What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-14 compared with 2025-08-14 · 172 added, 152 removed, 177 unchanged (65% of the section changed)

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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, 2024 and 2023 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.

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

You should read the following discussion and analysis of our financial

condition and results of operations for the periods ended September 30, 2025 and 2024 in conjunction with our unaudited consolidated financial

statements and the related notes included elsewhere in this Quarterly Report and our audited financial statements contained in our most

recent Form 10-K.

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.

The Company offers a suite

of proprietary business-to-business software solutions designed to enhance user engagement through gamification and rewards.

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 mostly sports teams (Professional and Collegiate), venues

(Arenas, Football Stadiums, Baseball Stadiums), and advertising agencies, which 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.

June 30, 2025 and December 31, 2024, we had three active customers.

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,

The Company’s customers

primarily include professional and collegiate sports teams, event venues such as arenas and stadiums, and advertising agencies, which

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 September 30, 2025 and December 31, 2024, the Company had three active customers.

The Company continues to pursue new customer relationships and expansion opportunities within its core verticals.

The Company’s products

are designed to enable end users to be able to earn prizes by registering on our system and completing in-content challenges like trivia,

polls, or casual mobile games.

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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 line 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 Company’s current offerings include the in-venue XEO and Filter Fan Cam (FFC) platforms for live

events, as well as the stand-alone “Winfinite” product line 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 largest customers in 2024

were the Texas Rangers and San Jose Sharks.

For the six months ended June 30, 3025 our largest customer is ASPIS, a significant shareholder

of the Company.

Interactive in June 2021, we acquired a number of key pieces of technology and relationships that have supported the growth and development

of the Company’s engagement and rewards platform, 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

The Company’s largest customers in 2024 included the Texas Rangers and the San Jose Sharks.

For the nine months ended September

30, 2025, the Company’s largest customer was ASPIS, a significant shareholder and continues to do business with the Texas Rangers.

Transactions with ASPIS were conducted on an arm’s-length basis and in accordance with applicable related-party transaction policies.

We now have three principal

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ad agencies, and other content creators.

During the period, we have now made some major headway in our new market

of Brazil, which we expect to come online and be revenue generating within Q3.

Including and not limited to discussions with major soccer

franchises, leagues, festival promoters and tennis tournaments.

Additionally, we now are using Aspis Cyber Technologies, Inc products

to secure the company’s websites and all technology offerings.

We have now also embarked upon a project of creating new and more

current IP, which will be an ongoing project and bolster our company’s position.

During the period, the Company made progress in establishing operations

and partnerships in Brazil, a new target market expected to begin generating revenue in the near term.

Discussions have included major

soccer franchises, leagues, festival promoters, and tennis organizations.

The Company has also implemented cybersecurity solutions provided

by Aspis Cyber Technologies, Inc.

to strengthen the security of its websites and technology infrastructure.

The Company has initiated

an ongoing project to develop new intellectual property aimed at enhancing and modernizing its technology portfolio.

These initiatives

are intended to strengthen the Company’s competitive position over time.

Management continues to focus on expanding customer relationships,

enhancing its technology offerings, and pursuing new opportunities in key markets such as Brazil.

The Company believes these initiatives,

together with ongoing cost discipline and strategic partnerships, may support improved financial performance in future periods.

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 recognize revenue in accordance with ASC 606, Revenue from Contracts

with Customers, when control of promised goods or services transfers to a customer in an amount that reflects the consideration we expect

to receive in exchange for those goods or services.

Our contracts may include multiple performance obligations, and we evaluate the timing

of revenue recognition—whether at a point in time or over time—based on when control of each promised good or service transfers

to the customer.

We earn revenue through the

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Operating Results

Comparison of Results of Operations for the three months ended June

30, 2025 and June 30, 2024

Comparison of Results of Operations for the three months ended September

30, 2025 and 2024

The following table summarizes

our results of operations for the three months ended June 30, 2025 and 2024:

our results of operations for the three months ended September 30, 2025 and 2024:

For the Three Months Ended

Consolidated Statement of Operations and Comprehensive Income (Loss)

Revenues – related party

September 30,

Consolidated Statement of Operations and Comprehensive Income (Loss) Data:

Cost of revenues

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Other income (expense), net

Net income (loss)

Other comprehensive income (loss), net of tax:

Change in foreign currency translation, net of tax

Total comprehensive income (loss)

Total comprehensive loss

Basic and diluted earnings (loss) per share to shareholders

Our revenues are derived

primarily from our license with ASPIS and related professional services.

Revenue was $1,980,000 for the three month period ended June

30, 2025, representing a increase of $1,953,063, or 7,250%, from $26,937 for the three month period ended June 30, 2024.

can be attributed to the recognition of the ASPIS license revenue of $1,980,000.

Cost of revenues

was $8,222 for the three month period ended June 30, 2025, representing a decrease of $8,222, or 49%, from $16,231 for the three month

period ended June 30, 2024.

The decrease was due to the decrease in infrastructure needed for the Xcite Interactive.

Research and development

We realized no revenue for the three month period ended September 30,

2025, representing a decrease of $3,848, or 100%, from $3,848 for the three month period ended September 30, 2024.

The decrease can be

attributed to the recognition of revenue attributed to our Xcite business which did not reoccur in 2025.

Research and development

was $6,219 for the three month period ended June 30, 2025, representing a decrease of $60,984, or 91%, from $67,203 for the three month

period ended June 30, 2024.

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

the prior year.

Research and development expense was $14,470 for the three month period

ended September 30, 2025, representing an increase of $3,008, or 26%, from $11,462 for the three month period ended September 30, 2024.

The increase was primarily due to increases in vendor cost associated with our research and development activities.

Selling, general and administrative

Selling, general and administrative was $1,026,758 for the three month

period ended June 30, 2025, representing a decrease of $416,413, or 29%, from $1,443,171 for the three month period ended June 30, 2024.

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

there was a reduction in expense due to a one-time severance payment of $305,000 during the three months ended June 30, 2024.

Selling, general and administrative expense was $741,931 for the three

month period ended September 30, 2025, representing an increase of $220,521, or 42%, from $521,410 for the three month period ended September

The increase was primarily due to an increase in professional services as the Company is looking to expand operations in Brazil.

Operating Results

Comparison of Results of Operations for the six month period ended

June 30, 2025 and June 30, 2024

Comparison of Results of Operations for the nine month period ended

September 30, 2025 and 2024

The following table summarizes

our results of operations for the six months ended June 30, 2025 and 2024:

For the Six Months Ended

our results of operations for the nine months ended September 30, 2025 and 2024:

For the Nine Months Ended

September 30,

Consolidated Statement of Operations and Comprehensive Income (Loss) Data:

Revenues – related party

Cost of revenues

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Total comprehensive loss

$ (1,095,994 )

Basic and diluted loss per share to shareholders

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primarily from our license with ASPIS and related professional services.

Revenue was $2,179,348 for the six month period ended June 30,

2025, representing an increase of $2,125,908, or 3,978%, from $53,440 for the six month period ended June 30, 2024.

The increase can be

attributed to the recognition of the ASPIS license revenue and professional services.

Revenue was $2,179,348 for the nine month period ended September

30, 2025, representing an increase of $2,122,060, or 3,704%, from $57,288 for the nine month period ended September 30, 2024.

can be attributed to the recognition of the ASPIS license revenue and professional services.

Cost of revenues

Cost of revenues was $16,446 for the six month period ended June 30,

2025, representing a decrease of $23,831, or 59%, from $40,277 for the six month period ended June 30, 2024.

The decrease was due to the

decrease in infrastructure needed for the Xcite Interactive.

Research and development

Cost of revenues was $16,446 for the nine month period ended September

30, 2025, representing a decrease of $23,831, or 59%, from $40,277 for the nine month period ended September 30, 2024.

The decrease was

due to the decrease in infrastructure needed for the Xcite Interactive.

Research and development

was $12,368 for the six month period ended June 30, 2025, representing a decrease of $94,247, or 88%, from $106,615 for the six month

period ended June 30, 2024.

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

the prior year.

Research and development expense was $26,838 for the nine month period

ended September 30, 2025, representing a decrease of $91,239, or 77%, from $118,077 for the nine month period ended September 30, 2024.

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

Selling, general and administrative

was $2,384,494 for the six month period ended June 30, 2025, representing a decrease of $523,158, or 18%, from $2,907,652 for the six

month period ended June 30, 2024.

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.

expense was $3,126,425 for the nine month period ended September 30, 2025, representing a decrease of $302,637, or 9%, from $5,429,062

for the nine month period ended September 30, 2024.

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 nine months ended September 30,

The effect of inflation on

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We have cash of $1,405,628 and a working capital balance of $2,770,192

as at June 30, 2025, compared to a cash position of $3,065,914 and working capital balance of $3,509,272 as at December 31, 2024.

decrease in our cash related to using cash to fund operations and ongoing losses for the six months ended June 30, 2025 and an increase

in working capital balance was due to the account receivable’s owed from ASPIS.

as at September 30, 2025, compared to a cash position of $3,065,914 and working capital balance of $3,509,272 as at December 31, 2024.

The decrease in our cash related to using cash to fund operations and ongoing losses for the nine months ended September 30, 2025 and

a decrease in working capital balance was due to the decrease in cash as a result of cash used in operations.

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;

our capital expenditure requirements.

Since inception, we have incurred significant operating losses.

the six months ended June 30, 2025 and 2024, we incurred net losses of approximately $0.2 million and $3.0 million, respectively.

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, convertible debt, warrant exercises and private placements.

In October 2024 warrant holders

exercised $0.9 million of warrants into common stock.

Also, in November and December 2024 the Company raised $2.5 million of convertible

Our cash and cash equivalents as of June 30, 2025 was $1.7 million.

Our primary cash needs are for working capital requirements,

capital expenditures and to fund our operations.

We are subject to the risks

and uncertainties associated with a new business.

We believe that our current resources and the expected revenues from operations will

be insufficient to fund our planned operations for the next twelve months.

The report of our independent registered public accounting

firm on our condensed consolidated financial statements for the year ended December 31, 2024 stated that our recurring losses from operations,

accumulated deficit as of December 31, 2024, inability to achieve positive cash flows from operations and inability to fund day to day

activities through operations indicates that a material uncertainty exists that may cast significant doubt on our ability to continue

as a going concern.

We plan to increase our cash

flow from our operations to address some of our liquidity concerns and are evaluating other strategic alternatives.

However, to execute

our business plan and implement our business strategy, we anticipate that we will need to obtain additional financing from time to time

and may choose to raise additional funds through public or private equity or debt financings, a bank line of credit, borrowings from affiliates

or other arrangements.

We cannot be sure that any additional funding, if needed, will be available on terms favorable to us or at all.

Furthermore, any additional capital raised through the sale of equity or equity-linked securities may dilute our current shareholders’

ownership in us and could also result in a decrease in the market price of our common shares.

The terms of those securities issued by

us in future capital transactions may be more favorable to new investors and may include the issuance of warrants or other derivative

securities, which may have a further dilutive effect.

Furthermore, any debt financing, if available, may subject us to restrictive covenants

and significant interest costs.

There can be no assurance that we will be able to raise additional capital, when needed, to continue operations

in their current form.

If we cannot raise needed funds, we might be forced to make substantial reductions in our operating expenses, including

reductions in our research and development expenses or headcount reductions, which could adversely affect our ability to implement our

business plan and ultimately our viability as a company.

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;

capital expenditure requirements.

Since inception, the Company has incurred operating losses as it continues

to invest in developing and commercializing its technology platform.

For the nine months ended September 30, 2025 and 2024, the Company

recorded net losses of approximately $1.0 million and $3.5 million, respectively.

During these periods, operations were primarily financed

through an initial public offering of common shares in January 2021 and subsequent equity and debt transactions, including warrant exercises

and private placements.

In October 2024, warrant holders exercised approximately $0.9 million of warrants, and in November and December

2024 the Company raised $2.5 million through convertible notes.

As of September 30, 2025, cash and cash equivalents totaled $1.4 million.

The Company’s principal cash requirements relate to working capital, capital expenditures, and funding ongoing operations.

The Company continues to be subject to the risks and uncertainties

common to emerging growth businesses.

Management believes that current resources and expected operating revenues may not be sufficient

to fund planned activities for the next twelve months.

The report of our independent registered public accounting firm on the Company’s

consolidated financial statements for the year ended December 31, 2024 included an explanatory paragraph noting that recurring operating

losses, accumulated deficit, and negative operating cash flows raise substantial doubt about the Company’s ability to continue as

a going concern within one year after the issuance of those financial statements.

Management is pursuing initiatives intended to improve cash flows from

operations and continues to evaluate strategic and financing alternatives to strengthen liquidity.

To execute the business plan and support

growth initiatives, the Company may seek additional financing through equity or debt offerings, credit facilities, or other arrangements.

There can be no assurance that such financing will be available on terms acceptable to the Company, or at all.

Any future equity or equity-linked

financing could dilute existing stockholders and may affect the market price of the Company’s common shares, while debt financing,

if obtained, could impose covenants or interest obligations.

If sufficient funding is not secured when required, the Company may need

to further align its operating expenditures with available resources, which could impact certain development programs or staffing levels.

Management believes that disciplined cost control, continued customer engagement, and expansion into new markets may provide a foundation

for improved liquidity over time;

however, material uncertainties remain until additional financing or sustained positive cash flows are

The following summarizes

the key components of our cash flows for the six month period ended June 30, 2025 and 2024:

the key components of our cash flows for the nine month period ended September 30, 2025 and 2024:

September 30,

Net cash used in operating activities

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Operating Activities

Net cash used in operating

activities for the six months ended June 30, 2025 was $1,508,972 as compared to $3,874,311 for the six months ended June 30, 2024.

decrease in cash used in operating activities was primarily attributable to a decrease in the net loss of $2,787,409 and prepaids of $1,042,853

off set by an increase of stock-based compensation of $226,611 and an increase in accounts receivable of $1,987,972.

Net cash used in operating activities for the nine months ended September

30, 2025 was $1,484,267 as compared to $4,255,345 for the nine months ended September 30, 2024.

The decrease in cash used in operating

activities was primarily attributable to a decrease in the net loss of $2,558,363 and prepaids of $879,061 off set by an increase of stock-based

compensation of $248,087 and an increase in contract assets of $1,166,000.

Investing Activities

No cash was used in or provided

by investing activities for the six months ended June 30, 2025 and 2024, respectively.

Cash used in investing activities

of $300,000 for the nine months ended September 30, 2025 was attributed to monies spent on developed technology attributed to the Company’s

new product offerings.

No cash was used in or provided by investing activities for the nine months ended September 30,2024, respectively.

Financing Activities

No cash was used in or provided

by financing activities for the six months ended June 30, 2025 and 2024, respectively.

Critical Accounting Policies and Estimates

by financing activities for the nine months ended September 30, 2025 and 2024, respectively.

Critical Accounting Estimates

The preparation of condensed

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to determine the stand-alone selling price, for each distinct performance obligation.

During the three and six months ended June 30, 2025, the Company recognized $176,000

attributed to professional services, respectively.

During the nine months ended

September 30, 2025, the Company recognized $176,000 attributed to professional services.

License Revenue

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first period of the contract term in which the license agreement is in force.

For the three and six month periods ended June 30, 2025,

$1,980,000 of revenue was recognized on our functional IP as the Technology Agreement with ASPIS as the license had been delivered to

ASPIS during the quarter.

For the three and nine month periods ended September 30,

2025, none and $1,980,000, respectively, of revenue was recognized on our functional IP as the Technology Agreement with ASPIS as the

license had been delivered to ASPIS during the quarter.

The Company invoices ASPIS on a monthly basis with 30 day payment terms.

For the three and nine months ended September 30, 2025 the Company has collected $825,000 and $1,001,000, respectively, from ASPIS.

Stock-based compensation

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These estimates may not necessarily be indicative of future actual patterns.

Emerging Growth Company and Smaller Reporting

Company Status

We are an emerging growth

company, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act.

Under the JOBS Act, emerging growth companies

can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards

apply to private companies.

We have elected to use this extended transition period for complying with new or revised accounting standards

that have different effective dates for public and private companies until the earlier of the date that we (a) are no longer an emerging

growth company or (b) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.

As a result, our

condensed financial statements may not be comparable to those of companies that comply with the new or revised accounting pronouncements

as of public company effective dates.

We may choose to early adopt any new or revised accounting standards whenever such early adoption

is permitted for private companies.

We are also a “smaller reporting company.” If we are a

smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure

requirements that are available to smaller reporting companies.

Specifically, as a smaller reporting company, we may choose to present

only the two most recent fiscal years of audited consolidated financial statements in our Form 10-K and, similar to emerging growth companies,

smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Quantitative and Qualitative Disclosures about Market Risk

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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