VIPZ 10-K
VIP Play, Inc. (VIPZ)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For
the fiscal year ended
For the transition period from _________ to ________
Commission
file number:
| (Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s
telephone number:
(Former name or former address, if changed since last report)
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
(Title of each class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
Indicate
by checkmark 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.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company.
| ☐ Large accelerated filer | ☐ Accelerated filer |
| ☒ |
|
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 has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The
aggregate market value of the voting and non-voting common stock held by non-affiliates as of December 31, 2025 (the last business day
of the registrant’s most recently completed second fiscal quarter) was approximately $
As of September 28, 2026, the registrant had shares of common stock issued and outstanding.
TABLE OF CONTENTS
| ii |
CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements and information in this Annual Report may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements concerning plans, objectives, goals, projections, strategies, future events, or performance, and underlying assumptions and other statements, which are not statements of historical facts. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or other comparable terminology. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Forward-looking statements involve known and unknown risks, uncertainties, and other 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. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements represent management’s beliefs and assumptions only as of the date of this Annual Report. You should read this Annual Report completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
| iii |
PART I
Item 1. Business
Overview
VIP Play, Inc. (“VIP Play,” the “Company,” “we,” “our,” or “us”) is a Nevada corporation incorporated on April 16, 2020. During the fiscal year ended June 30, 2026, the Company completed a strategic transition from operating an online sportsbook business to focusing on the development of proprietary artificial intelligence (“AI”) technologies, software, and related intellectual property.
Until April 2026, the Company operated an online mobile sportsbook in the State of Tennessee under a Tennessee Sports Gaming Operator license. On April 6, 2026, management approved a plan to discontinue the sportsbook business as part of a broader strategic realignment. Customer wagering operations ceased on April 30, 2026, and the Company’s Tennessee Sports Gaming Operator license expired on May 24, 2026, and was not renewed. The Company also previously received interim regulatory approval in West Virginia in connection with a potential expansion of its gaming operations; however, operations never commenced, the related market access agreement was terminated, and the interim regulatory approval has since expired. Accordingly, the Company no longer conducts sportsbook operations.
Following the exit from the sportsbook business, the Company redirected its resources toward the development of artificial intelligence technologies and software applications. The Company’s current activities are focused on developing proprietary AI platforms, software solutions, and related intellectual property that management believes may be commercialized through licensing arrangements, strategic partnerships, enterprise software offerings, or other technology-based business opportunities.
The Company continues to develop internally created software and related technologies intended to support future commercial applications. As an early-stage technology company, the Company is focused on expanding its intellectual property portfolio, enhancing its software capabilities, and evaluating strategic opportunities that leverage its proprietary technology.
Our principal executive offices are located at 8400 W. Sunset Road, Suite 300, Las Vegas, Nevada 89113. Our website address is www.viplayinc.com. Information contained on our website is not incorporated by reference into this Annual Report.
Corporate History
The Company was formerly known as KeyStar Corp. and changed its name to VIP Play, Inc. on September 20, 2024. In August 2022, the Company acquired ZenSports, Inc., through which it entered the sports wagering business. The Company subsequently operated its sports wagering business under the VIP Play brand until ceasing its gaming operations in April 2026.
Business Strategy
The Company’s strategy is centered on the development of proprietary artificial intelligence technologies that management believes have the potential to address a variety of enterprise software and workflow automation opportunities. During fiscal 2026, management determined that concentrating the Company’s financial and operational resources on AI development represented the most effective long-term strategic direction.
Management intends to continue investing in internally developed software, artificial intelligence technologies, and related intellectual property while evaluating opportunities to commercialize these technologies through licensing arrangements, strategic collaborations, and other commercial relationships.
Because the Company’s AI initiatives remain in the development stage, there can be no assurance regarding the timing or extent of future commercialization or revenue generation.
Technology and Product Development
The Company develops proprietary software using internal personnel and specialized third-party consultants. Development activities include software architecture, artificial intelligence technologies, machine learning applications, workflow automation tools, and other internally developed software designed to support future commercial offerings.
The Company evaluates software development costs for capitalization in accordance with applicable accounting guidance. Costs that do not meet the criteria for capitalization are expensed as incurred.
The Company believes that ownership of proprietary software and related intellectual property will remain an important component of its long-term business strategy.
In June 2026, the Company transferred certain early-stage and pre-production artificial intelligence intellectual property and related development materials to FuzeBox AI, Inc., a related party, in exchange for a secured promissory note. The transferred assets included certain AI platform concepts, methodologies, proof-of-concept materials, development work, documentation, know-how and related rights. The Company continues to develop software and artificial intelligence technologies through its internal personnel and third-party service providers as part of its current technology strategy. See Note 13 — Related Party Transactions to the consolidated financial statements for additional information regarding the transfer.
| 1 |
The Company also utilizes related parties, including FuzeBox AI, Inc. and Eagle II, LLC d/b/a Loop TV, for certain administrative, technology, operational and management support services. Certain personnel and related costs are shared or allocated among the entities, and the Company’s Chief Technology Officer provides services to the Company through FuzeBox AI, Inc. The Company supplements these arrangements with its own employees and other third-party consultants and advisors.
Competition
The markets for artificial intelligence software and technology solutions are highly competitive and rapidly evolving. The Company competes with numerous public and private technology companies, software developers, artificial intelligence platform providers, and emerging technology businesses, many of which possess substantially greater financial, technical, marketing, and operational resources.
Management believes that the Company’s ability to compete will depend primarily upon the quality of its proprietary technology, its ability to develop commercially viable software applications, the protection of its intellectual property, strategic partnerships, and its ability to attract and retain qualified technical personnel.
Government Regulation
Although the Company no longer operates an online sportsbook, its business remains subject to various federal, state, and local laws applicable to technology companies. These include laws relating to intellectual property, privacy, cybersecurity, data protection, employment matters, taxation, and other regulations applicable to software development and technology businesses.
As the Company develops and commercializes new technologies, additional regulatory requirements may become applicable depending upon the nature of future products, services, and jurisdictions in which the Company conducts business.
Intellectual Property
The Company’s business depends substantially upon the development, acquisition, protection, and use of proprietary technology and intellectual property. The Company relies on a combination of trade secrets, copyrights, trademarks, contractual protections, confidentiality agreements, and other proprietary rights to protect its technology and software.
The Company enters into confidentiality and invention assignment agreements with employees, consultants, and contractors involved in software development and seeks to protect its proprietary technology through contractual restrictions and applicable intellectual property laws.
Management believes continued investment in internally developed software and related intellectual property will remain an important element of the Company’s long-term strategy.
Employees
As of June 30, 2026, the Company had five full-time employees. In addition, the Company engages independent consultants and advisors with specialized expertise to support software development, technology, finance, legal, and other corporate functions.
Segments
The Company’s Chief Executive Officer serves as the Chief Operating Decision Maker (“CODM”). The CODM evaluates operating performance, allocates resources, and makes strategic decisions based on consolidated financial information. Accordingly, the Company operates as a single operating and reportable segment.
| 2 |
Item 1A. Risk Factors
Investing in our common stock involves a high degree of risk. You should consider carefully the risks and uncertainties described below, together with all of the other information in this Annual Report, including the consolidated financial statements, the notes thereto and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report before deciding whether to invest in shares of our common stock. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of or that we deem immaterial may also become important factors that adversely affect our business. If any of the following risks actually occur, our business, financial condition, results of operations and future prospects could be materially and adversely affected. In that event, the market price of our common stock could decline, and you could lose part or all of your investment.
Risks Related to Our Business
We have incurred recurring losses from operations, have an accumulated deficit, and there is substantial doubt regarding our ability to continue as a going concern.
We have incurred recurring operating losses since inception and have generated negative cash flows from operations. As of June 30, 2026, we had an accumulated deficit of $72.6 million and limited liquidity. Our independent registered public accounting firm has included an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern.
Our ability to continue operations depends upon our ability to obtain additional financing, successfully execute our business strategy, and ultimately generate sufficient cash flows from operations. There can be no assurance that we will be successful in accomplishing these objectives. If we are unable to obtain additional capital when needed, we may be required to significantly reduce or discontinue operations, delay development activities, sell assets, or seek protection under applicable bankruptcy laws.
Our substantial indebtedness to a related party is payable on demand, and a demand for repayment could materially adversely affect our liquidity and ability to continue operations.
As of June 30, 2026, we had approximately $29.8 million of principal outstanding under discretionary line of credit facilities with Excel Family Partners, LLLP, an entity controlled by Bruce Cassidy, our Chairman and majority shareholder, together with approximately $4.8 million of accrued interest. These facilities are payable on demand, and additional advances are made in Excel’s sole discretion. We currently rely on these facilities as a significant source of liquidity. If Excel demands repayment of amounts outstanding or declines to provide additional advances, we may not have sufficient cash to satisfy our obligations or fund our operations and may be required to seek alternative financing, which may not be available on acceptable terms or at all. Such circumstances could materially adversely affect our liquidity, financial condition and ability to continue as a going concern.
We recently transitioned our business strategy, and our future success is uncertain.
During fiscal year 2026, we discontinued our online sportsbook operations and redirected our resources toward the development of artificial intelligence technologies and related software products. Because our continuing business differs significantly from our historical operations, investors have limited information regarding our ability to successfully execute this strategy.
The transition to an AI-focused business involves substantial risks, including developing commercially viable technologies, obtaining customer acceptance, competing against significantly larger companies, protecting proprietary technology, securing adequate financing, and generating sustainable revenues. There can be no assurance that our new business strategy will be successful.
We currently generate no revenue from our AI-focused operations and may never achieve profitability.
Following the discontinuation of our sportsbook business, our continuing operations are focused primarily on developing artificial intelligence technologies and software. We currently generate no revenue from these activities and expect that our future operating results will depend largely upon our ability to successfully commercialize our technology.
| 3 |
Commercialization may require substantial additional investments, strategic partnerships, customer adoption, regulatory compliance, and market acceptance, none of which can be assured.
The markets for artificial intelligence technologies are highly competitive and rapidly evolving.
The artificial intelligence industry is characterized by rapid technological change, evolving customer requirements, frequent introductions of new products, and increasing competition. Many of our current and potential competitors possess substantially greater financial, technical, research, marketing, and operational resources than we do.
If we fail to develop technologies that meet customer needs or fail to respond to technological changes in a timely manner, our competitive position, financial condition, and results of operations could be materially adversely affected.
We may not successfully develop or commercialize our proprietary technology.
Our business strategy depends upon our ability to develop, improve, protect, and commercialize proprietary software and artificial intelligence technologies.
Software development projects frequently encounter delays, unexpected technical challenges, increased costs, changing market demands, and uncertain commercial outcomes. Even if development efforts are completed successfully, customers may not adopt our products or services.
Our business depends upon our intellectual property.
Our future success depends substantially upon our ability to protect and maintain rights to the proprietary technology used in our business. We rely on copyrights, trademarks, trade secrets, contractual protections, confidentiality agreements and other intellectual property rights. In addition, our Chief Executive Officer retains ownership of certain specified artificial intelligence-related intellectual property developed before his employment with us or further developed during his employment outside the scope of his work for us. Any dispute regarding the ownership, scope or use of intellectual property, or unauthorized disclosure, reverse engineering or independent development by competitors, could reduce the value of our technology or adversely affect our ability to develop and commercialize our products.
We rely on third-party vendors and service providers.
Our operations depend upon third-party providers for cloud infrastructure, software development tools, cybersecurity services, data hosting, and other critical technologies.
Interruptions, security incidents, financial instability, or termination of relationships with these providers could adversely affect our ability to develop or operate our technology.
Cybersecurity incidents could materially harm our business.
Our business relies upon information technology systems and the protection of confidential information.
Cybersecurity threats continue to increase in frequency and sophistication. Unauthorized access, ransomware attacks, data breaches, denial-of-service attacks, or other cybersecurity incidents could result in business interruption, reputational damage, litigation, regulatory investigations, increased costs, or loss of proprietary information.
We depend upon key members of management.
Our success depends significantly upon the continued services of our executive officers and other key personnel.
| 4 |
The loss of any key employee or an inability to attract and retain qualified technical, operational, or management personnel could adversely affect our business.
Our business includes significant related-party transactions.
We engage in significant transactions and arrangements with related parties, including FuzeBox AI, Inc. and Eagle II, LLC d/b/a Loop TV. These arrangements include the sharing of administrative, technology, operational and management services and the allocation of certain personnel costs. In addition, during fiscal 2026 we transferred certain early-stage artificial intelligence intellectual property to FuzeBox AI, Inc. in exchange for a secured promissory note, and our Chief Technology Officer provides services to us through FuzeBox AI, Inc. These relationships may create actual or perceived conflicts of interest and may result in our dependence on related parties for certain personnel, technology and support services. If these relationships change, are terminated, or result in disputes, our operations, liquidity or ability to execute our business strategy could be adversely affected.
Future disputes or changes in these relationships could adversely affect our liquidity, operations, or financial condition.
We are involved in an unresolved dispute with Wheeling Island Gaming, Inc. relating to the termination of our Casino and Sportsbook Online Operations Agreement, which could result in significant liability and adversely affect our financial condition.
On October 24, 2025, Delaware North/Wheeling Island Gaming, Inc. (“Wheeling Island”) terminated its Casino and Sportsbook Online Operations Agreement with us and demanded payment of a $4.5 million termination fee. The agreement had not been approved by the West Virginia Lottery Commission because it contained provisions that would have provided us with ownership of certain customer data, and a representative of the Commission advised us that such provisions were contrary to West Virginia law. We dispute Wheeling Island’s position that a termination fee is due. Wheeling Island has prepared, but as of September 17, 2026 had not filed, an arbitration complaint against us. The parties have engaged in settlement discussions but have not reached an agreement.
If Wheeling Island commences arbitration or other proceedings against us, we may incur significant legal fees and other costs in defending the matter, regardless of its ultimate outcome. If the dispute is resolved adversely to us, we could be required to pay all or a substantial portion of the $4.5 million termination fee sought by Wheeling Island, as well as potentially other amounts, which could have a material adverse effect on our liquidity, financial condition and results of operations. In addition, any settlement of the dispute could require us to make a significant payment. There can be no assurance that we will prevail in the dispute or that any settlement will be reached on terms favorable to us.
Risks Related to Regulation
Future laws regulating artificial intelligence, privacy, cybersecurity, or data protection could adversely affect our business.
Artificial intelligence technologies continue to receive increasing regulatory attention throughout the United States and internationally.
Future legislation or regulations governing AI, automated decision-making, privacy, cybersecurity, data protection, intellectual property, or related technologies could increase our compliance costs, restrict our business activities, delay commercialization efforts, or otherwise adversely affect our business.
Risks Related to Our Financial Reporting
We have identified material weaknesses in our internal control over financial reporting.
Management has identified material weaknesses in our internal control over financial reporting.
Although we continue implementing remediation measures, there can be no assurance that these efforts will be successful or that additional material weaknesses will not be identified in the future.
| 5 |
Our financial statements require significant estimates and judgments.
Preparation of our financial statements requires management to make estimates involving complex accounting matters, including stock-based compensation, derivative liabilities, accounting for software development costs, impairment analyses, valuation allowances, and other estimates.
Actual results may differ materially from these estimates.
Risks Related to Our Capital Structure
Bruce Cassidy beneficially controls a substantial percentage of our voting power.
Bruce Cassidy beneficially owns a significant percentage of our outstanding voting securities and is therefore able to significantly influence matters requiring stockholder approval, including the election of directors, mergers, financings, amendments to our organizational documents, and other significant corporate actions.
This concentration of ownership may discourage transactions that other stockholders believe would be beneficial.
Future issuances of equity securities may substantially dilute existing stockholders.
We may issue additional shares of common stock, preferred stock, options, warrants, convertible securities, or other equity-linked instruments to raise capital, satisfy contractual obligations, compensate employees or consultants, or complete strategic transactions.
Such issuances could significantly dilute existing stockholders.
Our outstanding convertible debt and related-party financing could result in substantial dilution.
Certain of our outstanding related-party debt instruments contain conversion features that permit Excel Family Partners, LLLP, an entity controlled by our Chairman and principal stockholder, to convert outstanding indebtedness into shares of our common stock at prices determined under the applicable agreements. As of June 30, 2026, approximately $29.8 million of principal was outstanding under our related-party line of credit facilities, certain of which are convertible into shares of our common stock. We also have outstanding warrants, stock options, restricted stock units and other convertible debt. The exercise, vesting or conversion of these securities could result in the issuance of a substantial number of additional shares of our common stock, significantly dilute the ownership interests of existing stockholders and adversely affect the market price of our common stock.
Risks Related to Ownership of Our Common Stock
Our common stock price may be volatile.
The market price of our common stock may fluctuate significantly due to factors beyond our control, including changes in operating results, financing activities, market conditions, analyst reports, technological developments, regulatory changes, or general economic conditions.
Our common stock may continue to be considered a penny stock.
Trading in penny stocks is subject to additional regulations that may reduce trading activity and adversely affect liquidity.
| 6 |
We have never paid cash dividends and do not expect to do so.
We have never declared or paid cash dividends and currently intend to retain any future earnings to fund the development and growth of our business.
Future sales of our common stock could adversely affect our stock price.
Sales of substantial amounts of our common stock, or the perception that such sales may occur, could adversely affect the market price of our common stock.
As a Smaller Reporting Company, our public disclosures are less extensive than those of larger public companies.
Because we qualify as a Smaller Reporting Company, we are permitted to provide reduced disclosures in our SEC filings. Investors may therefore receive less information than they would from companies that are not eligible for these accommodations.
Item 1B. Unresolved Staff Comments
None
Item 1C. Cybersecurity
The Company has established processes designed to identify, assess, manage, and respond to cybersecurity risks that could materially affect its business, operations, or financial condition. These processes are integrated into the Company’s overall enterprise risk management activities and include the implementation of administrative, technical, and physical safeguards intended to protect the confidentiality, integrity, and availability of the Company’s information systems and data.
The Company’s cybersecurity program incorporates policies and procedures designed to monitor network activity, manage access to systems, protect cloud-based infrastructure, respond to security incidents, and periodically evaluate the effectiveness of security controls. The Company also utilizes third-party service providers for certain information technology and cloud infrastructure services and considers cybersecurity risks associated with those providers as part of its overall risk management process.
In August 2025, the Company identified a software defect in its information technology infrastructure that resulted in unauthorized player withdrawals, as further described in Note 12 to the consolidated financial statements. Management evaluated the incident and determined that it did not materially affect the Company’s business strategy, results of operations, or financial condition. The Company has not identified any cybersecurity threats, including as a result of this incident, that have materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations, or financial condition.
Our Board of Directors (the “Board”) oversees risks from cybersecurity threats as part of its general oversight of our risk management activities. Senior management informs the Board of significant cybersecurity risks and material cybersecurity incidents, as appropriate.
Our cybersecurity program is overseen by senior management, including our Chief Technology Officer (“CTO”), who provides services to us through Fuzebox AI, Inc. The CTO is responsible for overseeing cybersecurity and information technology matters, evaluating information security risks, and coordinating our response to cybersecurity incidents. The CTO has significant technology and engineering experience, including experience with technology solutions in regulated industries, payment solutions, fraud automation and data processing. The CTO communicates with senior management regarding significant cybersecurity risks, emerging threats and cybersecurity incidents, as appropriate.
| 7 |
Assessment and Oversight
The
Company periodically evaluates its cybersecurity controls through internal assessments and
Item 2. Properties
The Company leases shared office space on a month-to-month basis located at 8400 West Sunset Road, Suite 300, Las Vegas, Nevada 89113, which serves as its principal executive offices.
Management believes its current facilities are adequate to meet its present operating requirements.
Item 3. Legal Proceedings
On October 24, 2025, Delaware North/Wheeling Island Gaming, Inc. (“Wheeling Island”) terminated its Casino and Sportsbook Online Operations Agreement with the Company and demanded payment of a $4.5 million termination fee. The agreement had not been approved by the West Virginia Lottery Commission because it contained provisions that would have provided the Company with ownership of certain customer data, and a representative of the Commission advised the Company that such provisions were contrary to West Virginia law. The Company disputes Wheeling Island’s position that a termination fee is due. Wheeling Island has prepared, but as of September 17, 2026 had not filed, an arbitration complaint against the Company. The parties have engaged in settlement discussions but have not reached an agreement.
For additional information regarding this matter, see Note 12 — Commitments and Contingencies to the consolidated financial statements, which is incorporated herein by reference.
Item 4. Mine Safety Disclosures
Not applicable.
PART II
Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock is quoted on the OTC Markets Group’s OTCQB Venture Market under the trading symbol “VIPZ.”
Holders of Our Common Stock
As of September 28, 2026, there were 73,944,386 shares of our common stock outstanding, held by approximately 147 stockholders of record. Because many of our shares are held by brokers and other institutions on behalf of stockholders, the number of record holders does not represent the total number of beneficial owners of our common stock.
| 8 |
Dividend Policy
We have never declared or paid cash dividends on our common stock and currently intend to retain any future earnings to fund the development and growth of our business. Accordingly, we do not anticipate paying cash dividends in the foreseeable future.
Any future determination to declare cash dividends will be made at the discretion of our Board of Directors and will depend upon our financial condition, results of operations, capital requirements, contractual restrictions, and other factors the Board deems relevant.
Under the Nevada Revised Statutes, we may not declare or pay dividends if, after giving effect to the distribution:
| ● | we would not be able to pay our debts as they become due in the ordinary course of business; or |
| ● | our total assets would be less than the sum of our total liabilities plus the amount needed to satisfy the preferential rights of shareholders whose rights are senior to those receiving the distribution. |
Recent Sales of Unregistered Securities
During the fiscal year ended June 30, 2026, all sales of unregistered securities have previously been reported in Current Reports on Form 8-K or Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.
Purchase of Equity Securities by the Issuer and Affiliated Purchasers
Neither the Company nor any affiliated purchaser repurchased any shares of the Company’s equity securities during the quarter ended June 30, 2026.
Item 6. [Reserved]
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the related notes thereto and other financial information appearing elsewhere in this Annual Report. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report, particularly in the section titled “Risk Factors.”
Overview
During the fiscal year ended June 30, 2026, the Company completed a significant strategic transformation. In April 2026, management approved a plan to discontinue the Company’s Tennessee online sportsbook operations and redirect its resources toward the development of proprietary artificial intelligence (“AI”) technologies, software applications, and related intellectual property. Customer wagering operations ceased on April 30, 2026, and the Company’s Tennessee Sports Gaming Operator license expired on May 24, 2026.
The Company’s current operations consist principally of software development activities, corporate administration, financing activities, and the continued development of proprietary AI technologies. As of June 30, 2026, and through the date of this Annual Report, the Company’s AI and software technologies remained in the development stage and had not generated revenue from commercial operations. The Company continues to develop and evaluate potential applications and commercialization opportunities for these technologies. The timing and extent of commercialization will depend on the successful development of the Company’s technologies and its ability to identify and secure customers and other commercial opportunities. Accordingly, the Company may experience a period of limited or no revenue while these development and commercialization efforts continue, and operating results during this period are not necessarily indicative of future operating performance.
| 9 |
Results of Operations
Gaming Revenue and Cost of Gaming Revenue
Gaming revenue was approximately $184 thousand for the year ended June 30, 2026, compared to negative gaming revenue of approximately $86 thousand for the year ended June 30, 2025. Gaming revenue reflects the Company’s historical online sportsbook operations in Tennessee, which ceased accepting customer wagers on April 30, 2026.
Cost of gaming revenue was approximately $1.2 million for the year ended June 30, 2026, compared to approximately $510 thousand for the year ended June 30, 2025. The increase primarily reflects gaming platform costs, including fees paid to Kambi as the betting service provider for the VIP Play application, as well as promotional and bonus-bet costs, payment processing fees, and other direct gaming costs incurred through the wind-down of the sportsbook operations. As a result, the Company incurred a net gaming loss of approximately $1.0 million during fiscal 2026 compared to approximately $596 thousand during fiscal 2025.
The Company ceased its sportsbook operations during fiscal 2026 and does not expect to generate gaming revenue from these operations in future periods. The cessation of the Company’s sportsbook operations did not meet the criteria for presentation as discontinued operations under ASC 205-20; accordingly, the historical results of the sportsbook operations are included in continuing operations for all periods presented.
Salaries and Wages
Salaries and wages increased to approximately $5.2 million for the year ended June 30, 2026 from approximately $4.5 million during the prior year.
The increase was primarily attributable to personnel costs associated with the Company’s software development activities, including artificial intelligence initiatives, together with stock-based compensation recognized during the year.
General and Administrative Expenses
General and administrative expenses increased to approximately $3.8 million for the year ended June 30, 2026, compared to approximately $2.6 million for the prior year, primarily due to a $1.2 million write-off of prepaid assets related to the Company’s gaming operations. General and administrative expenses otherwise primarily consist of public company costs, professional fees, consulting expenses, insurance, and other corporate overhead.
Depreciation and Amortization
Depreciation and amortization expense decreased to approximately $458 thousand for the year ended June 30, 2026 from approximately $993 thousand during the prior year.
Asset Impairment
The Company recognized impairment expense of approximately $831 thousand during the year ended June 30, 2026, related to the developed technology and other intangible assets associated with the Company’s VIP Play gaming application, compared to approximately $5.9 million during the year ended June 30, 2025, related to the intangible assets associated with the Company’s former ZenSports application.
Sales and Marketing
Sales and marketing expense totalled approximately $590 thousand during fiscal 2026 compared to $1.1 million during fiscal 2025. The decrease was primarily attributable to reduced marketing and promotional activities associated with the Company’s sportsbook operations as those operations were wound down during fiscal 2026.
Interest Expense
Interest expense and related-party interest expense remained significant during fiscal 2026 as the Company continued to rely on related-party financing and convertible debt to fund operations.
| 10 |
Interest expense totalled approximately $173 thousand, while related-party interest expense totalled approximately $3.2 million during the current year, compared to approximately $483 thousand and $3.0 million, respectively, during the prior year.
Gain on Change in Fair Value of Derivative Liabilities
The Company recognized a gain on the change in fair value of derivative liabilities of approximately $5.7 million during fiscal 2026 compared to approximately $47 thousand during fiscal 2025.
The derivative liabilities arise from embedded conversion features associated with certain related-party line of credit arrangements and convertible promissory notes. These liabilities are remeasured at fair value each reporting period, with changes recognized in earnings. The increase in the gain during fiscal 2026 primarily resulted from changes in the estimated timing and economics of conversion under the underlying instruments, which reduced the estimated fair value of the derivative liabilities, partially offset by changes in other valuation assumptions, including expected volatility. The resulting gain was noncash.
Net Loss
Net loss for fiscal 2026 totalled approximately $9.5 million, compared to approximately $19.2 million during fiscal 2025.
The decrease in net loss was primarily attributable to the approximately $5.7 million non-cash gain recognized on the change in fair value of derivative liabilities during fiscal 2026 and the decrease in impairment expense from approximately $5.9 million in fiscal 2025 to approximately $0.8 million in fiscal 2026. These decreases were partially offset by an approximately $1.2 million increase in general and administrative expenses associated with the write off of gaming-related prepaid assets recognized during fiscal 2026 and higher salaries and wages.
Liquidity and Capital Resources
Liquidity is the ability of the Company to generate sufficient cash to fund its operations, satisfy its obligations, and support future business activities. During the year ended June 30, 2026, the Company completed the strategic exit of its Tennessee sportsbook operations and redirected its resources toward the development of artificial intelligence technologies, software applications, and related intellectual property. As a result, the Company’s future liquidity requirements are expected to be driven primarily by software development activities, corporate operating expenses, working capital requirements, and investments in new technologies.
As of June 30, 2026, the Company had current assets of approximately $887 thousand, current liabilities of $42.2 million, and a working capital deficit of $41.3 million, compared to current assets of $2.9 million, current liabilities of $35.5 million, and a working capital deficit of $32.7 million as of June 30, 2025.
Management expects to continue funding operations through a combination of cash on hand, borrowings under related-party financing arrangements, primarily with Excel Family Partners, LLLP, and additional capital raising activities as necessary. The Company is dependent on continued related-party financing to fund a significant portion of its operating and liquidity needs. If such financing were reduced, terminated, or otherwise unavailable, the Company would need to obtain alternative sources of financing and/or reduce or delay expenditures, including expenditures related to its software development activities. There can be no assurance that related-party or other financing will continue to be available on acceptable terms, or at all.
Operating Activities
Net cash used in operating activities during the year ended June 30, 2026 was $8.9 million, compared to $10.4 million during the year ended June 30, 2025.
| 11 |
Operating cash flows primarily reflected the Company’s net loss, adjusted for significant non-cash items, including gains from changes in the fair value of derivative liabilities, stock-based compensation, depreciation and amortization, and changes in working capital accounts. Cash used in operating activities also reflected the continued funding of corporate operations and software development activities.
Investing Activities
Net cash used in investing activities during the year ended June 30, 2026 was $406 thousand, compared to $1.0 million during the year ended June 30, 2025.
Investing activities during fiscal 2026 consisted of approximately $338 thousand of capitalized software development costs, primarily related to enhancements to the Company’s sportsbook application, and $68 thousand of other gaming-related intangible assets.
Financing Activities
Net cash provided by financing activities during the year ended June 30, 2026 was $9.0 million, compared to $11.4 million during the year ended June 30, 2025.
Financing activities during fiscal 2026 primarily consisted of approximately $10.2 million of borrowings under the Company’s related-party line of credit and $100 thousand of proceeds from convertible notes, partially offset by approximately $500 thousand of convertible note repayments and $858 thousand of repayments of other notes payable.
Going Concern
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As of June 30, 2026, the Company had an accumulated deficit of $72.6 million, incurred a net loss of $9.5 million during the year ended June 30, 2026, and used $8.9 million of cash in operating activities. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
During fiscal 2026, the Company completed the strategic exit of its Tennessee sportsbook operations and redirected its resources toward artificial intelligence technologies, software development, and related intellectual property. Management intends to continue funding operations through existing related-party financing arrangements and additional equity or debt financings while continuing to develop its technology platform and pursue commercialization opportunities.
The Company’s ability to continue as a going concern is dependent upon its ability to obtain additional financing, generate future cash flows from operations, and successfully execute its business strategy. There can be no assurance that additional financing will be available on acceptable terms, or at all.
The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result should the Company be unable to continue as a going concern.
Critical Accounting Estimates
The Company’s derivative liabilities are measured at fair value using a Monte Carlo simulation model and are classified within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs. The valuation requires management to make estimates and assumptions regarding expected stock price volatility, risk-free interest rates, expected term and other contractual terms of the underlying instruments. Changes in these assumptions could result in materially different fair value measurements and corresponding gains or losses recognized in the consolidated statements of operations. See Note 8 — Derivative Liabilities for additional information regarding the valuation methodology and assumptions used.
| 12 |
The Company reviews long-lived assets, including finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The impairment assessment requires management to estimate future undiscounted cash flows and, when applicable, the fair value of the related assets. These estimates involve significant judgment regarding expected future operating performance, useful lives and other assumptions. Changes in these assumptions could result in additional impairment charges. During the year ended June 30, 2026, the Company recognized impairment expense in connection with the cessation of its gaming operations. See Note 4 — Intangible Assets for additional information.
The Company measures stock-based compensation based on the fair value of equity awards. The fair value of stock options and certain warrants is estimated using the Black-Scholes option pricing model, which requires assumptions regarding expected stock price volatility, risk-free interest rates, expected term and dividend yield. Changes in these assumptions could affect the estimated fair value of awards and the amount of compensation expense recognized. See Note 10 — Stock-Based Compensation for additional information.
Off-Balance Sheet Arrangements
As of June 30, 2026, there were no off-balance sheet arrangements.
Emerging Growth Company Status
The Company no longer qualifies as an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act, and are not required to provide the information under this Item.
Item 8. Financial Statements and Supplementary Data
The information required by this Item is incorporated herein by reference to the consolidated financial statements and supplementary data set forth in Item 15 - “Exhibits and Consolidated Financial Statement Schedules” of Part IV of this Annual Report.
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
On October 15, 2025, the Company dismissed Grassi & Co., CPAs, P.C. (“Grassi”) as its independent registered public accounting firm and engaged Frank, Rimerman + Co. LLP (“Frank Rimerman”) as its independent registered public accounting firm, effective immediately. The decision to change independent registered public accounting firms was approved by the Company’s Board of Directors.
Grassi’s audit reports on the Company’s financial statements for the fiscal years ended June 30, 2025 and 2024 did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that Grassi’s audit reports for each of those fiscal years contained an explanatory paragraph regarding substantial doubt about the Company’s ability to continue as a going concern. During those fiscal years and the subsequent interim period through October 15, 2025, there were no disagreements with Grassi on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, and there were no reportable events, in each case as described in Item 304(a)(1) of Regulation S-K.
During the fiscal years ended June 30, 2025 and 2024 and the subsequent interim period through September 30, 2025, neither the Company nor anyone acting on its behalf consulted with Frank Rimerman regarding the application of accounting principles to a specified transaction, the type of audit opinion that might be rendered on the Company’s consolidated financial statements, or any matter that was the subject of a disagreement or reportable event as described in Item 304 of Regulation S-K.
| 13 |
Item 9A. Controls and Procedures
Evaluation of Effectiveness of Disclosure Controls and Procedures
Management, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Accounting Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of June 30, 2026.
Based on that evaluation, the Chief Executive Officer and Chief Accounting Officer concluded that the Company’s disclosure controls and procedures were not effective as of June 30, 2026 due to the material weakness in internal control over financial reporting described below.
Management’s Annual Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles in the United States.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of June 30, 2026 using the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Accordingly, even effective internal controls can provide only reasonable assurance with respect to financial statement preparation and presentation.
Based on this assessment, management concluded that the Company’s internal control over financial reporting was not effective as of June 30, 2026 because the material weakness described below continued to exist.
Material Weaknesses in Internal Control Over Financial Reporting
As previously disclosed, management identified a material weakness in internal control over financial reporting related to:
| ● | limited segregation of duties due to the size of the accounting staff; |
| ● | insufficient review controls over certain complex accounting and financial reporting matters; and |
| ● | insufficient information technology controls to prevent or detect, on a timely basis, unauthorized access to certain financial reporting systems. |
The insufficient review controls over complex accounting and financial reporting matters contributed to errors in the Company’s accounting that resulted in revisions to previously issued financials statements, as described in Note 2 to the consolidated financial statements.
Because of this material weakness, there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements would not be prevented or detected on a timely basis.
Remediation Activities
During fiscal 2026, management continued implementing measures designed to strengthen the Company’s internal control over financial reporting and address the identified material weakness. These efforts included:
| ● | utilizing third-party accounting and financial reporting professionals to supplement the Company’s internal accounting resources and provide additional review and technical accounting support in significant and complex accounting areas; |
| 14 |
| ● | enhancing management review and documentation over significant accounting matters, including complex financing transactions, stock-based compensation, impairment assessments, and income tax accounting; and |
| ● | implementing compensating review controls where segregation of duties is limited due to the size of the Company’s accounting staff. |
Management believes these measures have strengthened the Company’s financial reporting processes. However, the material weakness will not be considered remediated until the applicable controls have been fully implemented and have operated effectively for a sufficient period of time. Accordingly, the material weakness had not been remediated as of June 30, 2026, and management intends to continue its remediation efforts during fiscal 2027.
Auditor Attestation Report
This Annual Report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting because the Company is a non-accelerated filer and is therefore exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act.
Changes in Internal Control Over Financial Reporting
During the fourth quarter of fiscal 2026, management continued implementing the remediation activities described above, including enhanced management review and the use of third-party accounting and financial reporting professionals to supplement the Company’s internal accounting resources. Other than these ongoing remediation activities, there were no changes in the Company’s internal control over financial reporting during the quarter ended June 30, 2026 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Item 9B. Other Information
During
the three months ended June 30, 2026, none of the Company’s directors or officers
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
The following table sets forth the names and ages of our current directors and executive officers as of the date of this Annual Report on Form 10-K, their positions with us and the date they were first appointed to such positions.
| Name | Age | Position | Date First Appointed | |||
| Bruce Cassidy | 76 | Secretary and Director of the Board | December 17, 2021 | |||
| Les Ottolenghi | 63 | Chief Executive Officer, President and Director | June 2, 2025 | |||
| Jacob Shrader | 26 | Chief Gaming & Experience Officer | November 1, 2023 |
Bruce Cassidy: From 2019 to 2025, Mr. Cassidy served as a member of the board of directors of Loop Media, Inc. (OTC: LPTV), a Glendale, California-based multichannel digital platform media company that offers self-curated, premium videos to customers in OOH venues and D2C on their personal in-home and mobile devices. From 2020 to 2025, he served as chairman of the board of Assisted 4 Living Inc. (OTC: ASSF), a Bradenton, Florida-based entity that provides, among other services, daily medical care for medically fragile and chronically ill children. Bruce also currently serves as chairman of the board of Segmint, Inc. He serves as Chairman of the Sarasota Green Group, the Executive Chairman of each of CelebYou LLC and CelebYou Productions, and is on the board of directors of Selinsky Force LLC. He was also the founding investor and served on the board of directors of Ohio Legacy Corp. Previously, Mr. Cassidy was the founder and CEO of Excel Mining Systems from 1991 until its sale in 2007 to Orica Mining Services, and from 2008 to 2009, served as the President and CEO of one of its subsidiaries, Minora North & South Americas. Bruce currently serves as President of The Concession Golf Club in Sarasota, Florida.
| 15 |
Les Ottolenghi: The year prior to joining us, Mr. Ottolenghi served as the Chief Transformation Officer and Commercial Officer of Lee Enterprises, Incorporated. Mr. Ottolenghi currently serves as Chief Executive Officer of FuzeBox AI, Inc. From June 2021 to April 2024, he served as Executive Vice President and Chief Information and Technology officer for Stride Inc., leading the education company’s digital transformation, artificial intelligence and digital products initiatives. Immediately prior to that, he served as Executive Vice President and Global Chief Information Officer for Caesars Entertainment Corp. He also previously served as Global Chief Information Officer for Las Vegas Sands Corp. and Chief Information Officer for Carlson Wagonlit Travel, Inc. Mr. Ottolenghi has been recognized as Chief Information Officer of the year by CIO Magazine, Gartner Group and Computerworld. Also, he co-founded the world’s largest public technology innovation center, BlackFire, in Las Vegas. He received a Bachelor of Arts degree from Duke Trinity College in 1984, and a Master of Business Administration degree from Emory University Goizeuta School of Business in 1994.
Jacob Shrader: Mr. Shrader has spent the majority of his professional career as a member of ZenSports Inc. and the Company following the acquisition of ZenSports Inc. in June 2022. He originally joined ZenSports Inc. in 2020 as the General Manager of Esports, and has served multiple roles within the Marketing, Business Development, and Operational groups, most recently as the Chief Operations Officer of the Company. Mr. Shrader graduated from Tufts University with a Bachelor’s Degree in Economics where he provided insight into the gaming space to both the private and public sector through his work in the financial industry as well as independent journalism channels.
Term of Office
Each of our directors is elected or appointed to hold office for a one-year term expiring at the next annual meeting of our stockholders or until his successor has been elected or appointed and qualified, or until his earlier death, resignation, or removal. There are no agreements with respect to the election of directors. Our executive officers are appointed by the Board and serve at the discretion of the Board or until they resign.
Family Relationships
There are no family relationships between or among the directors, executive officers or persons nominated or chosen by us to become directors or executive officers.
Involvement in Certain Legal Proceedings
None of our directors and executive officers has been involved in any legal or regulatory proceedings, as set forth in Item 401 of Regulation S-K, during the past ten years.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors, executive officers and persons who beneficially own more than 10% of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC.
Based solely on our review of reports filed electronically with the SEC and other information known to us, we believe that all reports required under Section 16(a) during the fiscal year ended June 30, 2026 were timely filed, except that (i) Les Ottolenghi did not timely report one transaction relating to an award of restricted stock units, resulting in one unfiled Form 4 and one unfiled Form 5, and (ii) Bruce Cassidy and his affiliated entity, Excel Family Partners LLLP, did not timely report 46 transactions relating to additional indebtedness under an outstanding line of credit, resulting in 44 unfiled Forms 4 and one unfiled Form 5.
| 16 |
Code of Ethics
We have not yet adopted a written code of ethics applicable to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. Given our relatively small management team and limited number of directors, the Board has historically addressed matters involving ethical conduct and compliance directly. The Board intends to consider the adoption of a formal code of ethics as we continue to develop our corporate governance policies and procedures.
The Board intends to consider the adoption of a formal Code of Ethics as part of the Company’s continuing corporate governance initiatives.
Board Leadership Structure
As of the date of this Annual Report, the Board of Directors consists of two members.
The Board has determined that, given the Company’s current size and stage of development, this leadership structure is appropriate and allows the Board to effectively oversee the Company’s business and strategic direction.
Board Meetings
During the fiscal year ended June 30, 2026, the Board acted through meetings and unanimous written consents in accordance with Nevada law and the Company’s Bylaws.
Director Independence
The Company does not currently have any independent directors as defined under Rule 5605(a)(2) of the Nasdaq Listing Rules, which the Board has adopted as its standard for evaluating director independence.
Audit Committee
The Company does not currently maintain a separately designated Audit Committee. Accordingly, the full Board performs the functions that would otherwise be performed by an Audit Committee.
Audit Committee Financial Expert
Because the Company does not currently have a separately designated Audit Committee, it has not designated an audit committee financial expert as defined under SEC rules.
Compensation Committee
The Company does not currently maintain a Compensation Committee. Compensation decisions are determined by the Board of Directors.
Nominating Committee
The Company does not currently maintain a Nominating Committee. Director nominations are considered by the full Board.
Stockholders wishing to recommend candidates for election to the Board may submit recommendations in writing to the Company’s principal executive offices.
| 17 |
Insider Trading Policy
Item 11. Executive Compensation.
The following table sets forth all compensation awarded to, earned by, or paid to the following “named executive officers,” which is defined as follows:
| (a) | all individuals serving as our principal executive officer (PEO) or acting in a similar capacity during our fiscal year ended June 30, 2026; and | |
| (b) | our two most highly compensated executive officers other than the PEO who were serving as executive officers at the end of our fiscal year ended June 30, 2026 |
Summary Compensation Table
| Name | Title | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||
| Bruce Cassidy | Secretary and Chairman of the Board (1) | 2026 | - | - | - | - | - | - | ||||||||||||||||||||||
| Bruce Cassidy | Chief Executive Officer, Principal Executive Officer and Secretary (1) | 2025 | - | - | - | - | - | - | ||||||||||||||||||||||
| Jacob Shrader | Chief Gaming and Experience Officer (2) | 2026 | 235,334 | - | - | - | - | 235,334 | ||||||||||||||||||||||
| Jacob Shrader | Chief Operations Officer (2) | 2025 | 235,200 | 14,286 | - | 21,096 | - | 270,582 | ||||||||||||||||||||||
| James Mackey | Chief Financial Officer, Treasurer, Principal Financial Officer and Principal Accounting Officer (3) | 2026 | 37,630 | - | - | - | 37,630 | |||||||||||||||||||||||
| James Mackey | Chief Financial Officer, Treasurer, Principal Financial Officer and Principal Accounting Officer (3) | 2025 | 299,821 | 14,286 | - | 6,884 | - | 320,991 | ||||||||||||||||||||||
| Les Ottolenghi | Chief Executive Officer, Principal Executive Officer and President (4) | 2026 | 461,733 | - | 1,529,737 | - | - | 1,991,470 | ||||||||||||||||||||||
| Les Ottolenghi | Chief Executive Officer, Principal Executive Officer and President (4) | 2025 | 50,000 | 100,000 | 275,000 | - | 10,000 | 435,000 | ||||||||||||||||||||||
| (1) | Mr. Cassidy was appointed our Chief Executive Officer (CEO) and PEO as of January 4, 2024. He resigned as our CEO and PEO as of June 2, 2025. Mr. Cassidy was appointed our Secretary as of December 17, 2021, and as a member and chairman of the Board as of June 28, 2022. |
| (2) | Mr. Shrader was appointed our Chief Operations Officer as of November 1, 2023 and then was appointed our Chief Gaming and Experience Officer as of December 2025. |
| (3) | Mr. Mackey served as our Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer and Treasurer from March 1, 2024 and through August 8, 2025. |
| (4) | Mr. Ottolenghi was appointed our Chief Executive Officer, Principal Executive Officer and President as of June 2, 2025. He was appointed as a member of the Board as of November 19, 2025. The fiscal 2026 salary amount includes approximately $45,000 paid by FuzeBox AI and allocated to the Company for services provided by Mr. Ottolenghi to the Company and excludes; $70,000 paid by the Company and allocated to FuzeBox AI for services provided by Mr. Ottolenghi to FuzeBox AI and $15,000 paid by the Company and allocated to Loop TV for services provided by Mr. Ottolenghi to Loop TV. |
| 18 |
Narrative to Compensation Table
Bruce Cassidy did not receive any compensation in connection with his prior service as our Chief Executive Officer or Principal Executive Officer. He also does not receive any compensation in connection with serving as our Secretary and Chairman of the Board.
Jacob Shrader receives an annual salary of $235,200. On April 10, 2023, Mr. Shrader was granted 150,000 incentive stock options. The options vested as to 25% of the shares on June 16, 2023 and thereafter vest as to 1/48th of the shares subject to the option on the 16th day of each month, beginning on July 16, 2023, for a period of 36 months, subject to his continued service through each applicable vesting date. On April 22, 2025, Mr. Shrader was granted 275,000 incentive stock options. The options vest over 36 months.
James Mackey received an annual salary of $299,821. On April 22, 2025, Mr. Mackey was granted 275,000 incentive stock options. The options were scheduled to vest over 36 months, subject to his continued service through each applicable vesting date. Mr. Mackey’s service with the Company ended on August 8, 2025.
Les Ottolenghi receives compensation for services provided to the Company. Effective April 2026, Mr. Ottolenghi transitioned to the payroll of an affiliated company while continuing to provide services to us, with 15% of his compensation allocated to the Company based on the services he provides to us. On October 3, 2025, Mr. Ottolenghi was granted 7,284,464 restricted stock units (“RSUs”), with each RSU representing the right to receive one share of our common stock. The RSUs generally vest over a four-year service period, with an initial tranche vesting on the grant date and subsequent tranches vesting quarterly beginning January 1, 2026. The award also provides for accelerated vesting upon the occurrence of certain specified events, including certain changes in control and qualifying terminations of employment. Additional material terms of Mr. Ottolenghi’s employment agreement (“The Ottolenghi Agreement”) include: (i) a term of two years with auto-renewals of successive one-year terms; (ii) he is eligible for annual incentive bonus of no less than 50% of his then salary; (iii) he is eligible for additional bonuses in connection with performance goals in amounts that total no less than an additional 50% of his then salary; and (iv) he is eligible to participate in our employee benefit plans. Mr. Ottolenghi also retains all rights to certain intellectual property set forth in an exhibit to the Ottolenghi Agreement, including Generative AI Agent Frameworks, Local Media Distribution & AI Advertising Switches, Search Engines, Answer Engines, and Smart Sites, NotebookLM and Colab-based Architectures, Vectorized Database and Knowledge Systems and Meat Search Tools and methods for AI based systems regardless of whether it was developed prior to the employment period or further developed during the employment period but outside of the scope of his work for us. Upon termination by us other than for cause, death or disability, or due to Mr. Ottolenghi’s resignation with good reason, then, provided he executes a general release of claims, for 12 months he will be entitled to receive: (1) continued payments equal to his monthly pay under his base salary; and (2) if we do not offer medical health benefits as of the termination date, payment of $2,500 per month, or, if we do offer medical health benefits as of the termination date, payment of Mr. Ottolenghi’s COBRA premium while he is eligible for such coverage.
Outstanding Equity Awards at Fiscal Year End
The following table sets forth certain information regarding all outstanding equity awards held by our named executive officers as of June 30, 2026.
OPTION AWARDS
| Name | Options Exercisable (#) | Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Shares/Units Not Vested (#) | Market Value of Unvested Awards ($) | ||||||||||||||||||
| Bruce Cassidy | — | — | — | — | — | — | ||||||||||||||||||
| Les Ottolenghi | — | — | — | — | 5,918,627 | 1,911,717 | ||||||||||||||||||
| Jacob Shrader | 150,000 | — | 0.50 | 04/10/2033 | — | — | ||||||||||||||||||
| 106,944 | 168,056 | 0.62 | 04/22/2035 | — | — | |||||||||||||||||||
| James Mackey | — | — | — | — | — | — | ||||||||||||||||||
(1) Mr. Ottolenghi’s unvested RSUs are subject to continued service-based vesting. Market value is based on the closing market price of the Company’s common stock of $0.323 per share on June 30, 2026.
(2) Mr. Shrader’s April 10, 2023 option award was fully vested as of June 30, 2026. His April 22, 2025 option award vests in monthly installments over 36 months, subject to continued service.
| 19 |
Director Compensation
We have not compensated our directors for service on the Board or reimbursed for expenses incurred for attendance at meetings of the Board for the fiscal year ended June 30, 2026. We do not have any agreements for compensating our directors for their services in their capacity as directors. The Board may, however, in the future determine to pay directors’ fees and reimburse directors for expenses related to their activities as such.
Equity Compensation Plan Information
On December 28, 2021, our Board approved the 2021 stock option plan (“2021 Plan”). The 2021 Plan was subject to the approval of our stockholders within 12 months of the Board’s approval. We did not seek approval of the 2021 Plan from our stockholders on or before December 28, 2022, and no awards of any type were granted under the 2021 Plan.
On April 10, 2023, the Board terminated the 2021 Plan and approved a new stock option plan for our directors, officers, employees, advisors, and contractors containing the same terms and conditions as the 2021 Plan (the “2023 Plan”). The 2023 Plan was approved by our stockholders on March 15, 2024. In connection with the approval of the 2023 Plan, the Board granted Incentive Stock Options (“ISOs”) and Non statutory Stock Options (“NSOs”) under the 2023 Plan to employees and advisors of the Company to purchase a total of 3,250,000 shares of our common stock at an exercise price of $0.50 per share (the “Awards”).
The 2023 Plan provides eligible participants with benefits consisting of one or more of the following: ISOs, NSOs, Restricted Stock Units (“RSUs”), and bonuses in the form of our common stock (“Stock Bonuses”). The Board or a committee of directors will administer the 2023 Plan and determine what employees or officers will receive an award under the 2023 Plan. ISOs, which are intended to be compliant with Section 422 of the Internal Revenue Code, may be awarded only to our employees. NSOs, RSUs and Stock Bonuses are not subject to Section 422 of the Internal Revenue Code and can be awarded to employees and non-employees.
On October 3, 2025, the Board approved an amendment to the 2023 Plan to permit the issuance of RSUs and to increase the aggregate number of shares of our common stock reserved for issuance under the 2023 Plan from 5,960,000 to 18,250,000 shares. The amendment was subsequently approved and ratified by our stockholders on November 19, 2025. Awards can be issued under the 2023 Plan for ten years from the date the Board approved the 2023 Plan. ISOs may be exercised during a period no longer than ten years from the date of the award (five years for individuals who own more than 10% of the combined voting power of the Company). NSOs may be exercised for a maximum period of ten years from the date of the award. ISOs and NSOs may not be exercised after the earlier of the following: (a) in the event of termination for cause (as defined by the plan): the date of termination; (b) in the event of termination due to death or disability: the earlier of the ISO or NSO’s expiration or one year after the termination due to death or disability; (c) in the event of termination for any other reason: three months following the date of termination.
The following table summarizes the number of shares of our common stock authorized for issuance under our equity compensation plans (including individual compensation arrangements) as of June 30, 2026.
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted- average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (c) | |||||||||
| Equity compensation plans approved by security holders | 9,221,547 | $ | 0.57 | 9,028,453 | ||||||||
| Equity compensation plans not approved by security holders | - | $ | - | - | ||||||||
| Total | 9,221,547 | $ | 0.57 | 9,028,453 | ||||||||
Note: The weighted-average exercise price in column (b) reflects the weighted-average exercise price of outstanding stock options only. Outstanding RSUs included in column (a) do not have an exercise price. The 9,028,453 shares reflected in column (c) are available for future issuance under the 2023 Plan in the form of ISOs, NSOs, RSUs and Stock Bonuses.
| 20 |
Timing of Grants of Certain Equity Awards
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth, as of September 28, 2026, certain information with respect to the beneficial ownership of shares of our common stock by: (i) each of our directors (including director nominees); (ii) each of our named executive officers; (iii) our directors and executive officers as a group; and (iv) each stockholder known by us to be the beneficial owner of more than 5% of our outstanding common stock. To our knowledge, none of the shares reported below are pledged as security.
The information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the rules of the Securities and Exchange Commission and is not necessarily indicative of ownership for any other purpose. Under these rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is deemed to own beneficially any security as to which such person has the right to acquire sole or shared voting or investment power within 60 days through the conversion or exercise of any convertible security, warrant, option, or other right. More than one person may be deemed to be a beneficial owner of the same securities. The percentage of beneficial ownership by any person as of a particular date is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as to which such person has the right to acquire voting or investment power within 60 days, by the sum of the number of shares outstanding as of such date. Consequently, the denominator used for calculating such percentage may be different for each beneficial owner. Except as otherwise indicated below and under applicable community property laws, we believe that the beneficial owners of our common stock listed below have sole voting and investment power with respect to the shares shown. As of September 28, 2026, we had 73,944,386 shares of common stock and 11,693 shares of Series B preferred issued and outstanding.
| Common Stock | Series B Preferred Stock (2) | |||||||||||||||
| Name of Beneficial Owner (1) | Number of Shares Owned | Percent of Class | Number of Shares Owned | Percent of Class | ||||||||||||
| Bruce Cassidy (3) | 140,626,785 | 81.28 | % | 11,693 | 100 | % | ||||||||||
| Les Ottolenghi (4) | 3,707,116 | 2.14 | % | - | - | |||||||||||
| All Directors and Officers as a Group (2 persons) | 144,333,901 | 83.42 | % | 11,693 | 100 | % | ||||||||||
| (1) | Unless otherwise indicated, the address of each of the individuals and entity listed below is c/o VIP Play, Inc. 8400 W. Sunset Rd. Suite 300, Las Vegas, NV 89113. |
| 21 |
| (2) | Holders of Series B preferred stock vote with the common stockholders on an as-converted basis, with each share of Series B preferred stock converting into 100 shares of common stock, on all matters submitted to a vote by holders of our common stock; but, with respect to the election of directors, however, the majority of the holders of Series B preferred stock shall have the power to elect a majority of the then-seated or to-be-seated members of our Board and the common stockholders are entitled only to elect a minority of the then-seated or to-be-seated members of our Board. |
| (3) | Consists of: (i) 19,625,450 shares of common stock held of record by Eagle Investment Group, LLC, of which Mr. Cassidy is the manager; (ii) 1,169,300 shares of common stock underlying 11,693 immediately convertible shares of Series B Preferred Stock held of record by Eagle Investment Group, LLC; (iii) 26,047,798 shares of common stock held of record by Excel Family Partners, LLLP, of which Mr. Cassidy is the indirect general partner as sole manager of a limited liability company that is the general partner of Excel Family Partners; (iv) 8,460,000 shares of common stock underlying immediately exercisable warrants held of record by Excel Family Partners, LLLP; (v) 9,851,083 shares of common stock underlying the immediately convertible Sixth Amended and Restated Discretionary Convertible Revolving Line of Credit Demand Note held of record by Excel Family Partners, LLLP; and (vi) 75,473,154 shares of common stock underlying the immediately convertible First Amended and Restated Discretionary Convertible Revolving Line Of Credit Demand Note dated as of March 31, 2025 held of record by Excel Family Partners, LLLP. |
| (4) | Consists of: (i) 2,341,279 shares of common stock held of record by Mr. Ottolenghi and (ii) 1,365,837 shares of common stock issuable upon settlement of vested restricted stock units held by Mr. Ottolenghi. Each restricted stock unit represents the right to receive one share of common stock. |
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Except as disclosed herein, no director, executive officer, stockholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction since July 1, 2024, in which the amount involved in the transaction exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at the year-end for the last two completed fiscal years.
| 22 |
(a) Transactions with Related Persons
The Company maintains discretionary revolving and non-revolving demand line of credit arrangements with Excel Family Partners, LLLP (“Excel”), an entity controlled by Bruce Cassidy, the Company’s Chairman of the Board and principal stockholder. The credit facilities bear interest at rates ranging from 12% to 15% per annum and include conversion features permitting Excel, at its option, to convert outstanding indebtedness into shares of the Company’s common stock at prices determined under the applicable loan agreements. Certain amendments to the facilities also included the issuance of warrants to purchase shares of the Company’s common stock.
During the year ended June 30, 2026, the Company continued to utilize these facilities as its primary source of working capital financing. As of June 30, 2026, outstanding borrowings and accrued interest under these facilities totalled approximately $34.7 million. Additional information regarding these financing arrangements is included in Note 13 – Related Party Transactions, Note 7 – Line of Credit – Related Party, and Note 8 – Derivative Liabilities to the accompanying consolidated financial statements.
Bruce Cassidy and Les Ottolenghi jointly control FuzeBox AI, Inc. and Eagle II, LLC d/b/a Loop TV. During the year ended June 30, 2026, the Company and these entities provided certain administrative, technology, operational, management and other support services to one another in the ordinary course of business. Certain personnel and other costs, including a portion of the compensation of the Company’s Chief Executive Officer, were allocated among the entities based on management’s estimate of the services provided to each entity. Related-party receivables, payables, expenses and other transactions arising from these arrangements are disclosed in Note 13 – Related Party Transactions to the consolidated financial statements.
During the year ended June 30, 2026, the Company granted restricted stock units to certain executive officers, including Les Ottolenghi, the Company’s Chief Executive Officer and a director. Information regarding such equity awards is included under Item 11 – Executive Compensation and Note 11 – Restricted Stock Units to the accompanying consolidated financial statements.
On June 3, 2026, the Company transferred certain early-stage artificial intelligence intellectual property to FuzeBox AI, Inc., an entity under common control, in exchange for a secured promissory note with a principal balance of $1.38 million. The note bears interest at 4.0% per annum and matures 36 months from the date of issuance. The Company retained a security interest in the transferred intellectual property. Because the transfer occurred between entities under common control, the transaction was accounted for at carryover basis in accordance with U.S. GAAP, and no gain was recognized. Additional information regarding this transaction is included in Note 13 – Related Party Transactions to the consolidated financial statements.
On February 27, 2023, the Company entered into a Stock Redemption and Purchase Agreement with former executive officer John Linss and his wholly owned entity, Corespeed, LLC, pursuant to which the Company redeemed certain shares of Series C Convertible Preferred Stock.
The remaining balance of the related promissory note was repaid in full during the year ended June 30, 2026.
(b) Director Independence
The Company’s Board of Directors currently consists of Bruce Cassidy and Les Ottolenghi. The Board has adopted the definition of “independent director” contained in Rule 5605(a)(2) of the Nasdaq Listing Rules for purposes of evaluating director independence. In summary, an “independent director” means a person other than an executive officer or employee of the Company or any other individual having a relationship which, in the opinion of our Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, and includes any director who accepted any compensation from us in excess of $200,000 during any period of twelve consecutive months within the past three fiscal years. The ownership of our stock will not preclude a director from being independent.
The Board has determined that neither Mr. Cassidy nor Mr. Ottolenghi qualifies as an independent director under those standards. Accordingly, the Company currently has no independent directors.
| 23 |
Item 14. Principal Accounting Fees and Services
The following table sets forth the fees billed by the Company’s independent registered public accounting firms for professional services for the fiscal years indicated below:
For the Year Ended June 30 | Audit Fees | Audit Related Fees | Tax Fees | All Other Fees | ||||||||||||
| 2026 | $ | 351,415 | $ | - | $ | - | $ | - | ||||||||
| 2025 | $ | 253,000 | $ | - | $ | 11,500 | $ | - | ||||||||
Tax Fees
Tax fees for the year ended June 30, 2025 consisted of fees for tax compliance and tax provision services provided by Grassi.
Change in Independent Registered Public Accounting Firm
Effective October 15, 2025, the Company dismissed Grassi & Co., CPAs, P.C. (“Grassi”) as its independent registered public accounting firm and engaged Frank, Rimerman + Co. LLP (“Frank Rimerman”) as its independent registered public accounting firm. The decision to change independent registered public accounting firms was approved by the Company’s Board of Directors.
Grassi’s audit reports on the Company’s financial statements for the fiscal years ended June 30, 2025 and 2024 did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that the reports contained an explanatory paragraph regarding substantial doubt about the Company’s ability to continue as a going concern.
During the fiscal years ended June 30, 2025 and 2024 and the subsequent interim period through September 30, 2025, there were no disagreements with Grassi on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, and there were no reportable events as defined under applicable SEC rules. During those periods, neither the Company nor anyone on its behalf consulted with Frank Rimerman regarding the application of accounting principles to a specified transaction, the type of audit opinion that might be rendered on the Company’s financial statements, or any matter that was the subject of a disagreement or reportable event.
Pre-Approval Policies and Procedures
The Company does not have a separately designated audit committee. Accordingly, the Board of Directors performs the functions of an audit committee, including the pre-approval of audit and permissible non-audit services provided by the Company’s independent registered public accounting firm. All services provided by the Company’s independent registered public accounting firms during the fiscal years ended June 30, 2026 and 2025 were approved by the Board of Directors.
PART IV
Item 15. Exhibit and Financial Statement Schedules
| (a) | The following documents are filed as part of this Annual Report on Form 10-K: |
| (1) | Consolidated Financial Statements |
The following documents are filed as part of this Form 10 K, as set forth on the Index to Consolidated Financial Statements found below after the signature page.
| ● | Report of Independent Registered Public Accounting Firm | |
| ● | Consolidated Balance Sheets as of June 30, 2026 and 2025 | |
| ● | Consolidated Statements of Operations for the years ended June 30, 2026 and 2025 | |
| ● | Consolidated Statements of Stockholders’ Deficit for the years ended June 30, 2026 and 2025 | |
| ● | Consolidated Statements of Cash Flows for the years ended June 30, 2026 and 2025 | |
| ● | Notes to Consolidated Financial Statements |
| (2) | Consolidated Financial Statement Schedules |
All consolidated financial statement schedules are omitted because they are not applicable, or the required information is shown in the consolidated financial statements or notes thereto.
| 24 |
| (b) | Exhibits to this Form 10-K |
| * | Filed herewith. |
| ** | Furnished herewith. |
| † | Indicates a management contract or compensation plan, contract or arrangement. |
| 25 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Annual Report to be signed on its behalf by the undersigned thereunto duly authorized.
| VIP Play, Inc., a Nevada corporation | ||
| (Registrant) | ||
| September 28, 2026 | By: | /s/ Les Ottolenghi |
| Les Ottolenghi | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) and Director | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signature | Title | Date | ||
| /s/ Les Ottolenghi | Chief Executive Officer | September 28, 2026 | ||
| Les Ottolenghi | (Principal Executive Officer) | |||
| /s/ Amy Weiss | Chief Accounting Officer | September 28, 2026 | ||
| Amy Weiss | (Principal Financial and Accounting Officer) | |||
| /s/ Bruce A. Cassidy | Director | September 28, 2026 | ||
| Bruce A. Cassidy |
| 26 |
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
| Report of Independent Registered Public Accounting Firm (Frank, Rimerman + Co. LLP PCAOB firm ID |
F-1 |
| Report of Independent Registered Public Accounting Firm (Grassi
& Co., CPAs, P.C., Jericho, NY PCAOB firm ID |
F-2 |
| Consolidated Balance Sheets as of June 30, 2026 and 2025 | F-3 |
| Consolidated Statements of Operations for the years ended June 30, 2026 and 2025 | F-5 |
| Consolidated Statements of Stockholders’ Deficit for the years ended June 30, 2026 and 2025 | F-6 |
| Consolidated Statements of Cash Flows for the years ended June 30, 2026 and 2025 | F-7 |
| Notes to the Consolidated Financial Statements | F-8 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and stockholders of VIP Play, Inc.
Opinion on the Consolidated Financial Statements
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1, the Company has incurred recurring losses since inception, generated negative cash flows from operations, and has a working capital deficit. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the U.S. Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the Board of Directors and that (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.
/s/
We have served as the Company’s auditor since 2025.
September 28, 2026
| F-1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of VIP Play, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of VIP Play, Inc. (the Company) as of June 30, 2025, and the related consolidated statement of operations, stockholders’ deficit, and cash flows for the year ended June 30, 2025, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2025, and the results of its operations and its cash flows for the year ended June 30, 2025, in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has incurred losses since inception, has negative cash flows from operations, and has negative working capital, that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
We served as the Company’s auditor from 2023 to 2025.
September 29, 2025, except for Note 2 as to which the date is September 28, 2026.
| F-2 |
VIP PLAY, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except number of shares and par value)
| June 30, 2026 | June 30, 2025 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Cash reserved for users | ||||||||
| Related party receivables | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Intangible assets, net | ||||||||
| Related party note receivable | ||||||||
| Security deposit | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accrued expenses - related party | ||||||||
| Players balances | ||||||||
| Notes payable | ||||||||
| Notes payable - related party | ||||||||
| Convertible notes, net of discount | ||||||||
| Line of credit - related party | ||||||||
| Derivative liability | ||||||||
| Total current liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies – Note 12 | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-3 |
VIP PLAY, INC.
CONSOLIDATED BALANCE SHEETS - continued
| June 30, 2026 | June 30, 2025 | |||||||
| Stockholders’ deficit: | ||||||||
| Preferred stock, $ par value, shares authorized as of June 30, 2026, and June 30, 2025, respectively | ||||||||
| Series B preferred stock, shares designated, and shares issued and outstanding as of June 30, 2026, and June 30, 2025, respectively | ||||||||
| Common stock, $ par value, shares authorized, and shares issued and outstanding as of June 30, 2026, and June 30, 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-4 |
VIP PLAY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except number of shares and per share data)
| For the Years ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Gaming revenues | $ | $ | ( | ) | ||||
| Cost of gaming revenue | ||||||||
| Net gaming loss | ( | ) | ( | ) | ||||
| Operating expenses: | ||||||||
| Employee and contractor compensation | ||||||||
| General and administrative | ||||||||
| Depreciation and amortization | ||||||||
| Asset impairment | ||||||||
| Sales and marketing | ||||||||
| Total operating expenses | ||||||||
| Operating Loss | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Other income | ||||||||
| Gain on change in fair value of derivative | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Interest expense – related party | ( | ) | ( | ) | ||||
| Total other income (expense) | ( | ) | ||||||
| Loss before income taxes | ( | ) | ( | ) | ||||
| Income tax expense (benefit) | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Net loss per common share - basic and diluted | $ | ) | $ | ) | ||||
| Weighted average number of common shares outstanding - basic and diluted | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-5 |
VIP PLAY, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(in thousands except share data)
| Preferred Shares Series B | Amount | Common Shares | Amount | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Deficit | ||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Issuance of common stock and warrants for cash and offering costs | - | |||||||||||||||||||||||||||
| Shares issued for consulting services | - | |||||||||||||||||||||||||||
| Change in par value | - | - | ( | ) | ||||||||||||||||||||||||
| Stock-based compensation | - | - | ||||||||||||||||||||||||||
| Net loss for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Warrants granted for consulting services | - | - | ||||||||||||||||||||||||||
| Common-control transaction | - | - | ||||||||||||||||||||||||||
| Stock-based compensation | - | - | ||||||||||||||||||||||||||
| Net loss for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-6 |
VIP PLAY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| For the Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of debt issuance costs – related party | ||||||||
| Issuance of warrants for consulting services | ||||||||
| Issuance of common stock for consulting services | ||||||||
| Asset Impairment | ||||||||
| Stock-based compensation | ||||||||
| Amortization of debt discount | ||||||||
| Change in fair value of derivative liability | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Related party receivables | ( | ) | ||||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Accrued expenses - related party | ||||||||
| Players balances | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Cash paid for capitalized software | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from issuance of common stock | ||||||||
| Proceeds from line of credit, related party | ||||||||
| Proceeds from convertible notes | ||||||||
| Repayments of convertible note | ( | ) | ||||||
| Repayments of note payable - current | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
| NET CHANGE IN CASH AND CASH RESERVED FOR USERS | ( | ) | ( | ) | ||||
| CASH AND CASH RESERVED FOR USERS AT BEGINNING OF PERIOD | ||||||||
| CASH AND CASH RESERVED FOR USERS AT END OF PERIOD | $ | $ | ||||||
| DISCLOSURE OF CASH AND CASH RESERVED FOR USERS: | ||||||||
| CASH | $ | $ | ||||||
| CASH RESERVED FOR USERS | $ | $ | ||||||
| CASH AND CASH RESERVED FOR USERS AT END OF PERIOD | $ | $ | ||||||
| SUPPLEMENTAL INFORMATION: | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES: | ||||||||
| Derivative liability associated with convertible note issuance | $ | $ | ||||||
| Common stock and warrants issued for offering costs | $ | $ | ||||||
| Insurance financing | $ | $ | ||||||
| Note receivable received in common-control transaction | $ | $ | ||||||
| Related-party receivable settled in common-control transaction | $ | |||||||
| Additional Paid-In Capital recognized in association with common control transaction | $ | |||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-7 |
VIP Play, Inc.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026 and 2025
NOTE 1 – OVERVIEW AND ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Overview and Organization
VIP Play, Inc. (formerly KeyStar Corp.) (the “Company,” “we,” “us,” or “our”) was incorporated in the State of Nevada on April 16, 2020. The Company has one wholly owned subsidiary, VIP Play TN, LLC. Prior to September 20, 2024, the Company operated under the name KeyStar Corp.
The Company previously operated an online sportsbook in Tennessee under a Sports Gaming Operator license. The Company ceased accepting customer wagers on April 30, 2026, and its Tennessee Sports Gaming Operator license expired on May 24, 2026 and was not renewed. The Company also received interim approval for a West Virginia i-Gaming and Sports Wagering Management Service Provider License but did not commence operations in that market. In October 2025, the Company received notice of termination of its West Virginia market access agreement and is involved in a dispute regarding the validity of the termination and related fee claims. See Note 12 – Commitments and Contingencies.
Following the discontinuation of its sportsbook operations, the Company is primarily focused on the development of artificial intelligence (“AI”) technologies, products, and services for the sports and entertainment industry. As of June 30, 2026, the Company’s AI and software technologies remained in the development stage and had not generated revenue from commercial operations. The Company continues to develop and evaluate potential applications and commercialization opportunities for these technologies, including through strategic partnerships.
The sportsbook operations represented substantially all operating assets of the Company’s historical business. After evaluating the decision to abandon the sportsbook operations under ASC 205-20, management concluded that the disposition did not qualify for discontinued operations presentation because the assets abandoned did not constitute a separately identifiable component with distinguishable operations and cash flows. Accordingly, the results of the exit have not been presented as discontinued operations.
In
connection with the cessation of its sportsbook operations and the Company’s related evaluation of its assets, the Company ceased
generating gaming revenue and recognized approximately $
Basis of Presentation
The accompanying consolidated financial statements include the accounts of VIP Play, Inc. and its wholly owned subsidiary and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The Company’s fiscal year-end is June 30.
Principles of Consolidation
The consolidated financial statements include the results of VIP Play, Inc. and its wholly owned subsidiary. All intercompany accounts, transactions, and balances have been eliminated in consolidation.
Segment Reporting
The Company operates as a single operating and reportable segment. The Company’s Chief Executive Officer serves as the Chief Operating Decision Maker (“CODM”). The CODM evaluates financial performance, allocates resources, and makes operating decisions based on consolidated financial information. Accordingly, the Company has determined that it has one operating and one reportable segment.
During the year ended June 30, 2026, the Company discontinued its online sportsbook operations and transitioned its strategic focus toward the development of artificial intelligence (“AI”) technologies, products, and services. The CODM continued to evaluate the Company’s financial performance and allocate resources on a consolidated basis throughout the year, including the results of the sportsbook operations prior to their discontinuation.
| F-8 |
The CODM uses consolidated net loss as the primary measure of segment performance in evaluating operating results and making decisions regarding the allocation of resources. The financial information reviewed by the CODM is prepared on a consolidated basis consistent with the amounts presented in the Company’s consolidated financial statements.
| For the years ended June 30, | 2026 | 2025 | ||||||
| Gaming operations: | ||||||||
| Gaming revenues | $ | $ | ( | ) | ||||
| Cost of gaming revenue | ||||||||
| Net gaming loss | ( | ) | ( | ) | ||||
| Operating expenses: | ||||||||
| Salaries and wages | ||||||||
| Depreciation and amortization | ||||||||
| Asset Impairment | ||||||||
| Sales and marketing | ||||||||
| General and administrative | ||||||||
| Other income (expense): | ||||||||
| Other income | ||||||||
| Gain on change in fair value of derivative liabilities | ||||||||
| Interest expense | ||||||||
| Interest expense – related party | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates and assumptions include, but are not limited to, the valuation of derivative liabilities and equity-based awards, the allowance for credit losses, the assessment of long-lived assets and internally developed software for impairment, the estimated useful lives of property, equipment and intangible assets, the capitalization of internally developed software costs, the accounting for contingencies, and accrued liabilities. Actual results could differ from those estimates, and such differences may be material.
Going Concern
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the ordinary course of business.
As
of June 30, 2026, the Company had an accumulated deficit of $
Management’s plans to address these conditions include continuing to obtain financing through related-party credit facilities and debt and equity financings, pursuing strategic partnerships, and advancing the development and commercialization of its artificial intelligence (“AI”) technologies and related products. Management also continues to evaluate opportunities to reduce operating costs and improve liquidity.
There can be no assurance that the Company’s plans will be successfully implemented or that additional financing will be available on acceptable terms, if at all. Accordingly, substantial doubt about the Company’s ability to continue as a going concern has not been alleviated.
The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.
Cash and Equivalents
Cash and cash equivalents consist of cash held in demand deposit accounts with financial institutions. The Company’s cash balances are maintained at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”). As of June 30, 2026, the Company’s cash balances did not exceed applicable FDIC insurance limits. The Company has not experienced any losses on its cash deposits.
Cash Reserved for Users
The
Company maintained separate bank accounts to segregate users’ funds from operational funds in connection with its sportsbook operations.
User funds were held by VIP Play TN, LLC for the purpose of protecting users’ funds in the event of creditor claims. As of June
30, 2026 and 2025, approximately $
| F-9 |
Allowance for Credit Losses
The Company evaluates financial assets measured at amortized cost for expected credit losses in accordance with ASC 326, Financial Instruments—Credit Losses. The allowance for credit losses represents management’s estimate of expected credit losses over the contractual life of the financial assets and is based on relevant available information, including historical experience, current conditions, and reasonable and supportable forecasts. Changes in the allowance for credit losses are recognized in earnings.
Equipment
Equipment is stated at cost, less accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the asset’s estimated useful life. Expenditures for maintenance and repairs are expensed as incurred. When retired or otherwise disposed of, the related carrying value and accumulated depreciation are removed from the respective accounts, and the net difference less any amount realized from the disposition is reflected in earnings. Estimated useful lives are as follows:
| Equipment |
Intangible Assets
Intangible assets consist primarily of developed technology, internally developed software, gaming licenses, and trademarks. Intangible assets with finite useful lives are recorded at cost, less accumulated amortization and impairment, if any. Amortization is recognized on a straight-line basis over the estimated useful lives of the respective assets.
Intangible assets with indefinite useful lives, including certain gaming licenses, are not amortized and are tested for impairment at least annually or more frequently if events or changes in circumstances indicate that the asset may be impaired.
Estimated useful lives:
| Asset | Estimated Useful Life | |
| Developed technology | ||
| Internally developed software | ||
| Trademarks | ||
| Gaming license |
Internally Developed Software
The Company accounts for costs incurred to develop or obtain software for internal use in accordance with ASC 350-40, Intangibles—Goodwill and Other—Internal-Use Software.
Costs incurred during the preliminary project stage are expensed as incurred. Costs incurred during the application development stage are capitalized once management authorizes and commits to funding the project, it is probable the project will be completed, and the software will be used as intended. Capitalized costs include payroll and payroll-related costs for employees directly associated with software development and certain external direct costs.
Capitalization ceases when the software is substantially complete and ready for its intended use. Capitalized software costs are amortized using the straight-line method over their estimated useful lives. Costs associated with maintenance, training, and post-implementation activities are expensed as incurred.
Research and development costs are expensed as incurred and are included in employee and contractor compensation in the accompanying consolidated statements of operations. Certain software development costs that meet the criteria for capitalization under the Company’s internally developed software accounting policy are capitalized and included in intangible assets, net, in the accompanying consolidated balance sheets.
| F-10 |
Impairment of Long-Lived Assets
The Company reviews long-lived assets, including finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is evaluated by comparing the carrying amount of the asset to the estimated undiscounted future cash flows expected to result from its use and eventual disposition. If the carrying amount exceeds the estimated undiscounted future cash flows, an impairment loss is recognized for the amount by which the carrying value exceeds the asset’s fair value.
Fair value is determined using quoted market prices, when available, or other valuation techniques, including discounted cash flow analyses.
Lease Commitments
The Company accounts for leases in accordance with ASC Topic 842, Leases. The Company determines whether an arrangement contains a lease at contract inception. The Company has elected the short-term lease recognition exemption for leases with an initial term of twelve months or less that are not reasonably certain to be renewed. Accordingly, lease payments for such leases are recognized as lease expense on a straight-line basis over the lease term, and no right-of-use (“ROU”) asset or corresponding lease liability is recognized.
During
the year ended June 30, 2026, the Company leased office space in Sarasota, Florida under a month-to-month lease arrangement through October
2025. As of June 30, 2026, the Company leased office space in Las Vegas, Nevada under a month-to-month lease arrangement with monthly
lease payments of approximately $
Lease
expense for the years ended June 30, 2026 and 2025 was approximately $
Fair Value of Financial Instruments
The Company measures certain financial assets and liabilities at fair value in accordance with ASC Topic 820, Fair Value Measurement. ASC 820 establishes a framework for measuring fair value and requires disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
ASC 820 establishes a three-level hierarchy for measuring fair value based on the observability of inputs used in the valuation techniques as follows:
Level 1 – Quoted prices for identical assets or liabilities in active markets.
Level 2 – Observable inputs other than quoted prices included within Level 1, including quoted prices for similar assets or liabilities in active markets or other observable market data.
Level 3 – Unobservable inputs that are supported by little or no market activity and are significant to the fair value measurement.
The carrying amounts of cash, accounts payable, accrued liabilities, and other current financial instruments approximate fair value due to their short-term nature.
The Company’s derivative liabilities are measured at fair value on a recurring basis and are classified within Level 3 of the fair value hierarchy because the valuation incorporates significant unobservable inputs.
| F-11 |
The following table presents the Company’s financial liabilities measured at fair value on a recurring basis as of June 30, 2026 and 2025 (in thousands):
| Description | Total fair value at June 30, 2026 | Quoted prices in Active markets (level 1) | Significant other observable inputs (level 2) | Significant unobservable inputs (level 3) | ||||||||||||
| Derivative liability (1) | $ | $ | $ | $ | ||||||||||||
| Description | Total fair value at June 30, 2025 | Quoted prices in Active markets (level 1) | Quoted prices in Active markets (level 2) | Quoted prices in Active markets (level 3) | ||||||||||||
| Derivative liability (1) | $ | $ | $ | $ | ||||||||||||
| (1) |
The fair value of the Company’s derivative liabilities is estimated using a Monte Carlo simulation model. The Monte Carlo simulation model requires the use of significant assumptions, including the Company’s current stock price, expected volatility, expected term, and risk-free interest rate. There were no transfers between levels of the fair value hierarchy during the years ended June 30, 2026 and 2025. Additional information regarding the Company’s derivative liabilities, including the valuation methodology and the Level 3 rollforward, is included in Note 8 – Derivative Liabilities.
Derivative Liabilities
The Company accounts for derivative instruments in accordance with ASC Topic 815, Derivatives and Hedging. Derivative instruments are recognized as assets or liabilities in the consolidated balance sheets and are measured at fair value at each reporting date. Changes in the fair value of derivative instruments are recognized in the consolidated statements of operations in the period in which they occur.
Revenue Recognition
The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. Revenue is recognized when control of promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services.
During the years ended June 30, 2026 and 2025, the Company’s revenue was generated from its online sportsbook operations. Sportsbook betting involves a user wagering money on the outcome or series of outcomes of a sporting event. When a user’s wager wins, the Company pays the user a predetermined amount based on fixed odds.
Sportsbook revenue is recognized as users’ wagers, net of payouts on winning wagers and gaming and gaming-related incentives awarded to users. Each wager placed by a user represents a single performance obligation, which is satisfied when the underlying wagering event is completed. Unsettled wagers are recorded as player liabilities until the related wagering event is completed. Gaming and gaming-related incentives are recorded as a reduction of the transaction price.
Net gaming revenue represents the aggregate of gaming wins and losses based on the results of completed wagering events, reduced by gaming and gaming-related incentives. Accordingly, net gaming revenue may be negative for a reporting period when payouts on winning wagers and gaming and gaming-related incentives exceed wagers recognized as revenue during the period.
The Company discontinued its online sportsbook operations during the year ended June 30, 2026.
| F-12 |
Cost of Revenue
Cost of revenue related to the Company’s sportsbook operations and consisted principally of payment processing fees, technology platform costs, web hosting, regulatory compliance costs, sports wagering privilege taxes, and federal excise taxes on wagers.
The Company records stock-based compensation in accordance with ASC Topic 718, Compensation—Stock Compensation. All transactions in which services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.
The Company accounts for stock-based compensation awards issued to nonemployees in accordance with ASC Topic 718, Compensation—Stock Compensation. Such awards are measured at fair value and recognized as compensation expense over the applicable service period.
The Company uses the Black Scholes pricing model to calculate the fair value of stock-based awards. This model is affected the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to, the Company’s expected stock price volatility over the term of the awards, and actual projected employee stock option exercise behaviors. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the consolidated statement of operations over the requisite service period.
General and Administrative
General and administrative expenses consist primarily of professional fees, including legal, accounting, audit, consulting, and regulatory costs, as well as insurance, occupancy costs, office expenses, and other corporate overhead not directly attributable to revenue-generating activities, product development, or sales and marketing.
Sales and Marketing
Sales and marketing expenses consist primarily of advertising, promotional activities, and other marketing costs associated with the Company’s sportsbook operations. Such costs are expensed as incurred.
Income Taxes
The Company accounts for income taxes under the asset and liability method in accordance with ASC Topic 740, Income Taxes. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as operating loss and tax credit carryforwards.
Deferred tax assets are reduced by a valuation allowance when, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company evaluates the realizability of its deferred tax assets on a quarterly basis and records changes in the valuation allowance through income tax expense (benefit).
The Company recognizes the tax benefit of uncertain tax positions only if it is more likely than not that the position will be sustained upon examination by the applicable taxing authority based on the technical merits of the position. The amount recognized is measured as the largest benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Interest and penalties related to uncertain tax positions, if any, are recognized as a component of income tax expense.
As
of June 30, 2026 and 2025, the Company maintained a full valuation allowance against its net deferred tax assets and had
Basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period, adjusted for the effect of potentially dilutive securities, when dilutive.
| F-13 |
For the years ended June 30, 2026 and 2025, potentially dilutive securities were excluded from the computation of diluted net loss per common share because their effect would have been anti-dilutive due to the Company’s net loss. The potentially dilutive securities excluded from the calculation are summarized below:
| For the year ended June 30, 2026 | For the year ended June 30, 2025 | |||||||
| Stock Options | ||||||||
| Restricted Stock Units | ||||||||
| Series B Preferred Shares | ||||||||
| Warrants | ||||||||
| Shares issuable upon conversion of line of credit | ||||||||
| Shares issuable upon conversion of convertible notes | ||||||||
| Total potentially dilutive shares | ||||||||
Recently Adopted Accounting Pronouncements
Effective July 1, 2025, the Company adopted Accounting Standards Update 2023-09 (“ASU 2023-09”), Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 enhances the transparency and usefulness of income tax disclosures, including expanded rate reconciliation and income taxes paid disclosures. The adoption of ASU 2023-09 did not have a material impact on the Company’s consolidated financial statements but resulted in enhanced income tax disclosures.
Recently Issued Accounting Pronouncements Not Yet Adopted
In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures. ASU 2024-03 requires additional disclosures regarding specified categories of expenses included within certain expense captions presented on the face of the income statement, as well as disclosures related to selling expenses. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures.
In July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025-05 provides a practical expedient related to estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC Topic 606, Revenue from Contracts with Customers. The amendments are effective for annual reporting periods beginning after December 15, 2025, including interim reporting periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software. ASU 2025-06 updates the accounting for certain internal-use software development costs. The amendments are effective for annual reporting periods beginning after December 15, 2027, including interim reporting periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements.
Management does not believe that any other recently issued accounting pronouncements not yet effective, if adopted, would have a material impact on the Company’s consolidated financial statements.
Correction of Prior Period Error
See Note 2, Revision of Previously Issued Consolidated Financial Statements, for information regarding the revision of previously issued comparative financial statements.
| F-14 |
NOTE 2 — REVISION OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS
Convertible Notes, Net of Discount
During the year ended June 30, 2026, management identified an error related to the accounting for convertible promissory notes issued in September 2023. Specifically, while the embedded conversion features were properly bifurcated and recorded as derivative liabilities at issuance, the related debt discount was not amortized to interest expense over the contractual term of the notes as required under U.S. GAAP.
The error resulted in an understatement of non-cash interest expense and an understatement of convertible notes, net in previously issued annual financial statements beginning with the year ended June 30, 2024.
Management evaluated the error in accordance with SEC Staff Accounting Bulletin No. 99 (“SAB 99”) and SEC Staff Accounting Bulletin No. 108 (“SAB 108”). Although the error was determined to be immaterial to each previously issued reporting period, management concluded that correcting the error solely through a cumulative catch-up adjustment in the current period would result in significant fluctuations in comparative period amounts and reduce the comparability of the current period financial statements. Accordingly, prior period comparative financial information presented herein has been revised. The correction had no impact on the Company’s previously reported revenues, operating cash flows, or total cash balances.
Impact on Consolidated Statements of Operations
The following table presents the impact of the correction on the Company’s previously reported consolidated statements of operations:
Year Ended June 30, 2025
| As Previously Reported | Adjustment | As Revised | ||||||||||
| Interest expense | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Total other income (expense) | ( | ) | ( | ) | ( | ) | ||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ||||||
| Income tax expense (benefit) | ||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ||||||
| Loss per share – basic | ( | ) | ( | ) | ||||||||
| Loss per share – diluted | ( | ) | ( | ) | ||||||||
Impact on Consolidated Balance Sheet
The following table presents the impact of the correction on the Company’s consolidated balance sheet as of June 30, 2025:
| As Previously Reported | Adjustment | As Revised | ||||||||||
| Convertible notes, net of discount | $ | $ | $ | |||||||||
| Total current liabilities | ||||||||||||
| Total liabilities | ||||||||||||
| Accumulated deficit | ( | ) | ( | ) | ( | ) | ||||||
| Total stockholders’ deficit | ( | ) | ( | ) | ( | ) | ||||||
| Total liabilities and stockholders’ deficit | $ | $ | $ | |||||||||
The correction also resulted in a $
| F-15 |
Impact on Consolidated Statement of Cash Flows
The following table presents the impact of the correction on the Company’s previously reported consolidated statement of cash flows:
Year Ended June 30, 2025
| (in thousands except share data) | As Previously Reported | Adjustment | As Revised | |||||||||
| Net Loss | ( | ) | ( | ) | ( | ) | ||||||
| Amortization of Debt Discount (Non-Cash) | ||||||||||||
| Net Cash Used in Operating Activities | ( | ) | ( | ) | ||||||||
Intangible Assets, Net
Subsequent
to the filing of the Company’s fiscal year 2025 Form 10-K, the Company identified that the previously reported gross carrying value
of gaming-related developed technology and the related accumulated amortization as of June 30, 2025 had each been overstated by approximately
$
The Company evaluated the error, both qualitatively and quantitatively, and determined that no prior interim or annual periods were materially misstated. The Company also evaluated whether the cumulative amount of the overstatement was material to its fiscal year 2026 results and concluded that it was not qualitatively or quantitatively material.
Accordingly,
the Company recorded an adjustment of approximately $
NOTE 3 - EQUIPMENT
The Company’s equipment consisted of the following as of:
| (in thousands) | June 30, 2026 | June 30, 2025 | ||||||
| Computer Equipment | $ | $ | ||||||
| Total | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Equipment, net | $ | $ | ||||||
Depreciation
expense of equipment during the years ended June 30, 2026, and 2025 was $
NOTE 4 - INTANGIBLE ASSETS
Intangible asset activity for the year ended June 30, 2026 was as follows (in thousands):
| June 30, 2025 | Additions | Amortization | Impairment | June 30, 2026 | ||||||||||||||||
| Developed technology – Gaming | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||
| Gaming license | ( | ) | ||||||||||||||||||
| Other gaming-related intangible assets | ( | ) | ||||||||||||||||||
| Total intangible assets, net | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||
As
of June 30, 2025, the gross carrying amount of intangible assets was approximately $
During
the year ended June 30, 2026, the Company capitalized approximately $
During
the year ended June 30, 2026, the Company recognized impairment expense of approximately $
| F-16 |
During
the year ended June 30, 2025, the Company recognized impairment expense of approximately $
Amortization
expense related to intangible assets was approximately $
NOTE 5 - CONVERTIBLE DEBT
In
August and September 2023, the Company entered into three Convertible Note Purchase Agreements with unrelated investors, issuing
convertible promissory notes in principal amounts of $
In August 2024, the 2023 Notes were amended to extend their respective maturity dates by one year.
In
August 2025, the Company entered into amendments to the $
On
September 9, 2025, the Company issued an additional Convertible Promissory Note (the “2025 Note”) to an unrelated investor
in the principal amount of $
On
October 1, 2025, the Company repaid in full the $
At
June 30, 2026 and 2025, the Company had outstanding principal of $
Embedded Conversion Features
The conversion features contained in the Notes were evaluated under ASC Topic 815, Derivatives and Hedging. The embedded conversion options were required to be bifurcated from the debt host contracts and recorded as derivative liabilities at fair value, with a corresponding debt discount recorded against the carrying amount of the Notes. The debt discount is amortized to interest expense over the contractual term of the related debt instruments.
As discussed in Note 2 – Revision of Previously Issued Consolidated Financial Statements, the Company identified an immaterial error related to the amortization of the debt discount associated with the embedded conversion features. Comparative prior-period financial information has been revised to correct this error.
At
June 30, 2026 and June 30, 2025, the fair value of the derivative liabilities associated with the embedded conversion features was $
| F-17 |
Debt Modification
The Company evaluated the August and September 2025 amendments to all three original Notes under ASC Subtopic 470-50, Debt—Modifications and Extinguishments, and concluded that the amendments did not constitute substantial modifications. Accordingly, the amendments were accounted for as debt modifications rather than debt extinguishments. The effect of the modification was recognized through the remeasurement of the related derivative liabilities. See Note 8 – Derivative Liabilities.
NOTE 6 - NOTES PAYABLE AND NOTES PAYABLE – RELATED PARTY
Notes Payable – Related Party
As
of June 30, 2026 and 2025, principal of $
On
February 27, 2023, the Company entered into Stock Redemption and Purchase Agreement with John Linss, our former Chief Executive Officer
and former member of the board of directors, and his wholly owned Corespeed, LLC for the purchase of Series C Convertible Preferred Stock
owned by Linss’ Corespeed, LLC. See Note 9. The Company paid $
The
outstanding principal balance at June 30, 2026, is $
| F-18 |
Notes Payable
On
May 24, 2025, the Company renewed a short-term note payable with a premium finance company to fund the Company’s technology services
and cyber liability insurance. The total premiums, taxes and fees financed was $
On
May 24, 2026, the Company renewed the short-term note payable with a premium finance company to fund the Company’s technology
services and cyber liability insurance. The total premiums, taxes and fees financed was $
On
November 6, 2025, the Company entered into a short-term note payable with a premium finance company to fund the Company’s excess
and surplus insurance. The total premiums, taxes and fees financed was $
Interest expense related to the insurance premium financing arrangements for the years ended
June 30, 2026 and 2025 was $
NOTE 7- LINE OF CREDIT - RELATED PARTY
On February 22, 2022, the Company entered into a discretionary non-revolving demand line of credit with Excel Family Partners, LLLP (“Excel”), a related party controlled by Bruce Cassidy, the Company’s Chairman of the Board and principal stockholder. The facility has been amended and restated on multiple occasions since inception.
On
February 24, 2023, the facility was amended and restated to provide borrowing capacity of up to $
During
2023, the borrowing capacity was subsequently increased to $
On
December 28, 2023, approximately $
On August 6, 2024, the outstanding indebtedness was restructured into two separate revolving demand facilities consisting of:
| ● | a
$ |
| ● | a
$ |
On
March 31, 2025, the Revolving Facility was amended to increase the stated borrowing capacity to $
| F-19 |
The
Revolving Demand Note and the Revolving Facility remain payable on demand, do not constitute committed financing arrangements, and contain
conversion features permitting Excel to convert outstanding indebtedness into shares of the Company’s common stock. The Revolving
Demand Note provides for conversion at
At June 30, 2026, outstanding principal
under the Revolving Demand Note and Revolving Facility was approximately $
The embedded conversion features are accounted for as derivative liabilities under ASC Topic 815 and are remeasured at fair value each reporting period. See Note 8 – Derivative Liabilities for additional information. Debt issuance costs associated with prior amendments, including the fair value of warrants and embedded conversion features, were fully amortized as of June 30, 2025.
The weighted-average contractual interest
rate on the Company’s short-term obligations outstanding as of June 30, 2026 and 2025 was approximately
NOTE 8 – DERIVATIVE LIABILITIES
The Company’s related-party line of credit facilities and convertible promissory notes contain embedded conversion features that are accounted for as derivative liabilities under ASC Topic 815, Derivatives and Hedging. The embedded conversion features were bifurcated from the respective host debt instruments because the economic characteristics and risks of the conversion features were not clearly and closely related to those of the host debt instruments and the features otherwise met the criteria for separate accounting as derivatives. The derivative liabilities are measured at fair value at each reporting date and are included in Derivative liability in current liabilities on the consolidated balance sheets, with changes in fair value recognized as Gain on change in fair value of derivative in the consolidated statements of operations.
As
of June 30, 2026, the fair value of the derivative liabilities associated with the Company’s related-party line of credit facilities
and convertible promissory notes was approximately $
The following table summarizes the changes in the fair value of the Company’s Level 3 derivative liabilities for the year ended June 30, 2026 (in thousands):
| Derivative liability at June 30, 2024 | $ | |||
| Gain on change in fair value of derivative | ( | ) | ||
| Derivative liability at June 30, 2025 | $ | |||
| Embedded conversion feature on new convertible note issued during the period | ||||
| Gain on change in fair value of derivative | ( | ) | ||
| Derivative liability at June 30, 2026 | $ |
The derivative liabilities are classified within Level 3 of the fair value hierarchy because their valuation incorporates significant unobservable inputs. The fair value of the embedded conversion features is estimated using a Monte Carlo simulation model.
Valuation Assumptions
The following assumptions were used in the Monte Carlo simulation model to estimate the fair value of the embedded conversion features associated with the Company’s convertible notes as of the consolidated balance sheet dates and as of the September 8, 2025 derivative liability addition date:
| June 30, 2025 | September 8, 2025 | June 30, 2026 | ||||||||||
| Expected volatility | % | % | % | |||||||||
| Risk-free interest rate | % | % | % | |||||||||
| Expected dividend yield | % | % | % | |||||||||
| Expected life (years) | ||||||||||||
The
fair value of the embedded conversion feature associated with the $
| F-20 |
The following assumptions were used in the valuation of the derivative liabilities:
| Expected volatility | Risk-free interest rate | Expected dividend yield | Expected life (years) | |||||||||||||
| Related-party line of credit facilities | ||||||||||||||||
| At June 30, 2025 | % | % | % | |||||||||||||
| At June 30, 2026 | % | % | % | |||||||||||||
| Convertible promissory notes | ||||||||||||||||
| At June 30, 2025 | % | % | % | |||||||||||||
| At June 30, 2026 | % | % | % | |||||||||||||
NOTE 9 - STOCKHOLDERS’ DEFICIT
The Company is authorized to issue shares of common stock, par value $ per share, and shares of preferred stock, par value $ per share. Of the authorized preferred stock, shares have been designated as Series B Convertible Preferred Stock, par value $ per share.
Series B Convertible Preferred Stock
Each
share of Series B Convertible Preferred Stock has a par value and stated value of $
At June 30, 2026 and 2025, shares of Series B Convertible Preferred Stock were issued and outstanding.
Series C Convertible Preferred Stock
On
February 27, 2023, the Company entered into a Stock Redemption and Purchase Agreement with John Linss, the Company’s former Chief
Executive Officer and former member of the Board of Directors, and his wholly owned entity, Corespeed, LLC, to purchase shares
of Series C Convertible Preferred Stock. The Company paid $
On June 15, 2024, the Board of Directors approved the conversion of all outstanding Series C Convertible Preferred Stock into common stock. A total of shares of common stock were issued upon conversion of shares of Series C Convertible Preferred Stock.
The Series C Certificate of Designation was subsequently withdrawn effective August 6, 2024. Accordingly, no shares of Series C Convertible Preferred Stock were designated, issued or outstanding as of June 30, 2026 or 2025.
Common Stock
During the year ended June 30, 2026, the Company did t issue any shares of common stock.
| F-21 |
During the year ended June 30, 2025:
| ● | On November 6, 2024, the Company issued shares of common stock to two unrelated investors for gross cash proceeds of $ thousand in a private placement. In connection with the offering, the Company also issued shares of common stock and warrants to a placement agent as compensation for services. | |
| ● | On
April 28, 2025, the Company issued shares of common stock to a consultant for services
with a grant-date fair value of $ | |
| ● | On
May 14, 2025, the Company issued shares of common stock to a consultant for services
with a grant-date fair value of $ |
On
September 20, 2024, the Company changed the par value of its common stock from $ per share to $ per share. The change did
not affect the number of shares issued and outstanding. A $
At June 30, 2026 and 2025, shares of common stock were issued and outstanding.
On April 10, 2023, the Board of Directors (the “Board”) approved the 2023 Stock Option Plan (the “2023 Plan”).
The 2023 Plan permits eligible participants to receive one or more of the following awards: Incentive Stock Options (“ISOs”), Nonstatutory Stock Options (“NSOs”), and bonuses in the form of the Company’s common stock (“Stock Bonuses”). The Board, or a committee appointed by the Board, administers the 2023 Plan and determines the individuals eligible to receive awards under the plan. ISOs may be granted only to employees, while NSOs and Stock Bonuses may be granted to employees, directors, consultants, advisors, and other service providers.
The 2023 Plan originally authorized the issuance of up to shares of the Company’s authorized but unissued common stock. On October 3, 2025, the Board approved an amendment to increase the number of shares authorized for issuance under the 2023 Plan to shares. The amendment was subsequently approved and ratified by our stockholders on November 19, 2025 (the 2023 Plan, as amended, the “Amended 2023 Plan”).
Awards granted under the Amended 2023 Plan may be issued for a period of ten years from the date of adoption.
In April 2023, the Board granted ISOs and NSOs covering shares of common stock at an exercise price of $ per share.
In April 2025, the Board granted ISOs and NSOs covering shares of common stock at an exercise price of $ per share.
On January 22, 2026, the Board initially approved the proposed issuance of million ISOs and NSOs with an exercise price of $ per share. On February 13, 2026, the Board subsequently approved a revised proposed issuance of million ISOs and NSOs with an exercise price of $ per share. Neither the January nor February proposed awards had been granted as of June 30, 2026.
| F-22 |
Number of Shares Underlying Outstanding Options | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | Intrinsic Value | |||||||||||||
| Options outstanding as of June 30, 2024 | years | $ | $ | |||||||||||||
| Options exercisable as of June 30, 2024 | years | $ | $ | |||||||||||||
| Granted | years | - | ||||||||||||||
| Exercised | - | - | ||||||||||||||
| Forfeited or expired | - | $ | - | |||||||||||||
| Options outstanding as of June 30, 2025 | years | $ | $ | |||||||||||||
| Options exercisable as of June 30, 2025 | years | $ | $ | |||||||||||||
| Granted | - | - | ||||||||||||||
| Exercised | - | - | ||||||||||||||
| Forfeited or expired | - | $ | $ | - | ||||||||||||
| Options outstanding as of June 30, 2026 | $ | $ | ||||||||||||||
| Options exercisable as of June 30, 2026 | $ | $ | ||||||||||||||
The Company measures stock-based compensation in accordance with ASC Topic 718, Compensation—Stock Compensation. The grant-date fair value of stock options is estimated using the Black-Scholes option pricing model.
| Year Ended June 30, 2025 | ||||
| Exercise Price: | $ | |||
| Volatility: | % | |||
| Dividend Yield | % | |||
| Risk Free Rate: | % | |||
| Contractual Term: | years | |||
| Expected Life: | years | |||
As of June 30, 2026, the Company had $ thousand of total unrecognized stock-based compensation expense related to unvested stock options, which is expected to be recognized over a weighted-average period of years.
During the years ended June 30, 2026 and 2025, and stock options, respectively, were forfeited or expired, primarily as a result of employee and contractor terminations.
As of June 30, 2026, all outstanding stock options and RSUs were issued pursuant to the Amended 2023 Plan. As of June 30, 2026, shares of common stock remained available for future issuance under the Amended 2023 Plan, after giving effect to outstanding stock options and RSUs. See Note 11 – Restricted Stock Units for additional information regarding RSUs granted under the Amended 2023 Plan.
Stock-based compensation expense of $ thousand and $ thousand was recognized for the years ended June 30, 2026 and 2025, respectively.
Warrants
During
the year ended June 30, 2026, the Company issued warrants to a third-party advisor as compensation for services pursuant to an advisory
agreement. Under the agreement, the Company may elect to settle monthly advisory fees through the issuance of warrants in lieu of cash
compensation. During the year ended June 30, 2026, the Company issued warrants to purchase an aggregate of
The Company evaluated the warrants under ASC Topic 718, ASC Topic 480, and ASC Topic 815-40 and concluded that the warrants qualify for equity classification. Accordingly, the warrants are measured at grant-date fair value using the Black-Scholes option pricing model and are not subsequently remeasured. The aggregate grant-date fair value of the warrants issued during the year ended June 30, 2026 was approximately $ thousand, which was recognized as compensation expense with a corresponding increase to additional paid-in capital.
| F-23 |
| March 6, 2026 | April 6, 2026 | May 6, 2026 | June 8, 2026 | |||||||||||||
| Warrants issued | ||||||||||||||||
| Exercise price | $ | $ | $ | $ | ||||||||||||
| Expected volatility | % | % | % | % | ||||||||||||
| Risk-free interest rate | % | % | % | % | ||||||||||||
| Expected dividend yield | % | % | % | % | ||||||||||||
| Expected term | years | years | years | years | ||||||||||||
The Company used the contractual term of five years as the expected term due to the lack of sufficient historical exercise activity and limited trading history of the Company’s common stock.
The following table summarizes warrant activity for the year ended June 30, 2026:
| Warrants | Weighted Average Exercise Price | |||||||
| Outstanding – June 30, 2025 | $ | |||||||
| Granted | $ | |||||||
| Exercised | ||||||||
| Expired/Cancelled | ||||||||
| Outstanding – June 30, 2026 | $ | |||||||
As of June 30, 2026, all outstanding warrants were exercisable and had a weighted-average remaining contractual life of approximately years.
NOTE 11 – RESTRICTED STOCK UNITS
On October 3, 2025, the Board of Directors (the “Board”) approved an amendment to the Company’s 2023 Stock Option Plan (the “2023 Plan”) to authorize the issuance of Restricted Stock Units (“RSUs”). The amendment was subsequently approved and ratified by the Company’s stockholders on November 19, 2025 (the 2023 Plan, as amended, the “Amended 2023 Plan”). RSUs represent the right to receive shares of the Company’s common stock upon the satisfaction of specified vesting conditions.
In connection with the amendment, the Board granted RSUs to Les Ottolenghi, the Company’s Chief Executive Officer, Principal Executive Officer and President, and RSUs to John Dermody, Vice President of Operations.
The RSU awards generally vest over a four-year service period, with an initial tranche vesting on the grant date and subsequent tranches vesting quarterly beginning January 1, 2026. The awards also contain accelerated vesting provisions upon the occurrence of specified events, including certain changes in control and qualifying terminations of employment, as defined in the applicable award agreements.
The Company accounts for RSUs in accordance with ASC Topic 718, Compensation—Stock Compensation. Compensation expense is measured based on the grant-date fair value of the awards and recognized on a straight-line basis over the requisite service period.
During the year ended June 30, 2026, RSUs vested. The Company recognized approximately $ thousand of stock-based compensation expense related to RSUs during the year ended June 30, 2026, which is included in general and administrative expense. As of June 30, 2026, approximately $ million of unrecognized compensation expense related to unvested RSUs is expected to be recognized over a weighted-average period of approximately years. As of June 30, 2026, shares of common stock had not been issued in settlement of the vested RSUs.
| F-24 |
| Number of RSUs | Weighted-Average Grant Date Fair Value | |||||||
| Unvested at June 30, 2025 | $ | |||||||
| Granted | $ | |||||||
| Vested | ( | ) | $ | |||||
| Forfeited | ||||||||
| Unvested at June 30, 2026 | $ | |||||||
NOTE 12 - COMMITMENTS AND CONTINGENCIES
The Company is subject to various commitments and contingencies arising in the ordinary course of business. Liabilities for loss contingencies are recognized when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
Surety Bond
During
May 2023, the Company obtained a $
Agreement with Sport Betting Services Provider
On
November 1, 2024 (and then amended on January 8, 2025), the Company entered into an agreement with a sports betting services provider.
Pursuant to the terms of the Agreement, the provider has agreed to provide certain services to the Company to use through their software
platform over which gaming and betting transactions with their customers are conducted, including back-office software, player account
management software, geo-location software and/or services, e-wallet software and/or services, websites and mobile applications, any
underlying operating software, mobile platforms, or other means of remote communication. The Services are to be provided on a non-transferable,
non-sub-licensable and non-exclusive basis for a term of five years after the first live launch in respect of the business to consumer
sports betting activities that we intend to carry out in certain states, countries or territories. The terms of the agreement provide
for aggregate up-front payments of $
Wheeling Island Gaming Dispute
On
October 24, 2025, Delaware North/Wheeling Island Gaming, Inc. (“Wheeling Island”) terminated its Casino and Sportsbook
Online Operations Agreement with the Company and demanded payment of approximately $
As of June 30, 2026, management concluded that a loss related to this matter was reasonably possible but not probable and that the amount of any potential loss could not be reasonably estimated. Accordingly, no liability has been recorded in the accompanying consolidated financial statements with respect to this matter.
Player Account Management Services Agreement
On
February 7, 2025, the Company entered into a Player Account Management Services Agreement for a term of four years to enhance its online
gaming platform offerings. The terms of the agreement call for a combination of upfront fees as well as monthly platform fees that will
vary based upon monthly net gaming revenues. Although the Company ceased its online sportsbook operations during fiscal 2026, this agreement
remained in effect as of June 30, 2026. In connection with the cessation of gaming operations, the Company wrote off approximately $
| F-25 |
Software defect
In August 2025, the Company encountered a software defect (the “Defect”) impacting its internal information technology (“IT”) infrastructure and applications. Upon detecting the Defect, the Company promptly took steps to contain and remediate the Defect and initiated an investigation. The Defect has been addressed and corrected.
Based
on the Company’s investigation findings to date, the Defect resulted in unauthorized player withdrawals that were processed by
the Company’s external payment processor vendor in the amount of approximately $
Because recovery of the remaining amounts was contingent upon future judgments, settlements, or other collection outcomes, the Company did not recognize a receivable for the outstanding claims as of June 30, 2026.
Federal Excise Tax Matter
The
Company previously identified certain late-filed federal excise tax returns on Form 730 related to its historical sports wagering operations.
The Company subsequently filed the applicable returns and made payments for the underlying excise taxes. In August 2026, the Company
received correspondence from the Internal Revenue Service asserting an additional balance due of approximately $
Legal matter contingencies
Except as described above, the Company believes, based on current knowledge and after consultation with counsel, that it is not currently party to any material pending proceedings, individually or in the aggregate, the resolution of which would have a material effect on the Company. Provisions for losses are established in accordance with ASC Topic 450, “Contingencies” when warranted. Once established, such provisions are adjusted when there is more information available about an event that occurs requiring a change.
NOTE 13 - RELATED PARTY TRANSACTIONS
Promissory Note – Former Officer
On
February 19, 2024, the Company amended its promissory note with John Linss, a former officer and former member of the Board of Directors,
and his wholly owned entity, Corespeed, LLC. The amendment required a principal payment of $
Excel Family Partners, LLLP
The Company maintains discretionary revolving and non-revolving demand line of credit arrangements with Excel Family Partners, LLLP (“Excel”), an entity controlled by Bruce Cassidy, the Company’s Chairman of the Board and principal shareholder. See Note 7.
| F-26 |
The
line of credit agreements have been amended on multiple occasions and bear interest at rates ranging from
On
December 28, 2023, approximately $
During
the year ended June 30, 2026, the Company borrowed approximately $
Eagle Investment Group, LLC
Eagle
Investment Group, LLC (“Eagle Investment”) is an entity controlled by Bruce Cassidy, the Company’s Chairman of the
Board and majority shareholder. As of June 30, 2026 and 2025, the Company had a $
Transactions with Entities Under Common Control
Beginning in October 2025, the Company entered into arrangements with FuzeBox AI, Inc. and Eagle II, LLC d/b/a Loop TV, entities under common control with the Company, to provide administrative, accounting, finance, technology, and operational support services. The arrangements do not provide for fixed service fees or a stated contractual term. Costs are allocated based on actual time incurred, relative benefit received, or other supportable allocation methodologies, and related balances are subject to reimbursement, offset, or other agreed-upon settlement methods.
As
of June 30, 2026, related-party receivables associated with these arrangements totalled $
Intellectual Property Transfer
During 2026, the Company transferred certain intellectual property to FuzeBox AI, Inc., an entity under common control. The transferred intellectual property consisted of early-stage and pre-production artificial intelligence platform concepts, methodologies, proof-of-concept and development work, and related documentation, know-how, trade secrets, goodwill, and related rights.
In
exchange, FuzeBox AI, Inc. issued a secured promissory note to the Company in the principal amount of $
Because
the transaction occurred between entities under common control, it was accounted for using carryover basis. In connection with the transaction,
approximately $
Amounts
due from FuzeBox AI, Inc. under the promissory note were $
| F-27 |
NOTE 14 - INCOME TAXES
Year Ended June 30, 2025
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A full valuation allowance is established against all net deferred tax assets as of June 30, 2025 based on estimates of recoverability.
While the Company has optimistic plans for its business strategy, it determined that such a valuation allowance was necessary given the current and expected near term losses and the uncertainty with respect to its ability to generate sufficient profits from its business model. Because of the impacts of the valuation allowance, there was no income tax expense or benefit for the year ended June 30, 2025.
A reconciliation of the differences between the effective and statutory income tax rates for the year ended June 30, 2025:
| (in thousands, except percentages) | June 30, 2025 | |||||||
| Amount | Percent | |||||||
| $ | ( | ) | % | |||||
| State income taxes | ( | ) | % | |||||
| Valuation allowance against net deferred tax assets | ( | )% | ||||||
| Effective rate | $ | % | ||||||
At June 30, 2025, the significant components of the deferred tax assets are summarized below:
(In thousands)
| Deferred income tax asset | June 30, 2025 | |||
| Net operating loss carryforwards | $ | |||
| Debt extinguishment/modification | ||||
| Depreciation and amortization | ||||
| Gain or loss on sale | ||||
| Unrealized gains and losses on investments | ||||
| Impairments | ||||
| Accrued Interest | ||||
| Non-cash compensation | ||||
| Capitalized Sec 174 R&D | ||||
| Amortization of 174 R&D | ( | ) | ||
| Total deferred income tax asset | ||||
| Less valuation allowance | ( | ) | ||
| Total deferred income tax asset | $ | |||
The
valuation allowance increased by $
The
Company has recorded as of June 30, 2025, a valuation allowance of $
The Company conducts an analysis of its tax positions and has concluded that it has no uncertain tax positions as of June 30, 2025.
As
of June 30, 2025, the Company has net operating loss carry-forwards of approximately $
| F-28 |
Year Ended June 30, 2026
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A full valuation allowance is established against net deferred tax assets when, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
The provision for income taxes for the year ended June 30, 2026 was $0. The Company recorded a full valuation allowance against its net deferred tax assets as of June 30, 2026 based on estimates of recoverability. In evaluating the need for a valuation allowance, management considered all available positive and negative evidence, including the Company’s cumulative losses in recent years, the absence of available net operating loss carrybacks, the uncertainty regarding future taxable income, and the absence of tax planning strategies that would support realization of the deferred tax assets. Accordingly, management concluded that a full valuation allowance was required as of June 30, 2026.
A reconciliation of the differences between the effective and statutory income tax rates for the year ended June 30, 2026 is as follows:
(in thousands, except percentages)
| Year Ended June 30, 2026 | Amount | Percent | ||||||
| U.S. Federal Statutory Tax Rate | $ | ( | ) | % | ||||
| State and Local Income Taxes, Net of Federal Income Tax Effect | % | |||||||
| Foreign Tax Effects | % | |||||||
| Effect of Changes in Tax Laws or Rates Enacted in Current Period | % | |||||||
| Effect of Cross-Border Tax Laws | % | |||||||
| Tax Credits | % | |||||||
| Changes in Valuation Allowances | ( | )% | ||||||
| Nontaxable or Nondeductible Items | ||||||||
| Unrealized gain/(loss) on fair value of derivative | ( | ) | % | |||||
| Accrued interest on convertible debt | ( | )% | ||||||
| Other | ( | )% | ||||||
| Changes in Unrecognized Tax Benefits | % | |||||||
| Other Adjustments | ( | ) | % | |||||
| Effective Tax Rate | $ | % | ||||||
The
$
(in thousands)
| Valuation Allowance Adjustment | Tax Effect | |||
| Removal of prior-year deferred tax assets | $ | |||
| Current-year deferred-only adjustments (installment sale) | ||||
| Actual decrease in federal valuation allowance | ( | ) | ||
| Change in federal valuation allowance | $ | |||
Income taxes paid, net of refunds received, were as follows:
(in thousands)
| Jurisdiction | Year Ended June 30, 2026 | |||
| Federal | $ | |||
| State | ||||
| Local | ||||
| Foreign | ||||
| Total income taxes paid | $ |
The Company had an immaterial state income tax payable as of June 30, 2026; the amount payable is not included in income taxes paid.
| F-29 |
All of the Company’s loss before income taxes for the year ended June 30, 2026 was attributable to domestic operations. The Company had no foreign income or loss before income taxes.
(in thousands)
| Year Ended June 30, 2026 | ||||
| Domestic loss before income taxes | $ | ( | ) | |
| Foreign income (loss) before income taxes | ||||
| Total loss before income taxes | $ | ( | ) | |
The provision for income taxes from continuing operations was comprised of the following:
| (in thousands) | Year Ended June 30, 2026 | |||
| Federal | $ | |||
| State | ||||
| Foreign | ||||
| Total provision for income taxes | $ |
At June 30, 2026, the significant components of the deferred tax assets and liabilities are summarized below:
(in thousands)
| June 30, 2026 | ||||
| Deferred income tax asset | ||||
| Net operating loss carryforwards | $ | |||
| Accruals and reserves | ||||
| Loss on extinguishment of debt | ||||
| Stock-based compensation | ||||
| Section 174 research and development costs | ||||
| Unrealized gains and losses | ||||
| Goodwill and intangibles | ||||
| Other | ||||
| Gross deferred tax assets | ||||
| Less valuation allowance | ( | ) | ||
| Net deferred tax assets | $ | |||
| Installment sale | $ | ( | ) | |
| Total deferred tax liabilities | $ | ( | ) | |
| Total net deferred tax asset/(liability) | $ | |||
The
Company has federal and state net operating losses available to offset against future taxable income of approximately $
On
July 4, 2025, the One Big Beautiful Bill Act of 2025 was enacted, which permits immediate expensing of domestic research and experimental
expenditures for tax years beginning after December 31, 2024, with an election to capitalize and amortize such expenditures over a period
of at least 60 months. Foreign research and experimental expenditures continue to be amortized over
The Company evaluates its tax positions to determine whether it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position. Based on its review of prior tax returns and tax positions, the Company determined that no reserve for uncertain tax positions was required as of June 30, 2026.
Utilization of the Company’s NOL carryforwards may be subject to a substantial annual limitation due to the “ownership change” provisions of Section 382 of the Internal Revenue Code of 1986, as amended, and similar state provisions. In general, an ownership change occurs if there is a cumulative change in the ownership of the Company by “5-percent shareholders” (as defined in the Code) that exceeds 50 percentage points over a rolling three-year period.
If the Company undergoes one or more ownership changes, the Company’s ability to utilize NOL carryforwards and other pre-change tax attributes to offset future taxable income will be subject to an annual limitation. This Section 382 limitation is generally calculated by multiplying the fair market value of the Company’s stock immediately before the ownership change by the applicable long-term tax-exempt rate, subject to certain adjustments (such as recognized built-in gains). The Company has not yet performed an analysis to determine if an ownership change has occurred; as such, the NOL carryforwards may be subject to limitation.
The Company’s federal and state income tax returns for the fiscal years ended June 30, 2020 through 2026 remain subject to examination.
| F-30 |
NOTE 15 — CESSATION OF GAMING OPERATIONS
On April 6, 2026, the Company notified the Tennessee Sports Wagering Council of its decision to cease its Tennessee sports wagering operations. Customer wagering operations ceased on April 30, 2026, when the VIP Play gaming application was shut down. The Company’s Tennessee Sports Gaming Operator license expired on May 24, 2026 and was not renewed.
The cessation of the Company’s Tennessee sports wagering operations did not meet the criteria for presentation as discontinued operations under ASC 205-20, Presentation of Financial Statements—Discontinued Operations. Management concluded that the Tennessee sportsbook operations did not constitute a component of the Company because their operations and cash flows could not be clearly distinguished, operationally and for financial reporting purposes, from the remainder of the Company. Accordingly, the operating results and costs associated with the Company’s gaming operations are included in continuing operations in the accompanying consolidated financial statements for all periods presented.
In
connection with the cessation of gaming operations, the Company evaluated assets associated with the gaming business to determine whether
they continued to provide future economic benefit. During the year ended June 30, 2026, the Company recognized impairment expense of
approximately $
The
Company also recognized a write-off of approximately $
The asset impairments are further discussed in Note 4 — Intangible Assets. See Note 12 — Commitments and Contingencies for additional information regarding the Company’s West Virginia gaming arrangement.
| F-31 |
NOTE 16 - SUBSEQUENT EVENTS
In accordance with ASC 855-10, the Company has analyzed its operations subsequent to June 30, 2026, through the date these financial statements were issued, and as of September 28, 2026, there were no other material subsequent events to disclose in these financial statements with the exception of the events below.
On September 10, 2026, the Company issued an aggregate of shares of common stock in settlement of previously vested restricted stock units granted under the Company’s 2023 Equity Incentive Plan, consisting of shares issued to Les Ottolenghi, the Company’s Chief Executive Officer, and shares issued to John Dermody. The restricted stock units were granted on October 3, 2025.
Subsequent to June 30, 2026, the Company issued warrants to a third-party advisor as compensation for services pursuant to an advisory agreement discussed in Note 10 — Stock Options and Warrants. On July 6, 2026, the Company issued warrants to purchase shares of common stock, on August 6, 2026, the Company issued warrants to purchase shares of common stock and on September 8, 2026, the Company issued warrants to purchase shares of common stock. The warrants are exercisable for terms of five years from their respective grant dates and include customary provisions, including cashless exercise and anti-dilution adjustments.
Subsequent
to June 30, 2026 and through September 28, 2026, the Company borrowed an additional $
Subsequent
to June 30, 2026, the
maturity date of the $
| F-32 |
Exhibit 4.6
DESCRIPTION
OF SECURITIES REGISTERED PURSUANT TO
SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
The following description of the common stock, par value $0.001 per share (the “Common Stock”), of VIP Play, Inc. (the “Company,” “we,” “us” or “our”) summarizes the material terms of the Common Stock. The Common Stock is registered under Section 12(g) of the Securities Exchange Act of 1934, as amended. This description is a summary and is qualified in its entirety by reference to our Amended and Restated Articles of Incorporation, as amended (the “Articles of Incorporation”), our Amended and Restated Bylaws, as amended (the “Bylaws”), and applicable provisions of the Nevada Revised Statutes (“NRS”).
Authorized Capital Stock
Our authorized capital stock consists of 500,000,000 shares, of which 475,000,000 shares are Common Stock, par value $0.001 per share, and 25,000,000 shares are preferred stock, par value $0.001 per share. Our Board of Directors is authorized, subject to the Articles of Incorporation and applicable law, to issue shares of preferred stock in one or more series and to establish the voting powers, designations, preferences, limitations, restrictions and relative, participating, optional and other rights of each series.
Voting Rights
Except as otherwise required by the NRS or provided in the Articles of Incorporation, including any certificate of designation relating to an outstanding series of preferred stock, each holder of Common Stock is entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Holders of Common Stock do not have cumulative voting rights in the election of directors. If a quorum is present, directors are elected by a plurality of the votes cast. Except where a different vote is required by the Articles of Incorporation, the Bylaws, the NRS or other applicable law, action on matters other than the election of directors is approved if the votes cast in favor of the action exceed the votes cast in opposition.
Dividends
Subject to the rights of holders of any outstanding preferred stock and to applicable law, holders of Common Stock are entitled to receive dividends and other distributions when, as and if declared by our Board of Directors out of assets legally available therefor.
Liquidation Rights
Upon our liquidation, dissolution or winding up, after payment or provision for payment of our debts and other liabilities and subject to the prior rights of holders of any outstanding preferred stock, the holders of Common Stock are entitled to share ratably in the remaining assets available for distribution to stockholders. A merger, conversion, exchange or consolidation of the Company with or into another entity, or a transfer of all or any part of our assets followed by a distribution of the proceeds to stockholders, is not deemed to be a liquidation under the Articles of Incorporation.
No Conversion, Redemption or Preemptive Rights
Holders of Common Stock have no conversion, redemption or preemptive rights under the Articles of Incorporation.
Preferred Stock; Series B Convertible Preferred Stock
Our Articles of Incorporation authorize our Board of Directors to issue preferred stock in one or more series and, subject to the Articles of Incorporation and applicable law, to determine the rights and preferences of those series. The issuance of preferred stock could adversely affect the voting power and other rights of holders of Common Stock.
The Company has designated Series B Convertible Preferred Stock (“Series B Preferred Stock”). The Series B Preferred Stock has voting and conversion rights that affect holders of Common Stock. Subject to the terms of the Series B Certificate of Designation, holders of Series B Preferred Stock generally vote together with holders of Common Stock as a single class on matters submitted to stockholders, with the voting power of the Series B Preferred Stock based on the number of shares of Common Stock into which the Series B Preferred Stock is convertible, subject to the voting limitations contained in the Series B Certificate of Designation. With respect to the election of directors, the holders of a majority of the outstanding Series B Preferred Stock have the right to elect a majority of the members of the Board of Directors, and holders of Common Stock are entitled to elect only a minority of the members of the Board. The Series B Preferred Stock also contains certain protective provisions requiring approval of the holders of Series B Preferred Stock for specified corporate actions. The Series B Preferred Stock is convertible into Common Stock at a conversion ratio of 100 shares of Common Stock for each share of Series B Preferred Stock, and has a liquidation preference senior to the Common Stock. Accordingly, the rights of holders of Series B Preferred Stock may affect the voting power, liquidation rights and other interests of holders of Common Stock.
| 1 |
Stockholder Meetings; Written Consent
Special meetings of stockholders may be called only by our Board of Directors, the Chairman of the Board or the Chief Executive Officer. Our Bylaws permit stockholders to take action without a meeting by written consent of stockholders having not less than the minimum number of votes that would be necessary to authorize or take the action at a meeting at which all shares entitled to vote were present and voted, subject to the notice and timing procedures set forth in the Bylaws and applicable law.
Board of Directors; Removal and Vacancies
Our Board of Directors consists of not fewer than one nor more than thirteen directors, with the number within that range fixed from time to time by the Board. The Board is not classified. Subject to the rights of holders of any outstanding preferred stock, vacancies and newly created directorships may be filled by a majority of the remaining directors then in office, even if less than a quorum, or by a sole remaining director. Subject to the rights of holders of preferred stock and the NRS, a director may be removed with or without cause by holders of not less than two-thirds of the voting power of the issued and outstanding stock entitled to vote generally in the election of directors.
Advance Notice Provisions
Our Bylaws establish advance notice procedures for stockholders seeking to nominate candidates for election as directors or to bring other business before an annual or special meeting of stockholders. These provisions require that specified information concerning the proposing stockholder, any beneficial owner on whose behalf a nomination or proposal is made, and the proposed nominee or business be provided within the time periods specified in the Bylaws.
Restrictions Relating to Gaming Laws
Our Articles of Incorporation contain provisions intended to enable the Company and its affiliates to comply with gaming laws and the requirements of gaming authorities. Among other things, if a holder or beneficial owner of our capital stock is determined to be an “Unsuitable Person,” as defined in the Articles of Incorporation, the Company may require that person to dispose of or transfer its shares, may purchase or cause the purchase of such shares in the circumstances and on the terms specified in the Articles of Incorporation, and may restrict or suspend certain rights associated with those shares. Transfers of capital stock are subject to these provisions and may also be subject to applicable gaming-law requirements. These provisions could restrict the ability of a holder to own or transfer Common Stock and could affect the rights otherwise associated with the Common Stock.
Transfer of Shares
Shares of Common Stock may be certificated or uncertificated as determined in accordance with the Bylaws. No transfer of stock is valid against the Company for any purpose until the transfer has been entered in the Company’s stock records.
Potential Anti-Takeover Effects
Certain provisions of the Articles of Incorporation and Bylaws may have the effect of delaying, deferring or discouraging a change in control of the Company or changes in our management. These provisions include the authority of the Board of Directors to issue preferred stock with rights and preferences established by the Board, restrictions on who may call special meetings of stockholders, advance notice requirements for stockholder nominations and other business, the two-thirds voting requirement for removal of directors, the Board’s authority to fill vacancies and newly created directorships, the rights of the Series B Preferred Stock, and the provisions relating to compliance with gaming laws.
| 2 |
Exhibit 10.9
THIS SECURED PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY APPLICABLE STATE SECURITIES LAWS. IT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN AVAILABLE EXEMPTION THEREFROM.
SECURED PROMISSORY NOTE
U.S. $1,383,000.00
Las Vegas, Nevada Dated: June 03, 2026
FOR VALUE RECEIVED, FuzeBox AI, Inc., a Nevada corporation (the “Maker” or the “Company”), having its principal office at 8400 W. Sunset Road, Suite 300, Las Vegas, Nevada 89113, hereby unconditionally promises to pay to the order of VIP Play, Inc., a Nevada corporation (together with its successors and permitted assigns, the “Payee” or the “Holder”), having its principal executive offices at 8400 W. Sunset Road, Suite 300, Las Vegas, Nevada 89113, the principal sum of One Million Three Hundred Eighty-Three Thousand and 00/100 U.S. Dollars (U.S. $1,383,000.00) (the “Principal Amount”), on the terms set forth in this Secured Promissory Note (this “Note”).
Consideration. This Note is issued by the Maker to the Payee as consideration for the transfer, assignment and conveyance to the Maker of certain intellectual property of the Payee (the “Transferred IP”), consisting of the intellectual property described in Schedule A hereto. The Principal Amount corresponds to the fair market value of the Transferred IP of $1,383,000 (rounded) as of February 28, 2026, as determined in the independent valuation report titled “Fair Market Value of Intellectual Property of VIP Play, Inc. as of February 28, 2026,” issued June 3, 2026 by Cherry Bekaert Advisory LLC (the “Valuation Report”).
1. Interest. This Note shall bear interest on the outstanding Principal Amount from and including the date first written above (the “Date of Issuance”) at the rate of four percent (4.00%) per annum (the applicable federal rate in effect on the Date of Issuance), computed on the basis of a 365-day year for the actual number of days elapsed. Accrued and unpaid interest shall be due and payable together with the Principal Amount on the Maturity Date. Following the occurrence and during the continuance of an Event of Default (as defined below), the outstanding Principal Amount and all accrued and unpaid interest shall bear interest at the lesser of (a) ten percent (10%) per annum and (b) the maximum rate permitted by applicable law.
2. Maturity; Payment of Principal. The entire outstanding Principal Amount, together with all accrued and unpaid interest and any other amounts payable under this Note, shall be due and payable in a single balloon payment on the date that is thirty-six (36) months after the Date of Issuance (the “Maturity Date”). All payments under this Note shall be made in lawful money of the United States of America, in immediately available funds, at the address of the Payee set forth above or at such other place as the Payee may from time to time designate in writing to the Maker. If any payment becomes due on a day that is not a business day, such payment shall be made on the next succeeding business day.
3. Prepayment. The Maker may prepay this Note, in whole or in part, at any time and from time to time prior to the Maturity Date, without premium, penalty or prior notice. All prepayments shall be applied first to accrued and unpaid interest and other amounts then due, and thereafter to the outstanding Principal Amount.
4. Grant of Security Interest. As security for the full and timely payment and performance of all obligations of the Maker under this Note (the “Obligations”), the Maker hereby grants to the Payee a continuing security interest in, and lien upon, all of the Maker’s right, title and interest in and to the Transferred IP described in Schedule A, together with all associated goodwill, registrations and applications, all rights to sue for and collect damages for past, present and future infringement thereof, and all products and proceeds of the foregoing (collectively, the “Collateral”). The parties intend that this security interest constitute a purchase-money security interest in the Collateral. This Note shall constitute a security agreement within the meaning of the Uniform Commercial Code as in effect in the State of Nevada (the “UCC”).
5. Perfection; Further Assurances. The Maker authorizes the Payee to file one or more financing statements (including UCC-1 financing statements) and any amendments or continuations thereof describing the Collateral, and to take any other action reasonably necessary to perfect and maintain the perfection and priority of the Payee’s security interest in the Collateral. The Maker shall promptly execute and deliver such further documents and instruments as the Payee may reasonably request to effectuate the purposes of this Note. Until the Obligations are paid in full, the Maker shall not sell, assign, license (other than in the ordinary course of business), or grant any competing lien or security interest in the Collateral without the prior written consent of the Payee.
6. Release of Security Interest. Upon the payment in full of the Principal Amount and all other Obligations under this Note, the Payee’s security interest in the Collateral shall automatically terminate and be released, and the Payee shall, at the Maker’s expense, promptly execute and deliver such termination statements and other documents as the Maker may reasonably request to evidence such release.
7. Events of Default. The occurrence of any one or more of the following shall constitute an “Event of Default” under this Note: (a) the Maker fails to pay the Principal Amount or any other amount due under this Note on the date the same becomes due and payable; (b) the Maker breaches any other covenant or agreement in this Note and such breach continues uncured for thirty (30) days after written notice thereof from the Payee; (c) the Maker files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law, or makes any assignment for the benefit of creditors, or takes any corporate action in furtherance of any of the foregoing; or (d) an involuntary petition is filed against the Maker and is not dismissed or discharged within sixty (60) days, or a custodian, receiver, trustee or similar official is appointed to take possession of any material property of the Maker.
8. Remedies. Upon the occurrence and during the continuance of an Event of Default, the outstanding Principal Amount and all other Obligations shall, at the option of the Payee and upon written notice to the Maker (except that no such notice shall be required upon an Event of Default described in Section 7(c) or 7(d), upon which acceleration shall be automatic), become immediately due and payable. Upon an Event of Default, the Payee may exercise all rights and remedies of a secured party under the UCC and any other applicable law, all of which rights and remedies shall be cumulative and not exclusive.
9. Costs of Collection. The Maker shall pay, on demand, all reasonable costs and expenses (including reasonable attorneys’ fees and court costs) incurred by the Payee in connection with the enforcement or collection of this Note or the exercise of any remedy hereunder following an Event of Default.
10. Waivers. The Maker hereby waives presentment, demand for payment, notice of dishonor, protest and notice of protest, and all other notices or demands in connection with the delivery, acceptance, performance, default or enforcement of this Note. No delay or omission by the Payee in exercising any right or remedy under this Note shall operate as a waiver thereof, and no single or partial exercise of any right or remedy shall preclude any other or further exercise thereof.
11. Usury Savings. Notwithstanding anything to the contrary in this Note, in no event shall any interest charged, collected or reserved under this Note exceed the maximum rate permitted by applicable law. If any amount paid under this Note would otherwise exceed such maximum rate, such excess shall be applied to reduce the outstanding Principal Amount or, if no Principal Amount remains outstanding, refunded to the Maker.
12. Successors and Assigns. This Note shall bind and inure to the benefit of the Maker and the Payee and their respective successors and permitted assigns; provided, however, that the Maker may not assign or delegate any of its obligations under this Note without the prior written consent of the Payee. The Payee may transfer this Note only in compliance with applicable securities laws and upon surrender of this Note to the Maker for reissuance in the name of the transferee.
13. Amendments; Waivers in Writing. No term of this Note may be amended, modified or waived except by a written instrument signed by the Maker and the Payee (or, in the case of a waiver, by the party against whom the waiver is to be enforced).
14. Notices. All notices and other communications under this Note shall be in writing and shall be deemed duly given when delivered personally, sent by nationally recognized overnight courier, or mailed by certified or registered mail (return receipt requested), in each case to the address of the applicable party set forth above (or to such other address as such party may designate by notice given in accordance with this Section).
15. Governing Law. This Note, and all matters arising out of or relating to this Note, whether sounding in contract, tort or statute, shall be governed by and construed in accordance with the internal laws of the State of Nevada, without giving effect to any choice or conflict of law provision or rule that would require or permit the application of the laws of any jurisdiction other than those of the State of Nevada.
16. Severability. If any provision of this Note is held to be invalid, illegal or unenforceable, such provision shall be modified to the minimum extent necessary to make it valid, legal and enforceable, and the remaining provisions of this Note shall continue in full force and effect.
17. Corporate Approval. The Maker represents and warrants that the execution, delivery and performance of this Note have been duly authorized by all necessary corporate action of the Maker, and that its board of directors, in the exercise of its fiduciary duties, has approved the Maker’s execution of this Note based upon a reasonable belief that the terms hereof are fair and appropriate for the Maker after reasonable inquiry concerning the Maker’s financing objectives and financial situation.
IN WITNESS WHEREOF, the Maker has executed and delivered this Secured Promissory Note as of the date first written above.
| MAKER: | ||
| FUZEBOX AI, INC. | ||
| By: | /s/ Duncan Beatty | |
| Name: | Duncan Beatty | |
| Title: | CFO | |
| ACKNOWLEDGED AND AGREED (as to the security terms): | ||
PAYEE: |
||
| VIP PLAY, INC. | ||
| By: | /s/ John Dermody | |
| Name: | John Dermody | |
| Title: | GM of Gaming | |
SCHEDULE A
Description of Transferred IP / Collateral
The “Transferred IP” and “Collateral” consist of all right, title and interest of VIP Play, Inc. in and to the intellectual property valued in the Valuation Report, comprising the early-stage, pre-production ideas, concepts, methods, conceptual system designs, proposed AI use cases, technical approaches, methodologies, and related proof-of-concept and development work relating to a potential AI-enabled software platform, together with all associated documentation, know-how, trade secrets, goodwill, and all products and proceeds of the foregoing.
Note: The parties should confirm and, if desired, itemize the specific assets comprising the Transferred IP (e.g., named designs, documents, repositories, or files) to ensure the security interest and any UCC-1 filing adequately identify the Collateral.
Exhibit 21.1
SUBSIDIARIES OF VIP PLAY, INC.
| 1. | VIP Play TN, LLC, a limited liability company organized in Tennessee. |
| 1 |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-293455) of VIP Play, Inc. and its subsidiary of our report dated September 28, 2026, relating to the consolidated financial statements of VIP Play, Inc. and its subsidiary, appearing in this Annual Report on Form 10-K for the year ended June 30, 2026.
/s/ Frank, Rimerman + Co. LLP
San Francisco, California
September 28, 2026
Exhibit 23.2
Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in this Form S-8 of our report, dated September 29, 2025, except for note 2, as to which the date is September 28, 2026, with respect to our audits of the consolidated financial statements of VIP Play, Inc. as of June 30, 2025 and 2024 and for the years then ended. Our report included an explanatory paragraph related to substantial doubt about the company’s ability to continue as a going concern.
Grassi & Co., CPAs, P.C.
Jericho, New York
September 28, 2026
EXHIBIT 31.1
CERTIFICATION PURSUANT TO
EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Les Ottolenghi, certify that:
| 1. | I have reviewed this annual report on Form 10-K of VIP Play, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: | September 28, 2026 | /s/ Les Ottolenghi |
| Les Ottolenghi | ||
| Principal Executive Officer | ||
EXHIBIT 31.2
CERTIFICATION PURSUANT TO
EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Amy Weiss, certify that:
| 1. | I have reviewed this annual report on Form 10-K of VIP Play, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: | September 28, 2026 | /s/ Amy Weiss |
| Amy Weiss | ||
| Principal Financial Officer | ||
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the annual report of VIP Play, Inc., (the “Company”) on Form 10-K for the 12-month period ended June 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Les Ottolenghi, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that;
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| /s/ Les Ottolenghi | |
| Name: Les Ottolenghi | |
Title: Chief Executive Officer |
|
| Date: September 28, 2026 |
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the annual report of VIP Play, Inc., (the “Company”) on Form 10-K for the 12-month period ended June 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Amy Weiss, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that;
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| /s/ Amy Weiss | |
| Name: Amy Weiss | |
| Title: Principal Financial Officer | |
| Date: September 28, 2026 |