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 consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q (this "report"). Some of the information contained in this discussion and analysis or set forth elsewhere in this report, including information with respect to our plans and strategy for our business, include forward-looking statements that involve risks and uncertainties. You should review "Risk Factors" for a discussion of important factors that could cause our actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Further, effective as of March 31, 2026, we completed the Conversion, pursuant to which we effectuated the conversion from a Delaware corporation to a Nevada corporation. As a result, all shares of the Company's common stock, per-share data and related information included in the operating results discussed in this section and the financial statements and related notes thereto included elsewhere in this report have been retroactively adjusted as though the Conversion had been effected prior to all periods presented.

Overview

We develop and market an artificial intelligence-based sports performance tracking technology that is primarily focused on the golf industry. We are a sports technology company seeking to enhance the golf playing experience with tools that leverage the power of AI, precision shot tracking, and personalized feedback. Our solutions integrate advanced tracking with global positioning system ("GPS") technology, smart sensors, and AI-based analytics to enhance player performance and enjoyment. With the GameGolf KZN AI shot tracker and AI powered GameGolf Smart Caddie, we are creating a unified, data-driven platform tailored to the needs of golfers worldwide.

Our products leverage advanced GPS shot tracking hardware, AI algorithms, and a smart coaching app to provide players with real-time insights, strategy recommendations, and personalized performance analytics. We are dedicated to changing the way golfers and instructors worldwide utilize data to enhance on course performance. By enabling golfers to make informed, data-driven decisions, we believe we help improve their skills and contribute to the overall growth of the sport. Our technology equips players of all levels with the tools to meticulously track their progress, from every shot to every round.

Over the last two years, we have concentrated our efforts on the development of our new generation GameGolf KZN AI devices, applications and infrastructure. We launched a beta version of the GameGolf KZN AI device in May 2025 to our legacy product user base, a limited release to a select group of golfers in August 2026, and expect to fully launch the GameGolf KZN AI device and associated iOS and Android mobile apps for general release on or around the end of the third quarter of 2026.

The sale proceeds from the sale of a GameGolf KZN AI device comprises two elements, proceeds from the sale of the hardware device and a subscription fee that allows customers to obtain access to our software platform and services. On the anniversary of the setup of the GameGolf KZN AI device by the customer, and subsequent anniversaries thereafter, the customer is charged a subscription fee for continued access to the Company's platform, features and services. Up until 2023, we only generated revenue on the sale of the device and provided free access to our platform. The change to a subscription-based model increases customer lifetime value ("CLV") and provides a recurring revenue stream, while enabling the Company to continuously deliver new features, data insights, and performance enhancements. The subscription offering includes access to the GameGolf App, GameGolf Smart Caddie functionality, and the broader GameGolf platform.

We generate revenue from the sale of the GameGolf KZN AI hardware device and from recurring annual subscription fees for continued access to the GameGolf App, GameGolf Smart Caddie and the GameGolf platform. Our products are currently sold directly to consumers via online platforms, and, in the future, we intend to expand our sales and marketing initiatives to grow our distribution network via strategic partnerships, influencer campaigns, and other direct-to-consumer initiatives.

Our path to profitability is focused on transitioning from predominantly one-time hardware sales to a recurring, higher-margin software and data-driven revenue model. We intend to monetize our installed base and proprietary dataset through subscriptions for advanced analytics and AI-enabled features, as well as through potential licensing and business-to-business partnerships with coaches, golf facilities, and industry participants. Over time, this strategy is expected to improve revenue predictability, expand gross margins, and enhance operating leverage as scale is achieved.

A core component of our long-term growth is to pursue strategic acquisitions, joint ventures, minority investments and other strategic transactions designed to expand our capabilities and platform, accelerate market penetration and enhance our data and technology capabilities. While we expect to evaluate opportunities within golf technology and performance analytics, our strategic mandate is not limited to a predefined category of businesses. We may also pursue transactions across the broader sports, entertainment, and experiential ecosystem where we believe we can create value through technology integration, data intelligence, brand leverage, or operational scale. We intend to remain opportunistic and flexible in evaluating transactions, and our acquisition criteria will focus on strategic fit, scalability, data enhancement potential, revenue quality, margin profile, and the ability to accelerate our long-term platform strategy.

We experienced a net loss of $3,325,413 and $4,030,345 for the three and six months ended June 30, 2026, respectively. We experienced net income of $1,809 and a net loss of $144,966 for the three and six months ended June 30, 2025, respectively. The Company has directed its resources over the past number of years to the development of its new hardware device, GameGolf KZN AI and the development of software applications. During that period revenues have been minimal. The Company cannot assure that it will ever earn future revenues sufficient to support its operations, or that it will ever be profitable. In order to continue our operations, we have historically supplemented the revenues we earned with loans received from our former parent company, Grafiti LLC, and Streeterville.

Recent Developments

Bridge Financing

On March 31, 2026, we entered into a securities purchase agreement (the "Purchase Agreement"), with Streeterville, pursuant to which we agreed to offer and sell to Streeterville a secured convertible promissory note in the principal amount of $1,135,000 (the "Bridge Note"), and a warrant (the "Note Warrant") to purchase 250,000 shares of common stock at an exercise price equal to $6.80 per share, for an aggregate purchase price of $500,000, which, in addition to the original issue discount described below, includes (i) $575,000 underlying that certain secured promissory note, issued to Streeterville on December 31, 2025 (the "First Note"), which was deemed cancelled as partial consideration for the issuance of the Bridge Note and Note Warrant and (ii) $35,000 to pay for Streeterville's fees. The Bridge Note and the Note Warrant were issued on March 31, 2026. The Note Warrant may be exercised at any time on or after the Listing Date until the date that is five years from the Listing Date, unless terminated earlier by the Company at any time following one year from the Listing Date.

The Bridge Note carries an original issue discount of $100,000 and accrues interest at a rate of ten percent (10%) per annum with the principal amount and all accrued interest being due and payable on April 30, 2027. We may prepay the Bridge Note upon ten (10) trading days' notice; provided that if such prepayment is made, then we must pay a prepayment penalty in an amount equal to 110% of the amount being prepaid.

Upon an event of default, the interest rate shall increase to eighteen percent (18%) per annum or the maximum rate permitted under applicable law. In addition, the Bridge Note contains certain triggering events that would increase the outstanding balance. Upon the occurrence of a Major Triggering Event (as defined in the Bridge Note), the outstanding balance would increase by an amount equal to fifteen percent (15%) of the then outstanding balance, and upon the occurrence of a Minor Triggering Event (as defined in the Bridge Note), the outstanding balance would increase by an amount equal to five percent (5%) of the then outstanding balance.

At any time commencing on the Listing Date, Streeterville may, at its election, convert all or any portion of the outstanding balance of the Bridge Note, which includes the principal amount under the Bridge Note and any accrued interest thereunder, into shares of common stock at a conversion price equal to $6.80 per share ("Note Conversion Price"). Assuming that the Bridge Note is converted on March 31, 2027, at the Note Conversion Price, the Bridge Note will be convertible into up to 184,730 shares of common stock including principal and accrued interest as of such date (the "Note Shares").

Series A Preferred Stock Financing

On June 30, 2026, we entered into another securities purchase agreement (the "Preferred Purchase Agreement") with Streeterville, pursuant to which we agreed to offer and sell to Streeterville (i) up to $40,000,000 (the "Commitment Amount") in shares of Series A Preferred Stock, at a purchase price of $1,000 per Series A Preferred Stock; (ii) 1,438,000 shares of common stock (the "Pre-Delivery Shares"); and (iii) a warrant (the "Warrant") to purchase 1,250,000 shares of common stock at a purchase price of $1,250, which Warrants may be exercised at any time after the Listing Date at an exercise price of $8.00 per share (subject to standard adjustments for stock splits, stock dividends, recapitalizations and similar transactions). The terms of the Series A Preferred Stock are governed by the certificate of designation filed with the Nevada Secretary of State on June 30, 2026 (the "Certificate of Designation") (see Note 8 - Preferred Stock for additional information on the transactions contemplated under the Preferred Purchase Agreement).

The Preferred Purchase Agreement provides for closings in multiple tranches. At the first closing, which occurred at the time we entered into such agreement, we issued the Pre-Delivery Shares to Streeterville for a purchase price of $1,438 and the Warrants for a purchase price of $1,250. At the second closing, which occurred on the Listing Date, we issued 8,000 shares of Series A Preferred Stock to Streeterville for a purchase price of $8,000,000.

The Series A Preferred Stock is convertible at any time into shares of common stock at a conversion price equal to: (i) $8.00 per share (subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or other similar events) (the "Fixed Price"), prior to the occurrence of a Trigger Event or Event of Default, and (ii) following the occurrence of a Trigger Event or Event of Default, the lesser of (A) the Fixed Price, and (B) 88% multiplied by the lowest daily VWAP during the ten (10) trading day period prior to the applicable measurement date, but in no event lower than the Floor Price of $4.00.

Pursuant to the Preferred Purchase Agreement, we shall have the right, at any time after the six (6) month anniversary of the Subsequent Registration Statement being declared effective by the SEC, to repurchase the Pre-Delivery Shares upon a written request delivered to Streeterville at a purchase price of $0.001 for each such Pre-Delivery Share (as adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions), which, upon receipt of such written request, will be delivered by Streeterville within thirty (30) trading days of such date.

On July 30, 2026, the Company completed the second closing contemplated under the Preferred Purchase Agreement in connection with the Direct Listing. At the second closing, the Company issued and sold to Streeterville 8,000 shares of Series A Preferred Stock for an aggregate purchase price of $8,000,000, before deducting transaction expenses.

GolfSuites Co-Marketing and Collaboration Agreement

On April 2, 2026, we entered into a Co-Marketing and Collaboration Agreement (the "Marketing Agreement") with GolfSuites 1, Inc. ("GolfSuites"), a Delaware corporation that operates golf entertainment facilities. Under the Marketing Agreement, we appointed GolfSuites as a non-exclusive authorized reseller of our GameGolf KZN AI product within GolfSuites' network of facilities and channels. GolfSuites committed to purchasing a minimum of approximately $105,000 in units per quarter for an initial four-quarter term, with payment obligations commencing upon the delivery of the initial purchase order which shall occur no later than August 31, 2026 (the "Commencement Date"). GolfSuites is entitled to a reseller discount of our then-current suggested retail price, and has full discretion to set its own end-customer resale prices. In exchange for GolfSuites providing co-marketing services, including on-site promotion, digital and direct marketing, customer activation, and events across its facilities, we agreed to pay GolfSuites a total marketing fee of $500,000, payable in two installments: (i) $150,000 upon execution of the Marketing Agreement and (ii) $350,000 within five (5) business days of the completion of our direct listing.

The Marketing Agreement has an initial one-year term from the Commencement Date and renews on successive one-year terms by mutual written agreement, with either party able to terminate for convenience on thirty (30) days' notice following the initial term, or immediately for cause upon material breach (subject to a 30-day cure period) or insolvency. The closing of the Marketing Agreement is conditioned upon the concurrent execution and effect of the Share Exchange Agreement (the "Share Exchange Agreement") by and among GolfSuites, us and Grafiti, and our payment of the first marketing fee installment of $150,000. We entered into such Share Exchange Agreement, as further described below, and such marketing fee installment was paid, on April 3, 2026. Each party granted the other a limited, non-exclusive, royalty-free license to use its trademarks and brand assets solely in connection with approved co-marketing activities.

On August 10, 2026, we received the initial purchase order from GolfSuites for 500 units of our GameGolf KZN AI product, representing the Quarterly Minimum number of units required to be purchased by GolfSuites under the Marketing Agreement.

Exchange Agreement

On June 30, 2026, we entered into an Exchange Agreement (the "Exchange Agreement") with Grafiti Group (the "Majority Holder"), pursuant to which we issued 18,000.018 shares of Series A Preferred Stock to the Majority Holder in exchange for 2,500,000 shares of our common stock held by the Majority Holder (the "Exchange").

Related Party Note Payable

On December 28, 2024, we issued the Grafiti Note to Grafiti LLC, for an aggregate principal sum of $2,500,000. On March 31, 2025, we entered into an Amendment Agreement with Grafiti LLC to increase the aggregate principal of the promissory note to $3,000,000 and extend the due date to December 31, 2025. Subsequently, we and Grafiti LLC executed an additional amendment with an effective date of December 31, 2025, to extend the due date of the promissory note to June 30, 2026. On July 29, 2026, we entered into the Amendment with Grafiti LLC, which extends the maturity date of the Grafiti Note to July 31, 2027, with retroactive effect as of June 30, 2026, and adds repayment provisions. The Grafiti Note has an interest rate of 10% and is for funding of liabilities and working capital needs.

During the year ended December 31, 2025, we received $1,007,000 under the Grafiti Note and repaid $104,883 of the principal under such note, leaving a principal balance of $2,792,117 as of December 31, 2025, with the amount available under the Grafiti Note of $207,883 as of that date. On December 31, 2025, we paid the accrued interest payable balance of $326,572 and therefore there was no interest payable as of December 31, 2025.

During the six months ended June 30, 2026, we received $336,408 under the Grafiti Note and repaid $128,568 of the principal under such note, leaving a principal balance under the Grafiti Note of $2,999,957 as of June 30, 2026, with the amount available under such note of $43 as of that date. On June 30, 2026, we owed $72,387 of accrued interest payable under such note.

We received no further advances under the Grafiti Note during the period from July 1 through August 10, 2026. A total repayment of the Grafiti Note for an amount equal to $500,000 was made on August 3, 2026, comprising $97,387 in accrued interest and $402,613 in principal repayments. As of August 10, 2026, the balance owed under the Grafiti Note was $2,597,344 and the amount available for future loan under such note was $402,656.

Critical Accounting Policies and Significant Management Estimates

Our financial statements are prepared in accordance with GAAP. Our discussion and analysis of its financial condition and operating results require us to make judgments, assumptions and estimates that affect the amounts reported. We base our estimates on historical experience, current trends, and various other assumptions we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. There have been no material changes to our critical accounting policies and estimates from those disclosed in our Registration Statement. For a discussion of our critical accounting policies and estimates, please refer to the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates" in the Registration Statement.

Components of Results of Operations

Revenue

We generate revenue from the sale of the GameGolf KZN AI hardware device and from recurring annual subscription fees for continued access to the GameGolf App, GameGolf Smart Caddie and the GameGolf platform. Our products are currently sold directly to consumers via online platforms and in the future we intend to expand our sales and marketing initiatives to grow our distribution network via strategic partnerships, influencer campaigns, and other direct-to-consumer initiatives.

Operating Expenses

Research and Development

Research and development activities represent a significant part of our business. Our research and development efforts focus on the design and testing of our GameGolf suite of products.

Research and development expenses consist primarily of the following types of expenses:

●

employee-related expenses, including salaries and benefits for personnel engaged in research and development functions;

●

expenses incurred under agreements with third parties such as consultants and contractors; and

●

software and technology-related on-course and off-course testing expenses.

Research and development costs are expensed as incurred. We expect our research and development expenses to decrease modestly in absolute terms, as we shift focus from hardware and software into the exploitation of the AI and machine learning capabilities of our GameGolf products.

We cannot determine with certainty the timing, duration or the costs necessary to complete the design, development, and manufacturing future enhancements of our GameGolf product line due to the inherently unpredictable nature of our research and development activities. Development timelines, the probability of success, and development costs may differ materially from expectations.

Sales and Marketing Expenses

Sales and marketing costs include salary costs for marketing, sales and business development personnel and commissions payable to providers of such services, including marketing. It also includes marketing and advertising activities such as developing marketing content, investment in social media campaigns and partnering with influencers to engage with the wider golfing public. Initial costs will be directed towards building awareness and credibility of our GameGolf products with return on investment expected to improve as we establish a presence in our target markets. Sales and marketing expenses are expensed as incurred. We expect sales and marketing costs to substantially increase as we launch our GameGolf KZN AI product on or around the end of the third quarter of 2026.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and related costs for personnel in executive, finance, operations, and administrative functions. General and administrative expenses also include professional fees for accounting, auditing, tax and administrative consulting services; insurance costs, GameGolf platform hosting costs, third party logistics (3PL) partners and other operating costs.

We anticipate that general and administrative expenses will increase in the future as we increase our headcount and cost base to support the growth of the business through continued research and development and commercialization of the GameGolf products and incur regulatory and compliance costs as a result of being a public company

Other Income/Expense

Other income and expense primarily consist of interest expense relating to the Grafiti Note, the First Note and the Bridge Note and foreign exchange gains and losses. We expect the overall interest expense to decrease due to a lower interest cost on the Grafiti Note due to principal repayments over time.

Results of Operations

Three Months Ended June 30, 2026 compared to the Three Months Ended June 30, 2025

The following table sets forth selected consolidated financial data as a percentage of our revenue and the percentage of period-over-period change:

		For the Three Months Ended June 30,
		2026								2025
		Amount				% Of Revenues				Amount				% Of Revenues				Change				% Change
Revenues		$	1,403				100	%		$	15,169				100	%		$	(13,766	)			(91	)%
Cost of revenues		$	853				61	%		$	13,888				92	%		$	(13,035	)			(94	)%
Gross profit		$	550				39	%		$	1,281				8	%		$	(731	)			(57	)%
Operating expenses		$	3,076,630				219,289	%		$	273,785				1,805	%		$	2,802,845				1,024	%
Loss from operations		$	(3,076,080	)			(219,250	)%		$	(272,504	)			(1,796	)%		$	(2,803,576	)			1,029	%
Other income/(expense)		$	(249,333	)			(17,771	)%		$	274,313				1,808	%		$	(523,646	)			(191	)%
Net (loss)/gain		$	(3,325,413	)			(237,022	)%		$	1,809				12	%		$	(3,327,222	)			(183,926	)%
Other comprehensive gain/(loss)		$	57,082				4,069	%		$	(336,846	)			(2,221	)%		$	393,928				117	%
Total comprehensive loss		$	(3,268,331	)			(232,953	)%		$	(335,037	)			(2,209	)%		$	(2,933,294	)			876	%

Revenues

Revenues were $1,403 for the three months ended June 30, 2026, compared to $15,169 for the three months ended June 30, 2025, representing a decrease of $13,766, or 91%. This decrease was primarily attributable to lower sales of GameGolf KZN AI devices to customers engaged in beta testing during the three months ended June 30, 2026, as compared to the prior period in 2025.

Cost of revenues

Cost of revenues decreased to $853 for the three months ended June 30, 2026, from $13,888 for the three months ended June 30, 2025, representing a decrease of $13,035, or 94%. The decrease was primarily driven by the lower volume of GameGolf KZN AI devices sold during 2026, as we are currently concentrating our efforts towards the commercialization of the GameGolf KZN AI product.

Gross profit and gross margin

Gross profit was $550 for the three months ended June 30, 2026, compared to $1,281 for the three months ended June 30, 2025. Gross margin increased to 39% in the three months ended June 30, 2026, from 8% in the prior comparable period in 2025. The increase in gross margin was primarily attributable to the unfavorable margin impact of discounted pricing associated with beta program sales of GameGolf KZN AI devices during 2025.

Operating expenses

Operating expenses were $3,076,630 for three months ended June 30, 2026, compared to $273,785 for the three months ended June 30, 2025, representing an increase of $2,802,845, or 1,024%, year over year.

Research and development costs were relatively consistent with $121,661 for the three months ended June 30, 2026, and $128,315 for the three months ended June 30, 2025, for a decrease of $6,654 or 5%. We expect research and development costs to remain relatively stable in future periods as we refocus activities towards developing, testing and releasing new features to our GameGolf KZN AI product and related subscription services.

Sales and marketing expenses were $37,365 for the three months ended June 30, 2026, compared to $24,608 for the three months ended June 30, 2025. The $12,757, or 52%, increase resulted from an increase in marketing resources to prepare for the launch of our GameGolf KZN AI product on or around the end of the third quarter of 2026. We expect that our sales and marketing expenses will increase substantially in the future in connection with the commercialization of the GameGolf KZN AI product and related subscription services.

General and administrative expenses increased by $2,796,742, or an increase of 2,314%, from $120,862 for the three months ended June 30, 2025, to $2,917,604 for the three months ended June 30, 2026. The increase was primarily driven by accounting, legal and share-based compensation costs incurred in connection with our direct listing on Nasdaq.

We expect general and administrative expenses to decrease in future periods as compared to the three months ended June 30, 2026, as the transaction costs associated with the direct listing were non-recurring and higher than the general and administrative expenses we expect to incur going forward. We do, however, expect to incur increased general and administrative expenses associated with being a public company on an ongoing basis, including costs of accounting, audit, legal, regulatory and tax compliance services, directors' and officers' insurance, and investor and public relations costs.

Other income/(expense)

Other expense was $249,333 for the three months ended June 30, 2026, compared to other income of $274,313 for the three months ended June 30, 2025, an unfavorable change of $523,646. In the comparable period in 2025, other income/(expense) consisted of $57,013 of interest expense on the Grafiti Note, offset by a $331,326 foreign exchange gain on the Company's intercompany balance with its subsidiary, AMT.

In the current-year period, interest expense increased to $192,243, due to a larger outstanding balance under the Grafiti Note and interest accruing on the Bridge Note, which was issued on March 31, 2026. The Company also recognized a $57,090 foreign exchange loss on its AMT intercompany balance, compared to a $331,326 gain in the comparable period in 2025, due to unfavorable exchange rates and a growing intercompany balance with AMT.

Other comprehensive gain/(loss) - foreign currency translation adjustment

For the purposes of presenting condensed consolidated financial statements, the assets and liabilities of our Euro operations in Ireland are translated to U.S. dollar ("USD") at the exchange rate on the reporting date. The income and expenses are translated using average exchange rates. Foreign currency differences that arise on translation for consolidated purposes are recognized in other comprehensive gain/loss on the condensed consolidated statements of comprehensive loss. The currency translation adjustment increased favorably by $393,928, or approximately 117%, for the three months ended June 30, 2026, compared to the prior period in 2025. This increase was due to the fluctuation of the exchange rates between the Euro and the USD as well as the level of our activities.

Six Months Ended June 30, 2026, compared to the Six Months Ended June 30, 2025

The following table sets forth selected consolidated financial data as a percentage of our revenue and the percentage of period-over-period change:

		For the Six Months Ended June 30,
		2026								2025
		Amount				% of Revenues				Amount				% of Revenues				Change				% Change
Revenues		$	3,917				100	%		$	15,969				100	%		$	(12,052	)			(75	)%
Cost of revenues		$	2,090				53	%		$	14,186				89	%		$	(12,096	)			(85	)%
Gross profit		$	1,827				47	%		$	1,783				11	%		$	44				2	%
Operating expenses		$	3,557,491				90,822	%		$	578,745				3,624	%		$	2,978,746				515	%
Loss from operations		$	(3,555,664	)			(90,775	)%		$	(576,962	)			(3,613	)%		$	(2,978,702	)			516	%
Other income/(expense)		$	(474,681	)			(12,118	)%		$	431,996				2,705	%		$	(906,677	)			(210	)%
Net loss		$	(4,030,345	)			(102,894	)%		$	(144,966	)			(908	)%		$	(3,885,379	)			2,680	%
Other comprehensive gain/(loss)		$	135,195				3,451	%		$	(534,227	)			(3,345	)%		$	669,422				125	%
Total comprehensive loss		$	(3,895,150	)			(99,442	)%		$	(679,193	)			(4,253	)%		$	(3,215,957	)			473	%

Revenues

Revenues were $3,917 for the six months ended June 30, 2026, compared to $15,969 for the six months ended June 30, 2025, representing a decrease of $12,052, or 75%. This decrease was primarily attributable to lower sales of GameGolf KZN AI devices to customers engaged in beta testing during the six months ended June 30, 2026, as compared to the prior period in 2025.

Cost of revenues

Cost of revenues decreased to $2,090 for the six months ended June 30, 2026, from $14,186 for the six months ended June 30, 2025, representing a decrease of $12,096, or 85%. The decrease was primarily driven by the lower volume of GameGolf KZN AI devices sold during 2026, as we are currently concentrating our efforts towards the commercialization of the GameGolf KZN AI product.

Gross profit and gross margins

Gross profit was $1,827 for the six months ended June 30, 2026, compared to $1,783 for the six months ended June 30, 2025. Gross margin increased to 47% in the six months ended June 30, 2026, from 11% in the prior comparable period in 2025. The increase in gross margin was primarily attributable to the unfavorable margin impact of discounted pricing associated with beta program sales of GameGolf KZN AI devices during 2025.

Operating expenses

Operating expenses were $3,557,491 for six months ended June 30, 2026, compared to $578,745 for the six months ended June 30, 2025, representing an increase of $2,978,746, or 515%, year over year.

Research and development costs were relatively consistent with $264,698 for the six months ended June 30, 2026, and $269,167 for the six months ended June 30, 2025, for a decrease of $4,469 or 2%. We expect research and development costs to remain relatively stable in future periods as we refocus activities towards developing, testing and releasing new features to our GameGolf KZN AI product and related subscription services.

Sales and marketing expenses were $67,312 for the six months ended June 30, 2026, compared to $55,535 for the six months ended June 30, 2025. The $11,777, or 21%, increase resulted from an increase in marketing resources to prepare for the launch of our GameGolf KZN AI product on or around the end of the third quarter of 2026. We expect that our sales and marketing expenses will increase substantially in the future in connection with the commercialization of the GameGolf KZN AI product and related subscription services.

General and administrative expenses increased by $2,971,438, or an increase of 1,170%, from $254,043 for the six months ended June 30, 2025, to $3,225,481 for the six months ended June 30, 2026. The increase resulted mainly from accounting, legal and share-based compensation costs related to our direct listing on Nasdaq.

We expect general and administrative expenses to decrease in future periods as compared to the six months ended June 30, 2026, as the transaction costs associated with the direct listing were non-recurring and higher than the general and administrative expenses we expect to incur going forward. We do, however, expect to incur increased general and administrative expenses associated with being a public company on an ongoing basis, including costs of accounting, audit, legal, regulatory and tax compliance services, directors' and officers' insurance, and investor and public relations costs.

Other income/(expense)

Other expense was $474,681 for the six months ended June 30, 2026, compared to other income of $431,996 for the six months ended June 30, 2025, an unfavorable change of $906,677. For the six months ended June 30, 2025, other income consisted of $107,288 of interest expense on the Grafiti Note, offset by a $539,284 foreign exchange gain on the Company's intercompany balance with its subsidiary, AMT.

For the six months ended June 30, 2026, interest expense increased to $353,230, due to a larger outstanding balance under the Grafiti Note accruing interest at the same rate, along with interest accruing on the First Note that was issued on December 31, 2025, which was subsequently cancelled and replaced by the Bridge Note issued on March 31, 2026. As a result, no comparable interest expense was recorded during the six months ended June 30, 2025. Additionally, the Company recognized a $136,005 foreign exchange loss on its AMT intercompany balance, compared to a $539,284 gain in the prior-year period, due to unfavorable exchange rates and a growing intercompany balance with AMT.

Other comprehensive gain/(loss) - foreign currency translation adjustment

For the purposes of presenting condensed consolidated financial statements, the assets and liabilities of our Euro operations in Ireland are translated to U.S. dollar ("USD") at the exchange rate on the reporting date. The income and expenses are translated using average exchange rates. Foreign currency differences that arise on translation for consolidated purposes are recognized in other comprehensive gain/loss on the condensed consolidated statements of comprehensive loss. The currency translation adjustment increased favorably by $669,422, or approximately 125%, for the six months ended June 30, 2026, compared to the prior period in 2025. This increase was due to the fluctuation of the exchange rates between the Euro and the USD as well as the level of our activities.

Non-GAAP Financial Information

Adjusted EBITDA

EBITDA is defined as net income (loss) before interest, provision for (benefit from) income taxes, and depreciation and amortization. Adjusted EBITDA is used by our management as the matrix in which it manages the business. It is defined as EBITDA plus adjustments for other income or expense items, non-recurring items and non-cash items.

Adjusted EBITDA for the three months ended June 30, 2026, was a loss of $392,440 compared to a loss of $268,054 for the three months ended June 30, 2025. Adjusted EBITDA for the six months ended June 30, 2026, was a loss of $707,930 compared to a loss of $568,209 for the six months ended June 30, 2025.

The following table presents a reconciliation of our net (loss)/income, which is our GAAP operating performance measure, to Adjusted EBITDA for the three and six months ended June 30, 2026 and 2025:

		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2026				2025				2026				2025
Net (Loss)/Income		$	(3,325,413	)		$	1,809			$	(4,030,345	)		$	(144,966	)
Adjustments:
Non-cash unrealized foreign exchange (gain) loss			57,090				(331,326	)			136,005				(539,284	)
Share-based compensation			2,444,776				-				2,444,776				-
Public company readiness expenses			235,658				-				380,821				-
Interest expense - related party			72,387				57,013				143,820				107,288
Interest expense and amortization of debt discount			119,856				-				209,410				-
Depreciation			3,206				4,450				7,583				8,753
Adjusted EBITDA		$	(392,440	)		$	(268,054	)		$	(707,930	)		$	(568,209	)

We rely on Adjusted EBITDA, which is a non-GAAP financial measure for the following:

●

To review and assess the operating performance of our Company as permitted by ASC Topic 280, Segment Reporting ("ASC 280");

●

To compare our current operating results with corresponding periods and with the operating results of other companies in our industry;

●

As a basis for allocating resources to various projects;

●

As a measure to evaluate potential economic outcomes of operational alternatives and strategic decisions; and

●

To evaluate internally the performance of our personnel.

We have presented Adjusted EBITDA above because we believe it conveys useful information to investors regarding our operating results. We believe it provides an additional way for investors to view our operations, when considered with both our GAAP results and the reconciliation to net (loss)/income. By including this information, we can provide investors with a more complete understanding of our business. Specifically, we present Adjusted EBITDA as a supplemental disclosure because of the following:

●

We believe Adjusted EBITDA is a useful tool for investors to assess the operating performance of our business without the effect of interest, income taxes, depreciation and amortization and other non-cash items including one-time charges such as professional fees.

●

We believe it is useful to provide to investors a standard operating metric used by management to evaluate our operating performance; and

●

We believe the use of Adjusted EBITDA is helpful to compare our results to other companies.

Even though we believe Adjusted EBITDA is useful for investors, it does have limitations as an analytical tool. Thus, we strongly urge investors not to consider this metric in isolation or as a substitute for net income (loss) and the other consolidated statement of operations data prepared in accordance with GAAP. Some of these limitations include the fact that:

●

Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;

●

Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

●

Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements;

●

Adjusted EBITDA does not reflect income or other taxes or the cash requirements to make any tax payments; and

●

Other companies in our industry may calculate Adjusted EBITDA differently than we do, thereby potentially limiting its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA should not be considered a measure of discretionary cash available to us to invest in the growth of our business or as a measure of performance in compliance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and providing Adjusted EBITDA only as supplemental information.

Adjusted Net (Loss)/Income per Share

Basic and diluted net loss/income per share for the three months ended June 30, 2026 and 2025 was a net loss of $0.22 and net income of $0.00, respectively. Basic and diluted net loss per share for the six months ended June 30, 2026 and 2025, was a loss of $0.27 and $0.01, respectively.

Adjusted net (loss)/income per share is used by the Company's management as an evaluation tool as it manages the business and is defined as net (loss)/income per basic and diluted share adjusted for non-cash items and one-time, non-recurring charges.

Adjusted net loss per basic and diluted common stock for three months ended June 30, 2026 and 2025, was a loss of $0.04 and $0.02, respectively. Adjusted net loss per basic and diluted common stock for six months ended June 30, 2026 and 2025, was a loss of $0.07 and $0.05, respectively.

The following table presents a reconciliation of net (loss)/income per basic and diluted share, which is our GAAP operating performance measure, to Adjusted net loss per share for the periods reflected:

		Three Months Ended June 30,								Six Months Ended June 30,
		2026				2025				2026				2025
Net (loss)/income		$	(3,325,413	)		$	1,809			$	(4,030,345	)		$	(144,966	)
Adjustments:
Non-cash unrealized foreign exchange loss/(gain)			57,090				(331,326	)			136,005				(539,284	)
Public company readiness expenses			235,658				-				380,821				-
Share-based compensation			2,444,776				-				2,444,776				-
Proforma non-GAAP net loss			(587,889	)			(329,517	)			(1,068,743	)			(684,250	)
Proforma non-GAAP net loss per share - Basic and Diluted			(0.04	)			(0.02	)			(0.07	)			(0.05	)
Weighted average basic and diluted common stock outstanding			15,000,000				15,000,000				15,000,000				15,000,000

We rely on Adjusted net (loss)/income per share, which is a non-GAAP financial measure:

●

To compare our current operating results with corresponding periods and with the operating results of other companies in our industry;

●

As a measure to evaluate potential economic outcomes of operational alternatives and strategic decisions; and

●

To evaluate internally the performance of our personnel.

We have presented Adjusted net loss per share above because we believe it conveys useful information to investors regarding our operating results. We believe it provides an additional way for investors to view our operations, when considered with both our GAAP results and the reconciliation to net (loss)/income, and that by including this information we can provide investors with a more complete understanding of our business. Specifically, we present Adjusted net loss per share as supplemental disclosure because:

●

We believe Adjusted net loss per share is a useful tool for investors to assess the operating performance of our business without the effect of non-cash items and one-time charges.

●

We believe that it is useful to provide to investors a standard operating metric used by management to evaluate our operating performance; and

●

We believe that the use of Adjusted net loss per share is helpful to compare our results to other companies.

Historical Results and Cash Flows

We are finalizing development of our GameGolf KZN AI applications and underlying platform infrastructure. We have a limited beta program for legacy customers featuring a minimum viable product ("MVP") with a constrained feature set. In connection with the beta, a small number of devices were sold at promotional, discounted pricing to facilitate testing and feedback. We expect to continue adding features over the coming months. Subject to successful completion of beta testing and readiness milestones, we expect to commence initial commercial revenue generation on or around the end of the third quarter of 2026.

Management believes historical results and cash flows are not indicative of expected future performance. To date, the Company has been primarily in product development mode. As we transition to commercial activities, we anticipate a gradual rebalancing of operating expenditures from research and development toward sales and marketing. Development spending is expected to moderate in the near term as efforts shift from building a new product and platform to iterating and adding features.

Historically, operating cash needs have been funded principally through equity financing and promissory notes from stockholders. As commercialization begins, we expect sales of GameGolf KZN AI devices on hand (inventory) and subscription revenues to supplement financing activities for cash flow needs.

Liquidity and Capital Resources as of June 30, 2026

Our current capital resources and operating results as of and through June 30, 2026, consist of:

●

an overall working capital deficit of $184,853;

●

cash of $15,991; and

●

net cash used in operating activities for the six months ended June 30, 2026 of $796,585.

As of June 30, 2026, the Company had approximately $15,991 in cash. We have relied on financing from Grafiti LLC, a wholly-owned subsidiary of Grafiti Group, our parent company. which is controlled by Nadir Ali, our former Chief Executive Officer, pursuant to the Grafiti Note. See "Contractual Obligations and Commitments" section below for more information.

In addition, we received debt financing as of March 31, 2026, in an aggregate principal amount of $1,135,000 from Streeterville in connection with the issuance of the Bridge Note. The previously outstanding First Note was deemed cancelled as partial consideration for the issuance of the Bridge Note. The net proceeds received on issuance of the Bridge Note were $500,000. Subsequent to June 30, 2026, on July 30, 2026, the Company received an $8,000,000 investment through the issuance of shares of Series A Preferred Stock pursuant to the Preferred Purchase Agreement (see Note 8 for more information).

Our net cash flows used in operating, investing and financing activities for the six months ended June 30, 2026 and 2025, and certain balances as of the end of those periods are as follows:

		For the six months ended June 30,
		2026				2025
Net cash used in operating activities		$	(796,585	)		$	(556,805	)
Net cash from investing activities			685				-
Net cash provided by financing activities			729,528				509,750
Effect of foreign exchange rates on cash			(5,100	)			18,341
Net increase (decrease) in cash and cash equivalents		$	(71,472	)		$	(28,714	)

		As of June 30, 2026				As of December 31, 2025
Cash and cash equivalents		$	15,991			$	87,463
Working capital deficit		$	(184,853	)		$	(2,331,221	)

Operating activities

Net cash used in operating activities for the six months ended June 30, 2026, was $796,585, which reflects an increase of $239,780 compared to the net cash used in operating activities for the prior comparable period in 2025 of $556,805. This increase was primarily driven by a larger net loss of $4,030,345 for the current period, compared to a net loss of $144,966 for the comparative period. The increased net loss was primarily attributable to higher operating expenses and share-based compensation related to the direct listing on Nasdaq.

Investing activities

Our investing activities consisted of the sale of property and equipment and were immaterial for the six months ended June 30, 2026 and 2025. As our business grows, we expect our capital expenditures and our investment activity to increase, primarily to fund additional facilities and equipment for headcount growth, operational expansion, and manufacturing equipment and tooling to facilitate future product hardware redesigns, as applicable.

Financing activities

Net cash flows provided by financing activities during the six months ended June 30, 2026 was $729,528 which consisted of proceeds from the Grafiti Note of $336,408, advances from Grafiti LLC of $19,000, cash received from the Bridge Note of $500,000, and cash received from the issuance of common stock and warrants of $2,688, offset by cash repaid for the Grafiti Note of $128,568. Net cash flows provided by financing activities during the six months ended June 30, 2025, was $509,750, which consisted of proceeds from the Grafiti Note of $536,000 and advances from Grafiti LLC of $20,000, offset by cash repayments of the Grafiti LLC advances of $46,250.

Contractual Obligations and Commitments

Contractual obligations relate to cash that we are obligated to pay as part of certain contracts that we have entered into.

As of June 30, 2026, our principal contractual commitments consisted of obligations under the Bridge Note and Grafiti Note. As of June 30, 2026, we have outstanding indebtedness of $1,135,000 payable to Streeterville under the Bridge Note, which bears interest at a fixed rate of 10% per annum.

In addition, as of June 30, 2026, we have outstanding indebtedness of $2,999,957 under the Grafiti Note, which matures on July 31, 2027, and bears interest at a fixed rate of 10% per annum. Subsequent to June 30, 2026, the Company repaid $402,613 in principal repayments and has $2,597,344 in principal outstanding under the Grafiti Note subsequent to such repayment.

We expect to fund these commitments through cash on hand, cash generated from operations or future debt or equity financings.

Further, each share of Series A Preferred Stock outstanding accrues a return on its Stated Value at a rate of 10% per annum (increasing to 15% per annum following an Event of Default), payable quarterly within five trading days after the end of each calendar quarter (the "Preferred Return"). The Preferred Return is payable, at the Company's discretion, either in cash or through the issuance of additional shares of Series A Preferred Stock valued at the Stated Value. The Company intends to satisfy the Preferred Return through the issuance of additional shares of Series A Preferred Stock rather than in cash.

In addition to the above, on November 2025, the Company received a notice with an invoice (the "Invoice") from its manufacturer asserting a claim (the "Manufacturer Claim") in the amount of $543,369 (the "Invoice Amount") relating to amounts they claimed remained outstanding in connection with a previous order for Game Golf KZN AI devices and testing equipment made in May 2023 (the "Prior Order") that had not been shipped to or received by the Company as of the date of such invoice. Specifically, the claim relates to certain product and material that the manufacturer alleged it was unable to store due to regulatory constraints applicable to the manufacturer's operations. In December 2025, the Company responded to such Manufacturer Claim indicating that the Prior Order was made on "FOB" shipping terms and did not contain a delivery deadline, shipment schedule or other requirement to accept delivery at any time. The Company was not advised of such alleged regulatory constraints in advance and was not contractually obligated to accept delivery of the product within any specified time period. In addition, the Company was not obligated under the applicable arrangements to reimburse the manufacturer for raw materials, storage, or disposal-related costs associated with such product.

The manufacturer has not provided additional substantiation or further correspondence regarding the matter since the Company's response to such claim delivered to the manufacturer in December 2025.

Based on the foregoing, management concluded that the likelihood of a material loss is reasonably possible but not probable. In addition, while an unfavorable resolution of the matter could have an adverse effect on the Company's financial position, results of operations or cash flows in a future period, because the Company disputes that it has any contractual obligation for the asserted costs, management determined that any potential loss or range of loss is not reasonably estimable as of the balance sheet date. The Company will continue to evaluate the matter if additional information becomes available.

Liquidity and Financial Obligations

The Company has historically been funded by short-term debt, promissory notes and other advances from Grafiti LLC. The Company has directed its resources over the past number of years to the development of its new hardware device, GameGolf KZN AI, and the development of software applications. During that period revenues have been minimal. The Company cannot assure that it will ever earn future revenues sufficient to support its operations, or that it will ever be profitable.

Short-Term Liquidity and Financial Obligations

Our short-term liquidity requirements, measured through June 30, 2027, consist principally of funding our operating expenses and research and development activities, public company costs and required payments under our outstanding debt arrangements. We intend to satisfy these requirements primarily with proceeds we received under the first and second closings contemplated under the Preferred Purchase Agreement, which occurred on June 30, 2026 and July 30, 2026, respectively, and any cash generated from our operations.

As of June 30, 2026, we owed $2,999,957 under the Grafiti Note. The Grafiti Note matures on July 31, 2027, with automatic monthly extensions thereafter while amounts remain outstanding, provided that we comply with the applicable covenants thereunder. Repayment is generally limited to $500,000 in the first full calendar month following July 30, 2026, and $150,000 per month thereafter.

We also have obligations under the Bridge Note with an original principal amount of $1,135,000, which matures on April 30, 2027, and bears interest at 10% per annum. The Bridge Note may be satisfied through Streeterville's election to convert the principal amount outstanding thereunder into shares of common stock at a fixed price of $6.80 per share, or Series A Preferred Stock at a fixed price of $1,000 per share, or through cash repayment. Based on the terms of the Bridge Note and our current expectations, we do not anticipate that cash repayment will be required, and our short-term liquidity forecast does not include cash settlement of the amount expected to be outstanding at maturity. However, if Streeterville elects to be repaid in cash, the Company expects to have sufficient funding available for the repayment at maturity.

Holders of our Series A Preferred Stock are entitled to a quarterly Preferred Return accruing at 10% per annum on the Stated Value (15% per annum following an Event of Default). The Company has the discretion to pay the Preferred Return in cash or in additional shares of Series A Preferred Stock. The Company intends to satisfy this obligation through the issuance of additional shares of Series A Preferred Stock, which is not expected to require the use of Company cash resources.

Based on our current operating plan and cash flow forecast, including the $8,000,000 of gross proceeds received on July 30, 2026, and the contractual cash requirements described above, we believe that our available liquidity will be sufficient to fund our operations and meet our financial obligations through at least June 30, 2027. Management's forecast also supports the conclusion disclosed in Note 2 to the unaudited condensed consolidated financial statements that the conditions that initially raised substantial doubt about our ability to continue as a going concern have been alleviated. Our forecast depends on estimates regarding the timing and amount of operating expenditures and debt repayments. Actual results may differ from these estimates.

Long-Term Liquidity and Financial Obligations

Beyond June 30, 2027, our liquidity requirements will depend on the timing and extent of our product development and commercialization activities, the level of revenue generated by our products and subscription offerings, public company ongoing costs, and the timing and form of settlement of our outstanding debt and preferred stock obligations. We expect to increase operating, research and development, and sales and marketing expenditures as we advance our product and services roadmap, further commercialize the GameGolf KZN AI device and related software and ecosystem, and continue global expansion.

We expect that our longer-term capital resources may include cash generated from operations, additional sales of Series A Preferred Stock under the Preferred Purchase Agreement, and other equity or debt financings. Future sales under the Preferred Purchase Agreement are subject to certain conditions, and there can be no assurance that we will complete any additional closings thereunder.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage in trading activities involving non-exchange traded contracts.

Recently Issued Accounting Standards

For a discussion of recently issued accounting pronouncements, please see Note 3 to our unaudited condensed consolidated financial statements, which are included in this report beginning on page F-1.