What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-14 compared with 2024-08-14 · 138 added, 141 removed, 209 unchanged (57% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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 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

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 addition to the Quarterly

Report for the period ended March 31, 2024 and June 30, 2024, in conjunction with our unaudited

condensed consolidated interim financial statements and the related notes included elsewhere

in this Quarterly Report.

We offer a suite of proprietary

business-to-business software tools that are meant to drive user engagement through gamification and rewards.

These tools allow our partners

to offer in-game prizing and rewards, including merchandise, coupons, digital goods, and sweepstakes entries — inside

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.

offer a suite of proprietary business-to-business software tools that are meant to drive user engagement through gamification and rewards.

These tools allow our partners to offer in-game prizing and rewards, including merchandise, coupons, digital goods, and sweepstakes entries — inside

their websites, their venues, or their streaming media content.

Our customers are mostly

sports teams, venues, and advertising agencies, who typically use our products as part of their live events or as part of an advertising

campaign with the goal of engaging fans, increasing consented first-party data, and increasing sales.

At December 31, 2022, we had 16

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

designed so that end users of our products can earn prizes by registering on our system and completing in-content challenges like trivia,

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.

With the acquisition of Xcite

Interactive in June 2021, we acquired a number of key pieces of technology and relationships that have helped to drive our engagement

and rewards business, including a live events fan engagement business that has partnered with professional sports franchises in the National

Football League (“NFL”), the National Basketball Association (“NBA”), the National Hockey League (“NHL”)

and others to increase audience engagement using interactive gaming functions like trivia, polling, and casual games that can be played

alongside live experiences whether a player is at-home, in a restaurant, or in-venue at the event itself.

Our three largest customers

in 2023 were the San Jose Sharks, the Sacramento Kings, and ENT Marketing, a marketing agency that used our platform to promote Coca-Cola

We now have three principal

software products.

Our eXtreme Engagement Online or “XEO” platform is designed primarily for in-venue main-board work in stadiums

Our Filter Fan Cam (FFC) platform is an Augmented Reality filtering tool that can be used for mobile and in-venue applications.

In addition, we have a stand-alone gaming and prizing product that we call “Winfinite,” which allows brands, media companies,

and advertising agencies to reach out to customers directly on their mobile devices.

We license these three software products to teams,

ad agencies, and other content creators.

Significant Components of Our Results of Operations

general, we recognize revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow

to us, where there is evidence of an arrangement, when the selling price is fixed or determinable, and when specific criteria have been

met or there are no significant remaining performance obligations for each of our activities as described below.

Foreseeable losses, if

any, are recognized in the year or period in which the loss is determined.

We earn revenue through the

development and maintenance of custom-built software.

We recognize revenues received

from the development and maintenance of custom-built software and other professional services provided upon the satisfaction of our performance

obligation in an amount that reflects the consideration to which we expect to be entitled in exchange for those services.

obligations can be satisfied either at a single point in time or over time.

For those performance obligations that are satisfied at a

single point in time, the revenue is recognized at that time.

For each performance obligation satisfied over time, we recognize revenue

by measuring the progress toward complete satisfaction of that performance obligation.

Our contracts with customers

may include multiple performance obligations.

For these contracts, we account for individual performance obligations separately if they

are capable of being distinct within the context of the contract.

Determining which performance obligations are considered distinct may

require significant judgment.

Judgment is also required to determine the amount of revenue associated with each distinct performance obligation.

Operating Expenses.

customers are mostly sports teams, venues, and advertising agencies, who typically use our products as part of their live events or as

part of an advertising campaign with the goal of engaging fans, increasing consented first-party data, and increasing sales.

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

products and games are designed so that end users of our products can earn prizes by registering on our system and completing in-content

challenges like trivia, 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.

the acquisition of Xcite Interactive in June 2021, we acquired a number of key pieces of technology and relationships that have helped

to drive our engagement and rewards business, including a live events fan engagement business that has partnered with professional sports

franchises in the National Football League (“NFL”), the National Basketball Association (“NBA”), the National

Hockey League (“NHL”) and others to increase audience engagement using interactive gaming functions like trivia, polling,

and casual games that can be played alongside live experiences whether a player is at-home, in a restaurant, or in-venue at the event

Our three largest customers in 2023 were the San Jose Sharks, the Sacramento Kings, and ENT Marketing, a marketing agency that

used our platform to promote Coca-Cola products.

now have three principal software products.

Our eXtreme Engagement Online or “XEO” platform is designed primarily for in-venue

main-board work in stadiums and arenas.

Our Filter Fan Cam (FFC) platform is an Augmented Reality filtering tool that can be used for

mobile and in-venue applications.

In addition, we have a stand-alone gaming and prizing product that we call “Winfinite,”

which allows brands, media companies, and advertising agencies to reach out to customers directly on their mobile devices.

these three software products to teams, ad agencies, and other content creators.

Components of Our Results of Operations

In general, we recognize revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits

will flow to us, where there is evidence of an arrangement, when the selling price is fixed or determinable, and when specific criteria

have been met or there are no significant remaining performance obligations for each of our activities as described below.

losses, if any, are recognized in the year or period in which the loss is determined.

earn revenue through the development and maintenance of custom-built software.

recognize revenues received from the development and maintenance of custom-built software and other professional services provided upon

the satisfaction of our performance obligation in an amount that reflects the consideration to which we expect to be entitled in exchange

for those services.

Performance obligations can be satisfied either at a single point in time or over time.

For those performance obligations

that are satisfied at a single point in time, the revenue is recognized at that time.

For each performance obligation satisfied over

time, we recognize revenue by measuring the progress toward complete satisfaction of that performance obligation.

contracts with customers may include multiple performance obligations.

For these contracts, we account for individual performance obligations

separately if they are capable of being distinct within the context of the contract.

Determining which performance obligations are considered

distinct may require significant judgment.

Judgment is also required to determine the amount of revenue associated with each distinct

performance obligation.

We classify our operating expense as research and development, and selling, general and administrative.

Personnel costs are the

primary component of each of these operating expense categories, which consist of cash-based personnel costs, such as salaries, benefits

Additionally, these categories include intangible amortization, amortization expense, interest expense, software costs, professional

fees and share-based compensation.

Operating Results

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

Personnel costs

are the primary component of each of these operating expense categories, which consist of cash-based personnel costs, such as salaries,

benefits and bonuses.

Additionally, these categories include intangible amortization, amortization expense, interest expense, software

costs, professional fees and share-based compensation.

of Results of Operations for the three months ended September 30, 2024 and September 30, 2023

following table summarizes our results of operations for the three months ended September 30, 2024 and 2023:

For the Three

September 30,

Statement of Operations and Comprehensive Loss Data:

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Total comprehensive loss

$ (1,378,568 )

Basic and diluted loss per share to shareholders

1 unchanged sentence

primarily from software licensing.

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 June 30, 2023 to June 30, 2024.

Revenue was $3,848 for the three month period ended September 30, 2024, representing a decrease of

$19,102, or 83%, from $22,950 for the three month period ended September 30, 2023.

The decrease was primarily due to a significant reduction

in the number of clients from September 30, 2023 to September 30, 2024.

Cost of revenues

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

Cost of revenues was none

for the three month period ended September 30, 2024, representing a decrease of $23,570, or 100%, from $23,570 for the three month period

ended September 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.

Research and development

was $11,462 for the three month period ended September 30, 2024, representing a decrease of $260,649, or 96%, from $272,111 for the three

month period ended September 30, 2023.

The decrease 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.

was $521,410 for the three month period ended September 30, 2024, representing a decrease of $1,095,751, or 68%, from $1,617,161 for the

three month period ended September 30, 2023.

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

and a decrease in professional fees.

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.

Loss from operations was $529,024 for the three month period ended

September 30, 2024, representing a decrease of $1,360,868, or 72%, from $1,889,892 for the three month period ended September 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

Comparison of Results of Operations for the nine month period ended

September 30, 2024 and September 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

our results of operations for the nine months ended September 30, 2024 and 2023:

For the Nine months Ended

September 30,

Statement of Operations and Comprehensive Loss Data:

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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.

Revenue was $57,288 for the nine month period ended September 30, 2024, representing a decrease of

$179,665, or 76%, from $236,953 for the nine month period ended September 30, 2023.

The decrease was primarily due to a significant reduction

in the number of clients from September 30, 2023 to September 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.

for the nine month period ended September 30, 2024, representing a decrease of $39,220, or 49%, from $79,497 for the nine month period

ended September 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.

Research and development

was $118,077 for the nine month period ended September 30, 2024, representing a decrease of $938,841, or 89%, from $1,056,918 for the

nine month period ended September 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 $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.

was $3,429,062 for the nine month period ended September 30, 2024, representing a decrease of $1,044,648, or 23%, from $4,473,710 for

the nine month period ended September 30, 2023.

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

and a decrease in professional fees.

Loss from Operations

Loss from operations was

$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.

$3,530,128 for the nine month period ended September 30, 2024, representing a decrease of $1,843,044, or 34%, from $5,373,172 for the

nine month period ended September 30, 2023.

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

3 unchanged sentences

We had cash of $471,248 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.

a working capital surplus of $1,215,990 as at September 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:

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.

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.

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.

the nine months ended September 30, 2024 the company incurred a net loss of $3.5 million.

During such periods, we have financed our operations

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The following summarizes

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

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

September 30,

Net cash used in operating activities

3 unchanged sentences

Net cash provided by financing activities

Effect of exchange rates

Net increase (decrease) in cash

1 unchanged sentence

Operating Activities

Net cash used in operating

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.

Net cash used in operating activities for the nine month period ended

September 30, 2024 was $4,255,345 as compared to $4,355,723 for the nine month period ended September 30, 2023.

The decrease in cash used

in operating activities was primarily attributable to the change in our net loss of $1,436,364 offset by increase in non-cash stock compensation

offset by a decrease in amortization of intangible assets.

Investing Activities

Net cash used in investing

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.

activities for the nine month period ended September 30, 2024 was none as compared to $14,106 for the nine month period ended September

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.

Financing Activities

Net cash provided by financing

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.

activities was none for the nine month period ended September 30, 2024 as compared to $5,362,978 for the nine month period ended September

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

68 unchanged sentences

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

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

interest and penalties.

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

for interest and penalties.

We do not foresee material changes to our uncertain tax positions within the next twelve months.

26 unchanged sentences

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