UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal quarter ended March 31, 2026
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-41458
MOBILE GLOBAL ESPORTS INC.
(Exact Name of Registrant as Specified in Its Charter)
Registrant’s telephone number, including area code: (312) 241-2550
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
As of May 12, 2026 there were 75,457,876 shares of the registrant’s common stock outstanding.
Table of Contents
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Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements. All statements other than statements of historical facts contained in this Quarterly Report may be forward-looking statements. The forward-looking statements are contained principally in the sections entitled “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” but are also contained elsewhere in this Quarterly Report. In some cases, you can identify forward-looking statements by terms such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “would,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited to, statements about:
You should carefully review and consider the information regarding certain factors which could materially affect our business, financial condition or future results set forth under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. There have been no material changes from the risk factors previously disclosed therein, except as set in the “Risk Factors” section of this Quarterly Report on Form 10-Q for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. The forward-looking statements in this Quarterly Report are only predictions, and we may not actually achieve the plans, intentions or expectations included in our forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements.
These forward-looking statements speak only as of the date of this Quarterly Report. While we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.
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PART I. FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
Condensed Consolidated Balance Sheets
As of March 31, 2026 and December 31, 2025
The accompanying footnotes are an integral part of these unaudited financial statements.
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Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
For the three months ended March 31, 2026 and 2025
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Statements of Stockholders’ Equity
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Statements of Cash Flows
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NOTES TO FINANCIAL STATEMENTS
For the Three Months Ended March 31, 2026 and 2025 (unaudited)
Note 1 – Organization and Basis of Presentation
Organization
Mobile Global Esports Inc. (“MOGO Inc” or “MGAM”) was incorporated on March 11, 2021 under the laws of the State of Delaware. The Company was originally named Elite Esports, Inc. but changed its name to Mobile Global Esports Inc. on April 21, 2021. During July 2022, MOGO Esports Private Limited (“MOGO Pvt Ltd”) was established and incorporated in India. During June 2025, MOGO Pvt LTD was determined to have no value and was removed from MOGO Inc.’s records; see Note 15. Also, during June 2025, MGAM announced the beta launch of its flagship product, Dominus Sports, integrated with PUHZL, MGAM’s proprietary artificial intelligence platform. Dominus Baseball is the first product that has been developed by MGAM. Dominus introduces true-to-life simulation gameplay by turning live sports data into full 9-inning box scores using MGAM’s proprietary algorithms. The platform supports collaborative, role-based team ownership, enabling groups of users to manage teams as owners, scouts, coordinators, and general managers in a dynamic, strategic environment. PUHZL uses a combination of deterministic modeling and predictive modeling to drive in-app conversions, delivering personalized suggestions, adaptive chat experiences, and intelligent alerts that evolve with each user’s behavior. In November 2025, MGAM acquired Reality Sports Online, Inc. (“RSO” or “Seller”), which is a premier dynasty-style Football fantasy sports platform built around real-world contract negotiations, salary-cap management, and multi-season franchise control. This acquisition unites RSO’s long-term team-management experience with Dominus Baseball’s real-time predictive gameplay, creating a fully integrated fantasy sports ecosystem that bridges instant competition and strategic ownership.
Basis of Presentation
The accompanying consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include the accounts of MOGO Inc and its majority owned subsidiary, MOGO Pvt Ltd (collectively, the “Company”). MOGO Inc owns a 99% controlling interest in MOGO Pvt Ltd (the “Dissolved Entity”). The value of the non-controlling interest in MOGO Pvt Ltd is immaterial. In a strategic shift to focus on its flagship product, Dominus Sports, the Company decided to discontinue operations at MOGO Pvt Ltd; see Note 15. During the three months ended March 31, 2026, the Company completed the dissolution and liquidation of MOGO Pvt Ltd, in accordance with ASC Top 810, Consolidation. At the time of dissolution, the Dissolved Entity did not hold any assets and did not have any outstanding liabilities. Accordingly, the subsidiary was derecognized and the carrying amount of non-controlling interest was reclassified to the parent’s additional paid-in capital. Additionally, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 830, Foreign Currency Matters, the cumulative translation adjustment was reclassified from accumulated other comprehensive loss to earnings. The dissolution did not have a material impact on the Company’s consolidated financial statements.
The functional currency of MOGO Pvt Ltd is the Indian Rupee (“INR”). The assets and liabilities of MOGO Pvt Ltd are translated to United States Dollars (“USD”) at period end exchange rates, while statements of operations accounts are translated at the average exchange rate during the period. The effects of foreign currency translation adjustments are included in other comprehensive loss, which is a component of accumulated other comprehensive loss in stockholders’ equity. All significant intercompany accounts and transactions have been eliminated in consolidation.
Interim financial statements
The unaudited condensed financial statements are prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The information furnished herein reflects all adjustments, consisting only of normal recurring adjustments, which in the opinion of management, are necessary to fairly state the Company’s financial position, the results of its operations, and cash flows for the periods presented. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America were omitted pursuant to such rules and regulations. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results expected for the year ending December 31, 2026.
Liquidity and Going Concern
The Company’s operations are subject to certain risks and uncertainties, including, among others, the Company’s need for additional financing, the ability to attract users of the Company’s offerings, competition from other companies, and reliance on key members of management.
The accompanying financial statements have been prepared on the basis that assumes that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has a limited operating history, has incurred operating losses to date, and expects to incur operating losses for the foreseeable future. In addition, the Company has shut down its operational activity in India and is launching a different business model, which could negatively impact the Company’s ability to achieve its strategic direction. Furthermore, the Company may be unable to generate significant revenue within the next year or generate sufficient cash flows to continue its operations. The Company has a new Chief Executive Officer and is working with other consultants and its board of directors to operate the Company. Management believes the current team has the necessary experience to achieve its goals.
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Note 1 – Organization and Basis of Presentation (continued)
The Company has approximately $185,000 of cash and an accumulated deficit of approximately $13,678,000 as of March 31, 2026. Management believes that the Company will need to raise additional capital to continue to operate for the next 12 months from the date of the issuance of the consolidated financial statements. The failure of the Company to raise additional capital and achieve its business objectives could have a material adverse effect on the Company’s results of operations. These conditions, among other factors, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
Note 2 – Summary of Significant Accounting Policies
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Significant estimates in the accompanying consolidated financial statements include the valuation allowance on deferred tax assets and the estimated fair value of warrants issued for services, convertible debt and other current liabilities.
Cash and Cash Equivalents
For the purpose of the statement of cash flows, cash equivalents include time deposits, certificate of deposits, amounts held in escrow and all highly-liquid debt instruments with original maturities of three months or less. As of March 31, 2026 and December 31, 2025, the Company did not have any cash equivalents. As of March 31, 2026 and December 31, 2025, the Company had cash of approximately $185,000 and $573,000, respectively.
Deferred Offering Costs
In accordance with ASC Topic 340, Other Assets and Deferred Costs, the Company capitalizes certain legal, accounting, underwriting, printing, and other direct and incremental costs related to proposed offerings of its equity or debt securities as deferred offering costs. Deferred offering costs are recorded as an asset until the related offering is consummated. Upon completion of an equity offering, the deferred offering costs are charged against the gross proceeds of the offering and recorded as a reduction of additional paid-in capital. If a planned offering is abandoned or significantly delayed such that completion of the offering is no longer probable, the deferred offering costs are expensed as incurred. Deferred offering costs that are not directly attributable to a specific and probable offering are expensed as incurred.
Capitalized Software
The Company capitalizes internal-use software based on the guidance in ASC 350-40, Intangibles-Goodwill and Other-Internal-Use Software. The Company expenses costs during the preliminary project stage and capitalizes costs incurred during the application development stage until the software is substantially complete and ready for its intended use. Once the internal-use software is ready for its intended use, costs associated with training and routine maintenance are expensed as incurred. Significant enhancements and upgrades to the software are capitalized provided it is probable that these expenditures will result in additional functionality.
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Note 2 – Summary of Significant Accounting Policies (continued)
Long-Lived Assets
The Company reviews long-lived assets for realizability on an ongoing basis. Changes in depreciation and amortization, generally accelerated depreciation and variable amortization, are determined and recorded when estimates of the remaining useful lives or residual values of long-term assets change. The Company also reviews for impairment when conditions exist that indicate the carrying amount of the assets may not be fully recoverable. In those circumstances, the Company performs undiscounted operating cash flow analyses to determine if an impairment exists. When testing for asset impairment, the Company groups assets and liabilities at the lowest level for which cash flows are separately identifiable. Any impairment loss is calculated as the excess of the asset’s carrying value over its estimated fair value. Fair value is estimated based on the discounted cash flows for the asset group over the remaining useful life or based on the expected cash proceeds for the asset less costs of disposal. Any impairment losses would be recorded in the consolidated statements of operations and comprehensive loss. During the three months ended March 31, 2026 and 2025, no impairment loss was recorded.
Fair Value of Financial Instruments
The Company is required to disclose information on all assets and liabilities reported at fair value that enables the assessment of the inputs used in determining the reported fair values. ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), establishes a hierarchy of inputs used when available. Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.
The fair value hierarchy prioritizes inputs used to measure fair value into three levels as follows:
Convertible Notes Payable
Fair Value Option (“FVO”) Election. The Company elected to account for the convertible notes issued, as described at Note 7 under the fair value option election pursuant to ASC Topic 825, Financial Instruments (“ASC 825”), as discussed below. The election was made to simplify the accounting for the instrument by avoiding the requirement to separately account for the embedded conversion feature as a derivative or to bifurcate the instrument into debt and equity components under ASC 470-20, Debt with Conversion and Other Options. The convertible notes accounted for under the FVO election are a debt host financial instrument. ASC 825 provides for the “fair value option” election, to the extent, to be afforded to in scope financial instruments, wherein bifurcation of an embedded derivative is not necessary, and the financial instrument is initially measured at its issue-date fair value and then subsequently remeasured at fair value on a recurring basis at each reporting period date. The fair value adjustment, as required by ASC 825, is recognized as a component of other comprehensive income (“OCI”) with respect to the portion of the fair value adjustment attributed to a change in the instrument-specific credit risk, with the remaining amount of the fair value adjustment recognized as non-operating income or expense in the accompanying consolidated statements of operations and comprehensive loss. With respect to the note described at Note 7, as provided for by ASC 825, the estimated fair value adjustment is presented within the accompanying statements of operations, since the change in fair value of the convertible notes payable was not attributable to instrument specific credit risk.
Other Current Liabilities
The Company evaluates future equity shares to be issued in accordance with the guidance of ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”). Equity shares to be issued for which the Company does not have sufficient legally authorized shares to be issued are recorded as a liability and remeasured at each reporting period, until the obligation to issue shares meets equity classification, at which point the liability is reclassified to equity. During 2025, the Company incurred an obligation to issue 5,300,000 shares of restricted common stock related to the asset acquisition of RSO (see Note 3) and another 1,300,000 shares of restricted common stock in conjunction with the Convertible Bridge Notes (see Note 7). These obligations to issue shares met equity classification in January 2026, at which point the Company reclassed the liabilities to equity, recording any change in fair value through earnings.
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Concentration of Credit Risk
Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash. The Company places its cash with high quality financial institutions and at times may exceed the Federal Deposit Insurance Corporation $250,000 insurance limit. The Company has not and does not anticipate incurring any losses related to this credit risk.
Revenue
The Company records revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of ASC 606 is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:
In order to identify the performance obligations in a contract with a customer, the Company assesses the promised goods or services in the contract and identifies each distinct promised good or service.
If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified as distinct.
The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both.
Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company evaluates any noncash consideration, consideration payable to the customer, potential returns and refunds, and whether consideration contains a significant financing element in determining the transaction price.
Revenue is measured based on consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a service to its customer.
Dominus Sports: During 2025, the Company established a beta league for fantasy baseball utilizing its Dominus Sports product, which provides customers the opportunity to create and own a team with three different tier pricing options. Ownership fees paid provide the customer with ownership rights over a five-year period; these ownership fees are recorded as a liability and paid out as prize money (“Team Prize Payout”) over the five-year ownership period. Customers also have the ability to buy additional micro transactions, which provide various additional rights or improvements to their teams. Micro transactions are generally recognized as revenue when billed.
RSO: During 2025, the Company acquired RSO, which is a premier dynasty-style Football fantasy sports platform built around real-world contract negotiations, salary-cap management, and multi-season franchise control. The Company earns subscription and support revenue by granting customers access to its RSO platform technology, whereby customers are able to manage a football fantasy team. Subscription and support revenue primarily includes subscription fees from customers accessing the Company’s RSO platform (“RSO Platform Services”).
Subscription and support revenues are comprised of fees that provide customers with access to the RSO Platform Services and related support and updates during the term of the arrangement. RSO Platform Services allow customers to use the Company’s software without taking possession of the software. Revenue is generally recognized ratably over the contract term. Substantially all of the Company’s subscription service arrangements are noncancellable and do not contain refund-type provisions.
The Company typically invoices its customers annually and its payment terms provide that customers pay within 30 days of invoice. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether transfer of control to the customer has occurred.
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Revenue for the three months ended March 31, 2026 and 2025 from RSO Platform Services and Dominus Sports was approximately $6,000 and nil, respectively. During the three months ended March 31, 2025, the Company received approximately $1,600 of revenue (included as part of discontinued operations; see Note 15) from prize money earned from teams that it sponsored for certain Esports competitions.
Cost of Revenue
Cost of revenue consists primarily of costs directly attributable to providing customers access to the Company’s fantasy league platforms (both Dominus Sports and RSO Platform Services), including hosting and cloud infrastructure costs, third-party data and content fees, payment processing fees, platform-related customer support costs, and amortization of capitalized software costs related to the platform. Costs incurred for sales and marketing, and general and administrative activities are excluded from cost of revenue and expensed as incurred.
Stock-based compensation
The Company recognizes compensation for grants of stock options in the consolidated statement of operations based on their fair values at the measurement date (generally the grant date). The expense associated with the grants is recognized on a straight-line basis over the service period of each award. The Company recognizes forfeitures as they occur.
Income Taxes
The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC 740”). ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented.
Basic and Diluted Earnings Per Share
Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share (“ASC 260”). Basic earnings per share (“EPS”) is based on the weighted average number of common shares outstanding. Diluted EPS assumes that all dilutive securities are converted. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.
Segments
The Company has one reportable segment, which is the development of fantasy sports. At March 31, 2026 and December 31, 2025, 100% of the Company’s consolidated total assets are located within the United States of America.
Recent Accounting Pronouncements
During 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes. ASU No. 2023-09 amends income tax disclosures to provide information to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. The new guidance requires the entity to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Company adopted ASU 2023-09 for the year ended December 31, 2025, and applied the new disclosure requirements retrospectively.
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During November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). The guidance requires public companies to disclose, in the notes to financial statements, specified information about certain costs and expenses at each interim and annual reporting period. This guidance is effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company expects to adopt this guidance in its fiscal year beginning January 1, 2027. The Company is evaluating the potential impact of this guidance on its consolidated financial statement disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). The new guidance eliminates the previous requirement to track software development costs by project stage and instead requires capitalization of eligible costs when (1) management authorizes and commits to funding the project, and (2) it is probable that the project will be completed and the software will be used as intended. The guidance also introduces the concept of significant development uncertainty, which must be resolved before costs can be capitalized. This ASU is effective for annual reporting periods beginning after December 15, 2027, including interim periods within those fiscal years. The Company is evaluating the potential impact of this guidance on its consolidated financial statements.
Note 3 – Acquisitions
During October 2025, the Company entered into an asset purchase agreement (the “APA”) with Reality Sports Online, Inc. Pursuant to the APA, the Seller agreed to sell, and the Company agreed to purchase a technology platform, intellectual property, and other related assets associated with the Seller’s business (the “Purchased Assets”).
At the closing of the transaction on November 14, 2025, the Company agreed to pay $205,000 to the Seller and issue to the Seller, 5,300,000 shares of its common stock at an aggregate fair value of $646,600. The 5,300,000 shares of common shares were issued on January 14, 2026. The acquisition of RSO was accounted for as an asset acquisition.
The entirety of the purchase price of RSO, in addition to approximately $24,000 of direct transaction costs, was allocated to the technology platform, resulting in an approximate book value of $876,000 and a useful life of three years. The asset was placed in service as of the acquisition date and included in capitalized software with approximately $73,000 of amortization expense recorded for the three months ended March 31, 2026.
Note 4 – Capitalized Software
Capitalized software consisted of the following as of:
In November 2025, the Company acquired RSO and the technology platform acquired is included in capitalized software; see Note 3. Amortization expense was approximately $92,000 and nil for the three months ended March 31, 2026 and 2025, respectively. For the three months ended March 31, 2026, the Company capitalized approximately $98,000 of software costs, with approximately $96,000 being placed in use at the time of capitalization.
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Note 5 – Fair Value Measurements
The following tables sets forth the fair value of the Company’s financial liabilities measured at fair value, based on the three-tier fair value hierarchy:
As described in Note 7, the Company elected to record the convertible notes payable using the fair value option. The Company measures these convertible notes payable to fair value using a Scenario Base Model (“SBM”) and, accordingly, classifies these liabilities as Level 3. The key inputs to the valuations are underlying interest rates, stock prices, discount rates, terms (in years), the probabilities of being held to conversion, the probabilities of default and the probabilities of being held to maturity. A change in these significant unobservable inputs might result in a significantly higher or lower fair value measurement at the reporting date. Changes to fair value of these instruments are recorded in change in fair value of convertible notes payable on the consolidated statements of operations and comprehensive loss.
As described in Note 3, in November 2025 the Company incurred an obligation to issue 5,300,000 shares of restricted common stock as part of the RSO asset acquisition. The unadjusted quoted price of the Company’s common stock was used to estimate the fair value of this current liability. These shares were issued during the three months ended March 31, 2026.
As described in Note 7, as part of the Convertible Bridge Notes, the Company incurred an obligation to issue 1,300,000 shares of restricted common stock to the holders of the Convertible Bridge Notes. The Company measures the obligation to issue shares of restricted common stock using an option pricing model. The key inputs to the valuation is the underlying stock price, which was $0.10 on the grant date, and the 20% discount used to adjust the stock price for a lack of marketability (“DLOM”). These shares were issued during the three months ended March 31, 2026.
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Note 5 – Fair Value Measurements (continued)
The following significant unobservable inputs were used in the fair value measurement of the convertible notes payable:
The following table provides a reconciliation of the estimated fair value of the convertible notes payable and other current liabilities in level 3 for the three months ended March 31, 2026:
Note 6 – Notes Payable
During 2025, the Company entered into several note payable agreements totaling $125,000. The principal and interest (at 6% per annum) will be due and payable in June 2026. Each holder of a note payable also received shares of common stock equal to the principal amount of the note payable divided by $0.25 upon issuance of the respective note payable. During the year ended December 31, 2025, there were 500,000 shares of common stock issued with the notes payable at a value of approximately $32,000. The value of the common stock issued was recorded as a debt discount on the notes payable and is amortized to interest expense over the term of the notes payable on a straight-line basis, which is not materially different from the effective interest method. The common shares issued contain certain time restrictions on when they can be sold by the recipient. Approximately $8,000 and nil was amortized to interest expense during the three months ended March 31, 2026 and 2025. As of March 31, 2026 and December 31, 2025, the notes payable, net balances of approximately $125,000 and $115,000, respectively, included approximately $6,000 and $4,000, respectively, of accrued interest. For the three months ended March 31, 2026 and 2025, the Company had approximately $10,000 and nil of interest expense.
Note 7 – Convertible Notes Payable
During August 2025, the Company issued convertible promissory notes (“August 2025 Convertible Notes”) in the total principal amount of $283,000, for total cash proceeds of $275,000. The August 2025 Convertible Notes bear interest at 10% per annum and have a maturity date of May 30, 2026 (“Maturity Date”). Any amount of principal or interest which is not paid when due shall bear interest at the rate of 22% per annum. In addition, the August 2025 Convertible Notes are convertible into the Company’s common stock beginning six (6) months after issuance at a conversion price equal to 65% multiplied by the Market Price. Market Price means the average of the three (3) lowest trading prices of the common stock during the fifteen (15) trading day period ending on the latest complete trading day prior to the conversion date. The August 2025 Convertible Notes may be prepaid by the Company at 120% beginning on the date of issuance until ninety (90) days following the issuance date and 125% beginning on the ninety first (91st) days following the issuance date and ending one hundred eighty (180) days following the issuance date.
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Note 7 – Convertible Notes Payable (continued)
Holders of the August 2025 Convertible Notes shall have the right from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following the date of the August 2025 Convertible Notes and ending on the later of: (i) the Maturity Date, or (ii) the date of payment of the Default Amount (as defined in the Article III of the note agreement), each in respect of the remaining outstanding amount to convert all or any part of the outstanding and unpaid amount of the August 2025 Convertible Notes into fully paid and nonassessable shares of common stock, as such common stock exists on the issue date, or any shares of capital stock or other securities of the Company into which such common stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”).
During the period the conversion right exists, the Company will reserve from its authorized and unissued common stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of common stock upon the full conversion of the August 2025 Convertible Notes. The Company is required at all times to have authorized and reserved four times the number of shares that is actually issuable upon full conversion of the August 2025 Convertible Notes (based on the conversion price in effect from time to time) (the “Reserved Amount”). The Reserved Amount shall be increased (and/or decreased) from time to time in accordance with the Company’s obligations hereunder and the then current Conversion Price. The Company has reserved 37,027,748 shares of common stock of the Company for issuance upon conversion of the August 2025 Convertible Notes as of March 31, 2026.
During September 2025, the Company issued convertible promissory notes (“September Convertible Note A”) in the principal amount of $150,000, for total cash proceeds of $130,000. The September Convertible Note A bears interest at 6% per annum and has a maturity date of September 15, 2026. In addition, the Notes are convertible into the Company’s common stock beginning six (6) months after issuance at a conversion price equal to 65% multiplied by the Market Price. Market Price means the average of the three (3) lowest trading prices of the common stock during the fifteen (15) trading day period ending on the latest complete trading day prior to the conversion date. The September Convertible Note A may be prepaid by the Company at 110% beginning on the date of issuance until 29 days following the issuance date; at 115% from 30 to 59 days following the issuance date; at 125% from 60-89 days following the issuance date; 130% from 90-119 days following the issuance date; 135% from 120-149 days from the issuance date; and 140% from 150-180 days following the issuance date. The Company has reserved 31,562,399 shares of common stock of the Company for issuance upon conversion of the September 2025 Convertible Note A as of March 31, 2026.
During September 2025, the Company issued a convertible promissory note (“September Convertible Note B”) in the principal amount of $165,000, for total cash proceeds of $146,500. The September Convertible Note B bears interest at 10% per annum and has a maturity date of September 8, 2026. Any principal or interest which is not paid when due shall bear interest at the rate of the lesser of (i) 22% per annum and (ii) the maximum amount permitted by law from the due date thereof until the same is paid. In addition, the September Convertible Note B is convertible into the Company’s common stock beginning six (6) months after issuance at a conversion price equal to 65% multiplied by the Market Price. Market Price means the average of the three (3) lowest trading prices of the common stock during the fifteen (15) trading day period ending on the latest complete trading day prior to the conversion date. The September Convertible Note B may be prepaid by the Company at 97% beginning on the date of issuance until ninety (90) days following the issuance date; 98% from 91-150 days following the issuance date; and 99% from 151-180 days following the issuance date. The Company has reserved 48,510,716 shares of common stock of the Company for issuance upon conversion of the September 2025 Convertible Note B as of March 31, 2026.
During November and December 2025, the Company entered into several convertible promissory bridge notes (“Convertible Bridge Notes”) totaling $325,000. The principal and interest (at 17% per annum) will be due and payable in full on the close of a qualified financing event or twelve months from the date of execution, whichever comes first; a qualified financing event shall mean a registered public offering of the Company’s common stock resulting in an uplisting of such stock to the NASDAQ, NYSE, or another national securities exchange at a per-share offering price of not less than $4.00. Each holder of a Convertible Bridge Note also received shares of common stock equal to the principal amount of the note payable divided by $0.25 upon issuance of the respective Convertible Bridge Note. During the year ended December 31, 2025, there were 1,300,000 shares of common stock issued with the Convertible Bridge Notes at a value of approximately $105,000.
The common shares issued contain certain time restrictions on when they can be sold by the recipient, thus requiring the share price to be discounted in the fair value calculation (See Note 5). The common stock issued and issuable is subject to resale restrictions under Rule 144 of the Securities Act of 1933. At the time the convertible notes were issued, the Company did not have a sufficient number of authorized shares of common stock to settle the obligation to issue certain shares. Accordingly, the obligation to issue common stock was classified as a liability and measured at fair value. There was no material change in fair value between the issuance date and December 31, 2025. The Company amended its certificate of incorporation to authorize additional shares in January 2026. Upon effectiveness of the amendment, the obligation was reclassified to equity at fair value in January 2026, with a fair value of approximately $121,000. The 1,300,000 shares of common stock were issued in January 2026.
During March 2026, the holder of September Convertible Note A converted approximately $30,000 of principal and approximately $1,000 of accrued interest into 1,653,447 shares of common stock. The Company also issued 160,439 shares of common stock for approximately $8,000 of fees incurred.
During March 2026, the holder of September Convertible Note B converted approximately $12,000 of accrued interest into 449,602 shares of common stock. The Company also issued 135,398 shares of common stock to the holder of September Convertible Note B for approximately $4,000 of fees incurred.
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On December 1, 2025, the Company entered into a Securities Purchase Agreement (the “Promissory Note Purchase Agreement”) with an accredited investor (the “Investor”), pursuant to which the Company sold the Investor an unsecured original issue discount promissory note in the principal amount of $75,000 (the “2025 Promissory Note”) for which the Company received net proceeds of $59,000, as a $6,000 interest prepayment was deducted from the initial cash receipt. The 2025 Promissory Note carries an interest rate of 10%, which shall be applied to the principal on the issuance date of the 2025 Promissory Note, and is payable on the maturity date of December 1, 2026. The 2025 Promissory Note is convertible into common stock of the Company at any time after the 180th daily anniversary of the 2025 Promissory Note or at any time following an event of default. The conversion price shall be $0.06 per share (the “Fixed Price”), however, if six months after the date of issuance the Company’s common stock trades below $0.06 for more than 5 consecutive trading days, then the Fixed Price shall be lowered to the lowest traded price during the default period. In the event that the Company’s common stock trades below such adjusted price per share for more than five consecutive trading days, then the Fixed Price shall be eliminated and the conversion price shall reset to the lowest traded price throughout the period of default and shall be re-adjusted every 21 days that the 2025 Promissory Note remains in default.
The 2025 Promissory Note provides for standard and customary events of default such as failing to timely make payments under the 2025 Promissory Note when due, the failure of the Company to timely comply with the Securities Exchange Act of 1934 reporting requirements and the failure to maintain a listing on the Overt-the-Counter (“OTC”) Markets. The 2025 Promissory Note also contains customary covenants. At no time may the 2025 Promissory Note be converted into shares of the Company’s common stock if such conversion would result in the Investor, or its affiliates owning an aggregate of more than 9.99% of the then outstanding shares of the Company’s common stock.
The Promissory Note Purchase Agreement requires that during the period while any outstanding balance is owed, the Company will reserve from its authorized and unissued common stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of common stock upon the full conversion of the 2025 Promissory Note. The Company is required at all times to have authorized and reserved two times the number of shares that is actually issuable upon full conversion of the Note (based on the conversion price of the 2025 Promissory Note in effect from time to time) initially 5,000,000 shares (the “Reserved Amount”). The Reserved Amount shall be increased from time to time in accordance with the Company’s obligations pursuant to the Promissory Note Purchase Agreement. The Company has reserved 5,000,000 shares of common stock of the Company for issuance upon conversion of the 2025 Promissory Note.
On February 2, 2026, the Company entered into a convertible promissory bridge note (“Q1 2026 Convertible Bridge Note”) totaling $25,000. The principal and interest (at 17% per annum) will be due and payable in full on the close of a qualified financing event or twelve months from the date of execution, whichever comes first; a qualified financing event shall mean a registered public offering of the Company’s common stock resulting in an uplisting of such stock to the NASDAQ, NYSE, or another national securities exchange at a per-share offering price of not less than $4.00. The holder of a Convertible Bridge Note also received 1000,000 shares of common stock, which was equal to the principal amount of the note payable divided by $0.25 upon issuance of the respective Q1 2026 Convertible Bridge Note. At the issuance of the convertible promissory bridge note, the 100,000 shares of common stock had a fair value of approximately $10,500 and the convertible note had a fair value of approximately $14,500.
On December 1, 2025 the Investor also entered into the Standby Equity Purchase Agreement (“SEPA”) with the Company; see Note 12.
The Company elected to utilize the FVO to account for the convertible notes payable. The change in fair value of the convertible notes payable at each balance sheet date, if any, is recorded in the accompanying consolidated statement of operations and comprehensive loss. See Note 6 for the fair value methodology used to fair value the convertible notes payable.
At March 31, 2026 and December 31, 2025, the fair value of the convertible promissory notes was approximately $920,000 and $780,000, respectively, which reflects an increase of approximately $140,000 in fair value for the three months ended March 31, 2026. This change in fair value is included in earnings.
The convertible notes do not contain any embedded derivatives that require separate accounting, as these notes are measured at fair value under the FVO.
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Note 8 – Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consist of the following as of:
Note 9 – Related Party Transactions
During the three months ended March 31, 2026, the Company paid payments of approximately $55,000 for product development services provided by a third-party firm owned by the Company’s Director of Engineering. The Director of Engineering entered into an employment agreement with the Company in November 2025. The services provided by the related-party firm were rendered under terms the Company believes to be no less favorable than those that could have been obtained from an unrelated third party.
During the three months ended March 31, 2026 and 2025, the Company made payments of approximately $47,000 and $156,000 to certain stockholders for consulting services provided to the Company, which included payments to the Chief Executive Officer, Chief Operating Officer and a board member. In addition, during the three months ended March 31, 2025, the Company issued 14,625,000 shares of common stock valued at approximately $103,000 to various consultants for services provided.
During the three months ended March 31, 2026 and 2025, the Company incurred a total of $7,500 and $20,350 for the quarterly board stipend payable to the Board of Directors for services provided. During the three months ended March 31, 2025, the Company issued 1,600,000 shares of common stock valued at approximately $13,000 for a portion of the payment for the board stipend.
Note 10 – Stockholders’ Equity
Preferred Stock
The Company has authorized the issuance of 10,000,000 shares of $0.0001 par value preferred stock. At March 31, 2026 and December 31, 2025, there were nil shares issued and outstanding.
Common Stock
On January 12, 2026, the Company filed a Certificate of Amendment with the Secretary of State of the State of Delaware to the Company’s Certificate of Incorporation (the “Certificate of Amendment”) to increase the number of authorized shares of the Company’s common stock from 100,000,000 to 300,000,000. As of March 31, 2026, the Company had authorized the issuance of 300,000,000 shares of $0.0001 par value common stock. At March 31, 2026 and December 31, 202, there were 64,456,391 and 54,440,074 shares issued and outstanding, respectively.
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Note 10 – Stockholders’ Equity (continued)
Warrants
At March 31, 2026, the Company had the following warrants outstanding:
Note 11 – 2025 Incentive Plan
2025 Omnibus Equity Incentive Plan
On January 12, 2026, the Company filed a Certificate of Amendment to approve the Company’s 2025 Omnibus Equity Incentive Plan (“2025 Incentive Plan”) and reserved an aggregate of 13,422,000 shares of common stock for the issuance of awards thereunder. The plan administrator may grant incentive stock options, non-statutory stock options, share appreciation rights, restricted shares, restricted share units and other share-based awards to participants to acquire shares of the Company’s common stock under the 2025 Incentive Plan.
As of March 31, 2026, the total amount of shares authorized by the Board of Directors under the 2025 Incentive Plan was 13,422,000 with a total of 7,097,000 available for issuance. During the three months ended March 31, 2026, the Company granted 6,325,000 options with a contractual term of ten years and a weighted average vesting term of 4 months.
Determining the appropriate fair value model and the related assumptions requires judgment. The fair value of each option granted is estimated using a Black-Scholes option-pricing model on the date of grant as follows:
The expected volatility rates are estimated based on the actual volatility of MGAM over the expected term. The expected term represents the average time that options that vest are expected to be outstanding. Due to limited historical data, the Company calculates the expected life based on the midpoint between the vesting date and the contractual term, which is in accordance with the simplified method. The risk-free rate is based on the United States Treasury yield curve during the expected life of the option.
The following summarizes the stock option activity for the three months ended March 31, 2026:
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Note 11 – 2025 Incentive Plan (continued)
The following table summarizes certain information about the stock options outstanding and exercisable as of March 31, 2026:
During the three months ended March 31, 2026, the Company granted 6,325,000 options with a total fair value of approximately $416,000. The company recorded approximately $165,000 of stock-based compensation expense during the three months ended March 31, 2026. At March 31, 2026, there was approximately $251,000 of total unrecognized compensation cost related to non-vested stock option compensation expense, which is expected to be recognized over a weighted-average period of 4 months.
Note 12 – Commitments and Contingencies
Legal
From time to time, the Company may be involved in various litigation matters, which arise in the ordinary course of business. There is currently no litigation that management believes will have a material impact on the financial position of the Company.
Investment Bank
During September 2025, the Company signed an agreement (“Investment Bank Agreement”) with a brokerage firm and investment bank (“Investment Bank”); in the event that the Investment Bank introduces the Company to one or more persons or entities which results in the completion of a (i) non-financing transactions, including without limitation, licensing agreement(s), joint venture(s), merger(s) and acquisition(s) (collectively referred to as a “non-financing transaction”) and/or (ii) financing transactions, including equity, debt or any combination thereof and a financing transaction to complete a non-financing transaction, the Company will be entitled to pay a success fee (the “Placement Success Fee”) equal to 8% on a S-3 retail takedown, an equity placement, a private investment in public equity (“PIPE”), or a convertible note, and 6% on each draw down of an Equity Line of Credit (“ELOC”) along with 1% upfront commitment shares registered in the S-1 for the ELOC, and 4% for a debt deal/placement. The Placement Success Fee is due and payable to the Investment Bank immediately upon the closing of the placement and shall be disbursed directly to the Investment Bank simultaneously with the delivery of the proceeds of the placement to the Company.
The Investment Bank shall be entitled to receive from the Company a Placement Success Fee on any monies received from an Introduced Party (as defined in the Investment Bank Agreement) subsequent to the final closing of the placement (the “Tail Fee”). The Tail Fee shall be payable in cash and shall be based upon whether the transaction was completed as an equity or debt financing. In the event that a placement is a combination equity/debt deal, then the placement shall be appropriately pro-rated between the two transactions. The tail is activated, and in effect for 12 months from the date of termination or expiration of this Investment Bank Agreement, or from the last funding tranche; whichever is the latter.
At the time of closing of a financing transaction during the term or the tail period, the Company also shall pay the Investment Bank equity in the form of common stock equal to 7% of the gross proceeds received.
The Company issued 917,431 shares of common stock to the Investment Bank, with an approximate fair value of $106,000, during the three months ended March 31, 2026. The Investment Bank earned this Placement Success fee for helping to originate the Standby Equity Purchase Agreement that was signed on December 1, 2025.
During November 2025, the Company signed an agreement (“Underwriting Agreement”) with the Investment Bank to act as the Company’s exclusive financial advisor, sole book-runner, sole underwriter and sole investment banker in connection with a proposed Initial Public Offering (“IPO”) or any other financing; the term of this engagement is six months. The Underwriting Agreement will provide that in an IPO, the Company will grant to Craft Capital an option, exercisable within 45 days after the closing of the IPO (“Closing”), to acquire up to an additional 15% of the total number of Shares to be offered by the Company in the IPO, solely for the purpose of covering over-allotments (the “Over-allotment Shares”).
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Note 12 – Commitments and Contingencies (continued)
The Company will pay the Investment Bank an underwriting discount or spread of 7.0% of the IPO price. The Investment Bank will also be entitled to a non-accountable expense allowance of 1% payable at the Closing (the “Non-Accountable Expense Allowance”). As additional compensation for the Investment Bank’s services, the Company shall issue to the Investment Bank or its designees at the Closing; warrants (the “Underwriter’s Warrants”) to purchase that number of Shares equal to 5.0% percent of the aggregate number of Shares sold in the IPO (including Overallotment Shares, if applicable). The Underwriter’s Warrants will be exercisable at any time and from time to time, in whole or in part, during the 5-year period commencing at the time of the IPO, at a price per share equal to 125.0% of the IPO price per Share at the IPO (and shall provide for adjustments to the exercise price and number of shares of ordinary shares for which the warrant is exercisable in the event of stock dividends, splits and recapitalizations). The Underwriter’s Warrant shall not be redeemable. The Underwriter’s Warrants may not be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities for a period of six months following the commencement of sales of the IPO, except that they may be assigned, in whole or in part, to any successor, officer, manager, member or partner of the Investment Bank (or to officers, managers or members for any such successor, member or partner), if all securities so transferred remain subject to the lock-up restriction for the remainder of the time period. The Underwriter’s Warrant will provide for registration rights (including a one-time demand registration right and unlimited piggyback rights) and customary anti-dilution provisions (for stock dividends and splits and recapitalizations) consistent with Financial Industry Regulatory Authority (“FINRA”) Rule 5110, and further, the number of shares underlying the Underwriter’s Warrants and any of the other compensation and expense payments/reimbursements shall be reduced if necessary to comply with FINRA rules or regulations.
At March 31, 2026 and December 31, 2025, the Company has paid approximately $68,000 and $50,000, respectively, in deferred offering costs.
Standy Equity Purchase Agreement (“SEPA”)
On December 1, 2025, the Company entered into a SEPA with the Investor, pursuant to which the Company may sell up to $10 million of its common stock, par value $0.0001 per share, over a period ending on the Maturity Date, defined as the first day of the month following the 24-month anniversary of the Commencement Date.
Under the SEPA, the Company issued 500,000 restricted shares of common stock as a Commitment Fee valued at approximately $79,000, which were deemed earned upon execution. The Investor is obligated to purchase, and the Company has the right (but not the obligation) to direct the Investor to purchase, additional shares (“Purchase Shares”) through written Request Notices, subject to specified Request Limits. These limits cap any single request to the lesser of $1,000,000 or 400% of the average trading volume over the 10 preceding trading days, with a minimum request of $25,000 and at least 10 business days between requests.
The purchase price for each draw equals 85% of the lowest daily closing price during the 10-day valuation period preceding the purchase date. All shares issued must be DWAC-eligible and freely tradable under an effective registration statement. Additionally, the SEPA includes a 9.99% beneficial ownership cap, preventing the Investor from acquiring shares that would put its beneficial ownership above that threshold.
The Company must maintain an effective resale registration statement, ensure continued listing on its Principal Market, and comply with restrictions preventing integration of this financing with other securities offerings. The Investor is prohibited from engaging in short sales or hedging transactions during the term of the SEPA. The SEPA also includes customary representations, warranties, and covenants by both parties, as well as indemnification provisions in favor of the Investor.
The SEPA may be terminated under several conditions, including failure of the Commencement to occur by December 31, 2025, the Company’s completion of the full $10,000,000 commitment amount, or the arrival of the Maturity Date. Certain obligations, including indemnification, survive termination.
On December 1, 2025, the Company entered into the Promissory Note Purchase Agreement with this same Investor, pursuant to which the Company sold the Investor an unsecured original issue discount promissory note in the principal amount of $75,000; see Note 7.
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Note 13 – Selling, General and Administrative Expense
Selling, general and administrative costs are expensed as incurred and primarily include personnel costs in the U.S., public filing fees, travel expenses, contractor fees, and professional fees. Advertising expense was immaterial for the three months ended March 31, 2026 and 2025.
Note 14 – Net Loss Per Share
Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the periods. Fully diluted net loss per common share is computed using the weighted-average number of common and dilutive common equivalent shares outstanding during the periods. Common equivalent shares consist of warrants that are computed using the treasury stock method.
At March 31, 2026 and December 31, 2025, there were 4,068,916 warrants outstanding. Due to the net loss incurred potentially dilutive instruments would be anti-dilutive. Accordingly, diluted net loss per share is the same as basic net loss per share for all periods presented.
Note 15 – Discontinued Operations
In a strategic shift to focus on its flagship product, Dominus Sports, the Company decided to discontinue operations at its India subsidiary, MOGO Pvt Ltd. Because the Company will no longer work with universities to promote and establish sports leagues on college campuses, the Company has determined that the disposal of this subsidiary qualifies for reporting as a discontinued operation.
During the three months ended March 31, 2025, there was approximately $1,600 of revenue from discontinued operations, respectively. During the three months ended March 31, 2025 there was approximately $6,000 of selling, general and administrative expenses from discontinued operations. Additionally, during the three months ended March 31, 2025, there was an approximate $13,000 gain on sale of property and equipment, resulting from the discontinuing of operations.
During the three months ended March 31, 2025, there was approximately $9,000 of net cash provided by operating activities for discontinued operations.
Note 16 – Subsequent Events
Under the SEPA during April 2026, the Company issued 2,500,000 restricted shares of common stock for total cash proceeds of $25,000 and stock issuance costs of $1,500.
During April 2026, the Company issued a convertible promissory note in the principal amount of $130,000, for total cash proceeds of $117,000. This promissory note bears interest at 6% per annum and has a maturity date of April 28, 2027. In addition, this note is convertible into the Company’s common stock beginning six (6) months after issuance at a conversion price equal to 65% of the lowest trading price of the common stock as reported on the OTC Markets on which the Company’s shares are then traded or any exchange upon which the Common Stock may be traded in the future, for the fifteen prior trading days including the day upon which a Notice of Conversion is received by the Company. This promissory note may be prepaid by the Company at 110% beginning on the date of issuance until 29 days following the issuance date; at 115% from 30 to 59 days following the issuance date; at 125% from 60-89 days following the issuance date; 130% from 90-119 days following the issuance date; 135% from 120-149 days from the issuance date; and 140% from 150-180 days following the issuance date. As of the date of issuance, the Company has reserved 70,921,986 shares of common stock of the Company for issuance upon conversion of this promissory note.
During April 2026, the holder of September Convertible Note A converted approximately $35,000 of principal and approximately $1,000 of accrued interest into 3,641,909 shares of common stock. The Company also issued 296,697 shares of common stock for approximately $7,000 of fees incurred.
During April 2026, the holder of September Convertible Note B converted approximately $1,000 of principal and approximately $5,000 of accrued interest into 506,450 shares of common stock. The Company also issued 153,550 shares of common stock to the holder of September Convertible Note B for approximately $3,000 of fees incurred.
During May 2026, the holder of September Convertible Note A converted approximately $10,000 of principal into 2,661,469 shares of common stock. The Company also issued 256,410 shares of common stock for approximately $2,000 of fees incurred.
During May 2026, the holder of September Convertible Note B converted approximately $6,000 of principal into 755,522 shares of common stock. The Company also issued 229,478 shares of common stock to the holder of September Convertible Note B for approximately $2,000 of fees incurred.
Management has evaluated the subsequent events for disclosure in these consolidated financial statements through May 15, 2026, the date these consolidated financial statements were available for issuance and determined that no other events have occurred that would require adjustment to or disclosure in these consolidated financial statements.
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Item 2. 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 together with our condensed financial statements and related notes appearing in this Quarterly Report on Form 10-Q. This discussion and other parts of this Quarterly Report contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Quarterly Report, our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis.
Overview
We are a technology and intellectual-property-driven gaming and digital entertainment company developing proprietary platforms that deliver skill-based, data-supported, and highly personalized interactive experiences. The Company’s focus is on creating curated engagement products that blend fantasy sports frameworks, predictive modeling, gamification mechanics, and behavioral personalization to drive user participation through direct team ownership across underserved and emerging segments of the sports entertainment marketplace.
MGAM’s current strategy emphasizes the development and commercialization of technology assets, data-driven scoring engines, mobile-first user interfaces, and proprietary behavioral-logic systems designed to support next-generation fantasy formats. These products are intended to offer users deeper strategic optionality and more immersive experiences than conventional fantasy sports models, which often rely on simplified scoring systems and limited personalization.
Components of Statements of Operations
Revenue and Cost of Revenue
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Revenue for the three months ended March 31, 2026 and 2025 from RSO Platform Services and Dominus Sports was approximately $6,000 and nil, respectively. During the three months ended March 31, 2025, the Company received approximately $1,600 of revenue (included as part of discontinued operations) from prize money earned from teams that it sponsored for certain Esports competitions.
Selling, General and Administrative Expenses
Selling, general and administrative costs are expensed as incurred and primarily include personnel costs in the U.S., public filing fees, travel expenses, contractor fees, and professional fees.
Critical Accounting Policies and Estimates
We discussed our accounting policies and significant assumptions used in our estimates in Note 2 of our audited financial statements included in our Annual Report on Form 10K for the year ended December 31, 2025, and that disclosure should be read in conjunction with the Quarterly Report on Form 10-Q. There have been no material changes during the three months ended March 31, 2026 to our critical accounting policies, significant judgments and estimates disclosed in our Annual Report on Form 10K for the year ended December 31, 2025.
Results of Operations
Three months Ended March 31, 2026 compared with the Three months Ended March 31, 2025
The following table summarizes the results of our operations for the three months ended March 31, 2026 and 2025, together with the changes in those items in dollars and as a percentage:
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Revenue for the three months ended March 31, 2026 from RSO Platform Services and Dominus Sports was approximately $6,000 compared to nil for the three months ended March 31, 2025.
Cost of revenue for the three months ended March 31, 2026 was approximately $103,000 compared to nil for the three months ended March 31, 2025. The increase in cost of revenue was primarily driven by increases of approximately $1,000 in payment processing fees; $7,000 in software subscription expense; $3,000 in hosting expense and licensing fees; and $92,000 in software development expense and amortization of capitalized software.
Selling, general and administrative expenses were approximately $628,000 for the three months ended March 31, 2026, compared with $393,000 for the three months ended March 31, 2025. The increase in general and administrative expenses was primarily driven by increases of approximately $165,000 in stock based compensation expense; $58,000 in payroll expense; and $105,000 in legal, accounting and professional expense. This increase was offset by decreases of approximately $85,000 in consulting expense and board fees and $6,000 in insurance expense.
Discontinued Operations
As a result of this strategic shift, the India subsidiary’s revenue decreased by approximately $1,600 for the three months ended March 31, 2026 compared to March 31, 2025. Additionally, selling, general and administrative expenses also decreased by approximately $6,000 for the three months ended March 31, 2026 compared to March 31, 2025. Additionally, during the three months ended March 31, 2025, the India subsidiary recorded a $13,000 gain on classification as held for sale.
Liquidity and Capital Resources
As of March 31, 2026 and December 31, 2025, we had cash of approximately $185,000 and $573,000, respectively.
We have financed operations through the issuance of common stock with warrants; notes payable; and convertible notes payable; and convertible notes payable with restricted common stock. In 2025 the Company issued 500,000 shares of common stock with warrants to purchase up to 500,000 shares of common stock (“2025 Warrants”) at an exercise price of $0.26 per share through a private stock offering. The total purchase price was $0.25 per share and warrant for total gross proceeds of $125,000. In 2025, we also issued several note payable agreements totaling $125,000 and issued several convertible promissory notes for total gross proceeds of $610,500. We also issued $325,000 in convertible notes payable, whereby the holders of these notes were entitled to receive 1,300,000 shares of restricted common stock. During the three months ended March 31, 2026, we issued $25,000 in convertible notes payable with 100,000 shares of restricted common stock.
Funding Requirements
We believe we may need to raise additional funding to meet our cash, operational and liquidity requirements for at least 12 months after the date of this quarterly report.
See “Risk Factors” for additional risks associated with our substantial capital requirements.
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Cash Flows
The following table summarizes our sources and uses of cash:
Operating Activities
Net cash used in operating activities increased by approximately $100,000 for the three months ended March 31, 2026 compared with the three months ended March 31, 2025. The increase was primarily due to a $138,000 gain on the change in fair value of other current liabilities; a $15,000 decrease in operating assets and liabilities; and a $391,000 increase in net loss, offset by a $168,000 increase in expense due to the change in the fair value of convertible notes payable, a $92,000 increase in depreciation expense and amortization of right of use assets; a $165,000 increase in non-cash expense for stock-based compensation; a $9,000 foreign currency translation adjustment to retained earnings; an $8,000 increase in amortization of debt discount; and a $2,000 increase in common stock issued for services.
Investing Activities
Net cash used in investing activities increased by approximately $84,000 for the three months ended March 31, 2026 compared with the three months ended March 31, 2025. This increase was primarily due to an $84,000 increase in software costs.
Financing activities
Net cash provided by financing activities increased by approximately $23,000 for the three months ended March 31, 2026 compared with the three months ended March 31, 2025. The change was due to an increase of financing raised from the issuance of convertible notes payable with common stock, totaling $25,000, offset by payment of deferred offering costs of approximately $2,000.
As an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), we can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected to “opt out” of this provision and, as a result, we will comply with new or revised accounting standards when they are required to be adopted by public companies that are not emerging growth companies.
Subject to certain conditions, as an emerging growth company, we rely on certain of these exemptions, including without limitation:
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We may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) the last day of 2027; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC. We may choose to take advantage of some but not all of these exemptions. Accordingly, the information contained herein may be different from the information you receive from other public companies in which you hold stock.
Smaller Reporting Company
As a “smaller reporting company,” as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in addition to providing reduced disclosure about our executive compensation arrangements and business developments, among other reduced disclosure requirements available to smaller reporting companies, we present only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure. Accordingly, the information contained herein may be different from the information you receive from other public companies in which you hold stock.
Off-Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As of March 31, 2026, management has not completed an effective assessment of the Company’s internal controls over financial reporting based on the 2013 Committee of Sponsoring Organizations (COSO) framework. Management has concluded that, during the period covered by this quarterly report, our internal controls and procedures were not effective to detect the inappropriate application of U.S. GAAP. Management identified the following material weaknesses set forth below in our internal control over financial reporting.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION.
Item 1. Legal Proceedings.
We are not currently subject to any legal proceedings or claims, however, we may become subject to legal proceedings and claims arising in connection with the normal course of our business.
Item 1A. Risk Factors.
RISK FACTORS
You should carefully review and consider the information regarding certain factors which could materially affect our business, financial condition or future results set forth under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. There have been no material changes from the risk factors previously disclosed therein, except as set forth below;
We will require additional financing in order to implement and execute our business plan, and we cannot be certain that such additional financing will be available on reasonable terms when required, or at all.
As of March 31, 2026, we had a cash balance of approximately $185,000. We believe we may need to raise additional funding to meet our cash, operational and liquidity requirements to continue operating for at least 12 months after the date of this quarterly report.
We have obtained some additional financing during the three months ended March 31, 2026. However, we continue to seek additional financing and there can be no assurance that such additional capital will be available on a timely basis, or on terms acceptable to the Company. If adequate funds are not available or are not available on acceptable terms when needed, the Company may not be able to fund its business or its expansion, take advantage of strategic acquisitions or investment opportunities or respond to competitive pressures. Such inability to obtain additional financing when needed could have a material adverse effect on the Company’s business, results of operations, cash flow, financial condition and prospects. Any future equity financing may involve substantial dilution to existing shareholders.
If we raise additional funds by issuing equity or convertible debt securities, we will reduce the percentage ownership of our then-existing stockholders, and the holders of those newly-issued equity or convertible debt securities may have rights, preferences, or privileges senior to those possessed by our then-existing stockholders and/or note holders. Additionally, future sales of a substantial number of shares of our Common Stock or other equity-related securities could depress the market price of our Common Stock in the public market, and could impair our current or future ability to raise capital through the sale of additional equity or equity-linked securities or the sale of debt. We cannot predict the effect that future sales of our Common Stock or other equity-related securities would have on the market price of our Common Stock.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During January 2026, the Company issued 5,300,000 shares of common stock in connection with the asset purchase agreement with Reality Sports Online, Inc. in exchange for a technology platform, intellectual property, and other related assets.
During January 2026, the Company issued 1,300,000 shares of common stock in connection with convertible promissory notes that were issued during the three months ended December 31, 2025, in the total principal amount of $325,000. The holders of the notes payable also received shares of common stock equal to the principal amount of the note payable divided by $0.25 upon issuance of the respective notes payable.
During February 2026, the Company issued a convertible promissory note in the total principal amount of $25,000. The holder of the note payable also received shares of common stock equal to the principal amount of the note payable divided by $0.25 upon issuance of the respective note payable. There were 100,000 shares of common stock issued with the notes payable.
As part of the Company’s Investment Bank Agreement, the Company issued 917,431 shares of common stock to the Investment Bank, with an approximate fair value of $106,000, during the three months ended March 31, 2026. The Investment Bank earned this Placement Success fee for helping to originate the Standby Equity Purchase Agreement that was signed on December 1, 2025.
The foregoing issuances were made in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Item 5. Other Information
Rule 10b5-1 Trading Plans
During the fiscal quarter ended March 31, 2026, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”
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Item 6. Exhibits
The exhibits listed on the Exhibit Index hereto are filed or furnished (as stated therein) as part of this Quarterly Report on Form 10-Q.
EXHIBIT INDEX
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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