Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed financial statements and related notes appearing in this Quarterly Report on Form 10-Q. This discussion and other parts of this Quarterly Report contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. As a result of many factors, including those factors set forth in the "Risk Factors" section of this Quarterly Report, our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis.

Overview

We are a technology and intellectual-property-driven gaming and digital entertainment company developing proprietary platforms that deliver skill-based, data-supported, and highly personalized interactive experiences. The Company's focus is on creating curated engagement products that blend fantasy sports frameworks, predictive modeling, gamification mechanics, and behavioral personalization to drive user participation through direct team ownership across underserved and emerging segments of the sports entertainment marketplace.

MGAM's current strategy emphasizes the development and commercialization of technology assets, data-driven scoring engines, mobile-first user interfaces, and proprietary behavioral-logic systems designed to support next-generation fantasy formats. These products are intended to offer users deeper strategic optionality and more immersive experiences than conventional fantasy sports models, which often rely on simplified scoring systems and limited personalization.

Components of Statements of Operations

Revenue and Cost of Revenue

Dominus Sports: During 2025, the Company established a beta league for fantasy baseball utilizing its Dominus Sports product, which provides customers the opportunity to create and own a team with three different tier pricing options. Ownership fees paid provide the customer with ownership rights over a five-year period; these ownership fees are recorded as a liability and paid out as prize money ("Team Prize Payout") over the five-year ownership period. Customers also have the ability to buy additional micro transactions, which provide various additional rights or improvements to their teams. Micro transactions are generally recognized as revenue when billed.

RSO: During 2025, the Company acquired RSO, which is a premier dynasty-style Football fantasy sports platform built around real-world contract negotiations, salary-cap management, and multi-season franchise control. The Company earns subscription and support revenue by granting customers access to its RSO platform technology, whereby customers are able to manage a football fantasy team. Subscription and support revenue primarily includes subscription fees from customers accessing the Company's RSO platform ("RSO Platform Services").

Subscription and support revenues are comprised of fees that provide customers with access to the RSO Platform Services and related support and updates during the term of the arrangement. RSO Platform Services allow customers to use the Company's software without taking possession of the software. Revenue is generally recognized ratably over the contract term. Substantially all of the Company's subscription service arrangements are noncancellable and do not contain refund-type provisions.

The Company typically invoices its customers annually and its payment terms provide that customers pay within 30 days of invoice. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether transfer of control to the customer has occurred.

Revenue for the three and six months ended June 30, 2026 from RSO Platform Services and Dominus Sports was approximately $16,000 and $22,000, respectively. During the six months ended June 30, 2025, the Company received approximately $1,600 of revenue (included as part of discontinued operations) from prize money earned from teams that it sponsored for certain Esports competitions.

Cost of Revenue

Cost of revenue consists primarily of costs directly attributable to providing customers access to the Company's fantasy league platforms (both Dominus Sports and RSO Platform Services), including hosting and cloud infrastructure costs, third-party data and content fees, payment processing fees, platform-related customer support costs, and amortization of capitalized software costs related to the platform. Costs incurred for sales and marketing, and general and administrative activities are excluded from cost of revenue and expensed as incurred.

Selling, General and Administrative Expenses

Selling, general and administrative costs are expensed as incurred and primarily include personnel costs in the U.S., public filing fees, travel expenses, contractor fees, and professional fees.

Critical Accounting Policies and Estimates

We discussed our accounting policies and significant assumptions used in our estimates in Note 2 of our audited financial statements included in our Annual Report on Form 10K for the year ended December 31, 2025, and that disclosure should be read in conjunction with the Quarterly Report on Form 10-Q. There have been no material changes during the six months ended June 30, 2026 to our critical accounting policies, significant judgments and estimates disclosed in our Annual Report on Form 10K for the year ended December 31, 2025.

Results of Operations

Three and six months Ended June 30, 2026 compared with the Three and six months Ended June 30, 2025

The following table summarizes the results of our operations for the three and six months ended June 30, 2026 and 2025, together with the changes in those items in dollars and as a percentage:

Revenue

Revenue for the three and six months ended June 30, 2026 from RSO Platform Services and Dominus Sports was approximately $16,000 and $22,000 compared to nil for the three and six months ended June 30, 2025.

Cost of Revenue

Cost of revenue for the three and six months ended June 30, 2026 was approximately $104,000 and $207,000, respectively, compared to nil for the three and six months ended June 30, 2025. The increase in cost of revenue for the three months ended June 30, 2026 was primarily driven by increases of approximately $2,000 in payment processing fees; $7,000 in software subscription expense; $5,000 in hosting expense and licensing fees; and $89,000 in software development expense and amortization of capitalized software.

The increase in cost of revenue for the six months ended June 30, 2026 was primarily driven by increases of approximately $4,000 in payment processing fees; $14,000 in software subscription expense; $8,000 in hosting expense and licensing fees; and $181,000 in software development expense and amortization of capitalized software.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were approximately $761,000 and $1,389,000 for the three and six months ended June 30, 2026, respectively, compared with approximately $380,000 and $773,000 for the three and six months ended June 30, 2025, respectively. The increase in general and administrative expenses for the three months ended June 30, 2026 was primarily driven by increases of approximately $254,000 in stock-based compensation expense; $28,000 in payroll expense; $103,000 in legal, accounting and professional expense; and $131,000 in software maintenance expense. This increase was offset by decreases of approximately $68,000 in consulting expense and board fees; $15,000 in insurance expense; $29,000 in marketing, travel and entertainment expense; and $29,000 in other tax expense.

The increase in general and administrative expenses for the six months ended June 30, 2026 was primarily driven by increases of approximately $419,000 in stock-based compensation expense; $86,000 in payroll expense; and $208,000 in legal, accounting and professional expense; and $131,000 in software maintenance expense. This increase was offset by decreases of approximately $153,000 in consulting expense and board fees; $21,000 in insurance expense; $29,000 in marketing, travel and entertainment expense; and $31,000 in other tax expense.

Discontinued Operations

In a strategic shift to focus on its flagship product, Dominus Sports, the Company decided to discontinue operations at its India subsidiary, MOGO Pvt Ltd. Because the Company will no longer work with universities to promote and establish sports leagues on college campuses, the Company has determined that the disposal of this subsidiary qualifies for reporting as a discontinued operation.

As a result of this strategic shift, the India subsidiary's revenue decreased by approximately $1,600 for the six months ended June 30, 2026 compared to June 30, 2025. Additionally, selling, general and administrative expenses also decreased by approximately $67,000 and $73,000 for the three and six months ended June 30, 2026 compared to June 30, 2025. Additionally, during the six months ended June 30, 2025, the India subsidiary recorded a $13,000 gain on classification as held for sale.

Liquidity and Capital Resources

As of June 30, 2026 and December 31, 2025, we had cash of approximately $20,000 and $573,000, respectively.

We have financed operations through the issuance of common stock with warrants; notes payable; and convertible notes payable; and convertible notes payable with restricted common stock. In 2025 the Company issued 500,000 shares of common stock with warrants to purchase up to 500,000 shares of common stock ("2025 Warrants") at an exercise price of $0.26 per share through a private stock offering. The total purchase price was $0.25 per share and warrant for total gross proceeds of $125,000. In 2025, we also issued several note payable agreements totaling $125,000 and issued several convertible promissory notes for total gross proceeds of $610,500. We also issued $325,000 in convertible notes payable, whereby the holders of these notes were entitled to receive 1,300,000 shares of restricted common stock. During the six months ended June 30, 2026, we issued $155,000 in convertible notes payable with 100,000 shares of restricted common stock. During the six months ended June 30, 2026, we also issued $61,000 in notes payable with an obligation to issue 750,000 shares of restricted common stock. During April 2026, the Company issued 2,500,000 restricted shares of common stock for total cash proceeds of $25,000 and stock issuance costs of $1,500.

Funding Requirements

We believe we will need to raise additional funding to meet our cash, operational and liquidity requirements for at least 12 months after the date of this quarterly report.

See "Risk Factors" for additional risks associated with our substantial capital requirements.

Cash Flows

The following table summarizes our sources and uses of cash:

Operating Activities

Net cash used in operating activities increased by approximately $168,000 for the six months ended June 30, 2026 compared with the six months ended June 30, 2025. The increase was primarily due to a $138,000 gain on the change in fair value of other current liabilities; and a $467,000 increase in net loss, a $40,000 decrease in common stock issued for services; and a $164,000 decrease in the fair value of convertible note payable; offset by a $181,000 increase in depreciation expense and amortization of capitalized software; a $419,000 increase in non-cash expense for stock-based compensation; a $9,000 foreign currency translation adjustment to retained earnings; a $13,000 increase in amortization of debt discount; and a $19,000 increase in operating assets and liabilities.

Investing Activities

Net cash used in investing activities decreased by approximately $13,000 for the six months ended June 30, 2026 compared with the six months ended June 30, 2025. This decrease was primarily due to a $13,000 decrease in software costs.

Financing activities

Net cash provided by financing activities decreased by approximately $66,000 for the six months ended June 30, 2026 compared with the six months ended June 30, 2025. The change was due to an increase of financing raised from the issuance of convertible notes payable, notes payable and common stock, totaling approximately $7,000, offset by payment of deferred offering costs of approximately $2,000 and repayment of convertible notes payable and notes payable of approximately $71,000.

As an "emerging growth company" under the Jumpstart Our Business Startups Act of 2012, as amended (the "JOBS Act"), we can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected to "opt out" of this provision and, as a result, we will comply with new or revised accounting standards when they are required to be adopted by public companies that are not emerging growth companies.

Subject to certain conditions, as an emerging growth company, we rely on certain of these exemptions, including without limitation:

We may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii) the last day of 2027; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC. We may choose to take advantage of some but not all of these exemptions. Accordingly, the information contained herein may be different from the information you receive from other public companies in which you hold stock.

Smaller Reporting Company

As a "smaller reporting company," as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), in addition to providing reduced disclosure about our executive compensation arrangements and business developments, among other reduced disclosure requirements available to smaller reporting companies, we present only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced "Management's Discussion and Analysis of Financial Condition and Results of Operations" disclosure. Accordingly, the information contained herein may be different from the information you receive from other public companies in which you hold stock.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.