platform maintenance, updates and upgrades.

Such arrangements are accounted for as a single performance obligation composed

of a series of distinct services that are substantially the same and have the same pattern of transfer (i.e., distinct days of service).

Consideration with respect to these arrangements typically takes the form of usage based fees (percentage of net winnings) which is recognized

as usage is incurred.

These fees are billed in arrears (usually monthly) and due typically 30 days from the date of the invoice.

revenue is generated from various games content made available via third party aggregation platforms integrated with

Inspired’s remote gaming server or direct to operators on the Company’s remote gaming servers platform, and services

such as customer support, platform maintenance, updates and upgrades.

The Company provides daily access to these platforms as well

as a stand ready obligation to deliver customer support, platform maintenance, updates and upgrades, as such arrangements are

accounted for as a single performance obligation composed of a series of distinct services that are substantially the same and have

the same pattern of transfer (i.e., distinct days of service).

When required, revenue is estimated based upon the prior period

Consideration with respect to these performance obligations typically takes the form of usage based fees (percentage of

net win) which is recognized as usage is incurred.

These fees are billed in arrears (usually monthly) and due typically 30 days from

the date of the invoice.

Revenue from aggregators who function as an agent is recognized on a net basis while revenue from operators

where the Company is the principal is recognized on a gross basis.

Company jointly operate arcades within holiday resorts with the resort owners.

The Company also wholly operates a number of gaming arcades

within certain motorway service stations.

The Leisure segment contract typically include one stand-ready performance obligation to provide

revenue is generated from various games content made available via third party aggregation platforms integrated with Inspired’s

remote gaming server or direct to operators on the Company’s remote gaming servers platform, and services such as customer support,

platform maintenance, updates and upgrades.

The Company provides daily access to these platforms as well as a stand ready obligation

to deliver customer support, platform maintenance, updates and upgrades, as such arrangements are accounted for as a single performance

obligation composed of a series of distinct services that are substantially the same and have the same pattern of transfer (i.e., distinct

days of service).

When required, revenue is estimated based upon the prior period averages.

Consideration with respect to these performance

obligations typically takes the form of usage based fees (percentage of net win) which is recognized as usage is incurred.

are billed in arrears (usually monthly) and due typically 30 days from the date of the invoice.

Revenue from aggregators who function

as an agent is recognized on a net basis while revenue from operators where the Company is the principal is recognized on a gross basis.

to November 6, 2025 and the sale of our UK holiday parks business and certain associated leisure assets, the Company jointly

operated arcades within holiday resorts with the resort owners.

The Company also wholly operates a number of gaming arcades within

certain motorway service stations.

The Leisure segment contract typically includes one stand-ready performance obligation to provide

managed services to pubs, holiday resorts and amusement arcades, both standalone and within motorway service stations.

Managed service

is an end-to-end management solution to provide a comprehensive range of gaming machine terminals, amusement machine terminals, and service

of operating amusements over a term, as well as service obligations related to terminal repairs, content and maintenance, cash collections,

personnel and other services.

Consideration with respect to these performance obligations typically takes the form of usage based fees

(percentage of net win) which is recognized as usage is incurred, with adjustments to account for the movement of income uncollected

in the specific period.

These fees are billed in arrears (usually monthly) and due typically 30 days from the date of the invoice.

Subsequent to

the sale of our UK holiday parks business and certain associated leisure assets, this reduced to only pubs, bingo and motorway

service stations.

Managed service is an end-to-end management solution to provide a comprehensive range of gaming machine terminals,

amusement machine terminals, and service of operating amusements over a term, as well as service obligations related to terminal

repairs, content and maintenance, cash collections, personnel and other services.

Consideration with respect to these performance

obligations typically takes the form of usage-based fees (percentage of net win) which is recognized as usage is incurred, with

adjustments to account for the movement of income uncollected in the specific period.

These fees are billed in arrears (usually

monthly) and due typically 30 days from the date of the invoice.

Company also provides terminal maintenance and spares management services to third parties, including customers.

24 unchanged sentences

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Disaggregation

3 unchanged sentences

Payment Arrangements

Company accounts for stock-based compensation in accordance with ASC 718, “Compensation - Stock Compensation”

ASC 718 requires generally that all equity awards be accounted for at their “fair value.” This

fair value is measured on the grant date for stock-settled awards.

Fair value is equal to the underlying value of the stock for

“full-value” awards such as restricted stock and restricted stock units that have time and performance vesting

conditions, restricted stock and restricted stock units that have market conditions are valued using a Monte Carlo simulation

The Company has elected to recognize stock-based compensation cost using

the graded vesting attribution method for each separately vesting tranche of the award from the grant date to the date that each tranche

vests over the requisite service period for the restricted stock and restricted stock units.

equal to these fair values are recognized ratably over the requisite service period based on the number of awards that are expected to

vest, or in the period of grant for awards that vest immediately and have no future service condition.

The Company accounts for forfeitures

as they occur.

For awards that vest over time, previously recognized compensation cost is reversed if the service or performance conditions

are not satisfied and the award is forfeited.

Company accounts for stock-based compensation in accordance with ASC 718, “Compensation - Stock Compensation” (“ASC

ASC 718 requires generally that all equity awards be accounted for at their “fair value.” This fair value is

measured on the grant date for stock-settled awards.

Fair value is equal to the underlying value of the stock for “full-value”

awards such as restricted stock units that have time and performance vesting conditions, restricted stock units that have market conditions

are valued using a Monte Carlo simulation model.

Company has elected to recognize stock-based compensation cost using the graded vesting attribution method for each separately vesting

tranche of the award from the grant date to the date that each tranche vests over the requisite service period for the restricted stock

The Company accounts for forfeitures as they occur.

For awards that vest over time, previously recognized compensation cost is

reversed if the service or performance conditions are not satisfied and the award is forfeited.

modifications to outstanding awards result in incremental cost if the fair value is increased as a result of the modification.

The incremental

cost is charged over the estimated derived service period.

cost is charged over the estimated service derived period.

taxes are accounted for under the asset and liability method.

18 unchanged sentences

(Loss) Income

include and separately classify in comprehensive (loss) income unrealized gains and losses, gains or losses associated with pension or

other post-retirement benefits, prior service costs or credits associated with pension or other post-retirement benefits and transition

assets or obligations associated with pension or other post-retirement benefits.

include and separately classify in comprehensive (loss) income unrealized gains and losses arising from foreign currency translation

adjustments and from hedging instruments, gains or losses associated with pension or other post-retirement benefits, prior service costs

or credits associated with pension or other post-retirement benefits and transition assets or obligations associated with pension or

other post-retirement benefits.

ENTERTAINMENT, INC.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

determine if an arrangement is a lease at inception of the arrangement.

30 unchanged sentences

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

lease expense for minimum operating lease payments is recognized on a straight-line basis over the lease term.

27 unchanged sentences

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Issued Accounting Standards

14 unchanged sentences

to have a material impact on the Company’s financial statement presentation or disclosures.

December 2023, the FASB issued ASU No.

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” (“ASU

The amendments in ASU 2023-09 enhance income tax disclosures, primarily through standardization, disaggregation of rate

reconciliation categories, and income taxes paid by jurisdiction.

ASU 2023-09 is effective for annual periods beginning on January 1,

2025, with early adoption allowed.

The Company is not early adopting ASU 2023-09 and will therefore adopt the standard in the 2025 financial

The adoption of ASU 2023-09 is not expected to have a material impact on the Company’s financial statement presentation

or disclosures.

March 2024, the FASB issued ASU No.

2024-02, “Codification Improvements—Amendments to Remove References to the Concepts Statements”

(“ASU 2024-02”).

This Update contains amendments to the Codification that remove references to various FASB Concepts Statements.

In most instances, the references are extraneous and not required to understand or apply the guidance.

In other instances, the references

were used in prior Statements to provide guidance in certain topical areas.

ASU 2024-02 is effective for annual periods beginning after

December 15, 2024.

The adoption of ASU 2024-02 is not expected to have a material impact on the Company’s financial statement presentation

or disclosures.

November 2024, the FASB issued ASU No.

21 unchanged sentences

We are still evaluating the effect of this guidance.

July 2025, the FASB issued ASU No.

2025-05, “Credit Losses (Topic 326) Measurement of Credit Losses for Accounts Receivable and

Contract Assets” (“ASU 2025-05”).

ASU 2025-05 provides (1) all entities with a practical expedient and (2) entities

other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable

and current contract assets arising from transactions accounted for under Topic 606, as follows:

In developing reasonable and supportable forecasts as part of estimating expected credit losses, all entities may elect

a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the

policy election.

An entity other than a public business entity that elects the practical expedient is permitted to make an accounting

policy election to consider collection activity after the balance sheet date when estimating expected credit losses.

guidance should be adopted prospectively and will be effective for annual reporting periods beginning after December 15, 2025, and interim

reporting periods within those annual reporting periods.

We will be adopting the practical expedient as of January 1, 2026, and the adoption

of ASU 2025-05 is not expected to have a material impact on the Company’s financial statement presentation or disclosures.

September 2025, the FASB issued ASU No.

2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025-06”).

ASU 2025-06 changes the cost capitalization

threshold by:

accounting consideration of software project development stages;

cost capitalization would begin when (1) management has authorized

and committed to funding the project and (2) it is ‘probable’ the project will be completed and the software used to

perform its intended function (the ‘probable-to-complete’ threshold);

the guidance around the ‘probable-to-complete’ threshold (given its new prominence) and providing new examples in Subtopic

350-40 to illustrate its application.

ENTERTAINMENT, INC.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

Adopted Accounting Standards

January 1, 2024, the Company adopted ASU No.

2023-07, “Segment Reporting (Topic 280) – Improvements to Reportable Segment

Disclosures” (“ASU 2023-07”).

ASU 2023-07 improves reportable segment disclosure requirements, primarily through enhanced

disclosures about significant segment expenses.

The amendments in the Update 1) Require that a public entity disclose, on an annual and

interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within

each reported measure of segment profit or loss (collectively referred to as the “significant expense principle”).

that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description

of its composition.

The other segment items category is the difference between segment revenue less the segment expenses disclosed under

the significant expense principle and each reported measure of segment profit or loss.

3) Require that a public entity provide all annual

disclosures about a reportable segment’s profit or loss and assets currently required by Topic 280 in interim periods.

that if the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to

allocate resources, a public entity may report one or more of those additional measures of segment profit.

5) Require that a public entity

disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss

in assessing segment performance and deciding how to allocate resources.

6) Require that a public entity that has a single reportable

segment provide all the disclosures required by the amendments in this Update and all existing segment disclosures in Topic 280.

Company previously disclosed Cost of service, Cost of product sales, Selling, general and administrative expenses, Stock-based compensation

expense, Acquisition and integration related transaction expenses and Depreciation and amortization by reportable segment.

has reviewed its financial reporting for additional segment expenses not already disclosed that are regularly provided to the CODM, included

in reported segment profit and loss reporting and also which are quantitatively and qualitatively significant.

Three categories of expenses

met these criteria and have been broken out in segment disclosures.

The categories are 1) Staff-related selling, general and administrative

expenses, which includes compensation, benefits, bonus and contractor/temporary personnel expenses for each segment.

2) Non-staff related

selling, general and administrative expenses, composed of multiple categories across each segment.

3) Labor costs capitalized which include

software development costs, a primary business activity and expense for each of the segments.

The Company also discloses Other segment

items by reportable segment and a description of its composition, together with the title and position of the group that makes up the

CODM and how that group uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate

with respect to segment reporting are given in note 25 to these financial statements.

Acquisitions and Disposals

January 2022, the Company sold its Italian VLT business, including all terminal and other assets, staff costs and facilities and contracts,

to a non-connected party for total proceeds of € 1.1 million ($ 1.2 million), recognizing a profit on disposal of € 0.8 million

($ 0.9 million).

The Company continues to serve these Italian markets in the form of the provision of platform and games.

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

2025-06 also modifies the website development costs guidance by eliminating Subtopic 350-50 and relocating any remaining relevant guidance

into Subtopic 350-40 and adding a new example.

The guidance can be adopted retrospectively, prospectively or on a modified prospective

basis and will be effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those

annual reporting periods.

We are still evaluating the effect of this guidance.

November 2025, the FASB issued ASU No.

2025-09, “Hedge Accounting Improvements” (“ASU 2025-09”).

Consistent with

the original objective of Update 2017-12, the objective of ASU 2025-09 is to more closely align hedge accounting with the economics of

an entity’s risk management activities.

Five issues are addressed in ASU 2025-09 and are intended to better reflect those strategies

in financial reporting by enabling entities to achieve and maintain hedge accounting for highly effective economic hedges of forecasted

transactions.

The five issues are as follows:

Risk Assessment for Cash Flow Hedges

Forecasted Interest Payments on Choose-Your-Rate Debt Instruments

Flow Hedges of Nonfinancial Forecasted Transactions

Written Options as Hedging Instruments

Foreign-Currency-Denominated

Debt Instrument as Hedging Instrument and Hedged Item (Dual Hedge)

2025-09 applies to any entity that elects to apply hedge accounting in accordance with Topic 815 and is effective for annual periods

beginning after December 15, 2026 and for interim reporting periods within those annual reporting periods.

We are still evaluating the

effect of this guidance, however, the adoption of ASU 2025-09 is not expected to have a material impact on the Company’s financial

statement presentation or disclosures.

December 2025, the FASB issued ASU No.

2025-11, “Interim Reporting (Topic 270):

Narrow-Scope Improvements” (“ASU 2025-11”).

The amendments in ASU 2025-11 clarify interim disclosure requirements and the applicability of Topic 270.

The amendments result in a

comprehensive list of interim disclosures that are required by GAAP.

In developing the list of disclosures required by other Topics,

the FASB focused on identifying the interim disclosures that are currently required under GAAP.

The objective of the amendments is to

provide clarity about the current requirements, rather than evaluate whether to expand or reduce interim disclosure requirements.

amendments also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period

that have a material impact on the entity.

The intent of the disclosure principle, which is modeled after a previous SEC disclosure requirement,

is to help entities determine whether disclosures not specified in Topic 270 should be provided in interim reporting periods.

The amendments

also clarify the applicability of Topic 270, the types of interim reporting, and the form and content of interim financial statements

in accordance with GAAP.

The FASB expects that these clarifications will enhance consistency in interim reporting for all entities.

amendments are effective for public business entities for interim reporting periods within annual reporting periods beginning after December

15, 2027, and can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements.

The adoption of ASU 2025-11 is not expected to have a material impact on the Company’s financial statement presentation or disclosures.

December 2025, the FASB issued ASU No.

2025-12, “Accounting Standards Update Codification Improvements” (“ASU 2025-12”).

The FASB has a standing project to address suggestions received from stakeholders on the Accounting Standards Codification and to make

other incremental improvements to generally accepted accounting principles.

This evergreen project facilitates Codification updates for

a broad range of Topics arising from technical corrections, unintended application of the Codification, clarifications, and other minor

improvements.

The resulting amendments are collectively referred to as Codification improvements.

The FASB decided that the types of

issues that it will consider through this project are improvements that are not expected to have a significant effect on current accounting

practice or result in significant costs to most entities.

Thirty-three issues are addressed in ASU 2025-12 and represent changes to the

Codification that (1) clarify, (2) correct errors, or (3) make minor improvements.

The amendments make the Codification easier to understand

Generally, the amendments in ASU 2025-12 are not intended to result in significant changes for most entities.

The amendments

are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those

annual reporting periods.

The adoption of ASU 2025-12 is not expected to have a material impact on the Company’s financial statement

presentation or disclosures.

ENTERTAINMENT, INC.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Adopted Accounting Standards

December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) No.

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures”.

The amendments in the ASU enhance income tax

disclosures, primarily through standardization, disaggregation of rate reconciliation categories, and income taxes paid by jurisdiction.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption allowed.

We adopted this guidance prospectively

as of January 1, 2025, and included the necessary disclosures in this Form 10-K.

January 1, 2025, the Company adopted ASU No.

2024-02, “Codification Improvements—Amendments to Remove References to the Concepts

Statements” (“ASU 2024-02”).

This Update contains amendments to the Codification that remove references to various

FASB Concepts Statements.

In most instances, the references are extraneous and not required to understand or apply the guidance.

instances, the references were used in prior Statements to provide guidance in certain topical areas.

The adoption of ASU 2024-02 did

not have a material impact on the Company’s financial statement presentation or disclosures.

Acquisitions and Disposals

November 7, 2025, the Company completed the sale of its UK holiday parks business and certain associated leisure assets to an

unconnected third party, recognizing a loss of $ 6.6

Company will provide ongoing gaming content and platform services on a recurring revenue basis with respect to the disposed business,

in line with its ordinary course of business.

The Company will also provide support for ongoing IT and finance activities of the disposed

business for a period of up to 12 months post completion, chargeable on an arms-length basis.

Accounts Receivable

1 unchanged sentence

of Accounts Receivable

December 31, 2024

December 31, 2023

(in millions)

Trade receivables

long-term receivable recorded in other assets

Finance lease receivables

Allowance for credit losses

Total accounts receivable, net

lease receivables

for credit losses

accounts receivable, net

in the allowance for credit losses are as follows:

of Changes in Allowance for Credit Losses

December 31, 2024

December 31, 2023

(in millions)

Beginning balance

Additional allowance for credit losses

Foreign currency translation adjustments

Ending balance

allowance for credit losses on contracts with customers

consists of the following:

December 31, 2024

December 31, 2023

(in millions)

Component parts

Work in progress

Finished goods

Total inventory

parts include parts for gaming terminals.

6 unchanged sentences

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Prepaid Expenses and Other Assets

1 unchanged sentence

of Prepaid Expenses and Other Assets

December 31, 2024

December 31, 2023

(in millions)

expenses and other assets

accounts receivable

prepaid expenses and other assets

Unbilled accounts receivable

Total prepaid expenses and other assets

Property and Equipment, net

of Property and Equipment

December 31, 2024

December 31, 2023

(in millions)

Short-term leasehold property

Gaming and amusement terminals

Computer equipment

Plant and machinery

Property and equipment, gross

accumulated depreciation and amortization

leasehold property

and amusement terminals

and machinery

and equipment, gross

accumulated depreciation

and equipment, net

expense amounted to $ 19.8 million, $ 19.0 million and $ 21.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.

expense amounted to $ 18.6 million and $ 19.8 million for the years ended December 31, 2025 and 2024, respectively.

Software Development Costs, net

1 unchanged sentence

of Software Development Costs

December 31, 2024

December 31, 2023

(in millions)

Software development costs

development costs

accumulated amortization

1 unchanged sentence

the years ended December 31, 2025 and 2024, the Company capitalized $ 9.9 million and $ 12.0 million of software development costs, respectively.

As of December 31, 2024 capitalized software development costs related to the Company’s implementation of an enterprise resource

planning system were not material.

As of December 31, 2023 approximately $ 1.3 million of capitalized software development costs related

to the Company’s implementation of an enterprise resource planning system.

Other capitalized cloud-based implementation costs were

not material as of December 31, 2024 and 2023.

total amount of software costs amortized was $ 10.7 million, $ 10.3 million and $ 9.7 million for the years ended December 31, 2024, 2023,

and 2022, respectively.

Software costs written down to net realizable value amounted to $ 0.0 million, $ 0.3 million and $ 0.4 million for

the years ended December 31, 2024, 2023 and 2022, respectively.

The weighted average amortization period was 4.0 years and 3.8 years

for the years ended December 31, 2024 and 2023, respectively.

The total amount of software costs amortized was $ 11.5 million and $ 10.7 million for the years ended December 31, 2025 and 2024, respectively.

ENTERTAINMENT, INC.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

estimated software amortization expense for the years ending December 31, excluding costs that are yet to commence amortization, are

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

estimated software amortization expense for the years ending December 31, excluding costs that are yet to commence amortization, is as

of Estimated Software Amortization Expense

6 unchanged sentences

of Intangible Assets and Goodwill

December 31, 2024

December 31, 2023

(in millions)

Customer relationships

Intellectual property licenses

Intangible assets, gross

relationships

property licenses

assets, gross

accumulated amortization

intangible asset amortization expense amounted to $ 3.3 million, $ 1.5 million and $ 1.5 million for the years ended December 31, 2024,

2023 and 2022, respectively.

estimated intangible asset amortization expense for the years ending December 31 are as follows:

intangible asset amortization expense amounted to $ 3.5 million and $ 3.3 million for the years ended December 31, 2025 and 2024, respectively.

estimated intangible asset amortization expense for the years ending December 31 is as follows:

of Estimated Intangible Assets Amortization Expense

Year ending December 31, (in millions)

ending December 31, (in millions)

is summarized as follows:

December 31, 2024

December 31, 2023

(in millions)

Balance at beginning of period, gross

Accumulated goodwill impairment losses, recognized year ended December 31, 2020

Balance at beginning of period, net

Foreign currency translation adjustments

Ending balance, net

at beginning of period, gross

goodwill impairment losses, recognized year ended December 31, 2020

at beginning of period, net

currency translation adjustments

ENTERTAINMENT, INC.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

assets consist of the following:

of Other Assets

December 31, 2024

December 31, 2023

(in millions)

Long term finance lease receivable

Long term receivables

Long term prepaid expenses and other assets

Pension surplus

term finance lease receivable

term receivables

term prepaid expenses and other assets

Accounts Payable and Accrued Expenses

1 unchanged sentence

of Accounts Payable and Accrued Expenses

December 31, 2024

December 31, 2023

(in millions)

Accounts payable

Payroll and related costs

Cost of sales including inventory

Other creditors

Total accounts payable

and accrued expenses

and related costs

accounts payable and accrued expenses

Contract Related Disclosures

14 unchanged sentences

on a contract-by-contract basis at the end of each reporting period.

recognized that was included in the deferred income balance at the beginning of the period amounted to $ 3.8 million, $ 8.7 million and

$ 7.0 million for the years ended December 31, 2024, 2023 and 2022, respectively.

recognized that was included in the deferred income balance at the beginning of the period amounted to $ 4.8 million and $ 3.8 million

for the years ended December 31, 2025 and 2024, respectively.

the years ended December 31, 2025 and 2024 there was no significant amounts of revenue recognized as a result of changes in contract

4 unchanged sentences

of Customer Contact

December 31, 2024

December 31, 2023

(in millions)

Costs to obtain contracts with customers, net

Customer contract fulfillment costs, net

Total costs of obtaining and fulfilling customer contracts, net

of capitalized contract costs was $ 9.5 million, $ 8.5 million, and $ 7.0 million during the years ended December 31, 2024, 2023, and 2022,

respectively.

We did no t recognize any impairment losses on such costs during the years ended December 31, 2024, 2023, or 2022.

to obtain contracts with customers, net

contract fulfillment costs, net

costs of obtaining and fulfilling customer contracts, net

of capitalized contract costs was $ 12.9 million and $ 9.5 million during the years ended December 31, 2025 and 2024, respectively.

no t recognize any impairment losses on such costs during the years ended December 31, 2025 or 2024.

ENTERTAINMENT, INC.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Price Allocated to Remaining Performance Obligations

December 31, 2024, the transaction price allocated to unsatisfied performance obligations for contracts expected to be greater than one

year, or performance obligations for which we do not have a right to consideration from the customer in the amount that corresponds to

the value to the customer for our performance completed to date, variable consideration which is not accounted for in accordance with

the sales-based or usage-based royalties guidance, or contracts which are not wholly unperformed, is approximately $ 133.6 million.

this amount, we expect to recognize as revenue approximately 34 % within the next 12 months, approximately 44 % between 13 and 36 months,

approximately 22 % between 37 and 60 months, and the remaining balance through December 31, 2030.

December 31, 2025, in respect of contracts exceeding one year duration , t he aggregate amount of the transaction price allocated

to the performance obligations which are unsatisfied (or partially unsatisfied) at the end of the reporting period was approximately

$ 129.1 million.

Of this amount, we expect to recognize as revenue approximately 31 % through December 31, 2026, approximately 46 % through

December 31, 2028, approximately 22 % through December 31, 2030 and the remaining 1 % through December 31, 2031.

Other Liabilities

1 unchanged sentence

of Other Liabilities

December 31, 2024

December 31, 2023

(in millions)

Customer prepayments and deposits

Foreign exchange contract liabilities

Current portion of finance lease liabilities

Total other liabilities, current

Asset retirement obligations

Other creditors

Pension liability

Total other liabilities, long-term

Total other liabilities

prepayments and deposits

value of hedging instrument

other liabilities, current

retirement obligations

value of hedging instrument

termination costs

other liabilities, long-term

other liabilities

Long Term and Other Debt

Secured Notes

May 20, 2021, Inspired Entertainment (Financing) PLC, a wholly owned subsidiary of the Company, issued £ 235.0 million ($ 294.4 million,

as translated at December 31, 2024) aggregate principal amount of its 7.875 % senior secured notes due 2026 (the “Senior Secured

The Senior Secured Notes bear interest at a rate of 7.875 % per annum and mature on June 1, 2026.

Interest is payable on

the Senior Secured Notes on June 1 and December 1 of each year, commencing on December 1, 2021.

Senior Secured Notes and related guarantees were issued under an indenture (the “Indenture”), among Inspired Entertainment

(Financing) PLC, as issuer, the Company and certain English and U.S.

subsidiaries of the Company, as guarantors (collectively and together

with the Company, the “Guarantors”), GLAS Trustees Limited, as trustee, GLAS Trust Corporation Limited, as security agent

and GLAS Trust Company LLC as paying agent, transfer agent and registrar.

The terms of the Senior Secured Notes and related guarantees

are governed by the Indenture.

Senior Secured Notes are fully and unconditionally guaranteed on a senior secured first-priority basis by the Guarantors on a joint and

several basis.

The Senior Secured Notes and related guarantees are secured, subject to certain permitted collateral liens, on a first-priority

basis by substantially all assets of the Guarantors and all claims of the Inspired Entertainment (Financing) PLC under an intercompany

loan to Gaming Acquisitions Limited, a private limited liability company incorporated under the laws of England and Wales and an indirect

wholly-owned subsidiary of the Company (“GAL”), of the proceeds of the offering of the Senior Secured Notes.

of Long-Term Debt - Series B Notes

June 4, 2025, Inspired Entertainment (Financing) plc (the “Issuer”), a wholly owned (indirect) subsidiary of the Company,

together with certain subsidiaries of the Company entered into a Senior Notes Purchase Agreement (the “Notes Purchase Agreement”)

with (among others) Global Loan Agency Services Limited (the “Agent”) as the agent, GLAS Trust Corporation Limited (the “Security

Agent”) as the security agent, and Barclays Bank plc, HG Vora Special Opportunities Master Fund, Ltd., BSE Investments, Ltd.

HG Vora Opportunistic Capital Master Fund III A LP as the original noteholders.

On September 30, 2025, a number of documents comprising

Inspired Guarantor Accession Documents were signed following local law advice, such that the following entities are now guarantors under

the Notes Purchase Agreement, being DMWSL 631 Limited, Inspired Entertainment (Financing) PLC, Inspired Entertainment Lotteries LLC,

Inspired Gaming (USA) Inc., Gaming Acquisitions Limited, Inspired Gaming (UK) Limited, Inspired Gaming (Greece) Limited, and Inspired

Gaming (Gibraltar) Limited.

to the Notes Purchase Agreement, the Issuer issued £ 270.0 million ($ 363.2 million, as translated at December 31, 2025) aggregate

principal amount of Series B Notes (the “Senior Notes”) on June 9, 2025 (the “Closing Date”).

The Senior Notes

are initially guaranteed by the Issuer and certain other subsidiaries of the Company (the “Guarantors”).

The terms of the

Senior Notes and related guarantees are governed by the Notes Purchase Agreement.

to compliance with customary conditions, the Notes Purchase Agreement allows us to incur additional senior secured indebtedness in the

amounts permitted under the Senior Notes, either as a new series of notes or as an additional sub tranche or increase of the Senior Notes.

proceeds from the offering of Senior Notes were used to refinance the previously existing £ 235.0 million ($ 316.1 million) senior

secured notes due June 1, 2026 (the “Prior Notes”) and £ 15.0 million ($ 20.2 million) loans outstanding under the prior

revolving credit agreement (the “Prior RCF”) and accrued interest and/or fees, in each case (and any related fees, costs

and expenses).

The Issuer intends to use the balance of the proceeds for general corporate purposes and/or working capital purposes.

following is a brief description of the Senior Notes.

Senior Notes bear interest at a rate per annum equal to the Sterling Overnight Index Average (“SONIA”) rate plus a

margin (based on the Company’s consolidated senior secured net leverage ratio) ranging from 5.50 % to 6.00 % per annum and mature

on June 9, 2030 (five years from the date of issuance).

Interest is payable on the Senior Notes monthly, quarterly or semi-annually (as

selected by the Issuer) or by reference to any other period agreed with all the holders.

Senior Notes and related guarantees are senior secured obligations of the Issuer and the Guarantors that (i) rank equally in right of

payment to any of the Issuer’s and the Guarantors’ existing and future indebtedness (except as otherwise described in this

(ii) rank senior in right of payment with all of the Issuer’s and the Guarantor’s existing and future senior

subordinated indebtedness;

(iii) are effectively junior in right of payment to all of the Issuer’s and the Guarantors’ existing

and future secured indebtedness that is secured by assets that do not secure the Notes and the guarantees thereof to the extent of the

value of the assets securing such indebtedness;

and (iv) are structurally subordinated in right of payment to all existing and future

indebtedness and other liabilities of the Company’s subsidiaries that do not guarantee the Senior Notes (other than the Issuer).

Senior Notes are fully and unconditionally guaranteed on a senior secured first-priority basis by the Guarantors on a joint and several

Senior Notes and related guarantees are secured, subject to certain permitted collateral liens, on a first-priority basis by certain

assets of the Guarantors.

ENTERTAINMENT, INC.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

Indenture contains incurrence covenants that limit the ability of the Company and the Company’s restricted subsidiaries to, among

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Notes Purchase Agreement contains incurrence covenants that limit the ability of the Company and its restricted subsidiaries to, among

other things, (i) incur or guarantee additional debt and issue certain preferred stock of restricted subsidiaries;

2 unchanged sentences

(iii) make restricted payments, including dividends or distributions to the Company’s stockholders or repurchase

the Company’s stock;

(iv) prepay or redeem subordinated debt;

(v) make certain investments, including participating joint ventures;

(vi) create encumbrances or restrictions on the payment of dividends or other distributions by restricted subsidiaries;

(vii) sell assets,

or consolidate or merge with or into other companies;

(viii) sell or transfer all or substantially all of the Company’s assets

or those of the Company’s subsidiaries on a consolidated basis;

(ix) engage in certain transactions with affiliates;

and (x) create

unrestricted subsidiaries.

Certain of these covenants will be suspended if and for so long as the Senior Secured Notes have investment

grade ratings from any two of Moody’s Investors Service, Inc., Standard & Poor’s Investors Ratings Services and Fitch

Ratings, Inc.

These covenants are subject to exceptions and qualifications as set forth in the Indenture.

Entertainment (Financing) PLC may redeem the Senior Secured Notes, in whole or in part, at any time and from time to time on or after

June 1, 2023, at the redemption prices set forth in the Indenture and form of the Senior Secured Notes, plus accrued and unpaid interest,

if any, to, but excluding, the redemption date.

encumbrances or restrictions on the payment of dividends or other distributions by restricted subsidiaries;

(vii) sell assets, or consolidate

or merge with or into other companies;

(viii) sell or transfer all or substantially all of the Company’s assets or those of the

Company’s subsidiaries on a consolidated basis;

and (ix) engage in certain transactions with affiliates.

These covenants are subject

to exceptions and qualifications as set forth in the Notes Purchase Agreement.

Notes Purchase Agreement requires that the Company maintain a maximum consolidated senior secured net leverage ratio of 5.0x on the test

date for the relevant periods ending September 30, 2025, December 31, 2025, March 31, 2026, June 30, 2026, September 30, 2026, December

31, 2026 and March 31, 2027, stepping down to 4.75x on June 30, 2027 and each relevant period thereafter (the “Notes Financial

The Notes Financial Covenant is calculated as the ratio of consolidated senior secured net debt to consolidated pro

forma EBITDA (defined as consolidated net income after adding back certain items including (without limitation) interest expense, taxes,

depreciation and amortization expenses and exceptional or non-recurring costs and losses and after adjusting for certain projected savings

and synergies) for the 12-month period preceding the relevant quarterly testing date and is tested quarterly on a rolling basis.

Notes Purchase Agreement does not include a minimum interest coverage ratio or other financial covenants.

Covenant testing at December

31, 2025 showed covenant compliance with a net leverage of 3.06x.

Notes Purchase Agreement provides for events of default (subject in certain cases to grace and cure periods) which include, among others,

non-payment of amounts when due, breach of covenants or other agreements in the Notes Purchase Agreement, misrepresentations, defaults

in payment of certain other indebtedness and certain events of insolvency, material litigation and a “going concern” qualification

by the auditors.

Subject to certain exceptions, if an event of default occurs, the Agent or the holders of more than 50% of the Senior

Notes may declare the principal of, premium, if any, and accrued but unpaid interest on all of the Notes to be due and payable immediately.

Issuer may redeem the Senior Notes, in whole or in part, at any time and from time to time prior to the first anniversary of issuance,

at a redemption price equal to 100 % of the principal amount thereof, plus a “make-whole” premium (the “Make Whole”)

as set forth in the Notes Purchase Agreement, plus accrued and unpaid interest (if any) up to, but excluding, the redemption date.

Issuer may also redeem the Notes, in whole or in part, at any time and from time to time on or after the first anniversary of issuance

but prior to the second anniversary of issuance, at a redemption price equal to 100 % of the principal amount thereof, plus 1 % of the

principal amount redeemed (the “101” and, together with the Make Whole, “Call Protection”), plus accrued and

unpaid interest (if any) up to, but excluding, the redemption date.

On or after the second anniversary of issuance, the Issuer may redeem

the Notes, in whole or in part, at any time and from time to time at a redemption price equal to 100 % of the principal amount thereof,

plus accrued and unpaid interest (if any) up to, but excluding, the redemption date

a change of control occurs as specified in the Notes Purchase Agreement, the Issuer must offer to purchase the Notes, in cash, at a redemption

price equal to at 100 % of the principal amount thereof plus the applicable Call Protection plus accrued and unpaid interest (if any)

up to, but excluding, the redemption date.

If the Company generates excess cashflow as specified in the Notes Purchase Agreement, the

Issuer must offer to apply an agreed percentage of such excess cash flow (subject to certain deductions and varying by reference to the

level of senior secured net leverage at such time) to purchase the Senior Notes, in cash, at a redemption price equal to at 100 % of the

principal amount thereof plus accrued and unpaid interest (if any) up to, but excluding, the redemption date.

In addition, the Indenture

may require the Issuer to use excess proceeds from certain asset dispositions for an offer to purchase the Senior Notes at 100 % of the

principal amount thereof plus the applicable Call Protection (unless made in the first 12 months following issuance and not in an amount

exceeding £ 25.0 million ($ 33.6 million) and made in connection with certain planned disposals by the Company as set out in the

Notes Purchase Agreement) plus accrued and unpaid interest (if any) up to, but excluding, the redemption date.

Credit Facility

connection with the issuance of the Senior Secured Notes on May 20, 2021, the Company and certain of our direct and indirect wholly-owned

subsidiaries, entered into a Super Senior Revolving Credit Facility Agreement (the “RCF Agreement”) with Global Loan Agency

Services Limited, as agent, Barclays Bank plc (“Barclays”) and Macquarie Corporate Holdings Pty Limited (UK Branch) (“Macquarie

UK” and together with Barclays, the “Arrangers”) as arrangers and each lender party thereto (the “Lenders”),

pursuant to which the Lenders agreed to provide, subject to certain conditions, a secured revolving facility loan in an original principal

amount of £ 20 million ($ 25.1 million) under which certain of our subsidiaries are able to draw funds (the “RCF Loan”).

The RCF Loans will terminate on November 20, 2025.

funding of the RCF Loan is subject to customary conditions set forth in the RCF Agreement.

The undrawn commitment of each Lender under

the RCF Loan will automatically terminate, unless previously terminated by the Company, on October 20, 2025.

RCF Loans will bear interest at a rate per annum equal to (i) SONIA for borrowings in sterling, (ii) LIBOR (or, on and after December

31, 2021, SOFR) for borrowings in dollars, or (iii) EURIBOR for borrowings in Euro, as applicable, plus, in each case, a margin (based

on the Company’s consolidated senior secured net leverage ratio) ranging from 4.25 % to 4.75 % per annum.

With respect to the RCF

Loan, a commitment fee of 30 % of the then applicable margin is payable at any time on any unutilized portion of the RCF Loan.

RCF Agreement contains various covenants (which include restrictions regarding the incurrence of liens, the incurrence of indebtedness

by the Company’s subsidiaries and fundamental changes, subject in each case to certain exceptions), representations, warranties,

limitations and events of default (which include non-payment, breach of obligations under the financing documents, cross-default, insolvency

and litigation) customary for similar facilities for similarly rated borrowers and subject to customary carve-outs and grace periods.

Following the occurrence of an event of default which has not been waived or remedied, the Lenders who represent more than 66.67 % of

total commitments under the RCF may, subject to the terms of an intercreditor agreement (which governs the relationship between the Lenders

and the holders of the Senior Secured Notes), instruct the agent to (i) accelerate the RCF Loans, (ii) instruct the security agent to

enforce the transaction security and/or (iii) exercise any other remedies available to the Lenders.

connection with the issuance of the Senior Notes, the Issuer, together with certain subsidiaries of the Company, entered into a Senior

Facilities Agreement (the “SFA”) on June 4, 2025, with the Agent, the Security Agent and Barclays Bank plc as original lender

(the “Lender”), pursuant to which the Lender agreed to provide, subject to certain conditions, a secured revolving facility

(the “RCF”) in an original principal amount of £ 17.8 million ($ 23.9 million) under which, as of the Closing Date, the

Issuer is able to draw funds.

The RCF will terminate on December 9, 2029 (54 months from the Closing Date).

to compliance with customary conditions, the SFA allows certain members of the Group to incur additional senior secured, second lien

and unsecured indebtedness in the amounts permitted under the Senior Notes, either as a new facility or as an additional sub tranche

or increase of the RCF.

from the RCF, if drawn, may be used towards financing and/or refinancing (directly or indirectly) the general corporate and/or working

capital purposes of the Company (including, without limitation, restructuring costs or charges and any acquisitions or investments).

funding of the RCF is subject to customary conditions set forth in the SFA, including documentary conditions precedent which are to be

satisfied on the Closing Date.

ENTERTAINMENT, INC.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

RCF Agreement requires that the Company maintain a maximum consolidated senior secured net leverage ratio of 6.25x on the test date for

the relevant period ended June 30, 2021, stepping down to 6.0x on March 31, 2022, 5.75x on March 31, 2023 and 5.50x from March 31, 2024

and thereafter (the “RCF Financial Covenant”).

The RCF Financial Covenant is calculated as the ratio of consolidated senior

secured net debt to consolidated pro forma EBITDA (defined as net income (loss) excluding depreciation and amortization, interest expense,

interest income and income tax expense) for the 12-month period preceding the relevant quarterly testing date and is tested quarterly

on a rolling basis, subject to the Initial Facility (as defined in the RCF Agreement) being drawn on the relevant test date.

Agreement does not include a minimum interest coverage ratio or other financial covenants.

Covenant testing at December 31, 2024 showed

covenant compliance with a net leverage of 3.1x.

outstanding principal amount of each advance under the RCF Loans is payable on the last day of the interest period relating to such advance,

unless such advance is rolled over on a cashless basis in accordance with customary rollover provisions contained in the RCF Agreement,

with a final repayment on November 20, 2025 .

the year ended December 31, 2023, the Company drew down on the RCF Agreement.

Amounts due under the RCF Agreement at December 31, 2024

and December 31, 2023 amounted to £ 15.0 million ($ 18.8 million).

Interest relating to amounts drawn under the RCF Agreement amounted

to $ 1.9 million and $ 0.2 million for the years ended December 31, 2024 and December 31, 2023, respectively, and is recorded in Interest

expense, net.

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

loans under the RCF bear interest at a rate per annum equal to (i) SONIA for borrowings in sterling, (ii) LIBOR for borrowings in dollars,

or (iii) EURIBOR for borrowings in Euro, as applicable, plus , in each case, a margin (based on the Company’s consolidated

senior secured net leverage ratio) ranging from 3.25 % to 3.75 % per annum.

With respect to the RCF, a commitment fee of 35 % of the then

applicable margin is payable at any time on any unutilized portion of the RCF.

SFA contains various covenants (which include restrictions regarding the incurrence of liens, the incurrence of indebtedness by the Company’s

subsidiaries and fundamental changes, subject in each case to certain exceptions), representations, warranties, limitations and events

of default (which include non-payment, breach of obligations under the financing documents, cross default, insolvency and litigation)

customary for similar facilities and subject to customary carve-outs and grace periods.

Following the occurrence of an event of default

which has not been waived or remedied, the Lenders who represent more than 50% of total commitments under the SFA may, subject to the

terms of an intercreditor agreement (which governs the relationship between the Lenders and the holders of the Senior Notes), instruct

the agent to (i) accelerate the RCF loans, (ii) instruct the security agent to enforce the transaction security and/or (iii) exercise

any other remedies available to the Lenders.

SFA requires that the Company maintain a maximum consolidated senior secured net leverage ratio of 5.50x on the test date for the relevant

periods ending September 30, 2025, December 31, 2025, March 31, 2026, June 30, 2026, September 30, 2026, December 31, 2026 and March

31, 2027, stepping down to 5.25x on June 30, 2027 and each relevant period thereafter (the “RCF Financial Covenant”).

RCF Financial Covenant is calculated as the ratio of consolidated senior secured net debt to consolidated pro forma EBITDA (defined as

net loss excluding depreciation and amortization, interest expense, interest income and income tax expense) for the 12-month period preceding

the relevant quarterly testing date and is tested quarterly on a rolling basis.

The SFA does not include a minimum interest coverage

ratio or other financial covenants.

Covenant testing at December 31, 2025 showed covenant compliance with a net leverage of 3.06x.

outstanding principal amount of each advance under the RCF is payable on the last day of the interest period relating to such advance,

unless such advance is rolled over on a cashless basis in accordance with customary rollover provisions contained in the SFA, with a

final repayment on December 9, 2029.

the event that a Lender breaches its obligations under the SFA, otherwise repudiates or rescinds the SFA or any other finance document

or is subject to an insolvency event, the Issuer is entitled to prepay the amounts owed to such Lender, cancel its undrawn commitments

and replace it with another financial institution of the Company’s choosing who is willing to join the SFA as a Lender.

to the foregoing, recourse against the Lenders by the Company or its subsidiaries that are party to the SFA would, absent fraud or other

criminal behavior, generally be limited to remedies for breach of contract.

of Prior Financing

Company’s previous debt consisted of £ 235.0 million ($ 316.1 million) of Senior Secured Notes which bore interest at a fixed

rate of 7.875 % and a Super Senior Revolving Credit Facility in a principal amount of £ 20.0 million ($ 26.9 million), of which £ 15.0 million ($ 20.2 million) was drawn at the time of termination, which bore interest

at a rate per annum equal to (i) SONIA for borrowings in sterling, (ii) LIBOR (or, on and after December 31, 2021, SOFR) for borrowings

in US Dollars, or (iii) EURIBOR for borrowings in Euro, as applicable, plus, in each case, a margin (based on the Company’s consolidated

senior secured net leverage ratio) ranging from 4.25 % to 4.75 % per annum.

connection with the entry into each of the Notes Purchase Agreement and the SFA, on June 9, 2025, (i) the Issuer redeemed the Prior Notes

and terminated the indenture dated May 20, 2021 pursuant to which the Prior Notes had been issued, and (ii) the Issuer prepaid in full

all outstanding loans under the Prior RCF and terminated the Super Senior Revolving Credit Facilities Agreement dated May 20, 2021.

termination of the prior financing is considered to be a non-substantial modification, in accordance with Topic 470-50.

Fees directly

associated with the modified Senior Debt amounting to $ 18.1 million were capitalized and will be amortized over the term of the new Senior

Debt, along with the existing $ 1.6 million unamortized debt issuance costs of the old Senior Debt.

$ 0.9 million of fees associated with

the new RCF were capitalized and will be amortized over the term of the new RCF, along with the existing $ 0.1 million unamortized fees

attributable to the Prior RCF.

Fees paid to third parties of $ 2.3 million related to the new Senior Debt were expensed as incurred into

Selling, General and Administrative fees.

ENTERTAINMENT, INC.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Debt and Finance Leases

1 unchanged sentence

of Outstanding Debt and Finance Leases

December 31, 2024

(in millions)

Senior secured notes

Finance lease liabilities

Total long-term debt outstanding

lease liabilities

long-term debt outstanding

current portion of long-term debt

Long-term debt, excluding current portion

December 31, 2023

(in millions)

Senior secured notes

Finance lease liabilities

Total long-term debt outstanding

debt, excluding current portion

secured notes

lease liabilities

long-term debt outstanding

current portion of long-term debt

Long-term debt, excluding current portion

debt, excluding current portion

Company is in compliance with all relevant financial covenants and the long-term debt portion is correctly classified as such in line

2 unchanged sentences

of Maturities of Long-term Debt

Fiscal period:

(in millions)

ENTERTAINMENT, INC.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Derivatives and Hedging Activities

November 12, 2025, the Company entered into two interest rate swap agreements with Macquarie Bank Limited designed to protect the

Company against adverse fluctuations in interest rates by reducing its exposure to variability in cash flows on the current floating

rate debt facilities.

The swaps are effective from December 9, 2025, until maturity on December 9, 2027.

The swaps fix the interest

rate at 3.6208 %

on a notional amount of £ 250.0

million ($ 336.3

million), payable to Macquarie Bank Limited, with Macquarie Bank Limited paying an amount to the Company on the notional amount of

million ($ 336.3

million) at an interest rate equal to the floating amount due on the Senior Notes, subject to a floor of 3.00 %.

Management Objective of Using Derivatives

Company is exposed to certain risk arising from both its business operations and economic conditions.

The Company principally manages

its exposures to a wide variety of business and operational risks through management of its core business activities.

The Company manages

economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets

and liabilities and the use of derivative financial instruments.

Specifically, the Company enters into derivative financial instruments

to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts,

the value of which are determined by interest rates.

The Company’s derivative financial instruments are used to manage differences

in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally

related to the Company’s borrowings.

Flow Hedges of Interest Rate Risk

Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to

interest rate movements.

To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk

management strategy.

Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in

exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

During the year ended December 31, 2025, such derivatives were used to hedge the variable cash flows associated with existing variable-rate

derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in

Accumulated Other Comprehensive Income and subsequently reclassified into interest expense in the same period(s) during which the hedged

transaction affects earnings.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified

to interest expense as interest payments are made on the Company’s variable-rate debt.

During the next twelve-months, the Company

estimates that an additional $ 0.3 million will be reclassified as a decrease to interest expense.

of December 31, 2025, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of

interest rate risk:

of Cash Flow Hedges of Interest Rate Risk

Rate Derivative

of Instruments

million ($ 336.3 million)

Company did not have any derivatives as of December 31, 2024.

table below presents the fair value of the Company’s derivative financial instruments as well as their classification in the consolidated

balance sheet as of December 31, 2025 and December 31, 2024.

of Derivative Liability

current liabilities

long-term liabilities

derivatives designated as hedging instruments

was no effect of offsetting of the derivative financial instruments at December 31, 2025.

tables below present the effect of fair value and cash flow hedge accounting on accumulated other comprehensive income for the year ended

December 31, 2025 and December 31, 2024.

of Fair Value of Cash Flow Hedge Accounting

of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives

rate products

of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income

ENTERTAINMENT, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

tables below present the effect of the Company’s derivative financial instruments on the consolidated statements of operations

for the year ended December 31, 2025 and December 31, 2024.

amounts of income and expense line items presented in the statement of operations and comprehensive loss in which the effects of

fair value or cash flow hedges are recorded

of gain (loss) reclassified from accumulated other comprehensive income into income

Credit-risk-related

Contingent Features

of Inspired Gaming (UK) Limited and Gaming Acquisitions Limited, wholly owned (indirect) subsidiaries of the Company, (each, a “Hedging

Subsidiary”) has entered into an industry standard ISDA Master Agreement, with a negotiated Schedule thereto (each, an “ISDA

Agreement”), with the counterparty to its derivative transactions and which ISDA Agreements set forth various provisions which

govern the relationship between each such Hedging Subsidiary and its counterparty with respect to such derivative instruments.

Such provisions

include certain events which, if triggered by either party, may give rise to a termination of the relevant derivative instruments, which

may trigger a requirement for the exchange of a breakage payment between the parties.

ISDA Agreement contains a provision whereby if any of the Company’s subsidiaries that has granted credit support in respect of

such derivative transactions defaults on any of its indebtedness above a threshold amount, including default where repayment of such

indebtedness has not been accelerated by the relevant creditor, then the relevant Hedging Subsidiary could also be declared in default

on its derivative obligations.

Each ISDA Agreement also contains a provision where the relevant Hedging Subsidiary could be declared

in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the relevant

Hedging Subsidiary’s default on its indebtedness.

of December 31, 2025, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment

for non-performance risk, related to the ISDA Agreements was $ 0.5 million.

As of December 31, 2025, no Hedging Subsidiary has posted

any collateral related to the ISDA Agreement, as no collateral is required under the terms thereof.

If the Hedging Subsidiaries had breached

any of the provisions under the terms, which resulted in an acceleration of the ISDA Agreements, as at December 31, 2025, the Company

could have been required to settle its obligations under the respective ISDA Agreements at their termination value of $ 0.5 million.

Fair Value Measurements

17 unchanged sentences

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

fair value of our long-term senior debt as of December 31, 2024, was $ 287.1 million, based upon quoted prices in the marketplace, which

are considered Level 2 inputs.

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

each period, derivative financial instrument assets and liabilities measured at fair value on a recurring basis are included in the financial

statements as per the table below.

of Fair Value of Assets and Liabilities

liability (see note 14)

3 liabilities are valued using unobservable inputs to the valuation methodology that are significant to the measurement of the fair value

1 unchanged sentence

For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s

Principal Financial Officer, who reports to the Principal Executive Officer, determines its valuation policies and procedures.

Principal Financial and Accounting Officer determines its valuation policies and procedures.

The development

and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of

the Company’s Principal Financial Officer and approved by the Principal Executive Officer.

the Company’s Principal Financial and Accounting Officer.

December 31, 2025 and December 31, 2024, there were no Level 3 inputs, and no transfers in or out of Level 3 from other levels in the

14 unchanged sentences

of Directors on April 10, 2023 and approved by our stockholders on May 9, 2023.

The 2023 Plan succeeds the 2021 Omnibus Incentive Plan

The 2023 Plan succeeded the 2021 Omnibus Incentive Plan

and the 2018 Omnibus Incentive Plan (collectively, the “Prior Plans”) such that shares subject to the unused reserves of

8 unchanged sentences

to which the applicable vesting conditions have been met which remain subject to deferred settlement (a portion of which settled in January

(ii) 1,646,807 shares subject to outstanding awards under the Prior Plans, including 62,500 shares subject to performance-based

target awards, 97,500 shares subject to market-price vesting conditions, 77,949 shares subject to awards that were previously subject

to performance criteria that were determined to have been met which continue to remain subject to a time-based vesting schedule and 1,340,445

shares subject to awards as to which the applicable vesting conditions have been met which remain subject to deferred settlement (a portion

of which settled in January 2025);

and (iii) 1,168,686 shares subject to outstanding awards under the Terminated Plans as to which the

applicable vesting conditions have been met which remain subject to deferred settlement.

As of December 31, 2024, there were 2,562,170

shares available for new awards under the 2023 Plan (which includes shares rolled over from the Prior Plans) and no shares available

for new awards under the Prior Plans.

All awards outstanding as of December 31, 2024 consisted of RSUs (including time-based RSUs, performance-based

RSUs and stock price based RSUs).

(ii) 1,201,716 shares subject to outstanding awards under the Prior Plans, comprising 97,500 shares subject to market-price vesting

conditions and 1,104,216 shares subject to awards as to which the applicable vesting conditions have been met which remain subject to

deferred settlement (a portion of which settled in January 2026);

and (iii) 1,118,686 shares subject to outstanding awards under the

Terminated Plans as to which the applicable vesting conditions have been met which remain subject to deferred settlement.

As of December

31, 2025, there were 2,021,962 shares available for new awards under the 2023 Plan (which includes shares rolled over from the Prior

Plans) and no shares available for new awards under the Prior Plans.

All awards outstanding as of December 31, 2025 consisted of RSUs

(including time-based RSUs, performance-based RSUs and stock price based RSUs).

ENTERTAINMENT, INC.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Company also has an employee stock purchase plan (“ESPP”) that authorizes the issuance of up to an aggregate of 500,000 shares

3 unchanged sentences

Offerings may also be under the ESPP’s subplan for UK-based employees (the “Subplan”) which was adopted

in June 2022 and is designed to meet the requirements of a sharesave scheme under UK law.

in June 2022 and is designed to meet the requirements of a sharesave plan under UK law.

The terms applicable to offerings approved

under the ESPP and Subplan for 2023 and 2024 are described below.

under the ESPP and Subplan for 2024 are described below.

Offerings were not approved for 2025.

— Eligible employees may contribute up to 10 % of base compensation through payroll deductions over a period of twelve months, a

8 unchanged sentences

purchase rights under the Company’s ongoing offering periods).

No shares were purchased under the ESPP in 2022, a total of 4,080

shares were purchased in 2023 (at a purchase price of $ 8.483 per share) and a total of 3,670 shares were purchased in 2024 (at a purchase

price of $ 8.109 per share).

Such shares (from the 2023 and 2024 purchases) were issued in 2024.

Based on enrollments in the ESPP (including

the Subplan), an aggregate of approximately 125,000 shares were subject to outstanding purchase rights thereunder as of December 31,

A total of 3,670 shares were purchased in 2024 (at a purchase price

of $ 8.109 per share) and a total of 3,245 shares were purchased in 2025 (at a purchase price of $ 6.4175 per share).

The shares from the

2024 purchases were issued in 2024.

Based on enrollments in the ESPP’s Subplan, an aggregate of approximately 77,000 shares were

subject to outstanding purchase rights as of December 31, 2025.

summary of the Company’s RSU activity is as follows:

of Restricted Stock Unit Activity

Unvested Outstanding at January 1, 2024 (1)

Unvested Outstanding at December 31, 2024

amount shown as “unvested outstanding at January 1, 2024” does not include certain tranches of Adjusted EBITDA RSUs that

have performance criteria for annual periods later than 2023 (an aggregate of 312,500 RSUs, including 62,500 subject

to 2024 criteria), which were part of sign-on tranches approved for our Executive Chairman and our Chief Executive Officer during

the years 2021 and 2023, as the applicable performance targets were not set by January 1, 2024 (and, accordingly, the accounting

grant dates had not yet occurred for the tranches).

Such tranches had previously been included in the amounts shown in 2023 as unvested

outstanding since the initial approval date for the tranches.

The targets for the 2024 period were set in February 2024 and the remaining

targets (for each of 2025, 2026 and 2027) are anticipated to be set in February of the performance year.

amount shown as “granted” includes 245,694 performance-based target RSUs as to which the number eligible to

vest ranged from 0 % to 200 % of the target amount of RSUs (a maximum of 491,388 RSUs based on attainment of Adjusted

EBITDA targets for 2024 and criteria previously set by the Compensation Committee).

Outstanding at January 1, 2025

Outstanding at December 31, 2025

amount shown as “granted” includes 259,717 performance-based target RSUs for 2025 as to which the number eligible to

vest ranged from 0 % to 200 % of the target amount of RSUs (a maximum of 519,434 RSUs based on attainment of Adjusted EBITDA targets

for 2025 and criteria previously set by the Compensation Committee).

The amount shown also includes tranches covering an aggregate

of 104,166 Adjusted EBITDA RSUs (subject to performance criteria for 2025) which were part of sign-on awards of multiple tranches

approved in 2023 for our Executive Chairman and our Chief Executive Officer with respect to which the accounting grant date for the

2025 tranches did not occur until the targets were set in February 2025.

RSUs that vested during the year ended December 31, 2025 included:

(a) approximately 261,700 RSUs that

are subject to deferred settlement terms;

and (b) approximately 481,600 RSUs that vested on the last day of the year and were

settled on a net share basis in January 2025.

(a) approximately 97,935 RSUs that are subject to deferred settlement

and (b) approximately 314,470 RSUs that vested on the last day of the year and were settled on a net share basis in January

Company issued a total of 348,141 shares during the year ended December 31, 2025, in connection with the Company’s equity-based

plans, which included an aggregate of 274,112 shares issued in connection with the net settlement of RSUs that vested during the prior

year (primarily on December 29, 2023).

weighted average grant date fair value of awards granted for years ended December 31, 2024, December 31, 2023 and December 31, 2022 amounted

and $ 14.36 ,

year (on December 31, 2024) and an aggregate of 36,968 shares subject to awards that vested between 2020 and 2023.

weighted average grant date fair value of awards granted for years ended December 31, 2025 and December 31, 2024 amounted to $ 10.33 and

$ 9.07 , respectively.

The vesting date value of RSUs vesting for years ended December 31, 2024, December 31, 2023 and December 31, 2022 amounted

million, $ 10.2

million and $ 10.8

million, respectively.

The vesting date value of RSUs vesting for years ended December 31, 2025 and December 31, 2024 amounted to $ 4.2

million and $ 7.6 million, respectively.

tax deductions from stock options and awards are less than the cumulative book compensation expense, the tax effect of the resulting

differences is a shortfall.

For the year ended December 31, 2024 an income tax expense of $ 0.5 million was recorded for shortfalls generated

from stock options and awards exercised in 2024.

There was no income tax benefit recognized related

to awards that vested during the years ended December 31, 2023, and 2022 , as there was a full valuation allowance in place against

the RSU scheme ’s deferred tax asset.

For the year ended December 31, 2025 and December 31, 2024 an income tax expense of $ 0.4 million and $ 0.5

million was recorded for shortfalls generated from stock options and awards exercised in their respective years.

compensation is recognized as an expense over the requisite service period, which is generally the vesting period.

15 unchanged sentences

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Company recognized stock-based compensation expense as follows:

of Stock Based Compensation Expenses

December 31, 2024

December 31, 2023

December 31, 2022

(in millions)

Payroll taxes on vesting of RSUs

Stock-based compensation

taxes on vesting of RSUs

compensation expense

unrecognized compensation expense related to unvested stock awards and unvested RSUs at December 31, 2025 amounts to $ 4.1 million and

2 unchanged sentences

accumulated balances for each classification of comprehensive loss (income) are presented below:

Schedule of Accumulated Other Comprehensive

Loss (Income)

Benefit Costs

of Accumulated Other Comprehensive Loss (Income)

Comprehensive

(in millions)

Balance at January 1, 2022

Change during the period

Balance at December 31, 2022

Change during the period

Balance at December 31, 2023

Change during the period

Deferred tax on change during the period

Balance at December 31, 2024

connection with the issuance of the Senior Secured Notes, and the entry into the RCF Agreement, on May 19, 2021, the Company terminated

all of its interest rate swaps.

Accordingly, hedge accounting is no longer applicable.

The amounts previously recorded in Accumulated

Other Comprehensive Income were amortized into Interest expense over the terms of the hedged forecasted interest payments.

Losses reclassified

from Accumulated Other Comprehensive Income into Interest expense in the Consolidated Statements of Operations and Income for the year

ended December 31, 2024, December 31, 2023 and December 31, 2022 amounted to $ 0.0 million, $ 0.3 million and $ 0.7 million, respectively.

at January 1, 2024

during the period

tax on change during the period

at December 31, 2024

during the period

tax on change during the period

at December 31, 2025

Net Income (Loss) per Share

4 unchanged sentences

would be anti-dilutive.

computation of diluted EPS excludes the common stock equivalents of the following potentially dilutive securities because they were either

contingently issuable shares or because their inclusion would be anti-dilutive:

computation of diluted EPS excludes the common stock equivalents of the following potentially dilutive securities because they were contingently

issuable shares or because their inclusion would be anti-dilutive:

of Anti-dilutive Securities Excluded from Computation of Earnings Per Share

December 31, 2024

December 31, 2023

December 31, 2022

The following table reconciles the numerators and denominators of the basic and diluted EPS computations for the years ended

December 31, 2024, December 31, 2023 and December 31, 2022, respectively.

of Numerators and Denominators of the Basic and Diluted EPS Computations

(in millions)

(Denominator)

Per-Share Amount,

December 31, 2024

Income available to common stockholders

Effect of Dilutive Securities

Income available to common stockholders

(in millions)

(Denominator)

Per-Share Amount,

December 31, 2023

Income available to common stockholders

Effect of Dilutive Securities

Income available to common stockholders

(in millions)

(Denominator)

Per-Share Amount,

December 31, 2022

Income available to common stockholders

Effect of Dilutive Securities

Income available to common stockholders

calculation of Basic EPS includes the effects of 2,091,536 , 2,425,236 and 1,703,142 shares for the years ended December 31 2024, 2023

and 2022, respectively, with respect to RSU awards that have vested but have not yet been issued.

calculation of Basic EPS includes the effects of 2,506,145 and 2,091,536 shares for the years ended December 31, 2025 and 2024, respectively,

with respect to RSU awards that have vested but have not yet been issued.

ENTERTAINMENT, INC.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Repurchase of Common Stock

November 1, 2025, the Board of Directors authorized the Company to use up to $ 25.0 million to repurchase Inspired common shares, subject

to repurchases being effected on or before November 30, 2028 (the “Share Repurchase Program”).

Management has discretion

as to whether to repurchase shares of the Company.

the year ended December 31, 2025, the Company repurchased 56,604 shares under the Share Repurchase Program for gross payments of approximately

$ 0.4 million, which were canceled and retired during the year ended December 31, 2025.

As of December 31, 2025, approximately $ 24.6 million

remained available for future repurchases under the Share Repurchase Program.

Part II, Item 5 of this report for further details regarding shares repurchased during the three months ended December 31, 2025.

Other Finance Income

1 unchanged sentence

of Other Finance Income

December 31, 2024

December 31, 2023

December 31, 2022

(in millions)

Pension interest cost

Expected return on pension plan assets

Other finance income

Ended December 31, 2025

Ended December 31, 2024

interest cost

return on pension plan assets

finance income (expense)

effective tax rates for the years ended December 31, 2025 and 2024 were ( 188.6 )% and ( 3,466.2 )%, respectively.

For the year ended December

31, 2025, the Company’s effective tax rate differs from the federal statutory rate primarily due to an inclusion for global intangible

low-taxed income.

For the year ended December 31, 2024, the Company’s effective tax rate differs from the federal statutory rate

primarily due to the reversal of a majority of the Company’s valuation allowance on its deferred tax assets in various jurisdictions

as well as an inclusion for global low-taxed income.

For the year ended December 2023 and 2022, the Company’s effective tax rate

differs from the federal statutory rate primarily due to losses in certain jurisdictions where the Company presently has recorded a valuation

allowance against the related tax benefit as well as an inclusion for global intangible low-taxed income.

components of earnings before income taxes on the Company’s consolidated statement of operations by the U.S.

as well as an inclusion for global intangible low-taxed income.

components of (loss) earnings before income taxes on the Company’s consolidated statement of operations by the U.S.

jurisdictions were as follows:

of Earnings (Loss) Before Income Tax

December 31, 2024

December 31, 2023

December 31, 2022

(in millions)

United States

Foreign jurisdictions

Total earnings (loss) before income taxes

Ended December 31, 2025

Ended December 31, 2024

jurisdictions

tax provision, as reflected in the Company’s consolidated statement of operations, consists of the following:

of Provision for Income Taxes

December 31, 2024

December 31, 2023

December 31, 2022

(in millions)

Current provision (benefit)

Total current

December 31, 2024

December 31, 2023

December 31, 2022

(in millions)

Deferred provision (benefit)

Total deferred

Total provision

provision (benefit)

disclosure of cash paid during the period for income taxes (net of refunds received) is as follows:

of Income Taxes

Ended December 31, 2025

cash paid for income taxes, net of refunds received

ENTERTAINMENT, INC.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

differences between the federal statutory tax rate and our effective rate are reflected in the following table for the years ended December

31, 2024, 2023 and 2022:

of Differences Between the Federal Statutory Tax Rate and our Effective Rate

December 31, 2024

December 31, 2023

December 31, 2022

(in millions)

Statutory income tax

State taxes (net of federal)

Non-deductible officers’ compensation

Global intangible low-taxed income

Other permanent differences

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Reconciliation

of the differences between the effective income tax rate and federal statutory rate for the year ended December 31, 2025:

of Effective Income Tax Rate Reconciliation

(net of federal)

withholding taxes

in valuation allowance

of rates different than statutory

Non-deductible loss on disposal

tax credit on withholding taxes

Non-deductible

option deduction

Prior year true ups

Effect of rates different than statutory

Non-creditable withholding taxes

Foreign tax true ups

Research and development tax credits

Change in valuation allowance

Effective income tax rate

year tax assessment

foreign jurisdictions

of cross-border tax laws

intangible low-taxed income

or nondeductible items

Non-deductible

officers’ compensation

in valuation allowances

income tax rate

previously disclosed for the year ended December 31, 2024, prior to the adoption of ASU 2023-09, the following is a reconciliation of

the difference between the effective income tax rate and the federal statutory rate:

of Differences Between the Federal Statutory Tax Rate and Effective Rate

taxes (net of federal)

Non-deductible

officers’ compensation

intangible low-taxed income

permanent differences

year true ups

of rates different than statutory

Non-creditable

withholding taxes

in valuation allowance

income tax rate

$ ( 3,466.2 )%

ENTERTAINMENT, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

net deferred tax assets and liabilities arising from temporary differences are as follows:

of Deferred Tax Assets and Liabilities

December 31, 2024

December 31, 2023

(in millions)

Net operating losses

Other temporary differences

Intangible Assets

Right of Use liability

Total gross deferred tax assets

Valuation allowance balance

operating losses

temporary differences

limitation carry forward

of Use liability

gross deferred tax assets

Intangible assets

Other temporary differences

Right of Use asset

Gross deferred tax liabilities

Net deferred tax assets

allowance balance

deferred tax assets

temporary differences

deferred tax liabilities

deferred tax assets

in the valuation allowance are as follows:

of Changes in the Valuation Allowance

December 31, 2024

December 31, 2023

(in millions)

Beginning balance

(Decrease) increase

Reversal of allowance

Ending balance

One Big Beautiful Bill Act (the “OBBBA”) was signed into law on July 4, 2025.

The OBBBA contains significant tax law changes

with various effective dates affecting business taxpayers.

Among the tax law changes that will impact the Company relate to the timing

and amount of interest expense deductions within global low-taxed income calculation, and deductions and foreign tax credit calculations

related to the global low-taxed income calculation.

The tax provision was impacted by the timing and amount of interest expense deductions

within the global low-taxed income calculations in 2025.

of December 31, 2025 the Company’s cumulative state net operating losses are $ 48.6 million, which begin to expire in 2026.

6 unchanged sentences

The majority of these net operating losses have an unlimited carry forward period.

evaluates both positive and negative evidence to estimate whether sufficient future taxable income will be available to utilize

existing deferred tax assets.

A key piece of objective positive evidence considered is the cumulative income generated over a

three-year period.

In the fourth quarter of 2024, the Company determined that, due to positive income generation in the United

Kingdom in recent years leading to a cumulative income position, and based on forecasted future taxable income, while considering

expected permanent and temporary timing tax differences, a significant portion of the valuation allowance against its deferred tax

assets was no longer necessary.

As of December 31, 2024, the Company maintains a valuation allowance of $ 6.4

million in the United States and $ 2.1

million in the United Kingdom.

The remaining valuation allowance relates to capital loss carryovers in the United Kingdom, state net operating losses

unable to be utilized in the United States and United States interest expected to be limited under Section 163(j).

evaluates both positive and negative evidence to estimate whether sufficient future taxable income will be available to utilize existing

deferred tax assets.

A key piece of objective positive evidence considered is the cumulative income generated over a three-year period.

In the fourth quarter of 2024, the Company determined that, due to positive income generation in the United Kingdom in recent years leading

to a cumulative income position, and based on forecasted future taxable income, while considering expected permanent and temporary timing

tax differences, a significant portion of the valuation allowance against its deferred tax assets was no longer necessary.

As of December

31, 2025, the Company maintains a valuation allowance of $ 8.2 million in the United States and $ 2.2 million in the United Kingdom.

remaining valuation allowance relates to capital loss carryovers in the United Kingdom, state net operating losses unable to be utilized

in the United States and United States interest expected to be limited under Section 163(j).

Company has not recognized deferred tax liabilities in respect of unremitted earnings that are considered indefinitely reinvested in

15 unchanged sentences

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Related Parties

Corporate Holdings Pty Limited (UK Branch) (“Macquarie UK”) (an arranger and lending party under our RCF Agreement) is an

affiliate of MIHI LLC, which beneficially owned approximately 11.4 % of our common stock as of December 31, 2024, and 11.5 % of our common

stock as of December 31, 2023.

Macquarie UK held $ 2.1 million of the total $ 18.8 million of RCF drawn at December 31, 2024, and $ 2.1

million of the total $ 19.1 million of RCF drawn at December 31, 2023.

Interest expense payable to Macquarie UK for the RCF for the years

ended December 31, 2024, 2023 and 2022 (including non-utilization fees) amounted to $ 0.2 million, $ 0.0 million and $ 0.0 million, respectively.

Macquarie UK did not hold any of the Company’s senior notes at December 31, 2024 or December 31, 2023.

MIHI LLC is also a party

to a stockholders agreement with the Company and other stockholders, dated December 23, 2016, pursuant to which, subject to certain conditions,

MIHI LLC, jointly with Hydra Industries Sponsor LLC, are permitted to designate two directors to be nominated for election as directors

of the Company at any annual or special meeting of stockholders at which directors are to be elected, until such time as MIHI LLC and

Hydra Industries Sponsor LLC in the aggregate hold less than 5 % of the outstanding shares of the Company.

Corporate Holdings Pty Limited (UK Branch) (“Macquarie UK”) (an arranger and lending party under our previous RCF Agreement)

and Macquarie Bank Limited (“Macquarie Bank”) (a party to our interest rate swap agreements, as described in Note 14) are

affiliates of MIHI LLC, which beneficially owned approximately 11.3 %

of our common stock as of December 31, 2025.

Macquarie UK held

of the loans outstanding under our previous RCF which was repaid on June 9, 2025 in connection with the entry into the new SFA.

UK did not hold any of the Company’s outstanding debt as of December 31, 2025 and is not a lending party under the new RCF.

December 31, 2024, Macquarie UK held $ 2.1

million of the total $ 18.8

million of previous RCF drawn.

Interest expense payable to

Macquarie UK for the previous RCF for the years ended December 31, 2025 and 2024 (including non-utilization fees) amounted to $ 0.1

million and $ 0.2

million, respectively.

With respect to Macquarie Bank, for

the year ended December 31, 2025 , no periodic net settlements had occurred under the swap agreements,

and as of December 31, 2025, no amounts were payable to or receivable from Macquarie Bank .

MIHI LLC is also a party to a stockholders agreement with the Company and other stockholders, dated December 23, 2016,

pursuant to which, subject to certain conditions, MIHI LLC, jointly with Hydra Industries Sponsor LLC, are permitted to designate two

directors to be nominated for election as directors of the Company at any annual or special meeting of stockholders at which directors

are to be elected, until such time as MIHI LLC and Hydra Industries Sponsor LLC in the aggregate hold less than 5% of the outstanding

shares of the Company.

Weil, the brother of A.

Lorne Weil, our Executive Chairman, provides consulting services to the Company relating to our lottery operations

in the Dominican Republic under a consultancy agreement dated December 31, 2021, as amended.

The aggregate amount incurred by the Company

in consulting fees was $ 0.2 million, $ 0.1 million and $ 0.1 million for the years ended December 31, 2024, December 31, 2023 and December

31, 2022, respectively.

Lorne Weil, our Executive Chairman, provides consulting services to the Company relating to our lottery

operations in the Dominican Republic under a consultancy agreement dated December 31, 2021, as amended and extended.

The Company incurred

consulting fees totaling $ 0.2

million for each of the years ended December 31, 2025 and 2024.

Company as Lessee

18 unchanged sentences

for operating leases.

The operating leases have remaining terms of 1 to 11 years.

The operating leases have remaining terms of 4 months to 12 years.

ENTERTAINMENT, INC.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Company is also party to finance leases with third parties with respect to gaming machines.

2 unchanged sentences

Minimum amounts of cash are required to be maintained in the Company’s bank accounts with respect to the finance

The leases have remaining terms of between 6 months and 4.5 years.

The leases have remaining terms of between 1 month and 3.5 years.

components of lease expense were as follows:

of Lease Expense

December 31, 2024

Year Ended December 31, 2023

Year Ended December 31, 2022

(in millions)

Finance lease costs:

Operating lease costs

Short-term lease costs

Variable lease costs

December 31, 2024

Weighted average remaining lease term – finance leases

Weighted average remaining lease term – operating leases

Weighted average discount rate – finance leases

Weighted average discount rate – operating leases

average remaining lease term – finance leases

average remaining lease term – operating leases

average discount rate – finance leases

average discount rate – operating leases

leased under finance leases had a cost of $ 27.8 million and $ 21.4 million at December 31, 2025 and 2024, respectively, and accumulated

2 unchanged sentences

of Future Minimum Finance Lease Payments

Year ending December 31, (in millions)

Total future minimum lease payments

ending December 31, (in millions)

future minimum lease payments

imputed interest

1 unchanged sentence

of Future Minimum Operating Lease Payments

Year ending December 31, (in millions)

Total future minimum lease payments

ending December 31, (in millions)

future minimum lease payments

imputed interest

2 unchanged sentences

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Company as Lessor

9 unchanged sentences

component is accounted for under ASC 606.

recognized at commencement date of sales type leases amounted to $ 2.7 million, $ 4.9 million and $ 3.2 million for the years ended December

31, 2024, 2023 and 2022, respectively.

Lease income from operating leases and variable income and interest receivable from sales type

leases is not material for any of the years presented.

income from operating leases is not material for any of the periods presented.

Lease income from sales type leases is as follows:

Schedule of Lease Income from Operating Lease

recognized at commencement date of sales type leases

minimum sales type lease receivables as of December 31, 2025 were as follows:

of Future Minimum Sales Type Lease Receivables

Year ending December 31, (in millions)

Total future minimum lease receivables

ending December 31, (in millions)

future minimum lease receivables

imputed interest

2 unchanged sentences

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Commitments and Contingencies

1 unchanged sentence

among other terms, provisions relating to severance and notice requirements.

with Daniel B.

Silvers, former Executive Vice President and Chief Strategy Officer

January 10, 2023, Mr.

Silvers stepped down from his position as Executive Vice President and Chief Strategy Officer of the Company.

Silvers’ employment agreement dated December 14, 2016, as amended, Mr.

Silvers was entitled to receive a base salary at

a rate of $ 385,000 per year, a target annual bonus of not less than 100 % of his base salary and a maximum annual bonus of 200 % of his

He was also entitled to reimbursement for private medical insurance and to severance benefits over a period of two years

which were accrued in 2023.

time to time, the Company may become involved in lawsuits and legal matters arising in the ordinary course of business.

3 unchanged sentences

of operations.

operate a defined contribution plan in the US and both defined benefit and defined contribution pension schemes in the UK.

contribution scheme assets are held separately from those of the Company in an independently administered fund.

operate a defined contribution plan in the US and both defined benefit and defined contribution pension plans in the UK.

contribution plan assets are held separately from those of the Company in an independently administered fund.

The defined contribution

pension cost charge represents contributions payable by the Company and amounted to $ 3.5 million, $ 3.4 million and $ 2.9 million for the

years ended December 31, 2024, 2023 and 2022, respectively.

Contributions totaling $ 0.4 million and $ 0.4 million were payable to the

fund as at December 31, 2024 and 2023, respectively.

defined benefit scheme has been closed to new entrants since April 1, 1999 and closed to future accruals for services rendered to the

pension cost charge represents contributions payable by the Company and amounted to $ 3.5 million and $ 3.5 million for the years ended

December 31, 2025 and 2024, respectively.

Contributions totaling $ 0.4 million and $ 0.4 million were payable to the fund as at December

31, 2025 and 2024, respectively.

defined benefit plan has been closed to new entrants since April 1, 1999 and closed to future accruals for services rendered to the

Company for the entire financial statement periods presented in these consolidated financial statements.

1 unchanged sentence

based on a portion of an employee’s pensionable earnings during years prior to 2010.

The latest triennial actuarial

valuation of the scheme as at March 31, 2024 was finalized in March 2025.

The actuarial valuation revealed that the statutory funding

objective was not met, i.e.

there were insufficient assets to cover the Scheme’s Technical Provisions and there was a funding shortfall

of £ 2.0 million ($ 2.5 million) at the valuation date.

Under the Recovery Plan and Schedule of Contributions agreed between the

Trustee and the Company on March 5, 2025, it was agreed that the shortfall will be met by contributions of £ 0.6 million ($ 0.8 million)

for the period April 1, 2024 to December 31, 2024 and £ 0.7 million ($ 0.9 million) for the year ended December 31, 2025.

Actuary will assess the funding position of the Scheme at March 31, 2026 and if the funding level at that point is less than 100% the

Company will pay a single lump sum contingent contribution calculated as the lower of the deficit calculated by the Scheme Actuary at

March 31, 2026 and £ 0.5 million ($ 0.6 million).

This contingent contribution will be payable by October 31, 2026.

The Company will

also make expense contributions of £ 0.3 million ($ 0.4 million) per annum for the period covered by the Recovery Plan and Schedule

of Contributions.

latest triennial actuarial valuation of the plan as at March 31, 2024 was finalized in March 2025.

The actuarial valuation revealed

that the statutory funding objective was not met, i.e.

there were insufficient assets to cover the Plan’s Technical Provisions

and there was a funding shortfall of £ 2.0 million ($ 2.7 million) at the valuation date.

Under the Recovery Plan and Schedule of

Contributions agreed between the Trustee and the Company on March 5, 2025, it was agreed that the shortfall will be met by contributions

of £ 0.6 million ($ 0.8 million) for the period April 1, 2024 to December 31, 2024 and £ 0.7 million ($ 0.9 million) for the

year ended December 31, 2025.

The Plan Actuary will assess the funding position of the plan at March 31, 2026 and if the funding

level at that point is less than 100% the Company will pay a single lump sum contingent contribution calculated as the lower of the deficit

calculated by the Plan Actuary at March 31, 2026 and £ 0.5 million ($ 0.7 million).

This contingent contribution will be payable

by October 31, 2026.

The Company will also make expense contributions of £ 0.3 million ($ 0.4 million) per annum for the period covered

by the Recovery Plan and Schedule of Contributions.

ENTERTAINMENT, INC.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

trustee has made an allowance for the pension scheme liability profile when deciding the investment strategy of the pension scheme.

the pension scheme is closed to new entrants and ceased future accrual with effect from March 31, 2010, it has continued to mature gradually.

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

trustee has made an allowance for the pension plan liability profile when deciding the investment strategy of the pension plan.

the pension plan is closed to new entrants and ceased future accrual with effect from March 31, 2010, it has continued to mature gradually.

Therefore, the trustee reviews the investment strategy regularly to check whether any changes are needed.

2 unchanged sentences

position of the Company, and the extent to which the Company will be able to bear these changes.

scheme’s investment policy is to maximize long-term financial return commensurate with security and minimizing risk, with an objective

plan’s investment policy is to maximize long-term financial return commensurate with security and minimizing risk, with an objective

of achieving a return of around 2.8% per annum above the return on UK Government bonds.

2 unchanged sentences

In setting investment

strategy, the trustees considered the lowest risk strategy that they could adopt in relation to the scheme’s liabilities and designed

an asset allocation to achieve a higher return while maintaining a cautious approach to meeting the scheme’s liabilities.

strategy, the trustees considered the lowest risk strategy that they could adopt in relation to the plan’s liabilities and designed

an asset allocation to achieve a higher return while maintaining a cautious approach to meeting the plan’s liabilities.

undertake periodic reviews of the investment strategy and take advice from their investment advisors.

51 unchanged sentences

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

following table sets forth the combined funded status of the pension plans and their reconciliation to the related amounts recognized

1 unchanged sentence

of Pension Plans and their Reconciliation

December 31, 2024

December 31, 2023

(in millions)

Change in benefit obligation:

Benefit obligation at beginning of period

Interest cost

Actuarial (gain) loss

Benefits paid

Foreign currency translation adjustments

Benefit obligation at end of period

Change in plan assets:

Fair value of plan assets at beginning of period

Actual (loss) gain on plan assets

Employer contributions

Benefits paid

Foreign currency translation adjustments

Fair value of assets at end of period

Amount recognized in the consolidated balance sheets:

Overfunded (Unfunded) status (non-current)

Net amount recognized

following table presents the components of our net periodic pension cost (benefit):

in benefit obligation:

obligation at beginning of period

currency translation adjustments

obligation at end of period

in plan assets:

value of plan assets at beginning of period

gain (loss) on plan assets

contributions

currency translation adjustments

value of assets at end of period

recognized in the consolidated balance sheets:

status (non-current)

amount recognized

following table presents the components of our net periodic pension cost:

of Defined Benefit Plans

December 31, 2024

December 31, 2023

December 31, 2022

(in millions)

Components of net periodic pension (benefit) cost:

Interest cost

Expected return on plan assets

Amortization of net loss

Net periodic cost (benefit)

of net periodic pension cost:

return on plan assets

periodic cost

accumulated benefit obligation for all defined benefit pension plans was $ 68.4 million and $ 65.0 million as of December 31, 2025 and

1 unchanged sentence

The overfunded status of our defined benefit pension plan recorded as an asset in our consolidated balance

sheets as of December 31, 2024 was $ 3.5 million.

The underfunded status of our defined benefit pension plans recorded as a liability

in our consolidated balance sheets as of December 31, 2023 was $ 2.0 million

sheets as of December 31, 2025 and December 31, 2024 was $ 5.8 million and $ 3.5 million, respectively.

estimated net loss, net transition asset (obligation) and prior service cost for the plan that will be amortized from accumulated other

2 unchanged sentences

Schedule of Fair Value of Plan Assets

(in millions)

Diversified fund

Buy-in contract

Cash and other current assets

fair value of the plan assets at December 31, 2024 by asset category is presented below:

and other current assets

ENTERTAINMENT, INC.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

fair value of the plan assets at December 31, 2023 by asset category is presented below:

(in millions)

Diversified fund

Buy-in contract

Changes in the value of Level

3 assets are as follows:

December 31, 2024

(in millions)

Beginning balance

Actual return on plan assets still held

Transfer of payments to the Plan in respect of insured pensioner members

Foreign currency translation adjustments

Ending balance

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

in the value of Level 3 assets are as follows:

return on plan assets still held

of payments to the plan in respect of insured pensioner members

currency translation adjustments

table below presents the weighted-average actuarial assumptions used to determine the benefit obligation and net periodic benefit cost

2 unchanged sentences

Periodic Benefit Cost for Plan

December 31, 2024

December 31, 2023

Discount rate – non-insureds

Discount - insureds

Expected return on assets

RPI inflation

CPI inflation – pre 2030

CPI inflation – post 2030

Pension increases – pre-2006 service

Pension increases – post-2006 service

Pension increases – post 1988 GMP – pre 2030

Pension increases – post 1988 GMP – post 2030

rate – non-insureds

return on assets

inflation – pre 2030

inflation – post 2030

increases – pre-2006 service

increases – post-2006 service

increases – post 1988 GMP – pre 2030

increases – post 1988 GMP – post 2030

following benefit payments are expected to be paid:

of Benefit Payments are Expected to be Paid

(in millions)

benefit payments

Segment Reporting and Geographic Information

segments are identified as components of an enterprise for which separate and discrete financial information is available and is used

by the chief operating decision maker, or decision-making group, in making decisions on how to allocate resources and assess performance.

The Company’s chief decision-making group consists of the Executive Chairman, the Chief Executive Officer and the Chief Financial

segments are identified as components of an enterprise for which separate and discrete financial information is available and is

used by the chief operating decision maker, or decision-making group, in making decisions on how to allocate resources and assess

The Company’s chief decision-making group consists of the Executive Chairman and the President and Chief

Executive Officer.

Company’s chief decision-making group uses measures of segment profit and loss to evaluate the performance areas of 1) Achievement

17 unchanged sentences

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

following tables present revenue, cost of sales, excluding depreciation and amortization, staff-related selling, general and administrative

expenses, non-staff related selling, general and administrative expenses, labor costs capitalized, depreciation and amortization, stock-based

compensation expense, acquisition related transaction expenses, other segment items, operating profit/(loss), total assets and total

capital and other long-lived asset expenditures for the years ended December 31, 2024, December 31, 2023 and December 31, 2022, respectively,

by business segment.

Certain unallocated corporate function costs have not been allocated to the Company’s reportable operating

segments because these costs are not allocable and to do so would not be practical.

Corporate function costs consist primarily of selling,

general and administrative expenses, depreciation and amortization, capital expenditures, right of use assets, cash, prepaid expenses

and property and equipment and software development costs relating to corporate/shared functions.

All acquisition and integration related

transaction expenses are allocated as corporate function costs.

compensation expense, other segment items, operating profit/(loss), and total capital and other long-lived asset expenditures for the

years ended December 31, 2025 and December 31, 2024, respectively, by business segment.

Certain unallocated corporate function costs

have not been allocated to the Company’s reportable operating segments because these costs are not allocable and to do so would

not be practical.

Corporate function costs consist primarily of selling, general and administrative expenses, depreciation and amortization,

capital expenditures, right of use assets, cash, prepaid expenses and property and equipment and software development costs relating

to corporate/shared functions.

Asset information by reportable segment is not given as this information is not provided to the Company’s

chief decision-making group due to it not being considered necessary in order for the group to assess the reportable segments’

performance or to make decisions concerning the allocation of resources.

of Segment Reporting Information by Segment

Ended December 31, 2025

Corporate Functions

(in millions)

Product sales

Total revenue

Cost of sales, excluding depreciation and amortization:

Cost of service

Cost of product sales

Staff-related selling, general and administrative expenses

Non-staff related selling, general and administrative expenses

Labor costs capitalized

Acquisition and integration related transaction expenses

Stock-based compensation expense

Depreciation and amortization

Other segment items

Segment operating income (loss)

Net operating income

Total assets at December 31, 2024

Total goodwill at beginning of period

Accumulated goodwill impairment losses

Total goodwill at beginning of period, net

Foreign currency translation adjustments

Total goodwill at December 31, 2024, net

Total capital and other long-lived asset expenditures for the year ended December 31, 2024

segment revenue

of sales, excluding depreciation and amortization:

of product sales

Staff-related

selling, general and administrative expenses

related selling, general and administrative expenses

costs capitalized

compensation expense

and amortization

on sale of business

segment items

operating income (loss)

operating income

goodwill at beginning of period

goodwill impairment losses

goodwill at beginning of period, net

currency translation adjustments

goodwill at December 31, 2025, net

capital and other long-lived asset expenditures for the year ended December 31, 2025

Ended December 31, 2024

(in millions)

Product sales

Total segment revenue

Cost of sales, excluding depreciation and amortization:

Cost of service

Cost of product sales

Staff-related selling, general and administrative expenses

Non-staff related selling, general and administrative expenses

Labor costs capitalized

Stock-based compensation expense

Depreciation and amortization

Other segment items

Segment operating income (loss)

Net operating income

Total assets at December 31, 2023

Total goodwill at beginning of period

Accumulated goodwill impairment losses

Total goodwill at beginning of period, net

Foreign currency translation adjustments

Total goodwill at December 31, 2023, net

Total capital and other long-lived asset expenditures for the year ended December 31, 2023

of sales, excluding depreciation and amortization:

of product sales

Staff-related

selling, general and administrative expenses

related selling, general and administrative expenses

costs capitalized

compensation expense

and amortization

segment items

operating income (loss)

operating income

goodwill at beginning of period

goodwill impairment losses

goodwill at beginning of period, net

currency translation adjustments

goodwill at December 31, 2024, net

capital and other long-lived asset expenditures for the year ended December 31, 2024

ENTERTAINMENT, INC.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

Ended December 31, 2022

(in millions)

Product sales

Total revenue

Cost of sales, excluding depreciation and amortization:

Cost of service

Cost of product sales

Staff-related selling, general and administrative expenses

Non-staff related selling, general and administrative expenses

Labor costs capitalized

Stock-based compensation expense

Acquisition and integration related transaction expenses

Depreciation and amortization

Other segment items

Segment operating income (loss)

Net operating income

Total capital and other long-lived asset expenditures for the year ended December 31, 2022

OF AND FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

information for revenue is set forth below:

Schedule of Geographic Information

December 31, 2024

December 31, 2023

December 31, 2022

(in millions)

Total revenue

Rest of world

Total revenue

revenue includes revenue from customers headquartered in the UK, but whose revenue is generated globally.

information of our non-current assets excluding goodwill is set forth below:

December 31, 2024

December 31, 2023

(in millions)

Rest of world

non-current assets excluding goodwill

Total non-current assets

development costs are included as attributable to the market in which they are utilized.

ENTERTAINMENT, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

Customer Concentration

the year ended December 31, 2024 no customers represented at least 10% of revenue.

During the year ended December 31, 2023 two customers

represented at least 10% of revenue, accounting for 12 % and 11 % of the Company’s revenue, respectively.

The customers were served

by the Gaming, Virtual Sports and Interactive segments, and by the Virtual Sports and Interactive segments, respectively.

year ended December 31, 2022, one customer represented at least 10% of revenue, accounting for 13 % of the Company’s revenue.

customer was served by the Virtual Sports and Interactive segments.

December 31, 2024 there was one customer that represented at least 10% of the Company’s accounts receivable, accounting for 16 %

the year ended December 31, 2025 and December 31, 2024 no customers represented at least 10% of revenue.

December 31, 2025 no customers represented at least 10% of the Company’s accounts receivable.

At December 31, 2024 there was

one customer that represented at least 10% of the Company’s accounts receivable, accounting for

16 % of the Company’s accounts receivable.

At December 31, 2023, there was one customer that represented at least 10% of the Company’s

accounts receivable, accounting for 12 % of the Company’s accounts receivable.

Revision of Previously Reported Informatio n

the current year, the Company identified immaterial errors in its previously reported financial statements for the year ended December 31,

2023, and December 31, 2022 relating to the classification of leases between operating and sales type and immaterial errors relating to

capitalization of software project content costs.

accordance with Staff Accounting Bulletin (“SAB”) 99, Materiality, and SAB 108, Considering the Effects of Prior Year Misstatements

when Quantifying Misstatements in the Current Year Financial Statements, the Company evaluated the materiality of the errors from qualitative

and quantitative perspectives, and concluded that the errors were immaterial to any prior annual or interim financial statements.

Notwithstanding

this conclusion, management has revised the accompanying consolidated financial statements for 2023 and 2022, and related notes included

herein to correct the errors.

following tables present the effect of correcting this error on the Company’s previously issued financial statements.

of Effect of Correcting this Error on Previously Issued Financial Statements

of December 31, 2022

As previously reported

(in millions)

Consolidated Balance Sheet

Accounts receivable

Total current assets

Property and equipment

Software development

the year ended December 31, 2022

As previously reported

(in millions, except per share data)

Consolidated Statement of Operations

Cost of sales

Selling, general and administrative expenses

Depreciation and amortization

Net operating income

Interest expense, net

Total other expense, net

Net income before income taxes

Comprehensive income

Net income per common share - basic

Net income per common share - diluted

the year ended December 31, 2022

As previously reported

(in millions)

Consolidated Statement of Cashflows

Depreciation and amortization

Accounts receivable

Prepaid expenses and other assets

Net cash provided by operating activities

Purchases of property and equipment

Purchases of capital software and internally developed costs

Net cash used in investing activities

ENTERTAINMENT, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

OF DECEMBER 31, 2024 AND 2023, AND FOR THE YEARS ENDED

31, 2024, 2023 AND 2022

the year ended December 31, 2022

As previously reported

(in millions)

Consolidated Statement of Shareholders’ Deficit

Accumulated deficit – January 1, 2022

Accumulated deficit – December 31, 2022

of December 31, 2023

As previously reported

(in millions)

Consolidated Balance Sheet

Accounts receivable

Total current assets

Property and equipment

Software development

the year ended December 31, 2023

As previously reported

(in millions, except per share data)

Consolidated Statement of Operations

Cost of sales

Selling, general and administrative expenses

Depreciation and amortization

Net operating income

Interest expense, net

Total other expense, net

Net income before income taxes

Comprehensive income

Net income per common share - basic

Net income per common share - diluted

the year ended December 31, 2023

As previously reported

Restructuring Activities

the fourth quarter of 2025, linked to the non-renewal of two significant customer contracts and the Virtuals studio restructure, the Company completed a consultation

process that resulted in a number of employees leaving the business.

Costs associated with these activities are recognized in the

Consolidated Statements of Operations and Comprehensive Loss in Selling, general and administrative activities.

Restructuring

charges by type are as follows:

of Restructuring Activities

Property Closure

Equipment Novation

(in millions)

Consolidated Statement of Cashflows

Depreciation and amortization

Accounts receivable

Prepaid expenses and other assets

Net cash provided by operating activities

Purchases of property and equipment

Purchases of capital software and internally developed costs

Net cash used in investing activities

the year ended December 31, 2023

As previously reported

At January 1, 2025

Costs charged to expense

Costs paid or otherwise settled

Amounts payable at December 31, 2025

Restructuring

charges by segment are as follows:

Virtual Sports

Corporate Functions

(in millions)

Consolidated Statement of Shareholders’ Deficit

Accumulated deficit – January 1, 2023

Accumulated deficit – December 31, 2023

At January 1, 2025

Costs charged to expense

Costs paid or otherwise settled

Amounts payable at December 31, 2025

charged to expense above represent the total amount expected to be incurred in connection with these activities.

Subsequent Events

Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the financial statements

The Company did not identify subsequent events that would have required adjustment or disclosure in the consolidated financial

Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the financial

statements were issued.

Other than as described below, the Company did not identify subsequent events that would have required

adjustment or disclosure in the consolidated financial statements.

On March 6, 2026, as

permitted by the Notes Purchase Agreement described in Note 13, the Company repaid £ 10.0

million ($ 13.3

million) principal, and associated accrued interest of £0.2 million ($0.3 million), of its issued and outstanding Senior

As permitted by the Notes Purchase Agreement, the repayment was made without penalty using some of the funds received from the

sale of the holiday parks and certain associated leisure assets.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data