Sports Entertainment Gaming Global Corp 10-K

Item 8. Financial Statements and Supplementary Data. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Boladale Lawal & Co, Chartered Accountants (PCAOB ID: 6993 ) F-2 Consolidated Balance Sheets as of December 31, 2025 and 2024 F-4 Consolidated Statements of Operations and Comprehensive Loss for the Years ended December 31, 2025 and 2024 F-5 Consolidated Statements of Equity for the Years ended December 31, 2025 and 2024 F-6 Consolidated Statements of Cash Flows for the Years ended December 31, 2025 and 2024 F-7 Notes to Consolidated Financial Statements F-8 F- 1 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Sports Entertainment Gaming Global Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Sports Entertainment Gaming Global Corporation (the ‘Company’) as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity/ (deficit) and cash flows for each of the two years in the period ended December 31, 2025 and 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025 and 2024, in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2, the Company suffered an accumulated deficit of $(284,007,361), net loss of $(20,805,067) and a negative working capital of $(19,019,072). The Company is dependent on obtaining additional working capital funding from the sale of equity and/or debt securities to execute its plans and continue operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These 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. 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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, 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. Our audits 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 audits 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. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. Communication of critical audit matters does not alter in any way our opinion on the financial statements taken as a whole and we are not, by communicating the critical audit matters, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate. F- 2 Valuation of asset acquisition. Description of the Matter As discussed in Note 3 to the financial statements, on July 23, 2025 the Company acquired a 51% interest in the assets of DotCom Ventures Inc., through a share purchase agreement whereby the company issued 1,700,000 shares of its common stock valued at $3 per share prior to the August 2025 reverse stock split. The acquisition consists primarily of the Concerts.com and TicketStub.com domain names and certain related technology assets . The Company evaluated the transaction under the applicable accounting guidance and concluded that the acquired set of assets did not meet the definition of a business acquisition because there was no substantive process where a set of inputs could be converted into specific outputs and there was no workforce consisting of employees or organized contractors in place for converting acquired inputs into outputs as of December 31, 2025. Accordingly, the transaction has been accounted for as an asset acquisition, with the purchase price allocated to the acquired assets based on their relative fair values We identified the valuation of the asset and the adequacy of the accounting treatment applied by management as a critical audit matter because this required a higher degree of auditor’s judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s assumptions. The primary procedures we performed to address this critical audit matter included: ■ We reviewed and challenged the reasonableness of key management assumptions used in the estimate. ■ We reviewed the report of the independent valuation firm that performed the valuation of the intangible assets. ■ We evaluated whether the relative fair value allocation was consistent with observable market data and industry benchmarks. ■ We assessed the suitability of the market approach and Auction discount table used by the valuation specialist. ■ We obtained and reviewed the executed stock purchase agreements provided by management ■ We assessed whether management’s disclosures in Note 3 adequately described the basis for accounting as an asset acquisition rather than a business combination. ■ We re-performed the Screen test and framework evaluation of ASC 805 criteria to assess the appropriateness of the accounting treatment applied by management. ■ We performed data integrity procedures, including testing the accuracy of selected journal entries by agreeing them to approved supporting documentation. Accounting for Material Prepaid Advertising Credits Description of the Matter The Company recorded a material prepaid asset related to advertising credits received from third-party vendors in exchange for the Company’s issuance of shares approximately seven years ago. As of December 31, 2025, the prepaid asset remains substantially unutilized, with only approximately 55% amortized through the income statement to date. The remaining balance continues to be carried as a prepaid asset. Auditing this balance was especially challenging due to the nature of the transaction (a non-cash exchange), the long duration of inactivity, and the lack of direct confirmation from the third-party vendors. While the Company provided internal documentation, including historical agreements, email correspondence, and written representations from management, the audit team exercised significant judgment in evaluating the recoverability of the asset and whether sufficient appropriate audit evidence existed to support its continued recognition. Our procedures included, among others: ■ We obtained and reviewed the original transactions documentation and correspondence between the parties. ■ We considered the guidance under ASC 340 (Other Assets and Deferred Costs) in evaluating whether continued recognition of the prepaid balance was appropriate. ■ We evaluated the consistency of management’s position, reviewed legal representations and opinions regarding enforceability. ■ We assessed whether management’s representations were corroborated by external evidence, including legal opinions on enforceability of the advertising agreements. ■ We considered whether the asset remained probable of being realized in future periods. ■ We considered whether partial impairment was necessary to reflect recoverability risk, and whether disclosure in Note 6 adequately described the uncertainty. ■ We proposed an additional allowance of 30% to the income statement which is included in the approximately 55% described above. ■ We reviewed the journal entry posting, recalculated the prepayment amortization schedule and remaining credit balance on the advertising agreements ■ We evaluated whether the Company’s disclosures in Note 6 met SEC Regulation S-X and PCAOB requirements related to this prepaid balance. /S/ Boladale Lawal BOLADALE LAWAL & CO. (Chartered Accountants) (PCAOB ID 6993) Lagos, Nigeria We have served as the Company’s auditor since 2024. July 9, 2026 F- 3 SPORTS ENTERTAINMENT GAMING GLOBAL CORPORATION CONSOLIDATED BALANCE SHEETS December 31, 2025 December 31, 2024 ASSETS Current assets: Cash $ 171,524 $ 68,035 Restricted cash - - Accounts receivable 231,259 494,129 Prepaid expenses 8,634,275 14,449,333 Other current assets 3,843,228 880,961 Total current assets 12,880,286 15,892,458 Notes receivable 2,000,000 2,250,000 Investments 250,000 250,000 Goodwill 9,061,675 9,061,675 Intangible assets, net 14,648,458 12,569,165 Property and equipment, net 1,095 12,124 Other long-term assets 16,818,711 12,906,849 Total assets $ 55,660,225 $ 52,942,271 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Trade payables $ 8,556,029 $ 8,241,311 Deferred revenue 21,990 250,000 Notes payable - current 6,186,163 6,110,777 Accrued interest 1,557,032 1,218,864 Accrued and other expenses 13,512,607 12,161,311 Other liabilities 2,065,537 2,415,179 Total current liabilities 31,899,358 30,397,442 Long-term liabilities: Other long-term liabilities - - Total long-term liabilities - - Commitments and contingencies (Note 13) - - Total liabilities 31,899,358 30,397,442 Stockholders’ Equity Preferred Stock, par value $ 0.001 , 1,000,000 shares authorized, none issued and outstanding - - Common stock, par value $ 0.001 , 500,000,000 shares authorized, 6,880,287 and 1,832,685 issued and outstanding as of December 31, 2025 and December 31, 2024, respectively 6,880 1,833 Additional paid-in capital 307,012,770 283,929,927 Accumulated other comprehensive loss 264,768 16,880 Accumulated deficit ( 284,007,361 ) ( 263,468,728 ) Total SEGG Media stockholders’ equity 23,277,057 20,479,912 Noncontrolling interest 483,810 2,064,917 Total Stockholders Equity 23,760,867 22,544,829 Total liabilities and stockholders’ equity $ 55,660,225 $ 52,942,271 The accompanying notes are an integral part of these restated consolidated financial statements. F- 4 SPORTS ENTERTAINMENT GAMING GLOBAL CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS Years Ended December 31, 2025 2024 Revenue $ 559,590 $ 958,645 Cost of revenue 774,823 320,869 Gross profit (loss) ( 215,233 ) 637,776 Operating expenses: Personnel costs 2,469,812 4,761,186 Professional fees 6,637,644 5,436,831 General and administrative 4,306,273 3,688,547 Depreciation and amortization 4,238,921 5,020,647 Total operating expenses 17,652,650 18,907,211 Loss from operations ( 17,867,883 ) ( 18,269,435 ) Other expenses Interest expense 217,905 508,563 Other expense 1,248,967 968,903 Other income ( 4,234,581 ) ( 107,143 ) Reserve allowance for prepaid advertising credits 5,688,078 4,745,000 Loss on impairment of intangibles & goodwill - 4,298,002 Total other expenses, net 2,920,369 10,413,325 Net loss before income tax ( 20,788,252 ) ( 28,682,760 ) Income tax expense (benefit) 16,815 26,315 Net loss ( 20,805,067 ) ( 28,709,075 ) Other comprehensive loss Foreign currency translation adjustment, net 280,490 317,424 Comprehensive loss ( 20,524,577 ) ( 28,391,651 ) Net income (loss) attributable to noncontrolling interest 220,969 170,046 Net loss attributable to SEGG Media $ ( 20,303,608 ) $ ( 28,221,605 ) Net loss per common share Basic and diluted $ ( 5.78 ) $ ( 19.63 ) Weighted average common shares outstanding Basic and diluted recheck WA shares 3,515,444 1,437,534 The accompanying notes are an integral part of these restated consolidated financial statements. F- 5 SPORTS ENTERTAINMENT GAMING GLOBAL CORPORATION CONSOLIDATED STATEMENTS OF EQUITY FOR THE YEAR ENDING DECEMBER 31, 2025 and 2024 Shares Amount Capital Deficit Income Equity Interest Equity Common Stock Additional Paid-In Accumulated Accumulated Other Comprehensive Total AutoLotto Inc. Stockholders’ Noncontrolling Total Stockholders’ Shares Amount Capital Deficit Income Equity Interest Equity Balance as of December 31, 2023 287,705 288 269,693,158 ( 235,132,590 ) ( 91,667 ) 34,469,189 2,120,176 36,589,618 Stock based compensation 183,929 184 1,686,465 1,686,649 1,686,649 Stock issued for Acquisition of Subsidiary 9,848 10 90,297 90,307 90,307 Stock issued to convert debt to equity 274,020 274 2,512,519 2,512,519 2,512,793 Warrants to retire debt 70,671 70,671 70,761 Exercise of Stock Options 4,872 5 44,672 44,677 44,677 Stock issued for Commitment fee, Stock Purchase Agreement 51,266 51 470,064 470,116 470,116 Stock issued in lieu of cash 1,021,046 1,021 9,362,081 9,363,102 9,363,102 Other comprehensive loss Net loss - - ( 28,221,605 ) - ( 28,221,605 ) ( 170,046 ) ( 28,391,651 ) Balance as of December 31, 2024 1,832,686 $ 1,833 $ 283,929,927 $ ( 263,468,728 ) 16,880 $ 20,479,912 $ 2,064,917 $ 22,544,829 Balance 1,832,686 $ 1,833 $ 283,929,927 $ ( 263,468,728 ) 16,880 $ 20,479,912 $ 2,064,917 $ 22,544,829 Stock issued for asset acquisition 170,000 170 6,010,707 6,010,877 6,010,877 Conversion of debt to equity 672,553 673 3,649,565 3,650,238 3,650,238 Stock issued under Stock Purchase Agreement 1,495,118 1,495 2,945,632 2,947,127 2,947,127 Stock issued in lieu of cash 2,709,931 2,709 9,726,937 9,729,646 9,729,646 Stock issued for Commitment fee, Stock Purchase Agreement 750,003 750,003 750,003 Prior period adjustment ( 235,025 ) ( 235,025 ) ( 1,360,138 ) ( 1,595,163 ) Other comprehensive loss 247,888 247,888 247,888 Net loss - - ( 20,303,608 ) - ( 20,303,608 ) ( 220,969 ) ( 20,524,577 ) Balance as of December 31, 2025 6,880,288 6,880 307,012,770 ( 284,007,361 ) 264,768 23,277,057 483,810 23,760,867 Balance 6,880,288 6,880 307,012,770 ( 284,007,361 ) 264,768 23,277,057 483,810 23,760,867 The accompanying notes are an integral part of these restated consolidated financial statements. F- 6 SPORTS ENTERTAINMENT GAMING GLOBAL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS 2025 2024 Years Ended December 31, 2025 2024 Cash flow from operating activities Net loss attributable to SEGG Media $ ( 20,303,608 ) $ ( 28,221,605 ) Adjustments to reconcile net loss to net cash used in operating activities: Net income (loss) attributable to noncontrolling interest 220,969 170,045 Depreciation and amortization 4,523,487 5,020,647 Stock based compensation expense - 1,640,274 Stock issued in lieu of cash payments 9,746,138 9,352,892 Stock issued for commitment fee, stock purchase agreement 750,003 469,602 Warrants issued to retire debt - 70,671 Loss on impairment of goodwill and intangibles - 4,298,002 Changes in assets & liabilities: Accounts receivable 262,870 ( 438,543 ) Prepaid expenses 5,815,058 4,570,826 Other current assets ( 121,838 ) ( 250,000 ) Other long term assets ( 3,911,862 ) 26,671 Trade payables 314,718 ( 191,780 ) Deferred revenue ( 228,010 ) ( 107,143 ) Accrued and other expenses 1,351,296 461,604 Other liabilities ( 1,849,642 ) 543,508 Liability for acquisition of subsidiary - 704,560 Net cash used by operating activities ( 3,430,421 ) ( 1,879,769 ) Cash flow from investing activities Payments made as deposits for acquisitions ( 2,816,849 ) - Investment in subsidiaries, net - ( 1,549,184 ) Proceeds from collection of note receivable 250,000 - Net cash used in investing activities ( 2,566,849 ) ( 1,549,184 ) Cash flow from financing activities Accrued Interest 338,168 359,989 Proceeds (Payments) from stock purchase agreement 2,947,127 - Proceeds (Payments) from loans from execs and key consultants - 375,667 Proceeds (Payments) from convertible notes payable 2,986,707 2,510,053 Net cash provided by financing activities 6,272,002 3,245,709 Effect of exchange rate changes on cash ( 171,243 ) ( 108,547 ) Net change in net cash and restricted cash 103,489 ( 291,791 ) Cash and restricted cash at beginning of period 68,035 359,826 Cash and restricted cash at end of period $ 171,524 $ 68,035 Supplemental Disclosure of Cash Flow Information: Interest paid in cash $ - $ - Franchise taxes paid in cash $ 381,842 $ - Supplemental non-cash Operating, Investing, and Financing activities: Common stock issued for investing and financing activities $ 6,010,877 $ 10,621,823 Common stock issued from conversion of convertible debt $ 3,650,407 $ 2,512,793 Payments made via issuance of common stock in lieu of cash $ 9,729,646 $ 9,363,102 The accompanying notes are an integral part of these restated consolidated financial statements. F- 7 SPORTS ENTERTAINMENT GAMING GLOBAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Nature of Operations Description of Business During fiscal year 2025 and into fiscal year 2026, the Company has transitioned from a period of operational disruption and restructuring to a renewed focus on execution, revenue generation, and scalable growth. The Company ’s strategy is centered on the development and monetization of a multi-vertical platform at the intersection of sports, entertainment, and gaming, supported by targeted acquisitions, proprietary technology, and international expansion initiatives. Sports Entertainment Gaming Global Corporation (formerly Lottery.com Inc., and prior to that Trident Acquisitions Corp.) is a Delaware corporation formed on March 17, 2016. On October 29, 2021, the Company consummated a business combination with AutoLotto, Inc. (“AutoLotto”), which became its primary operating subsidiary. In January 2026, the Company changed its name to Sports Entertainment Gaming Global Corporation to reflect its transition to a diversified, technology-enabled platform operating at the intersection of sports, entertainment, and gaming. SEGG’s strategy is focused on building and monetizing a portfolio of digital platforms, media assets, and operating businesses through disciplined capital allocation, targeted acquisitions, and scalable technology infrastructure. Operational History and Transformation In July 2022, the Company ceased substantially all operations due to liquidity constraints (the “Operational Cessation”). Since that time, the Company has executed a structured turnaround, including leadership changes, financial remediation, and the re-establishment of core operations. Beginning in 2023 and accelerating through 2024 and 2025, the Company transitioned from restructuring to execution, with a focus on revenue generation, capital discipline, and platform expansion. The Company has prioritized initiatives that are either revenue-generating or have a clear path to near-term monetization. Media and Content Platforms The Company’s primary growth engine is its sports media platform, including Sports.com. Launched in 2024, Sports.com is designed to deliver global sports content, live event streaming, and audience engagement at scale. The acquisition of Sports.com Media provided a foundation for the continued development and monetization of Sports.com, including opportunities across advertising, sponsorship, content distribution, and strategic partnerships. The Company has begun expanding its international footprint through live event streaming and targeted market entry initiatives. The Company’s broader media strategy also includes the development and monetization of entertainment-focused digital assets, including Concerts.com, which is intended to expand the Company’s reach into live entertainment, music content, and related experiences. These initiatives are designed to complement the Company’s sports media platform by increasing total addressable audience, diversifying content offerings, and creating additional monetization opportunities across advertising, sponsorship, and ticketing-related services. While these platforms are in earlier stages of development relative to Sports.com, management believes they represent a natural extension of the Company’s integrated media and engagement strategy. Lottery and Gaming Services The Company continues to operate its legacy lottery and gaming platform, which enables the remote purchase of legally sanctioned lottery games in permitted jurisdictions. While this segment remains operational, it is no longer the primary driver of the Company’s growth strategy. The current offering is a B2C Platform providing direct-to-consumer lottery services via mobile and web applications in Mexico. Data, Technology and Digital Services The Company delivers proprietary data and technology solutions, including data feeds, live and curated sports content, analytics, and API-driven services. These capabilities support both internal platforms and third-party customers under contractual arrangements. The Company’s technology stack is a core asset that enables scalability across its media, gaming, and data-driven initiatives. Strategic Acquisitions The Company’s growth strategy is supported by a disciplined acquisition program focused on assets that: ● Generate or are expected to generate near-term revenue; ● Expand audience reach and engagement; ● Strengthen the Company’s technology and content capabilities; and ● Enhance overall enterprise value. The Company prioritizes transactions that can be funded through existing capital resources or that are expected to improve the balance sheet and reduce reliance on dilutive financing. Revenue and Market Opportunity The Company’s revenue model is derived from a combination of transactional sales of gaming and event tickets, subscriptions, data licensing, advertising, sponsorship, and content monetization streams across its platforms. Management believes that the Company’s integrated model positions it to participate in large and growing global markets, including digital sports media, gaming, and data services. The Company’s strategy is to leverage its platforms and acquisitions to aggregate audiences and increase engagement, which in turn supports the expansion of monetization opportunities across multiple revenue channels. As the Company scales its audience reach and platform capabilities, it expects to enhance revenue per user and expand margins through increased operating leverage, cross-platform integration, and the introduction of additional monetization features. The Company’s ability to execute on this strategy will depend on a number of factors, including successful integration of acquisitions, continued platform development, regulatory conditions, and overall market adoption. F- 8 Regulatory Environment The Company operates in regulated industries, particularly within lottery and gaming, and is subject to applicable laws in each jurisdiction in which it operates. In addition, the Company is subject to regulations relating to data privacy, consumer protection, digital content, and information security. Forward Strategy The Company is focused on scaling its platform through: ● Expansion of its sports media and content ecosystem; ● Monetization of audience and engagement across digital channels; ● Continued execution of targeted, revenue-focused acquisitions; and ● Strategic expansion into international markets. Management believes that the combination of media, gaming, and data-driven capabilities positions the Company to capture opportunities across large and growing global markets Note 2. Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“ GAAP ”) and include the accounts of the Company and its wholly owned operating subsidiaries. Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification (“ ASC ”) and Accounting Standards Update (“ ASU ”) of the Financial Accounting Standards Board (“ FASB ”). All intercompany accounts and transactions have been eliminated in consolidation. Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and classification of liabilities and commitments in the normal course of business. The accompanying consolidated financial statements do not reflect any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classifications of liabilities that might result if the Company is unable to continue as a going concern. Pursuant to the requirements of the Financial Accounting Standards Board’s ASC Topic 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date these financial statements are issued. This evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented or are not within control of the Company as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. In connection with the Company’s 2022 Operational Cessation, the Company has experienced recurring net losses and negative cash flows from operations and has on a consolidated basis an accumulated deficit of approximately $ 284 million and working capital of approximately negative $ 19.0 million on December 31, 2025. For the year ending December 31, 2025, the Company sustained a net loss of $ 20.8 million. The Company sustained a loss from operations of $ 17.9 million and $ 18.3 million for the years ending December 31, 2025 and 2024, respectively. Subsequently, the Company sustained additional operating losses and anticipates additional operating losses for the next twelve months. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company has historically funded its activities almost exclusively from debt and equity financing. Management’s plans in order to meet its operating cash flow requirements include financing activities such as private placements of its common stock, preferred stock offerings, and issuances of debt and convertible debt. Although Management believes that it will be able to continue to raise funds by sale of its securities or by issuing convertible debt obligations to provide the additional cash needed to meet the Company’s obligations as they become due. The Company’s ability to continue as a going concern for the next twelve months from the issuance of these financial statements depends on its ability to execute the business plans for the launch of its new business initiatives, the successful monetization of Sports.com, supporting legacy operations, and keeping expenditures in line with available operating capital. Such conditions raise substantial doubt about the Company’s ability to continue as a going concern. F- 9 Impact of Trident Acquisition Corp. Business Combination We accounted for the October 29, 2021 Business Combination as a reverse recapitalization whereby AutoLotto was determined as the accounting acquirer and Trident Acquisition Corp. (“TDAC”) as the accounting acquiree. This determination was primarily based on: ● former AutoLotto stockholders having the largest voting interest in Lottery.com Inc. (“Lottery.com”); ● the board of directors of Lottery.com having 7 members, and AutoLotto’s former stockholders having the ability to nominate the majority of the members of the board of directors; ● AutoLotto management continuing to hold executive management roles for the post-combination company and being responsible for the day-to-day operations; ● the post-combination company assuming the Lottery.com name; ● Lottery.com maintaining the pre-existing AutoLotto headquarters; and the intended strategy of Lottery.com being a continuation of AutoLotto’s strategy. Accordingly, the Business Combination was treated as the equivalent of AutoLotto issuing stock for the net assets of TDAC, accompanied by a recapitalization. The net assets of TDAC are stated at historical cost, with no goodwill or other intangible assets recorded. While TDAC was the legal acquirer in the Business Combination, because AutoLotto was determined as the accounting acquirer, the historical financial statements of AutoLotto became the historical financial statements of the combined company, upon the consummation of the Business Combination. As a result, the financial statements included in the accompanying consolidated financial statements reflect (i) the historical operating results of AutoLotto prior to the Business Combination; (ii) the combined results of the Company and AutoLotto following the closing of the Business Combination; (iii) the assets and liabilities of AutoLotto at their historical cost; and (iv) the Company’s equity structure for all periods presented. In connection with the Business Combination transaction, we have converted the equity structure for the periods prior to the Business Combination to reflect the number of shares of the Company’s common stock issued to AutoLotto’s stockholders in connection with the recapitalization transaction. As such, the shares, corresponding capital amounts and earnings per share, as applicable, related to AutoLotto convertible preferred stock and common stock prior to the Business Combination have been retroactively converted by applying the exchange ratio established in the Business Combination. Non-controlling Interest Non-controlling interest represents the proportionate ownership of Aganar and JuegaLotto held by minority members and reflects their capital investments as well as their proportionate interest in subsidiary losses and other changes in members’ equity, including translation adjustments. Segment Reporting Operating segments are defined as components of an enterprise for which discrete financial information is available and is regularly reviewed by the Company’s chief operating decision maker (“CODM”) to allocate resources and assess performance in accordance with ASC 280 – Segment Reporting . We determined that our Chief Financial Officer is the Chief Operating Decision Maker Historically, the Company operated as a single-reporting unit focused on its lottery and gaming platform, and its organizational structure, internal reporting systems, and resource allocation processes were aligned accordingly. As a result, the Company previously operated as one operating and reportable segment. Following the Company’s strategic transformation and expansion into a broader sports, entertainment, and gaming ecosystem, including the development and monetization of Sports.com and related media, technology, and experiential assets, the Company is in the process of evolving its internal reporting structure to reflect these distinct business activities. As of the reporting date, the CODM continues to evaluate financial performance and allocate resources on a consolidated basis; however, management is actively assessing whether the Company’s emerging business lines—principally gaming, sports media, and entertainment—meet the criteria for separate operating and reportable segments under ASC 280. The Company expects that, as these business verticals continue to scale and discrete financial information becomes more routinely reviewed by the CODM, it may present disaggregated segment information in future filings. F- 10 Concentration of Credit Risks Financial instruments that are potentially subject to concentrations of credit risk are primarily cash. Cash holdings are placed with major financial institutions deemed to be of high-credit-quality in order to limit credit exposure. The Company maintains deposits and certificates of deposit with banks which may exceed the Federal Deposit Insurance Corporation (“FDIC”) insured limit and money market accounts which are not FDIC insured. In addition, deposits aggregating approximately $ 315,159 at June 29, 2026 are held in foreign banks. Management believes the risk of loss in connection with these accounts is minimal. Use of Estimates The preparation of the financial statements requires management to make estimates and assumptions to determine the reported amounts of assets, liabilities, revenue and expenses. Although management believes these estimates are reasonable, actual results could differ from these estimates. The Company evaluates its estimates on an ongoing basis and prepares its estimates on historical experience and other assumptions the Company believes to be reasonable under the circumstances. Reclassifications Certain balances have been reclassified in the accompanying consolidated financial statements to conform to the current year presentation. These reclassifications had no effect on the balances of current or total assets and prior year’s net loss or accumulated deficit. Foreign currency translation Assets and liabilities of subsidiaries operating outside the United States with a functional currency other than U.S. Dollars are translated into U.S. Dollars using year-end exchange rates. Sales, costs and expenses are translated at the average exchange rates in effect during the year. For Global Gaming, translations are from Mexican Pesos [MXN] to U.S. Dollars. For Sports.com Media translations are from British Pounds [GBP] to U.S. Dollars. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive income (loss). Cash and Restricted Cash As of December 31, 2025 and 2024, cash was comprised of cash deposits, and there were no deposits with banks which exceeded federally insured limits with the majority of cash for the parent company held in one financial institution. Management believes all financial institutions holding its cash are of high credit quality and does not believe the Company is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company had no marketable securities as of December 31, 2025 and December 31, 2024. F- 11 Accounts Receivable The Company through its various merchant providers pre-authorizes forms of payment prior to the sale of digital representation of lottery games to minimize exposure to losses related to uncollected payments and does not extend credit to the user of the B2C Platform or the commercial partner of the B2B API, which are its customers, in the normal course of business. The Company estimates its bad debt exposure each period and records a bad debt provision for accounts receivable it believes it may not collect in full. In the fall of 2024, the Company completed a project whereby certain older items in accounts receivable for the TinBu subsidiary were offset against the allowance for uncollectible receivables, resulting in a reduction in the number of individual items in accounts receivable which were aged greater than 90 days and the total amount for them. At the completion of this project, the balance in the allowance for uncollectible receivables was $ 33,000 on December 31, 2024. In the Fall of 2025, the Company completed a similar project and offset older items in accounts receivable for the TinBu subsidiary against the allowance for uncollectible receivables. Approximately $ 55,000 representing individual items aged greater than 90 days was written-off against the allowance leaving approximately $ 8,000 aged greater than 90 days in accounts receivable and reducing the allowance for uncollectable receivables to zero . At December 31, 2025 the allowance for uncollectible receivables was $ 0 whereas, it was $ 33,000 at December 31, 2024. Prepaid Expenses for Advertising Credits Prepaid expenses consist of payments made on contractual obligations for services to be consumed in future periods. The Company entered into an agreement with two third parties to provide advertising services and issued equity instruments as compensation for the advertising services (“Prepaid advertising credits”). The Company expenses the service as it is performed by the third parties. The value of the services provided were used to value these contracts, except for the year ended December 31, 2021 the Company reserved for potential inability to realize $ 2,000,000 of prepaid advertising credits in future periods. For the period ending December 31, 2025, the Company determined that an estimated $ 5,688,000 of prepaid advertising credits purchased during 2017 and 2018 may not be able to be fully utilized. As a result, the Company decreased prepaid expenses by $ 5,688,000 and increased its reserve for loss of prepaid advertising credits by $ 5,688,000 for the year ended December 31, 2025. Similarly, for the period ending December 31, 2024, the Company determined that approximately an estimated additional $ 4,745,000 of prepaid advertising credits purchased during 2017 and 2018 might not be able to be fully utilized. As a result, the Company decreased prepaid expenses by $ 4,745,000 and increased its reserve for loss of prepaid advertising credits by $ 4,745,000 for the year ended December 31, 2024 . Prepaid expenses are included in current assets on the consolidated balance sheets. The Company had total remaining prepaid expenses of $ 8,634,275 and $ 14,449,333 for the years ended December 31, 2025 and 2024, respectively. Investments On August 2, 2018, AutoLotto purchased 186,666 shares of Class A-1 common stock of a third-party business development partner representing 4 % of the total outstanding shares of the company. As this investment resulted in less than 20 % ownership, it was accounted for using the cost basis method. Property and equipment, net Property and equipment are stated at cost. Depreciation and amortization are generally computed using the straight-line method over estimated useful lives ranging from three 3 to five years . Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the asset. Routine maintenance and repair costs are expensed as incurred. The costs of major additions, replacements and improvements are capitalized. Gains and losses realized on the sale or disposal of property and equipment are recognized or charged to other expense in the consolidated statement of operations. Depreciation of property and equipment is computed using the straight-line method over the following estimated useful lives: Schedule of Depreciation of Property and Equipment Computers and equipment 3 years Furniture and fixtures 5 years Software 3 years Leases Right-of-use assets (“ROU assets”) represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Variable lease payments are not included in the calculation of the right-of-use asset and lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period incurred. As most of the leases do not provide an implicit rate, the Company used its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Otherwise, the implicit rate was used when readily determinable. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Under the available practical expedient, the Company accounts for the lease and non-lease components as a single lease component for all classes of underlying assets as both a lessee and lessor. Further, management elected a short-term lease exception policy on all classes of underlying assets, permitting the Company to not apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of 12 months or less). F- 12 Internal Use Software Development Software development costs incurred internally to develop software programs to be used solely to meet our internal needs and applications are capitalized once the preliminary project stage is complete and it is probable that the project will be completed and the software will be used to perform the intended function. Additionally, we capitalize qualifying costs incurred for upgrades and enhancements to existing software that result in additional functionality. Costs related to preliminary project planning activities, post-implementation activities, maintenance and minor modifications are expensed as incurred. Internal-use software development costs are amortized on a straight-line basis over the estimated useful life of the software. Goodwill and Other Intangible Assets Goodwill represents the excess of the cost of assets acquired over the fair value of the net assets at the date of acquisition. Intangible assets represent the fair value of separately recognizable intangible assets acquired in connection with the Company’s business combinations. The Company evaluates its goodwill and other intangibles for impairment on an annual basis or whenever events or circumstances indicate that an impairment may have occurred in accordance with the provisions of ASC 350, “ Goodwill and Other Intangible Assets ”. Revenue Recognition Under the new standard, Accounting Standards Update (“ASU”) 2014-09, “ Revenue from Contracts with Customers (Topic 606) ”, the Company recognizes revenues when the following criteria are met: (i) persuasive evidence of a contract with a customer exists; (ii) identifiable performance obligations under the contract exist; (iii) the transaction price is determinable for each performance obligation; (iv) the transaction price is allocated to each performance obligation; and (v) when the performance obligations are satisfied. Revenues are recognized when control of the promised goods or services is transferred to the customers in an amount that reflects the consideration expected to be entitled to in exchange for those goods or services. Lottery game revenue Items that fall under this revenue classification include: Lottery game sales The Company’s performance obligations of delivering lottery games are satisfied at the time in which the digital representation of the lottery game is delivered to the user of the B2C, therefore, are recognized at a point in time. The Company receives consideration for lottery game sales at the time of delivery to the customer, which may be the user or commercial partner, as applicable. There is no variable consideration related to lottery game sales. As each individual lottery game delivered represents a distinct performance obligation and consideration for each game sale is fixed, representing the standalone selling price, there is no allocation of consideration necessary. In accordance with Accounting Standards Codification (“ASC”) 606, the Company evaluates the presentation of revenue on a gross versus net basis dependent on if the Company is a principal or agent. In making this evaluation, some of the factors that are considered include whether the Company has control over the specified good or services before they are transferred to the customer. The Company also assesses if it is primarily responsible for fulfilling the promise to provide the goods or services, has inventory risk, and has discretion in establishing the price. For all of the Company’s transactions, management concluded that gross presentation is appropriate, as the Company is primarily responsible for providing the performance obligation directly to the customers and assumes fulfillment risk of all lottery game sales as it retains physical possession of lottery game sales tickets from time of sale until the point of redemption. The Company also retains inventory risk on all lottery game sales tickets as they would be responsible for any potential winnings related to lost or unredeemable tickets at the time of redemption. Finally, while states have the authority to establish lottery game sales prices, the Company can add service fees to ticket prices evidencing its ability to establish the ultimate price of the lottery tickets being sold. F- 13 Arrangements with multiple performance obligations The Company’s contracts with customers may include multiple performance obligations. For such arrangements, management allocates revenue to each performance obligation based on its relative standalone selling price. Management generally determines standalone selling prices based on the prices charged to customers. Deferred Revenue The Company records deferred revenue when cash payments are received or due in advance of any performance, including amounts which are refundable. Payment terms vary by the type and location of the customer and the products or services offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, management requires payment before the products or services are delivered to the customer. Contract Assets Given the nature of the Company’s services and contracts, it has no contract assets. Taxes Taxes assessed by a governmental authority that are both imposed on and concurrent with specific revenue-producing transactions, that are collected by us from a customer, are excluded from revenue. Cost of Revenue Cost of revenue consists primarily of payments to lottery providers and partners, data acquisition costs, content and media production expenses, platform and transaction processing fees, and affiliate commissions. Costs are recognized as incurred and are matched to the period in which the related revenue is recognized. Certain costs, such as revenue share arrangements, are recognized concurrently with the associated revenue. Stock-based Compensation Effective October 1, 2019, the Company adopted ASU 2018-07, Compensation - “Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting” (“ASC 718”), which addresses aspects of the accounting for nonemployee share-based payment transactions and accounts for share-based awards to employees in accordance with ASC 718, Stock Compensation . Under this guidance, stock compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the estimated service period (generally the vesting period) on the straight-line attribute method. Advertising Costs Advertising costs are charged to operations when incurred. Advertising costs for the years ended December 31, 2025 and 2024 were approximately $ 1,248,000 and $ 104,000 respectively . F- 14 Income Taxes For both financial accounting and tax reporting purposes, the Company reports income and expenses based on the accrual method of accounting. For federal and state income tax purposes, the Company reports income or loss from their investments in limited liability companies on the consolidated income tax returns. As such, all taxable income and available tax credits are passed from the limited liability companies to the individual members. It is the responsibility of the individual members to report the taxable income and tax credits, and to pay any resulting income taxes. Therefore, the income and losses incurred by the limited liability companies have been consolidated in the Company’s tax return and provision based upon its relative ownership. Income taxes are accounted for in accordance with ASC 740, “ Income Taxes ” (“ASC 740”), using the asset and liability method. Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for those deferred tax assets for which it is more likely than not that the related benefit will not be realized. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (i) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position; and (ii) for those tax positions that meet the more likely than not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority . The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits. Generally, the taxing authorities can audit the previous three years of tax returns and in certain situations audit additional years. For federal tax purposes, the Company’s 2021 through 2024 tax years generally remain open for examination by the tax authorities under the normal three-year statute of limitations. For state tax purposes, the Company’s 2021 through 2024 tax years remain open for examination by the tax authorities under the normal four-year statute of limitations. Fair Value of Financial Instruments The Company determines the fair value of its financial instruments in accordance with the provisions of ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) , which establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below: ● Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities ● Level 2 - Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability ● Level 3 - Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect our own estimates of assumptions that market participants would use in pricing the asset or liability. Determination of fair value and the resulting hierarchy requires the use of observable market data whenever available. F- 15 The classification of an asset or liability in the hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. Fair value of stock options and warrants Management uses the Black-Scholes option-pricing model to calculate the fair value of stock options and warrants. Use of this method requires management to make assumptions and estimates about the expected life of options and warrants, anticipated forfeitures, the risk-free rate, and the volatility of the Company’s share price. In making these assumptions and estimates, management relies on historical market data. Recently Adopted Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which requires enhanced disclosures regarding significant segment expenses and other segment items for entities that report segment information under ASC 280. The amendments do not change the definition of a segment, the method for determining reportable segments, or the criteria for aggregating operating segments. The Company adopted ASU 2023-07 effective January 1, 2024 for annual reporting purposes. The adoption did not have a material impact on the Company’s consolidated financial statements but required expanded segment disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires expected credit losses on financial assets held at the reporting date to be measured based on historical experience, current conditions, and reasonable and supportable forecasts. The Company adopted ASU 2016-13 effective January 1, 2023. The adoption did not have a material impact on the Company’s consolidated financial statements or related disclosures. Recent Accounting Pronouncements Not Yet Adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires enhanced income tax disclosures, including additional information in the effective tax rate reconciliation and expanded disclosures of income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect of adopting this standard on its consolidated financial statement disclosures. Note 3. Business Combination TDAC Combination On October 29, 2021, the Company and AutoLotto consummated the transactions contemplated by the Merger Agreement. At the Closing, each share of common stock and preferred stock of AutoLotto that was issued and outstanding immediately prior to the effective time of the Merger (other than excluded shares as contemplated by the Merger Agreement) was cancelled and converted into the right to receive approximately 3.0058 shares (the “Exchange Ratio”) of Lottery.com. common stock. F- 16 The Merger closing was a triggering event for the Series B convertible notes, of which $ 63.8 million was converted into 16,243 shares of AutoLotto that were then converted into 48,823 shares of Lottery.com common stock using the Exchange Ratio. At the Closing, each option to purchase AutoLotto’s common stock, whether vested or unvested, was assumed and converted into an option to purchase a number of shares of Lottery.com common stock in the manner set forth in the Merger Agreement. The Company accounted for the Business Combination as a reverse recapitalization whereby AutoLotto was determined as the accounting acquirer and TDAC as the accounting acquiree. Refer to Note 2, Summary of Significant Accounting Policies , for further details. Accordingly, the Business Combination was treated as the equivalent of AutoLotto issuing stock for the net assets of TDAC, accompanied by a recapitalization. The net assets of TDAC are stated at historical cost, with no goodwill or other intangible assets recorded. The accompanying consolidated financial statements and related notes reflect the historical results of AutoLotto prior to the merger and do not include the historical results of TDAC prior to the consummation of Business Combination. Upon the closing of the transaction, AutoLotto received total gross proceeds of approximately $ 42,794,000 , from TDAC’s trust and operating accounts. Total transaction costs were approximately $ 9,460,000 , which principally consisted of advisory, legal and other professional fees and were recorded in additional paid in capital. Cumulative debt repayments of approximately $ 11,068,000 , inclusive of accrued but unpaid interest, were paid in conjunction with the close, which included approximately $ 5,475,000 repayment of notes payable to related parties, and approximately $ 5,593,000 payment of accrued underwriter fees. Pursuant to the terms of the Business Combination Agreement, the holders of issued and outstanding shares of AutoLotto immediately prior to the Closing (the “Sellers”) were entitled to receive up to 30,000 additional shares of Common Stock (the “Seller Earnout Shares”) and Vadim Komissarov, Ilya Ponomarev and Marat Rosenberg (collectively the “TDAC Founders”) were also entitled to receive up to 20,000 additional shares of Common Stock (the “TDAC Founder Earnout Shares” and, together with the Seller Earnout Shares, the “Earnout Shares”). One of the earnout criteria had not been met by the December 31, 2021 deadline thus no earnout shares were granted specific to that criteria. 15,000 of the Seller Earnout Shares and 10,000 TDAC Founder Earnout Shares were still eligible Earnout Shares until December 31, 2022. Conditions for the earnout were not met and the potential earnout shares were forfeited on December 31, 2022. Global Gaming Acquisition On June 30, 2021, the Company completed its acquisition of 100 percent of the equity of Global Gaming Enterprises, Inc., a Delaware corporation (“Global Gaming”), which holds 80 % of the equity of each of Medios Electronicos y de Comunicacion, S.A.P.I de C.V. (“Aganar”) and JuegaLotto, S.A. de C.V. (“JuegaLotto”). JuegaLotto is federally licensed by the Mexico regulatory authorities with jurisdiction over the ability to sell international lottery games in Mexico through an authorized federal gaming portal and is licensed for games of chance in other countries throughout Latin America. Aganar has been operating in the licensed Lottery market in Mexico since 2007 and is licensed to sell Mexican National Lottery draw games, instant win tickets, and other games of chance online with access to a federally approved online casino and sportsbook gaming license and additionally issues a proprietary scratch lottery game in Mexico under the brand name Capalli. The opening balance of the acquirees have been included in our consolidated balance sheet since the date of the acquisition. Since the acquirees’ financial statements were denominated in Mexican pesos, the exchange rate of 22.0848 pesos per dollar was used to translate the balances. The net purchase price was allocated to the assets and liabilities acquired as per the table below. Goodwill represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The fair values of the acquired intangible assets were determined using Level 3 inputs which were not observable in the market. F- 17 The total purchase price of $ 10,989,691 , consisting of cash of $ 10,530,000 and 687,439 shares of common stock of AutoLotto at $ 0.67 per share or 3,437 at $ 134.00 reflective of subsequent reverse stock splits. The total consideration transferred was approximately $ 10,055,214 , reflecting the purchase price, net of cash on hand at Global Gaming and the principal amount of certain loans acquired. The purchase price is for an 80 % ownership interest and is therefore grossed up to $ 13,215,842 to reflect the 20 % minority interest in the acquirees. The purchase price was allocated to the identified tangible and intangible assets acquired based on their estimated fair values at the acquisition date as follows: Schedule of Identified Tangible and Intangible Asset Acquired Cash $ 517,460 Accounts receivable, net 34,134 Accounts receivable - Other VAT (net) Prepaids 5,024 Property and equipment, net 2,440 Other assets, net 65,349 Intangible assets 8,590,000 Goodwill 4,940,643 Total assets $ 14,155,050 Accounts payable and other liabilities $ ( 387,484 ) Director’s Loan Customer deposits ( 134,707 ) Related party loan ( 417,017 ) Total liabilities $ ( 939,208 ) Total net assets of Acquirees $ 13,215,842 Goodwill recognized in connection with the acquisition - is primarily attributed to an anticipated growing lottery market in Mexico that is expected to be achieved from the integration of these Mexican entities. None of the goodwill is expected to be deductible for income tax purposes. Following are details of the purchase price allocated to the intangible assets acquired. Schedule of Intangible Assets Acquired Category Fair Value Customer relationships $ 410,000 Gaming licensees 4,020,000 Trade names and trademarks 2,540,000 Technology 1,620,000 Total Intangibles $ 8,590,000 S&MI Ltd. Acquisition On September 1, 2024, the Company finalized an agreement for the acquisition of S&MI, Ltd. which was renamed Sports.com Media Services Ltd. on September 12, 2024 and subsequently renamed Sports.com Media Group Ltd. on February 17, 2025 (“Sports.com Media”). The agreement with Sports.com Media shareholders (the “Share Purchase and Sale Agreement”), wherein the Purchase Price was the total equivalent One Million Dollars USD ($ 1,000,000.00 ) in restricted stock units of common shares in the Company. (the “Payment-In-Kind”) fixed at Thirty Dollars USD ($ 30.00 ) per share (the “Fixed Price”) post August 28, 2025 reverse stock split. The Purchase Price was to be paid out over five payments on the following schedule : The first payment of $ 150,000 in restricted common stock ( 50,000 shares) of the Company is due and payable on September 1, 2024 (the “Completion Date” and the “First Issuance Date”.). The remaining payments in restricted common stock to the shareholders of Sports.com Media by the Company were made as follows: (i) a second payment of $ 212,500 ( 7,083 shares) due on or before the 31 st day following ninety days after the Completion Date (the Second Issuance Date”); (ii) a third payment, of $ 212,500 ( 7,083 shares) due on or before the 31 st day following ninety days after the Second Issuance Date (the Third Issuance Date”); (iii) a fourth payment of $ 212,500 ( 7,083 shares) due on or before the 31 st day following ninety days after the Third Issuance Date (the “Fourth Issuance Date”); and (vi) a final and fifth payment of $ 212,500 ( 7,083 shares) due on or before the 31 st day following ninety days after the Fourth Issuance Date. In the event that the closing price of the restricted stock units of common shares of the Company to be issued to the shareholders of Sports.com Media is lower than the Fixed Purchase Price on the six (6) month anniversary of any issuance date of said shares (collectively the “Anniversary Issuance Price”), then the Fixed Purchase Price shall be adjusted downward to the volume-weighted average price (“VWAP”) of the common stock for the five (5) consecutive trading days immediately preceding the six (6) month anniversary date of said issuance date. Accordingly, the Company shall be obligated to tender to the shareholders of Sports.com Media additional restricted stock units of common shares of the Company to make up the difference between the Fixed Purchase Price and the Anniversary Issuance Price. F- 18 The opening balance of Sports.com Media has been included in our consolidated balance sheet since the date of the acquisition. Since the Sports.com Media’s financial statements were denominated in British Pounds, the exchange rate of 1.3141 pounds per dollar was used to translate the balances. The net purchase price was allocated to the assets and liabilities acquired as per the table below. Goodwill represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The fair values of the acquired intangible assets were determined using the valuation analysis performed by a third-party valuation firm. The total purchase price of $ 1,000,000 consists of 33,333 shares of common stock at $ 30.00 per share after the August 28, 2025 reverse split. The total consideration transferred after net assets and assumption of long-term debt was approximately $ 440,000 , reflecting the purchase price, net of cash on hand at Sports.com Media and the principal amount of certain loans assumed by the Company. The purchase price is for a 100 % ownership interest. The purchase price was allocated to the identified tangible and intangible assets acquired based on their estimated fair values at the acquisition date as follows: Schedule of Identified Tangible and Intangible Asset Acquired Accounts receivable, net 124,928 Other Receivables 50,817 Intangible assets 234,000 Goodwill 1,315,000 Total assets $ 1,724,745 Accounts payable and other liabilities $ ( 175,543 ) Director’s Loan ( 558,632 ) Total liabilities $ ( 734,175 ) Total net assets of Acquirees $ 990,570 Asset Acquisition- PlusEVO Ltd. and Spektrum Ltd. (March 2025) On March 6, 2025, the Company entered into a Stock Purchase and Sale Agreement to acquire certain assets from PlusEVO Ltd. and to create a new entity, Spektrum Ltd, which will become a provider of technology supporting international lottery and gaming operations. The purchase price for the asset acquisition was $ 1.5 million, payable in 50,000 shares of the Company’s restricted common stock at a fixed price of $ 30.00 per share. The shares are to be issued in five installments over a 30-month period following closing, subject to specified vesting and restriction terms. The agreement includes a price protection feature under which additional shares may be issued if the Company’s stock price is below the fixed price at certain measurement dates. Asset Acquisition - DotCom Ventures Inc. (August 2025) On July 23, 2025 the Company acquired a 51 % interest in the assets of DotCom Ventures Inc., consisting primarily of the Concerts.com and TicketStub.com domain names and certain related technology assets. The Company evaluated the transaction under the applicable accounting guidance and concluded that the acquired set of assets did not meet the definition of a business because there was no substantive process where a set of inputs could be converted into specific outputs and there was no workforce consisting of employees or organized contractors in place for converting acquired inputs into outputs as of December 31, 2025. Accordingly, the transaction has been accounted for as an asset acquisition, with the purchase price allocated to the acquired assets based on their relative fair values. As of December 31, 2025, the acquired assets are included within intangible assets on the accompanying consolidated balance sheet. The Company expects this transaction to change to controlling interest in the first quarter of 2026 when a workforce and substantive process will be in place. Note 4. Property and Equipment, net Property and equipment, net as of December 31, 2025 and 2024, consisted of the following: Schedule of Property and Equipment December 31, 2025 December 31, 2024 Computers and equipment $ 115,162 $ 123,911 Furniture and fixtures 18,612 16,900 Software 2,026,200 2,026,200 Property and equipment 2,159,974 2,167,011 Accumulated depreciation ( 2,158,879 ) ( 2,154,887 ) Property and equipment, net $ 1,095 $ 12,124 Depreciation expense for the years ended December 31, 2025 and 2024 amounted to $ 4,241 and $ 9,185 , respectively. F- 19 Note 5. Prepaid Expenses Prepaid expenses consist primarily of advertising credits from two top tier media organizations that operate in the United States. The advertising credits were obtained in return for warrants, shares of common stock and shares of preferred stock. The agreements do not specify a time period for utilizing these credits and there is no requirement to provide cash or other consideration in connection with utilizing them. The balance can be utilized at any time at the mutual consent of the parties. The Company expects to begin utilizing these credits in the third quarter of 2026. Accordingly, they are presented as current assets. Note 6. Notes Receivable Secured Note Receivable On March 22, 2022, the Company entered into a three-year secured promissory note with an original carrying amount of $ 2,000,000 . The note bears simple interest at approximately 3.1 % per annum, with principal and accrued interest due upon maturity. The note is secured by substantially all assets, accounts, and tangible and intangible property of the borrower and is further supported by a personal guarantee from the borrower’s principal. The borrower may prepay the note at any time without penalty. The note was received in consideration for cash advanced by the Company to the borrower, including a previously funded bridge loan, and in connection with a broader technology development and licensing relationship under which the Company agreed to develop technology for use by the borrower in connection with the launch of an online gaming platform in a jurisdiction outside the United States. As of December 31, 2025, the outstanding principal balance of the note was $ 2,000,000 . The note matured during 2025 and remained outstanding as of December 31, 2025. Management evaluated the collectability of the note in accordance with ASC 326, including consideration of the Company’s security interests, the personal guarantee, and the contractual enforcement rights available under the related agreements. Based on this evaluation, management concluded that the recorded carrying amount of the note remains recoverable as of December 31, 2025. SP Global Holdings On October 5, 2021, the Company provided $ 250,000 to SP Global Holdings in exchange for a 3 year promissory note with interest at 8 %. Principal and accrued interest were due in a balloon payment at maturity. The note was repaid in March 2025. Note 7. Write-Off of Goodwill and Intangibles As required by ASC 350 Intangibles – Goodwill and Other Impairment and ASC 360 – Impairment Testing: Long-Lived Assets, in connection with preparing the consolidated financial statements for the period ended December 31, 2025, management conducted a review as to whether there are conditions or circumstances that might indicate the impairment of its long-lived assets, goodwill and other indefinite-lived intangible assets. The Company reviewed the goodwill and intangibles acquired in the acquisitions of TinBu, LLC, Global Gaming Enterprises, Inc., Sports.com Media Ltd, and the domain names and software purchased from third parties, and software developed in-house. Each of TinBu, Global Gaming, and Lottery.com is considered a reporting unit for application of the annual review for potential impairment. The company performed a quantitative assessment for each of the reporting units described above and determined that goodwill and intangibles were not impaired for the year ended December 31, 2025. For 2023, the Company performed a valuation of each of the reporting units using discounted cash flow methodologies and estimates of fair market value. Based on the results of the quantitative assessment, the Company determined that the goodwill for the TinBu and Global Gaming reporting units was impaired for the year ended December 31, 2023. Accordingly, the Company recognized goodwill impairment charges of $ 5.65 million for the TinBu reporting unit and $ 1.06 million for the Global Gaming reporting unit. The total impairment charges related to goodwill were $ 6.71 million. In addition, it was determined that there was an impairment of certain intangible assets related to Global Gaming. For the year ended December 31, 2023, the Company recorded impairment charges of $ 488 thousand to trade names and trademarks and $ 312 thousand to technology acquired from Global Gaming. The total impairment charges to intangible assets were $ 800 thousand. Additionally, in connection with completion of the tax provision for 2023, a transaction which had been recorded for the year ended December 31, 2021 was reevaluated and a decision was made that it should not have been recorded and should be reversed. Specifically, at the end of 2021, a decision was made to increase goodwill related to the acquisition of Global Gaming Enterprises, Inc. due to an incorrect conclusion that “an adjustment should be made to goodwill for the recording of related deferred tax liabilities as the Company released $ 1.6 million of valuation allowance since the additional deferred tax liabilities represent a future source of taxable income”. This approach improperly accelerated the effects of future amortization of intangible assets related to Global Gaming, resulting in inappropriately releasing part of a valuation allowance for deferred taxes which is not in compliance with GAAP. At that time, the Company recorded an increase to goodwill for Global Gaming and an income tax benefit each in the amount of $ 1,653,067 . We reversed this transaction by reducing goodwill for Global Gaming by $ 1,653,067 and increased accumulated deficit to remove the income tax benefit which was incorrectly recorded for year ended December 31, 2021. Similarly, the Company performed an impairment analysis for the three months ended September 30 th , 2024 and as a result of that analysis it was determined that impairment charges were necessary. Impairments of goodwill for $ 1.6 million against Tinbu’s goodwill and $ 1.9 million against Global Gaming’s goodwill were recorded and an impairment of $ 817 thousand against intangibles of Global Gaming was recorded. This consisted of impairments against Trade Names & Technology in the amount of $ 547 thousand, Technology in the amount of $ 119 thousand and Customer Relationships in the amount of $ 150 thousand. There were no other impairments identified or recorded for the year ended December 31, 2024. Note 8. Intangible assets, net Gross carrying values and accumulated amortization of intangible assets: Schedule of Finite Lived Intangible Assets Amortization Expenses December 31, 2025 December 31, 2024 Useful Gross Carrying Accumulated Gross Carrying Accumulated Life Amount Amortization Net Amount Amortization Net Amortizing intangible assets Customer relationships 6 years $ 1,352,200 $ ( 1,331,700 ) $ 20,500 $ 1,352,200 ( 1,318,033 ) $ 34,167 Trade name 6 years 2,577,000 ( 2,435,000 ) 142,000 2,577,000 ( 2,314,769 ) 262,231 Technology 6 years 4,754,800 ( 2,911,676 ) 1,843,124 3,254,800 ( 2,737,567 ) 517,233 Software agreements 6 years 14,450,000 ( 14,035,000 ) 415,000 14,450,000 ( 11,545,000 ) 2,905,000 Gaming license 6 years 4,020,000 ( 3,015,000 ) 1,005,000 4,020,000 ( 2,345,000 ) 1,675,000 Internally developed software 2 - 10 years 3,316,923 ( 1,804,924 ) 1,511,999 3,316,923 ( 1,450,754 ) 2,342,969 Domain name 15 years 12,035,000 ( 2,324,165 ) 9,710,835 6,935,000 ( 2,016,417 ) 4,832,565 $ 42,505,923 $ ( 27,857,465 ) $ 14,648,458 $ 35,905,923 $ ( 23,727,540 ) $ 12,569,165 F- 20 Amortization expense with respect to intangible assets for the year ended December 31, 2025 and 2024 totaled $ 4,234,680 and $ 5,011,329 , respectively, which is included in depreciation and amortization in the Statements of Operations. For the year ended December 31, 2025, the Company determined there was no impairment of long-lived assets During the year ended December 31, 2022, the Company determined that there was an impairment of long-lived assets of $ 412,450 , which relates to a project no longer being pursued by the Company. In connection with the annual review of goodwill and intangibles for the year ended December 31, 2023, the Company determined that it was necessary to write down goodwill by $ 5.65 million for TinBu and $ 1.06 million for Global Gaming. The total impairment charges related to goodwill were $ 6.71 million for the year ended December 31, 2023. It was also determined that there was impairment of certain intangible assets related to Global Gaming. As a result, for the year ended December 31, 2023 the Company recorded impairment charges of $ 488 thousand to trade names and trademarks and $ 311 thousand to technology acquired from Global Gaming. The total impairment charges to intangible assets for the year ended December 31, 2023 were $ 799 thousand Similarly the company performed an impairment analysis for the three months ended September 30th, 2024 and determined that impairment charges were necessary. Impairments of goodwill for $ 1.6 million against Tinbu’s goodwill and $ 1.9 million against Global Gaming’s goodwill were recorded and $ 817 thousand against intangibles of Global Gaming was recorded. This consisted of impairments against Trade Names & Technology in the amount of $ 547 thousand, Technology in the amount of $ 119 thousand, and Customer Relationships in the amount of $ 150 thousand. There were no other impairments identified or recorded for the year ended December 31, 2024 or for the year ended December 31, 2025. Estimated amortization expense for years of useful life remaining is as follows: Schedule of Estimated Amortization Expense Years ending December 31, Amount 2026 $ 2,197,764 2027 1,154,181 2028 678,075 2029 643,941 2030 598,539 Thereafter 9,375,958 Total $ 14,648,458 The Company had software development costs of $ 476,850 related to projects not placed in service as of both December 31, 2025 and December 31, 2024, which is included in intangible assets in the Company’s consolidated balance sheets. Amortization will be calculated using the straight-line method over the appropriate estimated useful life when the assets are put into service. Note 9. Notes Payable and Convertible Debt Secured Convertible Note In connection with the Lottery.com domain purchase, the Company issued a secured convertible promissory note (“Secured Convertible Note”) with a fair value of $ 935,000 that matured in March 2021. The Company used the fair value of the Secured Convertible Note to value the debt instrument issued. In March 2021, the Secured Convertible Note was fully converted into 6,991 shares of the Company’s common stock. (see Note 11). Series A Notes From August to October 2017, the Company entered into seven Convertible Promissory Note Agreements with unaffiliated investors for an aggregate amount of $ 821,500 . The notes bear interest at 10 % per year, are unsecured, and were due and payable on June 30, 2019. The parties verbally agreed to extend the maturity of the notes to December 31, 2021 . As of both December 31, 2023 and December 31, 2022, the balance due on these notes was $ 771,500 . The Company could not prepay the loan without consent from the noteholders. As of December 31, 2021, there were no Qualified Financing events, that triggered conversion, this included the TDAC combination. As of both December 31, 2025, and December 31, 2024 the remaining outstanding balance of $ 771,500 relates to notes that are no longer convertible which have been reclassified to Notes Payable as per the agreement. Accrued interest on the Series A notes payable was $ 318,909 on December 31, 2025 and 2024. Series B Notes From November 2018 to December 2020, the Company entered into multiple Convertible Promissory Note agreements with unaffiliated investors for an aggregate amount of $ 8,802,828 . The notes bear interest at 8 % per year, are unsecured, and were due and payable on dates ranging from December 2020 to December 2021. For those notes maturing on or before December 31, 2020, the parties entered into amendments in February 2021 to extend the maturity of the notes to December 21, 2021 . The Company cannot prepay the loans without consent from the noteholders. During the year ended December 31, 2021, the Company entered into multiple Convertible Promissory Note agreements with unaffiliated investors for an aggregate amount of $ 38,893,733 . The notes bear interest at 8 % per year, are unsecured, and are due and payable on dates ranging from December 2021 to December 2022. The Company cannot prepay these loans without consent from the noteholders. As of December 31, 2021, the Series B Convertible Notes had a balance of $ 0 . During the year ended December 31, 2021, the Company entered into amendments with six of the Series B promissory noteholders to increase the principal value of the notes. The additional principal associated with the amendments totaled $ 3,552,114 . The amendments were accounted for as a debt extinguishment, whereby the old debt was derecognized and the new debt was recorded at fair value. The Company recorded loss on extinguishment of $ 71,812 as a result of the amendment which was mapped in “Other expenses” on the consolidated statements of operations and comprehensive loss. As of October 29, 2021, all except $ 185,095 of the series B convertible notes were converted into 48,823 shares of SEGG Media common stock after accounting for the 20:1 reverse stock split that took place on August 9, 2023 and the 10:1 reverse stock split that took place on August 28, 2025. As of December 31, 2025, the remaining notes comprising the outstanding balance of $ 185,095 are no longer convertible and have been reclassified to notes payable. See Note 11. Accrued interest on this note payable as of December 31, 2025 was $ 94,455 and $ 79,647 at December 31, 2024. F- 21 PPP Loan The Company received a loan under the Paycheck Protection Program in 2020, which was fully forgiven in 2021. The Company recognized a gain on extinguishment of debt in 2021. No amounts remain outstanding. Short term loans On June 29, 2020, the Company entered into a Promissory Note with the U.S. Small Business Administration (“SBA”) for $ 150,000 . The loan has a 30 thirty-year term and bears interest at a rate of 3.75 % per annum. Monthly principal and interest payments are deferred for twelve months after the date of disbursement. The loan may be prepaid at any time prior to maturity with no prepayment penalties. The Promissory Note contains events of default and other provisions customary for a loan of this type. As of December 31, 2025 and 2024, the balance of the loan was $ 150,000 . As of December 31, 2025 and December 31, 2024, the accrued interest on this note was $ 8,255 and $ 6,756 respectively. In August 2020, the Company entered into three separate note payable agreements with three individuals for an aggregate amount of $ 37,199 . The notes bear interest at a variable rate, are unsecured, and the parties have verbally agreed the notes will be due upon a qualifying financing event. As of December 30, 2025 and 2024, the balance of the loans totaled $ 13,000 , respectively. Notes payable On August 28, 2018, in connection with the purchase of the entire membership interest of TinBu, the Company entered into several notes payable for $ 12,674,635 with the sellers of the TinBu and a broker involved in the transaction. The notes had an interest rate of 0 %, and original maturity date of January 25, 2022 . The notes payable were modified during 2021 to extend the maturity to June 30, 2022 and change the interest rate to include simple interest of 4.1 % per annum effective October 1, 2021. Each of the amendments were evaluated and determined to be loan modifications and accounted for accordingly. As of both December 30, 2025 and December 31, 2024, the balance of the notes was $ 2,336,081 . Accrued interest on these notes was $ 410,669 on December 31, 2025 and $ 350,434 on December 31, 2024, respectively. Note 10. Stockholders’ Equity Reverse Split On August 28, 2025, the Company filed a Certificate of Amendment (the “Certificate of Amendment”) with the Secretary of State of the State of Delaware to amend the Company’s Third Amended and Restated Certificate of Incorporation to effect, effective as of 5:30 p.m. Eastern Time on August 28, 2025, a 10-for-1 reverse stock split (the “Reverse Stock Split”) of its common stock, par value $ 0.001 per share (“Common Stock”). At the effective time of the Reverse Stock Split, every ten(10) shares of Common Stock either issued and outstanding or held as treasury stock was automatically reclassified into one new share of Common Stock. The total number of shares of Common Stock authorized for issuance did not change as a result of the Reverse Stock Split. The Reverse Stock Split was approved by the Company’s stockholders at the Company’s 2024 annual meeting of its stockholders held virtually on February 20, 2025 (the “Annual Meeting”) and approved by the board of directors of the Company (the “Board”) on August 13, 2025. The new CUSIP number for the Common Stock following the Reverse Stock Split is 54570M306. The par value per share of Common Stock will remain unchanged at $ 0.001 . The Company’s publicly traded warrants continue to be traded on Nasdaq under the symbol “LTRYW” and the CUSIP number for the warrants remains unchanged. In addition, as a result of the Reverse Stock Split, proportionate adjustments were made to the number of shares of Common Stock underlying the Company’s outstanding equity awards, the number of shares issuable upon the exercise of the Company’s outstanding warrants and the number of shares issuable under the Company’s equity incentive plans and certain existing agreements, as well as the exercise, grant and acquisition prices of such equity awards and warrants, as applicable. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who would otherwise be entitled to receive fractional shares as a result of the Reverse Stock Split were entitled to a cash payment (without interest or deduction) in lieu thereof at a price equal to the fraction of one share to which the stockholder would otherwise be entitled multiplied by the closing price per share of Common Stock on Nasdaq on August 28, 2025 at 5:30 pm Eastern Standard time, the date of the effective time of the Reverse Stock Split. The effects of the Reverse Stock Split were reflected in the Quarterly Report on Form 10-Q for the period ended September 30, 2025 and in all subsequent reports for all periods presented. Preferred Stock Pursuant to the Company’s charter, the Company is authorized to issue 1,000,000 shares of preferred stock, par value $ 0.001 per share. Our board of directors has the authority without action by the stockholders, to designate and issue shares of preferred stock in one or more classes or series, and the number of shares constituting any such class or series, and to fix the voting powers, designations, preferences, limitations, restrictions and relative rights of each class or series of preferred stock, including, without limitation, dividend rights, conversion rights, redemption privileges and liquidation preferences, which rights may be greater than the rights of the holders of the common stock. As of December 31, 2025, there were no shares of preferred stock issued and outstanding. F- 22 Common Stock Our Charter authorizes the issuance of an aggregate of 500,000,000 shares of Common Stock, par value $ 0.001 per share. The shares of Common Stock are duly authorized, validly issued, fully paid and non-assessable. Our purpose is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the DGCL. Unless our Board determines otherwise, we will issue all shares of our common stock in an uncertificated form. Holders of our Common Stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. The holders of Common Stock do not have cumulative voting rights in the election of directors. Upon our liquidation, dissolution or winding up and after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of our Common Stock will be entitled to receive pro rata our remaining assets available for distribution. As of December 31, 2025 and December 31, 202 4 , 6,880,287 and 1,832,685 shares of Common Stock, post reverse stock split, respectively, were outstanding. Schedule of Common Stock As of December 31, 202 4 1,832,685 Stock granted in lieu of cash 2,709,931 Conversion of Debt to Equity 672,553 Stock Purchase Agreements 1,495,118 Stock for acquisition of assets from Dotcom Ventures Inc. 170,000 As of December 31, 2025 6,880,287 Public Warrants The Public Warrants became exercisable 30 days after the Closing; the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their Public Warrants on a cashless basis and such cashless exercise is exempt from registration under the Securities Act). The S-1 registration became effective November 24, 2021. The Public Warrants will expire five years after October 29, 2021, which was the completion of the TDAC Combination or earlier upon redemption or liquidation. The Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $ 0.01 per warrant; ● upon a minimum of 30 days’ prior written notice of redemption; ● if, and only if, the last sale price of the Company’s common stock equals or exceeds $ 3,200.00 per share for any 20 trading days within a 30 -trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders; and ● if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants at the time of redemption and for the entire 30 -day trading period referred to above and continuing each day thereafter until the date of redemption. F- 23 If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. These warrants cannot be net cash settled by the Company in any event. After giving effect to the Business Combination, and the reverse stock split which took place on August 28, 2025, as of December 31, 2025, there were Public Warrants outstanding for the issuance of 100,625 shares of common stock of the Company, which total includes previously issued warrants of AutoLotto, now warrants of Sports Entertainment Gaming Global Corporation., which are exercisable for the purchase of an aggregate of 1,978 shares of common stock of the Company. Adjustments were made to the Company’s warrants based on the 10:1 reverse split in August of 2025 and the previous 20:1 reverse split in August of 2023. The adjustments were made automatically. The number of shares of common stock issued subject to stock options, warrants, or convertible securities was automatically decreased by the split ratio and the exercise price or conversion ratio was automatically proportionately increased by the same split ratio. Private Warrants Private warrants of TDAC issued before the business combination were forfeited and did not transfer to the surviving entity. Common Stock Warrants During the year ended December 31, 2025, 68,241 warrants were issued. The Company issued 236,506 warrants during the year ended December 31, 2024. All warrants issued during the years 2024 and 2025 are fully vested. Schedule of Common Stock Warrants Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Life (years) Value Outstanding at December 31, 2023 2,441 $ 304.02 1.8 $ - Granted 2,365,063 - 4.5 1,726,496 Exercised - - - - Forfeited/cancelled - - - Outstanding at December 31, 2024 2,367,504 3.11 3.9 - Granted 682,410 - 4.5 498,159 Exercised ( 2,626,415 ) - - ( 1,917,283 ) Forfeited/cancelled ( 2,292 ) 30.40 - Outstanding at December 31, 2025 421,207 $ - 4.5 $ 307,482 F- 24 Note 11. Stock-based Compensation Expense 2015 Stock Option Plan Prior to the closing of the Business Combination, AutoLotto had the AutoLotto, Inc. 2015 Stock Option/Stock Issuance Plan (the “2015 Plan”) in place. Under the 2015 Plan, incentive stock options may be granted at a price not less than fair market value of the common stock (110% of fair value to holders of 10% or more of voting stock). If the Common Stock is at the time of grant listed on any Stock Exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question on the Stock Exchange, as such price is officially quoted in the composite tape of transactions on such exchange and published in The Wall Street Journal. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists. If the Common Stock is at the time neither listed on any Stock Exchange, then the Fair Market Value shall be determined by the Board of Directors or the Committee acting in its capacity as administrator of the Plan after taking into account such factors as the Plan Administrator shall deem appropriate. The maximum number of shares of Common Stock which may be issued over the term of the Plan shall not exceed Two Thousand Two Hundred Fifty (2,250). Options are exercisable over periods not to exceed 10 years (five years for incentive stock options granted to holders of 10% or more of voting stock) from the date of grant. Shares of Common Stock issued under the Stock Issuance Program may, in the discretion of the Plan Administrator, be fully and immediately vested upon issuance or may vest in one or more instalments over the Participant’s period of Service or upon attainment of specified performance objectives. The Plan Administrator may not impose a vesting schedule upon any option grant or the shares of Common Stock subject to that option which is more restrictive than twenty percent ( 20 %) per year vesting, with the initial vesting to occur not later than one ( 1 ) year after the option grant date. However, such limitation shall not be applicable to any option grants made to individuals who are officers of the Corporation, non-employee Board members or independent consultants. 2021 Equity Incentive Plan In connection with the Business Combination, our board of directors adopted, and our stockholders approved, the Lottery.com 2021 Incentive Award Plan (the “2021 Plan”) under which 61,652 shares of Class A common stock were initially reserved for issuance. The 2021 Plan allows for the issuance of incentive and non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units and other stock or cash-based awards. The number of shares of the Company’s Class A common stock available for issuance under the 2021 Plan increases annually on the first day of each calendar year, beginning on and including January 1, 2022 and ending on and including January 1, 2031 by a number of shares of Company common stock equal to five percent ( 5 %) of the total outstanding shares of Company common stock on the last day of the prior calendar year. Notwithstanding the foregoing, the Board may act prior to January 1st of a given year to provide that there will be no such increase in the share reserve for such year or that the increase in the share reserve for such year will be a lesser number of shares of Company common stock than would otherwise occur pursuant to the preceding sentence. On February 9, 2026, Company stockholders unanimously approved to increase the number of shares reserved for issuance under the 2021 Plan to 3,750,000 . Stock Options There were no grants of stock options during the year ended December 31, 2025. On February 5, 2024, the Company issued stock options to officers, directors, and key consultants. The exercise price for the options is $ 19.50 and the maturity date in February 5, 2029 . The following table shows stock option activity for the years ended December 31, 2025 and 2024: Schedule of Stock Option Activity Weighted Weighted Average Shares Outstanding Average Remaining Aggregate Available Stock Exercise Contractual Intrinsic for Grant Awards Price Life (years) Value Outstanding at December 31, 2023 - 1,728 $ 81.49 2.4 $ - Granted - 105,000 19.50 4.1 Exercised - - - - - Forfeited/cancelled - - - - - Outstanding at December 31, 2024 - 106,728 20.50 2.8 - Granted - - - - - Exercised - ( 4,871 ) 19.50 - - Forfeited/cancelled (uncancelled) - ( 744 ) 12.00 - Outstanding at December 31, 2025 - 101,113 $ 20.10 2.8 $ - Stock-based compensation expense related to the employee options was $ 0 for the years ended December 31, 2025 and December 31, 2024 F- 25 Note 12. Loss Per Share The following table sets forth the computation of basic and diluted net loss per share: Schedule of Basic and Diluted Net Income Loss Per Share Year ended December 31, 2025 2024 Comprehensive net loss attributable to stockholders $ ( 20,303,608 ) $ ( 28,221,605 ) Weighted average common shares outstanding Basic and diluted 3,515,444 1,437,534 Net loss per common share Basic and diluted $ ( 5.78 ) $ ( 19.63 ) As of December 31, 2025, the Company excluded 1,046 stock options, 2,342 restricted awards, 42,406 warrants, 25,000 earn out shares and 8,750 unit purchase options from the calculation of diluted net loss per share with the effect being anti-dilutive. As of December 31, 2024, the Company excluded 1,728 stock options, 10,064 convertible debt into common shares, 19,162 restricted awards, 19,347 warrants, 8,630 earn out shares and 3,021 unit purchase options from the calculation of diluted net loss per share with the effect being anti-dilutive. Note 13. Income Taxes The Company accounts for income taxes in accordance with ASC 740, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences and net operating loss (“NOL”) carryforwards. Income Tax Provision For the years ended December 31, 2025 and 2024, the Company recorded an income tax provision of $ 0 . The Company has generated net losses in the current and prior periods and does not expect to incur current income tax expense. Accordingly, no current income tax expense has been recorded. Deferred tax assets generated during the period have been fully offset by a valuation allowance, resulting in no net deferred tax benefit recognized in the consolidated statements of operations. Deferred Tax Assets and Valuation Allowance The Company’s deferred tax assets primarily relate to net operating loss carryforwards and other temporary differences. Due to cumulative losses and uncertainty regarding the timing and extent of future taxable income, the Company has recorded a full valuation allowance against its deferred tax assets as of December 31, 2025 and 2024. As a result, no net deferred tax assets are presented on the consolidated balance sheets. F- 26 Net Operating Loss Carryforwards As of December 31, 2025, the Company has generated federal and state net operating loss carryforwards. Such carryforwards may be subject to limitations under Section 382 of the Internal Revenue Code due to ownership changes. The Company has not completed a formal Section 382 analysis as of the date of these financial statements. Uncertain Tax Positions The Company recognizes the effect of income tax positions only if those positions are more likely than not to be sustained. As of December 31, 2025 and 2024, the Company has not identified any material uncertain tax positions. Open Tax Years The Company remains subject to examination by taxing authorities for all periods in which net operating losses are available for utilization. Preliminary Assessment The Company’s accounting for income taxes is based on currently available information and represents a preliminary assessment under ASC 740. The Company continues to evaluate its deferred tax assets, including net operating loss carryforwards, and related valuation allowance. Adjustments, if any, are not expected to be material to the consolidated financial statements. Note 14. Commitments and Contingencies Indemnification Agreements The Company enters into indemnification provisions under its agreements with other entities in its ordinary course of business, typically with business partners, customers, landlords, lenders and lessors. Under these provisions, the Company generally indemnifies and holds harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company’s activities or, in some cases, as a result of the indemnified party’s activities under the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is unlimited. The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the estimated fair value of these agreements is minimal. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2025 and 2024. Digital Securities In 2018, the Company commenced a sale offering and issuance (the “LDC Offering”) of 285 million revenue participation interests (the “Digital Securities”) of the net raffle revenue of LDC Crypto Universal Public Company Limited (“LDC”). The Digital Securities do not have any voting rights, redemption rights, or liquidation rights, nor are they tied in any way to other equity securities of LDC or the Company nor do they otherwise hold any rights that a holder of equity securities of LDC or the Company may have or that a holder of traditional equity securities or capital stock may have. Rather, each of the holders of the Digital Securities has a pro rata right to receive 7 % of the net raffle revenue. If the net raffle revenue is zero for a given period, holders of the Digital Securities are not eligible to receive any cash distributions from any raffle sweepstakes of LDC for such period. For the years ended December 31, 2025 and December 31, 2024, the company did not incur any obligations to the holders of the outstanding Digital Securities. For the year ended December 31, 2021, the Company incurred an obligation to pay an aggregate amount of approximately $ 5,632 to holders of the outstanding Digital Securities. The Company did not satisfy any of those obligations during the years ended December 31, 2021 through December 31, 2025. F- 27 Leases and Rent On September 1, 2024, the company moved its headquarters to Fort Worth, Texas under a membership agreement with monthly cost of $ 154 . The Company also leased a campus in Boca Raton Florida for $ 25,000 per month under a 12 month lease agreement that commenced on August 1, 2024 and continued thru July 31, 2025 . For the twelve months ended December 31, 2025 and 2024 rent expense was $ 346,382 and $ 252,406 , respectively. As of December 31, 2025, future minimum rent payments due under non-cancellable leases are as follows: Schedule of Future Minimum Rent Payments Due Under Non-Cancellable Leases Years ending December 31, Amount 2026 - Thereafter - Total $ - Litigation and Other Loss Contingencies As of December 31, 2025, there were no pending proceedings that are deemed to be materially detrimental. The Company is a party to legal proceedings in the ordinary course of its business. The Company believes that the nature of these proceedings is typical for a company of its size and scope. See Part II, Item 1 for additional information. Note 15. Related Party Transactions The Company has from time to time entered into transactions with related parties. The Company regularly reviews these transactions; however, the Company’s results of operations may have been different if these transactions were conducted with nonrelated parties. During the year ended December 31, 2020, the Company entered into borrowing arrangements with the individual founders to provide operating cash flow for the Company. The Company paid $ 4,700 during 2021 and the outstanding balance was $ 13,000 on December 31, 2025 and December 31, 2024. Christopher Gooding, appointed as a director of the Company on August 10, 2023, is an attorney licensed in the United Kingdom. He previously provided limited consulting services to the Company’s outside general counsel on select U.K. legal matters that could potentially impact the Company. These consulting services began in February 2024, and Mr. Gooding was compensated separately from his director compensation, receiving a total of $ 264,000 in 2024. To maintain his independence as a director, Mr. Gooding ceased providing consulting services to the Company’s outside general counsel as of June 30, 2025. His compensation for consulting services from January 1, 2025 to June 30, 2025 was $ 144,000 . Other than matters where Mr. Gooding is a named defendant alongside the Company, he provides opinions on all Board matters solely in his capacity as an independent director, without additional compensation from the Company or its outside general counsel. During the quarter ended September 30, 2024, the Company entered into a borrowing arrangement with Robert Stubblefield, the Company’s Chief Financial Officer, to provide funding for certain operating expenses of the Company. At September 30, 2024 the Loan amount was $ 57,682 . Additional amounts were provided by Mr. Stubblefield during the quarter ended December 31, 2024 and the loan amount at year end was $ 67,941 . The Loan was issued at zero percent interest. In February 2025, the Company granted shares of common stock which repaid the loan in full. See Subsequent Events regarding certain convertible promissory notes issued to Robert Stubblefield, CFO and Interim CEO & President and to Gregory Potts, COO in January of 2026 for unpaid compensation still owed to them from 2023 and 2024. As officers of the Company, they are related parties. Note 16. Subsequent Events Management has evaluated these events in accordance with ASC 855, Subsequent Events, and determined that they represent non-recognized subsequent events, as it relates to conditions arising after the balance sheet date. Accordingly, no adjustments to the consolidated financial statements were required. Related Party Transaction On January 15, 2026, the Company entered into certain convertible promissory notes with Robert Stubblefield, CFO and Interim CEO & President and to Greg Potts, COO, for unpaid compensation still owed to Messrs. Stubblefield and Potts from 2023 and 2024. As officers of the Company, they are related parties. The maturity date of the convertible promissory notes is January 15, 2027. Interest at a rate of 10 % per annum shall accrue on the principal amount of each note until the maturity date. The principal amount is: $ 291,485 and $ 258,448 , respectively for Messrs. Stubblefield and Potts. As of the date of this report, neither Messrs. Stubblefield or Potts have converted any portion of their notes. Other Convertible Note On January 15, 2026, the Company entered into a convertible promissory note with the Amar Ali Law, PLLC for outstanding legal fees provided to the Company. The maturity date of the convertible promissory note is January 15, 2027 . Interest at a rate of 10 % per annum shall accrue on the principal amount of $ 1,445,361 for the note until the maturity date. As of the date of this report, no portion of the note has been converted. Capital Markets Activity with Dawson James On January 16, 2026, the Company entered into a placement agency agreement with Dawson James Securities, Inc., pursuant to which Dawson James agreed to act as the Company’s exclusive placement agent, on a reasonable best-efforts basis, in connection with a registered direct offering of 2,449,857 shares of the Company’s common stock at a purchase price of $ 0.70 per share. The offering closed on January 20, 2026 and resulted in gross proceeds of approximately $ 1.7 million, before deducting placement agent fees and offering expenses. The securities in the foregoing offerings were issued pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-291505), which was declared effective by the U.S. Securities and Exchange Commission on November 26, 2025. On March 16, 2026, the Company entered into a Securities Purchase Agreement with certain institutional investors pursuant to which the Company agreed to issue unsecured convertible promissory notes in an aggregate principal amount of up to approximately $ 11.8 million in a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D promulgated thereunder. The notes are issuable in multiple tranches, including an initial tranche of approximately $ 3.5 million funded upon execution, with additional tranches subject to specified conditions, including the filing and effectiveness of a resale registration statement and, for subsequent tranches, based on mutual agreement of the parties through December 31, 2026. The notes were issued at a 15 % original issue discount, bear interest at 12 % per annum, and mature 24 months from issuance. The notes are convertible into shares of the Company’s common stock at a conversion price based on a discount to market price, subject to a floor price, and include customary terms, including events of default and a beneficial ownership limitation initially set at 4.99 %, which may be increased to 9.99 % upon notice. In connection with the foregoing arrangement, the Company entered into placement agency agreements with Dawson James and agreed to pay customary placement fees and expenses. The Company also entered into a registration rights agreement in connection with the convertible note financing requiring the filing and effectiveness of a resale registration statement covering the shares issuable upon conversion of the notes within specified time periods. Termination of UCIL Loan Agreement On January 20, 2026, the Company terminated its financing arrangement with United Capital Investments London Limited (“UCIL”) originally entered into on July 23, 2023, subsequently amended and restated on August 8, 2023, later amended on August 18, 2023, and finally amended and restated on February 16, 2024. UCIL has informed the Company that it is considering legal action to preserve is rights under the financing arrangement, however, as of the date of this filing, the Company has not received notice of any action nor has UCIL provided the requisite accounting information and evidence to substantiate its claims. F- 28 SEC Complaint Relating to Legacy Conduct On January 22, 2026, the U.S. Securities and Exchange Commission (the “SEC”) filed a civil complaint (the “Complaint”) in the United States District Court for the Southern District of New York naming the Company, certain former senior executive officers of the Company, and the former Chief Executive Officer of Trident Acquisitions Corp. as defendants. The Complaint alleges violations of certain federal securities laws and seeks injunctive relief, disgorgement, civil monetary penalties, and other equitable remedies. The allegations relate to conduct occurring primarily between 2020 and mid-2022, including periods prior to and shortly following the Company’s business combination with Trident Acquisitions Corp. The individuals identified in the Complaint who previously served as executive officers are no longer employed by the Company and have no ongoing affiliation or involvement with the Company. Since mid-2022, the Company has implemented significant changes in executive leadership, governance, and internal controls. The current management team was not involved in the conduct alleged in the Complaint. The Company has cooperated with the SEC’s investigation and intends to continue its cooperation. While the Company believes the claims asserted against it are without merit and is prepared to defend the matter, it has engaged in non-binding discussions with the SEC regarding a potential resolution. Although no assurances can be provided, the Company believes the matter is nearing resolution and does not currently expect the outcome to have a material adverse effect on its financial condition. This disclosure does not constitute an admission of liability by the Company or any other party. Corporate Name Change On January 23, 2026, the Company announced that it had changed its corporate name from Lottery.com Inc. to Sports Entertainment Gaming Global Corporation to better reflect its strategic focus on the convergence of sports, entertainment, and gaming. The name change became effective on January 27, 2026, following the filing of an amendment to the Company’s certificate of incorporation with the State of Delaware. In connection with the name change, the Company began operating under the brand “SEGG Media” and updated its corporate identity, including its website and marketing materials. The Company’s common stock continues to trade on the Nasdaq Capital Market under the ticker symbol “SEGG,” and the name change did not affect the Company’s capital structure, trading symbol, or shareholder rights. Termination of Securities Purchase Agreement with Evergreen Capital Management, LLC On December 2, 2025, the Company entered into a Securities Purchase Agreement with Evergreen Capital Management, LLC (“Evergreen”), pursuant to which the Company issued a senior secured convertible promissory note with an aggregate principal amount of $ 2.875 million. The note included an original issue discount of $ 0.375 million, resulting in net proceeds of $ 2.5 million to the Company. Funding was structured in two tranches: an initial $ 0.5 million at closing and $ 2.0 million upon (i) the effectiveness of a registration statement covering the underlying shares and (ii) receipt of requisite shareholder approval in accordance with Nasdaq Listing Rule 5635. The transaction was completed as a private placement under Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D. On January 26, 2026, the Company entered into a Termination Agreement with Evergreen pursuant to which the parties agreed to terminate the convertible promissory note and the related Securities Purchase Agreement. The termination became effective upon the issuance of shares of common stock pursuant to Conversion Notice #7, dated January 13, 2026. As a result, the note and the Securities Purchase Agreement are null and void and of no further force or effect, and no additional amounts are due or payable by either party thereunder. $ 500,000 was funded by Evergreen in December of 2025 and converted into equity in December 2025 and January 2026. The remaining $ 2,000,000 was not received and there are no remaining obligations of either party with respect to the $ 2,000,000 . Federal Case Dismissal On January 28, 2026, in Lottery.com, Inc. f/k/a AutoLotto, Inc., et al. v. John J. Brier, Jr., et al. , Case No. 8:23-cv-2594, the United States District Court for the Middle District of Florida granted, in part, the Company’s renewed motion to dismiss for lack of subject matter jurisdiction, declined to exercise supplemental jurisdiction over the remaining state-law counterclaims, overruled the defendants’ objections to the magistrate judge’s findings and recommendations, and directed that the case be closed. Simon Lewis Appointment On February 5, 2026, the Company announced the appointment of Simon Lewis as Chief Executive Officer of Concerts.com and EVP of Entertainment for SEGG Media. In this role, Mr. Lewis will lead the strategic development and commercial rollout of Concerts.com and oversee the Company’s broader entertainment portfolio strategy. Mr. Lewis brings significant experience in the global live entertainment and media industries, including prior service as President of Live Nation Europe. The appointment supports the Company’s previously disclosed strategy to expand its presence across sports, entertainment, and media platforms, including the development of Concerts.com and related digital assets. Illegal Trading Lawsuit On February 10, 2026, the Company announced that it had filed a civil complaint in the District Court of Tarrant County, Texas, Sports Entertainment Gaming Global Corporation v. Virtu Financial Capital Markets LLC, et al. , alleging illegal trading activities and market manipulation involving the Company’s securities. The complaint seeks damages of approximately $ 179 million, along with other relief, against multiple defendants. The Company alleges that the defendants engaged in unlawful trading practices that adversely impacted the market for the Company’s common stock. The litigation is in its early stages, and the outcome cannot be predicted at this time. The filing of the complaint does not constitute a determination of liability with respect to any party. Veloce Acquisition On February 17, 2026, the Company completed the acquisition of a controlling interest in Veloce Media Group Limited (“Veloce”), a digital motorsports, gaming and sports media platform. The acquisition was effected pursuant to a definitive share purchase agreement under which the Company acquired a supermajority ownership position of approximately 68% of the issued and outstanding equity interests of Veloce. The transaction represents a strategic expansion of the Company’s media and content capabilities, providing immediate scale in audience reach, digital distribution and commercial partnerships. Veloce operates a global media network with a focus on esports, gaming and motorsport content, generating significant monthly digital impressions and audience engagement across multiple platforms. The consideration for the acquisition consisted primarily of equity issued by the Company, along with certain contingent or deferred elements customary for transactions of this nature. The transaction is subject to customary closing adjustments and post-closing integration activities. The Company is in the process of finalizing the purchase price allocation and accounting for the transaction in accordance with ASC 805, Business Combinations. As such, the initial accounting for the acquisition is incomplete as of the date of issuance of these financial statements. The Company intends to extend an offer to acquire the remaining equity interests of Veloce, subject to applicable regulatory requirements and shareholder approvals, with the objective of increasing its ownership position over time. Board Appointments On February 25, 2026, the Board of Directors of the Company appointed Robert Stubblefield and Daniel Bailey to serve as members of the Board. Mr. Stubblefield was appointed as a Class II director with a term expiring at the Company’s 2027 annual meeting of stockholders or until his successor is duly elected and qualified, and Mr. Bailey was appointed as a Class III director with a term expiring at the Company’s 2028 annual meeting of stockholders or until his successor is duly elected and qualified. Mr. Stubblefield currently serves as the Company’s Chief Financial Officer and Interim Chief Executive Officer and President. Mr. Bailey is the Chief Executive Officer of Veloce Media Group. As previously disclosed in the Company’s Current Report on Form 8-K filed on February 23, 2026, Mr. Bailey was a party to the Share Purchase Agreement entered into in connection with the Company’s acquisition of a controlling interest in Veloce, and the transaction constituted a related party transaction under Item 404(a) of Regulation S-K. Other than as previously disclosed, the Company has not identified any additional related party transactions with Mr. Bailey requiring disclosure under Item 404(a) of Regulation S-K. Predictive Markets On April 24, 2026, the Company announced the formation of Sports Predicts Limited, a wholly owned subsidiary, to develop and operate “Sports.com Predict,” a prediction markets offering intended to be integrated into the Company’s Sports.com platform. The Company believes the initiative aligns with its broader strategy to expand monetization opportunities across its digital ecosystem by introducing interactive, engagement-driven features. Once developed and launched, Sports.com Predict is expected to enhance user engagement and create incremental, scalable revenue opportunities within the Sports.com platform. The global prediction markets sector has experienced significant recent growth, and the Company intends to position this offering to participate in that expanding market, subject to applicable regulatory considerations. On April 27, 2026, Sports Predicts Limited, a subsidiary of the Company, entered into a Partnership and Integration Agreement with Blockratize Inc. (d/b/a Polymarket) pursuant to which the Company will integrate Polymarket’s decentralized prediction markets technology into the Sports.com platform. Under the agreement, Polymarket will provide application programming interfaces, software development kits and related infrastructure to support the integration of prediction market products within the Sports.com ecosystem. The agreement provides for the sharing of net transaction fee revenue generated from users of the platform and grants Polymarket exclusivity as the Company’s provider of prediction markets technology during the term of the agreement. The agreement has an initial term through June 30, 2029, unless terminated earlier in accordance with its terms. The Company began allowing users to purchase contracts on June 10, 2026. Amorua Global Securities Purchase Agreement On May 26, 2026, the Company entered into a Securities Purchase Agreement with Amorua Global, Inc. pursuant to which the Company issued an unsecured convertible promissory note with an original principal amount of $ 3.5 million. The note bears interest at a rate of 12 % per annum, matures twenty-four months from issuance and was issued with an original issue discount of 15 %. Subject to the terms of the note, outstanding principal and accrued interest may be converted into shares of the Company’s common stock at a variable conversion price based on market prices of the Company’s common stock, subject to certain adjustments and a 9.99% beneficial ownership limitation. The Company intends to use the net proceeds for general corporate purposes, including the repayment of certain existing indebtedness. In connection with the financing, the Company agreed to file a registration statement covering the resale of shares issuable upon conversion of the note. Alumni Capital Notice of Default On June 18, 2026, the Company received a notice from Alumni Capital LP (“Alumni”), the holder of an unsecured convertible promissory note issued pursuant to a Securities Purchase Agreement dated March 16, 2026. In the notice, Alumni alleged that certain events of default had occurred under the applicable transaction documents, including alleged failures relating to registration obligations and periodic reporting requirements, and demanded redemption of the outstanding note at an asserted redemption price of approximately $ 4.4 million, plus other amounts that Alumni contends may be due under the transaction documents. The notice further states that Alumni may pursue legal remedies if the amounts demanded are not paid. The Company is evaluating Alumni’s claims, its rights and obligations under the transaction documents, and potential defenses, and is engaged in discussions with Alumni regarding the matter. As of the date of issuance of these financial statements, no conclusion has been reached regarding the ultimate outcome of this matter. Accordingly, the Company cannot reasonably estimate the amount or range of any potential loss, if any, that may result from the resolution of this matter. Virtu Financial Capital Markets LLC, Virtu Americas LLC, GTS Securities, LLC and G1 Execution Services, LLC Action On February 10, 2026, the Company commenced litigation in the District Court of Tarrant County, Texas against Virtu Financial Capital Markets LLC, Virtu Americas LLC, GTS Securities, LLC and G1 Execution Services, LLC alleging violations of state and federal securities laws arising from alleged manipulative trading activity affecting the Company’s common stock. The complaint seeks monetary damages, attorneys’ fees, costs, interest and other available relief. The Company will continue to evaluate developments in the litigation and disclose material updates as appropriate. White Diamond Research LLC and Adam Gefvert Civil Action On June 26, 2026, the Company filed a civil action in the District Court of Tarrant County, Texas against White Diamond Research LLC and Adam Gefvert. The complaint alleges, among other things, business disparagement and other claims arising from statements and publications made by the defendants concerning the Company and its business. The Company seeks monetary damages, injunctive and other equitable relief, attorneys’ fees where recoverable, costs, and such other relief as the court may deem appropriate. The Company believes the claims asserted in the action are meritorious and intends to prosecute the matter vigorously. Because the litigation is in its preliminary stages, the ultimate outcome cannot be predicted, and the Company is unable to reasonably estimate any potential recovery, if any. Accordingly, no asset has been recognized in the accompanying financial statements related to this matter. USA TODAY Litigation On July 6, 2026, the Company commenced litigation in the District Court of Tarrant County, Texas against USA TODAY Co., Inc. (formerly Gannett Co., Inc.), and certain affiliated entities relating to an Advertising Agreement executed in December 2016. The complaint alleges that the defendants have refused to recognize or permit the Company’s use of the remaining advertising inventory available under the agreement despite the Company’s efforts since 2024 to exercise its contractual rights. The Company is seeking declaratory relief, damages, and other available remedies. As of the date these financial statements were issued, the litigation remains in its preliminary stages, and no estimate of any potential recovery can be made. F- 29 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. See “ Item 14. Principal Accounting Fees and Services. ”