What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-14 compared with 2026-05-15 · 122 added, 189 removed, 30 unchanged (91% of the section changed)

Management’s Discussion and Analysis

of Financial Condition and Results of Operations

The following discussion

and analysis of our financial condition and results of operations should be read together with and is qualified in its entirety by reference

to the condensed consolidated financial statements and related notes that are included elsewhere in this Quarterly Report on Form 10-Q.

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

The following discussion and analysis of our financial condition and results of operations should be read together with and is qualified in its entirety by reference to the condensed consolidated financial statements and related notes that are included elsewhere in this Quarterly Report on Form 10-Q.

This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties.

Our actual results

may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed

under “Risk Factors,” set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025,

and any updates thereto set forth in this Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission

(“SEC”), including future SEC filings.

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 their websites,

their venues, or their streaming media content.

Our customers mostly sports

teams, venues (Arenas, Football Stadiums, Baseball Stadiums), fan engagement and sponsor activation platforms, digital out-of-home media

companies, 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 March 31, 2026 and December 31, 2025,

we had four active customers.

Our products and games are

designed so that end users could earn prizes by registering on our system and completing in-content challenges like trivia, polls, or

casual mobile games.

Players could 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 Filter Fan Cam (“FFC”) products for live events, our 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, as well as the “Winfinite” Games, which are customizable web-based casual games.

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 year ended December 31, 2025, the Company’s largest customer was ASPIS, a significant

shareholder and we continue to do business with the Texas Rangers.

We offer a suite of products

centered on “Winfinite” and FFC.

Our 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 software products

to teams, ad agencies, and other content creators.

Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed under “Risk Factors,” set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, and any updates thereto set forth in this Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission (“SEC”), including future SEC filings.

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

Our customers are mostly sports teams, venues (Arenas, Football Stadiums, Baseball Stadiums), fan engagement and sponsor activation platforms, digital out-of-home media companies, 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 June 30, 2026 and December 31, 2025, we had four active customers.

Our products and games are designed so that end users could earn prizes by registering on our system and completing in-content challenges like trivia, polls, or casual mobile games.

Players could 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 Filter Fan Cam (“FFC”) products for live events, our 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, as well as the “Winfinite” Games, which are customizable web-based casual games.

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 year ended December 31, 2025, the Company’s largest customer was ASPIS, a significant shareholder and we continue to do business with the Texas Rangers.

We offer a suite of products centered on “Winfinite” and FFC.

Our 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 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

Operating Expenses.

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 professional fees and share-based compensation.

Operating Results

Comparison of Results of Operations for the Three-Month periods

ended March 31, 2026 and March 31, 2025

The following table summarizes

our results of operations for the three-month periods ended March 31, 2026 and 2025:

Comparison of Results of Operations for the Three-Month periods ended June 30, 2026 and June 30, 2025

The following table summarizes our results of operations for the three-month periods ended June 30, 2026 and 2025:

For the Three Months Ended

Statement of Operations and Comprehensive Loss Data:

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

Revenue $ 6,821 $ -

Revenues – related party 1,485,000 1,980,000

Cost of revenues - 8,222

Gross margin 1,491,821 1,971,778

Research and development - 6,219

1 unchanged sentence

Total operating expenses 897,548 1,032,977

Operating loss

Other income/(expense)

Revenue was $17,300 for the

three-month period ended March 31, 2026, representing a decrease of $182,047, or 91%, from $199,347 for the three-month period ended March

The decrease was primarily due to one-time consulting services attributed to the ASPIS arrangement which accounted for approximately

$176,000 during the three months ended March 31, 2025.

Operating income 594,273 938,801

Other income, net - 3,660

Net income 594,273 942,461

Other comprehensive income (loss), net of tax:

Change in foreign currency translation, net of tax (41,000 ) (117,564 )

Total comprehensive income $ 553,273 824,897

Basic earnings per share to shareholders $ 0.10 $ 0.14

Third party Revenue

Revenue was $6,821 for the three-month period ended June 30, 2026, representing an increase of $6,821, or 100%, from $0 for the three-month period ended June 30, 2025.

The increase was the result of revenue earned from the Xcite business.

Related party Revenue

Related party revenue was $1,485,000 for the three-month period ended June 30, 2026, representing a decrease of $495,000, or 25%, from $1,980,000 for the three-month period ended June 30, 2025.

The decrease was primarily due to a decrease in license revenue earned.

Cost of revenues

Cost of revenues was $0 for

the three-month period ended March 31, 2026, representing a decrease of $8,223 or 100%, from $8,223 for the three month period ended March

The decrease was primarily due to a change in revenue mix as the $17,300 of revenue was attributable to the Company’s

legacy Xcite business, which did not incur associated cost of revenues during the period.

Research and development

Cost of revenues was $0 for the three-month period ended June 30, 2026, representing a decrease of $8,222 or 100%, from $8,222 for the three month period ended June 30, 2025.

The decrease was primarily due to the Company cancelling contracts associated with its cost of revenues for fiscal 2026.

Research and development

was $0 for the three month period ended March 31, 2026, representing a decrease of $6,149, or 100%, from $6,149 for the three month period

ended March 31, 2025.

Research and development was $0 for the three month period ended June 30, 2026, representing a decrease of $6,219, or 100%, from $6,219 for the three month period ended June 30, 2025.

The decrease was primarily due to a reduction in software costs.

Selling, general and administrative

was $835,995 for the three-month period ended March 31, 2026, representing a decrease of $521,741, or 38%, from $1,357,736 for the three

month period ended March 31, 2025.

Selling, general and administrative was $897,548 for the three-month period ended June 30, 2026, representing a decrease of $129,210, or 13%, from $1,026,758 for the three month period ended June 30, 2025.

The decrease was primarily due to a decrease in administrative employees and stock compensation.

Income from Operations

Income from operations was $594,273 for the three month period ended June 30, 2026, representing a decrease of $344,528, or 37%, from $938,801 for the three month period ended June 30, 2025.

The decrease was primarily the result of decrease in gross profit of $480,000 offset by a decrease in operating expenses of $135,000.

Comparison of Results of Operations for the six month period ended June 30, 2026 and June 30, 2025

The following table summarizes our results of operations for the six months ended June 30, 2026 and 2025:

For the Six Months Ended

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

Revenues $ 24,121 $ 23,348

Revenues – related party 1,485,000 2,156,000

Cost of revenues - 16,446

Gross margin 1,509,121 2,162,902

Research and development - 12,368

Selling, general and administrative 1,733,543 2,384,494

Total operating expenses 1,733,543 2,396,862

Operating loss (224,422 ) (233,960 )

Other income (expense), net - 19,944

Net loss (224,422 ) (214,016 )

Other comprehensive income (loss), net of tax:

Change in foreign currency translation, net of tax (119,529 ) (125,314 )

Total comprehensive loss $ (343,951 ) (339,330 )

Basic and diluted loss per share to shareholders $ (0.04 ) $ (0.06 )

Third party Revenue

Revenue was $24,121 for the six-month period ended June 30, 2026, representing an increase of $773, or 3%, from $23,348 for the six-month period ended June 30, 2025.

The increase was the result of revenue earned from the Xcite business.

Related party Revenue

Related party revenue was $1,485,000 for the six-month period ended June 30, 2026, representing a decrease of $671,000, or 31%, from $2,156,000 for the six-month period ended June 30, 2025.The decrease was primarily due to one-time consulting services attributed to the ASPIS arrangement which accounted for approximately $176,000 during the three months ended June 30, 2025 in addition to a decline in license revenue earned of $495,000.

Cost of revenues

Cost of revenues was $0 for the six month period ended June 30, 2026, representing a decrease of $16,446, or 100%, from $16,446 for the six month period ended June 30, 2025.

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

Research and development

Research and development was $0 for the six month period ended June 30, 2026, representing a decrease of $12,368, or 100%, from $12,368 for the six month period ended June 30, 2025.

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

Selling, general and administrative

Selling, general and administrative was $1,733,543 for the six month period ended June 30, 2026, representing a decrease of $650,951, or 27%, from $2,384,494 for the six month period ended June 30, 2025.

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

Loss from Operations

Loss from operations was

$818,695 for the three month period ended March 31, 2026, representing a decrease of $354,066, or 30%, from $1,172,761 for the three month

period ended March 31, 2025.

Loss from operations was $224,422 for the six-month period ended June 30, 2026, representing a decrease of $9,538, or 4%, from $233,960 for the six-month period ended June 30, 2025.

The decrease was primarily the result of decreased expenses and headcount offset by the decrease in revenue.

The effect of inflation on

our revenue and operating results was not significant.

The effect of inflation on our revenue and operating results was not significant.

Liquidity and Capital Resources

Since inception, the Company

has incurred operating losses as it continues to invest in developing and commercializing its technology platform.

The company incurred

a net loss of $0.8 million for the three months ended March 31, 2026.

For the years ended December 31, 2025 and 2024, we incurred net

losses of approximately $2.1 million and $4.6 million, respectively.

During these periods, operations were primarily financed through

residual proceeds from the Company’s 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.

Our cash and cash equivalents as of March

31, 2026 was $0.4 million.

Our primary cash needs are for working capital requirements, headcount, capital expenditures and to fund our

We are 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, 2025 and 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.

We are pursuing initiatives

intended to improve cash flows from operations and continue 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,

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 achieved.

The Company and ASPIS entered into a Stock Purchase Agreement (the

Pursuant to the SPA, the Company will sell to ASPIS, and Aspis will purchase for cash, a number of shares of Company

common stock, at a price, equal to $1,700,000 divided by 105% of the closing price of a share of Company common stock on the day preceding

consummation.

The purchase price per share shall be 105% of such closing price.

On May 15, 2026, the Company received notification from

ASPSIS that they wired $1,200,000 pursuant to the Stock Purchase Agreement;

however, no shares had been issued under the SPA as of such

The Company expects to receive the remaining balance of the purchase price in the near future and all shares will be issued at that

Based on the Company’s historic and projected expenses and revenues, the Company expects the proceeds from the SPA to result

in the Company maintaining at least $2,500,000 in stockholders’ equity through at least December 31, 2026.

In addition, as disclosed

in Note 9, in the first quarter of 2026, the Audit Committee of the Company’s Board of Directors conducted an internal investigation

and determined that fraudulent activity involving the Company’s former Chief Financial Officer had occurred.

A promissory note was

executed in connection therewith;

Since inception, the Company has incurred operating losses as it continues to invest in developing and commercializing its technology platform.

The Company incurred a net loss of $0.2 million for the six months ended June 30, 2026.

For the years ended December 31, 2025 and 2024, we incurred net losses of approximately $2.1 million and $4.6 million, respectively.

During these periods, operations were primarily financed through residual proceeds from the Company’s 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 and another $1.7 million in June 2026 as a result of a common stock issuance.

Our cash and cash equivalents as of June 30, 2026 was $1.4 million.

Our primary cash needs are for working capital requirements, headcount, capital expenditures and to fund our operations.

We are 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, 2025 and 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.

We are pursuing initiatives intended to improve cash flows from operations and continue 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 achieved.

The Company and ASPIS entered into a Stock Purchase Agreement (the “SPA”).

Pursuant to the SPA, the Company sold to ASPIS, and ASPIS purchased for cash, a number of shares of Company common stock, at a price, equal to $1,700,000 divided by 105% of the closing price of a share of Company common stock on the day preceding consummation.

The purchase price per share was 105% of such closing price.

Based on the Company’s historic and projected expenses and revenues, the Company expects the proceeds from the SPA to result in the Company maintaining at least $2,500,000 in stockholders’ equity through at least December 31, 2026.

On June 26, 2026, the Company consummated the transaction contemplated by its Stock Purchase Agreement with ASPIS dated April 15, 2026.

Specifically, the Company issued 1,310,969 shares of Company common stock for total consideration of $1,700,000.

In addition, as disclosed in Note 9, in the first quarter of 2026, the Audit Committee of the Company’s Board of Directors conducted an internal investigation and determined that fraudulent activity involving the Company’s former Chief Financial Officer had occurred.

A promissory note was executed in connection therewith;

however, there can be no assurance that such note will be collected in part or full or at all.

of May 15, 2026, no monies have been repaid on the promissory note.

Our financial condition and

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

As of August 14, 2026, no monies have been repaid on the promissory note.

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;

3 unchanged sentences

● our capital expenditure requirements.

The following summarizes

the key components of our cash flows for the three month periods ended March 31, 2026 and 2025:

Net cash provided by (used in) operating activities

The following summarizes the key components of our cash flows for the six month periods ended June 30, 2026 and 2025:

2026 Six Month

Net cash used in operating activities $ (331,203 ) $ (1,508,972 )

Net cash used in investing activities (654,000 ) -

1 unchanged sentence

Effect of foreign exchange 119,529 125,314

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents $ 834,326 $ (1,383,658 )

Operating Activities

Net cash provided by operating

activities for the three month period ended March 31, 2026 was $143,986 as compared to cash used in operations of $641,445 for the three

month period ended March 31, 2025.

The decrease in cash used in operating activities was primarily attributable to a decrease in the net

loss of $337,782, increase in collections of accounts receivable of $642,700 and an increase in accounts payable and accrued liabilities

These increases were offset by decreases in stock-based compensation of $344,524 and prepaid expenses of $191,334.

Net cash used in operating activities for the six month period ended June 30, 2026 was $331,203 as compared to cash used in operations of $1,508,972 for the six month period ended June 30, 2025.

The decrease in cash used in operating activities was primarily attributable to lower cash absorbed in accounts receivable of $1,220,000 offset by an increase in accounts payable of $610,839.

Investing Activities

Net cash used in investing

activities for the three months ended March 31, 2026 was $327,000 as compared to $0 for the three months ended March 31, 2025.

in cash flow used in investing activities was primarily attributable to monies spent on capitalized software development for technology

attributed to the Company’s new product offerings.

Net cash used in investing activities for the six months ended June 30, 2026 was $654,000 as compared to $0 for the six months ended June 30, 2025.

The change in cash flow used in investing activities was primarily attributable to monies spent on capitalized software development for technology attributed to the Company’s new product offerings.

Financing Activities

No cash was used in or provided

by financing activities for the three months ended March 31, 2026 and 2025, respectively.

Net cash provided by financing activities was $1,700,000 for the six months ended June 30, 2026 compared to $0 for the six months ended June 30, 2025, respectively.

The increase was attributed to the sale of common stock to ASPIS.

Critical Accounting Policies and Estimates

The preparation of consolidated

financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets

and liabilities at the date of the consolidated financial statements.

Estimates and assumptions are continually evaluated and are based

on historical experience and management’s assessment of current events and other facts and circumstances that are considered to

The preparation of consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements.

Estimates and assumptions are continually evaluated and are based on historical experience and management’s assessment of current events and other facts and circumstances that are considered to be relevant.

Actual results could differ from these estimates.

Our critical accounting estimates reflecting management’s estimates and judgments are described in our

Annual Report on Form 10-K for the year ended December 31, 2025.

We have reviewed recently issued accounting pronouncements and are evaluating

the potential impact, if any, on our condensed consolidated financial statements.

Accordingly, there have been no material changes to

critical accounting policies and estimates as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

Quantitative and Qualitative Disclosures

about Market Risk

Not required under Regulation

S-K for smaller reporting companies.

Our critical accounting estimates reflecting management’s estimates and judgments are described in our Annual Report on Form 10-K for the year ended December 31, 2025.

We have reviewed recently issued accounting pronouncements and are evaluating the potential impact, if any, on our condensed consolidated financial statements.

Accordingly, there have been no material changes to critical accounting policies and estimates as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

Quantitative and Qualitative Disclosures about Market Risk

Not required under Regulation S-K for smaller reporting companies.

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