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Item 2. Management’s Discussion and Analysis

2024-08-14 compared with 2024-05-15 · 120 added, 75 removed, 230 unchanged (46% of the section changed)

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You should read the following

discussion and analysis of our financial condition and results of operations for the years ended December 31, 2023 and 2022 in conjunction

with our audited consolidated financial statements and the related notes included elsewhere in this Quarterly Report.

This discussion

contains forward-looking statements that involve risks and uncertainties.

Our actual results and the timing of selected events could differ

materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under

“Risk Factors” and elsewhere in this Quarterly Report.

discussion and analysis of our financial condition and results of operations for the years ended December 31, 2023 and 2022, in addition

to the Quarterly Report for the period ended March 31, 2024, in conjunction with our unaudited condensed consolidated interim financial

statements and the related notes included elsewhere in this Quarterly Report.

This discussion contains forward-looking statements that

involve risks and uncertainties.

Our actual results and the timing of selected events could differ materially from those anticipated in

these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere

in this Quarterly Report.

We offer a suite of proprietary

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active customers.

At December 31, 2023 and at March 31, 2024, we had five active customers.

At December 31, 2023 and at June 30, 2024, we had five active customers due to the decrease in our sales force.

Our products and games are

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polls, or casual mobile games.

Players can use our system to play a variety of games and earn a wide range of prize types provided

by advertisers and sponsors.

Our products include our in-venue XEO and Filter Fan Cam products for live events, and our new stand-alone

“Winfinite” product that can be used by brands, advertising agencies, and content partners to reach potential customers outside

of sports venues, on mobile devices.

We also have an IP portfolio that could create future licensing and product development opportunities

including our recently allowed Artificial Intelligence (“AI”) and Machine Learning (“ML”) series of patent claims.

Players can use our system to play a variety of games and earn a wide range of prize types provided by

advertisers and sponsors.

Our products include our in-venue XEO and Filter Fan Cam products for live events, and our new stand-alone “Winfinite”

product that can be used by brands, advertising agencies, and content partners to reach potential customers outside of sports venues,

on mobile devices.

We also have an IP portfolio that could create future licensing and product development opportunities including our

recently allowed Artificial Intelligence (“AI”) and Machine Learning (“ML”) series of patent claims.

With the acquisition of Xcite

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Operating Results

Comparison of Results of Operations for the Three-Month periods

ended March 31, 2024 and March 31, 2023

The following table summarizes our results of

operations for the three month periods ended March 31, 2024 and 2023:

Comparison of Results of Operations for the three months ended June

30, 2024 and June 30, 2023

The following table summarizes

our results of operations for the three months ended June 30, 2024 and 2023:

For the Three Months Ended

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primarily from software licensing.

Revenue was $26,503 for the three month period ended March 31, 2024, representing a decrease of $131,447,

or 83%, from $157,950 for the three month period ended March 31, 2023.

Revenue was $26,937 for the three month period ended June 30, 2024, representing a decrease of $29,116,

or 52%, from $56,053 for the three month period ended June 30, 2023.

The decrease was primarily due to a significant reduction in the

number of clients from 16 active clients at March 31, 2023 to five active clients at March 31, 2024.

number of clients from June 30, 2023 to June 30, 2024.

Cost of revenues

Cost of revenues was $24,046

for the three month period ended March 31, 2024, representing a decrease of $8,311, or 26%, from $32,357 for the three month period ended

March 31, 2023.

The decrease was primarily due to significant reductions in staff related to our company restructuring.

Cost of revenues was $16,231 for the three month period ended June

30, 2024, representing a decrease of $7,339, or 31%, from $23,570 for the three month period ended June 30, 2023.

The decrease was in

line with the decrease in revenue

Research and development

Research and development was $67,203 for the three month period ended

June 30, 2024, representing a decrease of $650,464, or 91%, from $717,667 for the three month period ended June 30, 2023.

was primarily due to significant reductions in staff related to our company restructuring.

Selling, general and administrative

was $1,443,171 for the three month period ended June 30, 2024, representing a decrease of $182,300, or 11%, from $1,625,471 for the three

month period ended June 30, 2023.

The decrease was primarily due to a decrease in payroll as the Company reduced head count and a decrease

in professional fees, offset by a one-time severance payment of $305,000 during the three months ended June 30, 2024.

Loss from Operations

Loss from operations was

$1,499,742 for the three month period ended June 30, 2024, representing a decrease of $810,913, or 35%, from $2,310,655 for the three

month period ended June 30, 2023.

The decrease was primarily the result of decreased spend on professional fees and payroll.

Operating Results

Comparison of Results of Operations for the six month period ended

June 30, 2024 and June 30, 2023

The following table summarizes

our results of operations for the six months ended June 30, 2024 and 2023:

For the Six Months Ended

Statement of Operations and Comprehensive Loss Data:

Cost of revenues

Research and development

was $39,412 for the three month period ended March 31, 2024, representing a decrease of $27,728, or 41%, from $67,140 for the three month

period ended March 31, 2023.

The decrease was primarily due to a reduction in staffing levels, including a large portion of our engineering

staff, and a reduction in software costs.

Selling, general and administrative

Total Operating Expenses

Operating loss

Other income/(expense)

Other total comprehensive income (loss):

Change in foreign currency translation, net of tax

Total comprehensive loss

$ (2,840,560 )

Basic and diluted loss per share to shareholders

Our revenues are derived

primarily from software licensing.

Revenue was $53,440 for the six month period ended June 30, 2024, representing a decrease of $160,563,

or 75%, from $214,003 for the six month period ended June 30, 2023.

The decrease was primarily due to a significant reduction in the number

of clients from June 30, 2023 to June 30, 2024.

Cost of revenues

Cost of revenues was $40,277

for the six month period ended June 30, 2024, representing a decrease of $15,650, or 28%, from $55,927 for the six month period ended

June 30, 2023.

The decrease was in line with the decrease in revenue.

Research and development

Research and development was

$106,615 for the six month period ended June 30, 2024, representing a decrease of $678,192, or 86%, from $784,807 for the six month period

ended June 30, 2023.

The decrease was primarily due to a reduction in staffing levels, including a large portion of our engineering staff,

and a reduction in software costs.

Selling, general and administrative

was $1,464,481 for the three month period ended March 31, 2024, representing an increase of $79,139, or 6%, from $1,385,342 for the three

month period ended March 31, 2023.

The increase was primarily due to an increase in professional fees.

Selling, general and administrative

was $2,907,652 for the six month period ended June 30, 2024, representing a decrease of $103,161, or 3%, from $3,010,813 for the six month

period ended June 30, 2023.

The decrease was primarily due to a decrease in payroll as the Company reduced head count and a decrease in

professional fees, offset by a one-time severance payment of $305,000 during the six months ended June 30, 2024.

Loss from Operations

Loss from operations was

$1,503,893 for the three month period ended March 31, 2024, representing an increase of $51,411, or 4%, from $1,452,482 for the three

month period ended March 31, 2023.

The increase was primarily the result of increased spend on professional fees.

$3,001,104 for the six month period ended June 30, 2024, representing a decrease of $636,440, or 17%, from $3,637,544 for the six month

period ended June 30, 2023.

The decrease was primarily the result of decreased spend on professional fees and payroll.

The effect of inflation on

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Liquidity and Capital Resources

We had cash of $2,892,356 and a working

capital surplus of $3,166,672 as at March 31, 2024, compared to a cash position of $4,689,007 and working capital surplus of $4,546,227

We had cash of $905,915 and

a working capital surplus of $1,796,886 as at June 30, 2024, compared to a cash position of $4,689,007 and working capital surplus of

$4,546,227 as at December 31, 2023.

The decrease in our cash position and decrease in working capital surplus was related to using

cash to fund operations and ongoing losses.

Our financial condition and liquidity is and will continue to be influenced

by a variety of factors, including:

our ability to generate cash flows from our operations;

future indebtedness and the interest we are obligated to pay on this indebtedness;

the availability of public and private debt and equity financing;

changes in exchange rates which will impact our generation of cash flows from operations when measured in CAD;

our capital expenditure requirements.

Since inception, we have

incurred significant operating losses.

For the years ended December 31, 2023 and 2022, we incurred net losses of approximately $10.5 million

and $22.4 million, respectively.

During such periods, we have financed our operations primarily through an initial public offering of

our common shares in January 2021 and subsequent public offerings, registered direct offerings, and private placements.

In February 2023,

we completed a registered direct offering of our common shares in which we received gross proceeds of $2.25 million and net proceeds of

approximately $2 million.

In October 2023, we completed a public direct offering of our common shares in which we received gross proceeds

of approximately $3 million and net proceeds of approximately $2.5 million.

In November 2023, we completed a private placement of our

equity securities in which we received gross proceeds of $2.6 million.

Throughout 2023, we received approximately $4.6 million in proceeds

from warrant exercises.

The decrease in our cash position and decrease in working capital surplus was related to using cash

to fund operations and ongoing losses.

Our financial condition and

liquidity is and will continue to be influenced by a variety of factors, including:

ability to generate cash flows from our operations;

indebtedness and the interest we are obligated to pay on this indebtedness;

availability of public and private debt and equity financing;

in exchange rates which will impact our generation of cash flows from operations when measured in CAD;

capital expenditure requirements.

Since inception, we have incurred significant operating losses.

the years ended December 31, 2023 and 2022, we incurred net losses of approximately $10.5 million and $22.4 million, respectively.

the six months ended June 30, 2024 the company incurred a net loss of $3.0 million.

During such periods, we have financed our operations

primarily through an initial public offering of our common shares in January 2021 and subsequent public offerings, registered direct offerings,

and private placements.

In February 2023, we completed a registered direct offering of our common shares in which we received gross proceeds

of $2.25 million and net proceeds of approximately $2 million.

In October 2023, we completed a public direct offering of our common shares

in which we received gross proceeds of approximately $3 million and net proceeds of approximately $2.5 million.

In November 2023, we completed

a private placement of our equity securities in which we received gross proceeds of $2.6 million.

Throughout 2023, we received approximately

$4.6 million in proceeds from warrant exercises.

Our cash and cash equivalents as of December 31, 2023 was $4.7 million.

Our primary cash needs are for working

capital requirements, capital expenditures and to fund our operations.

Our primary cash

needs are for working capital requirements, capital expenditures and to fund our operations.

We are subject to the risks

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The following summarizes

the key components of our cash flows for the three month periods ended March 31, 2024 and 2023:

the key components of our cash flows for the six months period ended June 30, 2024 and 2023:

Net cash used in operating activities

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Net cash used in operating

activities for the three month period ended March 31, 2024 was $1,796,651 as compared to $2,257,959 for the three month period ended March

The decrease in cash used in operating activities was primarily attributable to a decrease in the net loss excluding share based

compensation expense, which was negative $1,247,113 in the three month period ended March 31, 2023.

activities for the six month period ended June 30, 2024 was $3,783,092 as compared to $(3,637.544) for the six month period ended June

The increase in cash used in operating activities was primarily attributable to the increase in cash used for prepaid expenses

as the Company is required to prepay for its directors and officers insurance.

Investing Activities

Net cash used in investing

activities for the three month period ended March 31, 2024 was $0 as compared to $8,550 for the three month period ended March 31, 2023.

The change in cash flow used in investing activities was primarily attributable to a significant reduction in payroll capitalized for

the development of intangible assets, and a reduction in the amount of equipment purchased.

activities for the six month period ended June 30, 2024 was $0 as compared to $9,670 for the six month period ended June 30, 2023.

change in cash flow used in investing activities was primarily attributable to a significant reduction in payroll capitalized for the

development of intangible assets.

Financing Activities

Net cash provided by financing

activities was $0 for the three month period ended March 31, 2024 as compared to $6,367,073 for the three month period ended March 31,

The change in cash flow provided by financing activities was mainly attributable to proceeds we received from the issuance of common

shares, exercise of warrants and options, and repayments on notes payable in 2023.

activities was $0 for the six month period ended June 30, 2024 as compared to $5,538,655 for the six month period ended June 30, 2023.

The change in cash flow provided by financing activities was mainly attributable to proceeds we received from the issuance of common shares,

net of issuance costs, exercise of warrants and options, which was offset by repayments on notes payable and lease liabilities in 2023.

Notes Payable

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and/or penalties related to income tax matters in income tax expense.

As of March 31, 2024 and 2023, we did not record any accruals for

As of June 30, 2024 and 2023, we did not record any accruals for

interest and penalties.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis