Quarterly Report for Quarter Ending September 30, 2024 (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-56290

VIP Play, Inc.

(Exact name of registrant as specified in its charter)

Nevada		85-0738656
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1645 Pine Tree Ln, Suite 2 Sarasota FL		34236
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number: (866) 783-9435

(Former name or former address, if changed since last report): N/A

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, par value of $0.001

(Title of each class)

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.:

	Large accelerated filer	☐	Accelerated filer	☐
	Non-accelerated filer	☒	Smaller reporting company	☒
			Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

The number of shares of the issuer's common stock outstanding as of November 8, 2024, was 72,661,657shares, par value $0.001per share.

VIP Play, Inc.

Form 10-Q

Table of Contents

PART I - FINANCIAL INFORMATION	1
ITEM 1. FINANCIAL STATEMENTS	1
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	2
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS	5
ITEM 4. CONTROLS AND PROCEDURES	5
PART II - OTHER INFORMATION	6
ITEM 6. EXHIBITS	6
SIGNATURES	7

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our financial statements included in this Form 10-Q are as follows:

F-1	Condensed Consolidated Balance Sheets as of September 30, 2024 (unaudited), and June 30, 2024;
F-3	Condensed Consolidated Statements of Operations for the three months ended September 30, 2024, and 2023 (unaudited);
F-4	Condensed Consolidated Statement of Stockholders' Deficit for the three month period ended September 30, 2024, and 2023 (unaudited);
F-6	Condensed Consolidated Statements of Cash Flow for the three months ended September 30, 2024, and 2023 (unaudited);
F-7	Notes to Condensed Consolidated Financial Statements.

VIP PLAY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

		September 30, 2024			June 30, 2024
		(unaudited)
ASSETS
Current assets:
Cash		$	342,186			$	221,754
Cash reserved for users			202,188				228,009
Prepaid expenses and other current assets			523,219				795,663
Total current assets			1,067,593				1,245,426
Other assets:
Equipment, net			1,738				2,153
Intangible assets, net			6,400,086				6,760,295
Debt issuance costs, net			689,512				1,330,173
Security deposit			12,236				12,236
Total other assets			7,103,572				8,104,857
Total assets		$	8,171,165			$	9,350,283
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses		$	1,041,252			$	1,408,729
Accrued expenses - related party			684,391				371,598
Players balances			261,799				313,758
Notes payable - current			813,620				875,828
Notes payable - related party, net of discount			30,000				30,000
Convertible notes, net			85,407				85,407
Line of credit - related party			10,395,000				7,670,000
Derivative liability			12,925,000				11,273,000
Total current liabilities			26,236,469				22,028,320
Long-term liabilities:
Notes payable - long-term			346,470				512,527
Total long-term liabilities			346,470				512,527
Total liabilities			26,582,939				22,540,847
Commitments and contingencies

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

VIP PLAY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS - Continued

		September 30, 2024			June 30, 2024
		(unaudited)
Stockholders' deficit:
Preferred stock, $0.0001par value, 25,000,000shares authorized
Series A preferred stock, 2,000,000shares designated, 0and 0shares issued and outstanding as of September 30, 2024, and June 30, 2024, respectively			-				-
Series B preferred stock, 12,000shares designated, 11,693and 11,693shares issued and outstanding as of September 30, 2024, and June 30, 2024, respectively			11,693				11,693
Series C preferred stock, 6,700,000shares designated, 0and 0shares issued and outstanding as of September 30, 2024, and June 30, 2024, respectively			-				-
Common stock, $0.001par value, 475,000,000shares authorized, 71,994,990and 71,994,990shares issued and outstanding as of September 30, 2024, and June 30, 2024, respectively			71,994				7,199
Additional paid-in capital			30,278,695				30,295,318
Accumulated deficit			(48,774,156	)			(43,504,774	)
Total stockholders' deficit			(18,411,774	)			(13,190,564	)
Total liabilities and stockholders' deficit		$	8,171,165			$	9,350,283

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

VIP PLAY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

		For the three months ended September 30,
		2024			2023
Negative gaming revenues		$	(3,337	)		$	(218,624	)
Costs of gaming revenue			96,232				405,244
Net gaming loss			(99,569	)			(623,868	)
Operating expenses:
Salaries and wages			925,801				815,341
Depreciation and amortization			472,223				432,427
Sales and marketing			116,362				1,216,067
General and administrative			988,564				708,002
Total operating expenses			2,502,950				3,171,837
Other income (expense):
(Loss) gain on change in fair value of derivative			(1,652,000	)			329,235
Interest expense			(61,408	)			(39,252	)
Interest expense - related party			(953,455	)			(1,552,580	)
Total other expense			(2,666,863	)			(1,262,597	)
Net loss		$	(5,269,382	)		$	(5,058,302	)
Less: deemed dividend from the purchase of Series C preferred stock			-				(1,006,000	)
Net loss attributable to common stockholders			(5,269,382	)			(6,064,302	)
Net loss per common share - basic and diluted		$	(0.07	)		$	(0.14	)
Weighted average number of common shares outstanding - basic and diluted			73,164,290				41,905,000

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

VIP PLAY, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

(unaudited)

		Preferred Shares Series A $0.0001 Par Value			Preferred Shares Series B $1.00 Par Value			Preferred Shares Series C $0.0001 Par Value			Common Shares $0.001 Par Value			Additional Paid-In			Accumulated			Total Stockholders' Equity
		Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount			Capital			(Deficit)			(Deficit)
Balance, June 30, 2023			-			$	-				11,693			$	11,693				2,499,998			$	250				41,905,000			$	4,191			$	12,669,930		$	(13,119,081	)		$	(433,017	)
Fair value of vested incentive stock -			-				-								-								-								-				112,720				-				112,720
Fair value of warrant granted as part of amended related party demand line of credit			-				-				-				-				-				-				-				-				1,753,037				-				1,753,037
Net loss for the period			-				-				-				-				-				-				-				-				-				(5,058,302	)			(5,058,302	)
Balance, September 30, 2023			-			$	-				11,693			$	11,693				2,499,998			$	250				41,905,000			$	4,191			$	14,535,687			$	(18,177,383	)		$	(3,625,562	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

VIP PLAY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - continued

(unaudited)

		Preferred Shares Series A $0.0001 Par Value			Preferred Shares Series B $1.00 Par Value			Preferred Shares Series C $0.0001 Par Value			Common Shares $0.001 Par Value			Additional Paid-In			Stock Subscriptions			Accumulated			Total Stockholders' Equity
		Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount			Capital			Receivable			Deficit			(Deficit)
Balance, June 30, 2024			-			$	-				11,693			$	11,693				-			$	-				71,994,990			$	7,199			$	30,295,318			$	-			$	(43,504,774	)		$	(13,190,564	)
Fair value of vested incentive stock options			-				-				-				-				-				-				-				-				48,172				-				-				48,172
Change in par value of common stock			-				-				-				-				-				-				-				64,795				(64,795	)			-				-				-
Net loss for the period			-				-				-				-				-				-				-				-				-				-				(5,269,382	)			(5,269,382	)
Balance, September 30, 2024			-			$	-				11,693			$	11,693				-			$	-				71,994,990			$	71,994			$	30,278,695			$	-			$	(48,774,156	)		$	(18,411,774	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

VIP PLAY, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)

		For the Three Months Ended September 30,
		2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(5,269,382	)		$	(5,058,302	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Amortization of debt issuance costs - related party			640,662				935,248
Depreciation and amortization			472,223				432,427
Incentive stock option expense			48,172				112,720
Discount on related party note payable			-				323,345
Loss (gain) on change in fair value of derivative			1,652,000				(329,235	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets			272,447				332,878
Accounts payable and accrued expenses			(367,477	)			443,631
Accounts payable and accrued expenses - related party			312,793				(82,937	)
Players balances			(51,958	)			1,289,144
Net cash used in operating activities			(2,290,520	)			(1,601,081	)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for capitalized software			(111,604	)			(111,000	)
Net cash used in investing activities			(111,604	)			(111,000	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from line of credit, related party			2,725,000				1,776,924
Proceeds from convertible notes			-				850,000
Repayments of note payable, current			(228,265	)			(113,222	)
Net cash provided by financing activities			2,496,735				2,513,702
NET CHANGE IN CASH			94,611				801,621
CASH AT BEGINNING OF PERIOD			449,763				355,396
CASH AT END OF PERIOD		$	544,374			$	1,157,017
DISCLOSURE OF CASH AND CASH RESERVERD FOR USERS:
CASH			342,186				113,593
CASH RESERVED FOR USERS			202,188				1,043,424
CASH AT END OF PERIOD		$	544,374			$	1,157,017
SUPPLEMENTAL INFORMATION:
Interest paid		$	56,120			$	8,500
NON-CASH FINANCING AND INVESTING ACTIVITIES:
Payoff of related party note payable with related party line of credit		$	-			$	1,760,000

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

VIP PLAY, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024 AND 2023

NOTE 1 - OVERVIEW AND ORGANIZATION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Overview and Organization

VIP Play, Inc., formerly known as KeyStar Corp. (the "Company," "we", "us" and "our") was incorporated on April 16, 2020, under the laws of the State of Nevada, as VIP Play, Inc. Up until August 5, 2024, the company had two wholly owned subsidiaries, one was formed on December 21, 2021, under the State of Nevada, as UG Acquisition Sub, Inc., the second KeyStar TN LLC was formed on December 9, 2022. On August 5, 2024, the board of directors approved the winding down and dissolution of its wholly owned subsidiary, UG Acquisition Sub, Inc. Prior to September 20, 2024, we were known as KeyStar Corp.

Currently the singular focus is on business-to-consumer (B2C) sports betting in one targeted jurisdiction, Tennessee. In May 2023, the Company received approval on its Tennessee Sports Gaming Operator license. The Company officially launched its Sports Betting operation in Tennessee in June 2023.

Basis of Presentation

The foregoing unaudited condensed interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission ("SEC"). Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles in the United States of America for complete financial statements. These unaudited interim financial statements should be read in conjunction with the audited financial statements and the notes thereto included on Form 10-K for the year ended June 30, 2024. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.

Operating results for the three month period ended September 30, 2024, are not necessarily indicative of the results that may be expected for the year ending June 30, 2025. The condensed consolidated balance sheet at June 30, 2024, has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles in the U.S. for complete financial statements.

Principals of Consolidation

The consolidated financial statements represent the results of VIP Play, Inc. and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation of these entities.

Segment Reporting

The Company operates as one reportable segment under Accounting Standards Codification "ASC" 280, Segment Reporting. The chief operating decision maker regularly reviews the financial information of the Company at a consolidated level in deciding how to allocate resources and in assessing performance.

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions reflected in the financial statements relate to and include, but are not limited to, the valuation of debt and equity instruments, the valuation and expensing of equity awards, accounting for contingencies and uncertainties, purchase price allocations, including fair value estimates of intangible assets, the estimated useful lives of fixed assets and intangible assets, internally developed software costs and accrued expenses.

Going Concern

The Company's condensed consolidated financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company has an accumulated deficit of $48,774,156as of September 30, 2024. The Company had a net loss from operations of $5,269,382and negative cash flows of $2,290,520from operations for the three months ended September 30, 2024. These conditions raise substantial doubt about the entity's ability to continue as a going concern for a period of one year from the issuance of these financial statements.

The Company is dependent upon, among other things, achieving a level of profitable operations and receiving additional cash infusions including securing additional lines of credit and raising additional capital through placement of preferred and/or common stock in order to implement its business plan. There can be no assurance that the Company will be successful in order to continue as a going concern. The Company is funding its initial operations by securing a related party line of credit, a related party note payable, a note payable, issuing preferred stock, and issuing common stock through private placements.

We cannot be certain that capital will be provided when it is required or in amounts sufficient to meet our operating requirements. Management believes the existing shareholders, the prospective new investors, and future sales will provide the additional cash needed to meet the Company's obligations as they become due and will allow the development of its core business operations. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing.

Cash and Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash includes amounts deposited in financial institutions in excess of insurable Federal Deposit Insurance Company (FDIC) limits. At times throughout the year, the Company may maintain cash balances in certain bank accounts in excess of FDIC limits. As of September 30, 2024, the Company's cash balance exceeded the FDIC limits by approximately $92,000. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk in these accounts.

Cash Reserved for Users

The Company maintains separate bank accounts to segregate users' funds from operational funds. User funds are held by KeyStar TN, LLC, a Tennessee limited liability company and wholly owned subsidiary of the Company, which was organized for the purpose of protecting users' funds in the event of creditor claims. As of September 30, 2024 and June 30, 2024, approximately $202,000 and $228,000 was reserved for users.

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

3to 5years

Intangible assets include developed technology, internally developed software and website development costs, gaming license, and trademarks.

Internally developed capitalized software and website development and the VIP Play, Inc. trade name is stated at cost, less accumulated amortization on the balance sheet. Amortization is calculated using the straight-line method over the asset's estimated useful life. The capitalization policy for the company is to capitalize intangible assets greater than $5,000. 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. Developed technology is principally related to technological assets acquired through Asset Purchase Agreements which are recorded at relative fair value based on the purchase consideration, less accumulated amortization on the balance sheet. Amortization 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. Developed technology was placed in service on June 8, 2023. See Note 3.

Estimated useful lives are as follows:

Developed technology			5years
Capitalized software and website development			3years
Trade marks			3-5years

Developed Technology

Developed technology primarily relates to the design and development of sports betting software for online sportsbook.

Internally Developed Software

Software that is developed for internal use is accounted for pursuant to ASC 350-40, Intangibles, Goodwill and Other-Internal-Use Software. Qualifying costs incurred to develop internal-use software are capitalized when (i) the preliminary project stage is completed, (ii) management has authorized further funding for the completion of the project and (iii) it is probable that the project will be completed and perform as intended. These capitalized costs include compensation for employees who develop internal-use software and external costs related to development of internal use software. Capitalization of these costs ceases once the project is substantially complete and the software is ready for its intended purpose. Internally developed software is amortized using the straight-line method over an estimated useful life. All other expenditures, including those incurred in order to maintain an intangible asset's current level of performance, are expensed as incurred. When intangible assets are retired or disposed of, the cost and accumulated amortization thereon are removed, and any resulting gain or losses are included in the consolidated statements of operations.

Gaming licenses

Certain costs, generally legal and professional fees, are required to attain jurisdictional gaming licenses in order to legally operate our core sports betting business. Gaming licenses, with indefinite useful lives, are tested at least on an annual basis as to the assets that have been impaired. Intangible assets determined to have an indefinite useful life are not amortized. Gaming licenses are assets that are determined to have an indefinite useful life are not amortized and are included in intangible assets in the balance sheet. Annual gaming license fees and legal and professional fees required to maintain the licenses are recorded as period costs in the statement of operations.

Trademarks

Trademarks are carried at cost and are mainly related to branding and promotion, with indefinite useful lives. The Company tests at least on an annual basis whether trademarks with indefinite useful lives are impaired. Intangible assets determined to have an indefinite useful life are not amortized and are included in intangible assets in the balance sheet.

The Company conducts its annual impairment tests at June 30 of each year or whenever events and changes in circumstances suggest that the carrying amount may not be recoverable.

Impairment of Long-Lived Assets

Intangible assets include the cost of developed technology, trademarks and trade names and gaming licenses. Intangible assets are amortized utilizing the straight-line method over their remaining economic useful lives. The Company reviews long-lived assets and intangible assets for potential impairment annually and when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. In the event the expected undiscounted future cash flows resulting from the use of the asset is less than the carrying amount of the asset, an impairment loss is recorded equal to the excess of the asset's carrying value over its fair value. If an asset is determined to be impaired, the loss is measured based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flows. In the event that management decides to no longer allocate resources to an asset, an impairment loss equal to the remaining carrying value of the asset is recorded. The Company did not record any impairment charges related to intangibles assets during the three months ended September 30, 2024 and 2023.

Lease Commitments

On October 1, 2023, the Company entered into a lease for office space in Miami, Florida. The lease expired on October 31, 2024, and was not renewed. The lease has a minimum monthly lease payment of $6,500.

On February 4, 2024, the Company entered into a lease for office space in Sarasota, Florida. The lease expires on February 1, 2025, and has a monthly lease payment of $1,600.

Total rental expense for the three months ended September 30, 2024 and 2023 was $26,220and $21,652, respectively.

ASC Topic 842 provides for certain practical expedients when adopting the guidance. The Company elected to apply the short-term lease exception; therefore, the Company will not record an ROU asset or corresponding lease liability for leases with an initial term of twelve months or less that are not reasonably certain of being renewed and instead will recognize a single lease cost allocated over the lease term, generally on a straight-line basis.

Fair Value of Financial Instruments

The Company recognized the fair value of financial instruments in accordance with FASB ASC 820, Fair Value Measurements and Disclosures, "Fair Value Measurements", which provides a framework for measuring fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standard also expands disclosures about instruments measured at fair value and establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1 - Quoted prices for identical assets and liabilities in active markets;

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted market prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

Level 3 - Unobservable inputs that are supported by little to no market activity.

The Company's derivative liabilities are carried at fair value and are classified as Level 3 liabilities.

The Company's financial instruments consist principally of cash, prepaid expenses, accounts payable, accrued expenses, related party notes payable, related party line of credit, and notes payable approximate the fair value because of their short maturities.

The Company's Derivative liabilities are determined based on "Level" 3 inputs, which are significant and unobservable and have the lowest priority. There were no transfers into our out of "Level 3" during the three months ended September 30, 2024, or 2023.

Description		Total fair value at September 30, 2024			Quoted prices in Active markets (level 1)			Significant other observable inputs (level 2)			Significant unobservable inputs (level 3)
Derivative liability (1)		$	12,925,000			$	-			$	-			$	12,925,000

Description		Total fair value at June 30, 2024			Quoted prices in Active markets (level 1)			Quoted prices in Active markets (level 2)			Quoted prices in Active markets (level 3)
Derivative liability (1)		$	11,273,000			$	-			$	-			$	11,273,000

(1)	The Company has estimated the fair value of these derivatives using the Monte-Carlo model.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial statement. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could transfer a liability in an orderly transaction between willing and able maker participants. In general, the Company's policy in estimating fair values is to first look at observable market prices for the identical assets and liabilities in active markets, where available. When these are not available other inputs used to model fair value such as prices of similar instruments, yield curves, volatilities., prepayment speeds, default rates credit spreads, rely first on observable data from active markets. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The values presented may not represent future fair value as discussed above.

Derivative Liabilities

The Company accounts for derivative instruments in accordance with ASC 815, "Derivatives and Hedging" and all derivative instruments are reflected as either assets or liabilities at fair value in the balance sheet. The Company uses estimates of fair value to value its derivative instruments. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, the Company's policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, where available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates, and credit spreads, relying first on observable data from active markets. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The values presented may not represent future fair values and may not be realizable. The Company categorizes its fair value estimates in accordance with ASC 820 based on the hierarchical framework associated with the three levels of price transparency utilized in measuring financial instruments at fair value as discussed above. As of September 30, 2024, and June 30, 2024, the Company had a derivative liability of $12,925,000and $11,273,000, respectively.

Players Balances

Players balances were comprised of players betting deposits and contestant prize winnings for promotional events.

As per the Tennessee Sports Wagering Council, the Company is required to maintain a reserve in the form of cash, cash equivalents and/or irrevocable letter of credit along with a required $500,000Surety Bond (see Note 11) of not less than the players liability balance at any given day. As of September 30, 2024, the Company had sufficient coverage for these liabilities as per the requirements of the state of Tennessee.

Revenue Recognition

The Company records revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"). ASC 606 requires companies to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the standard requires more detailed disclosures to enable readers of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

The Company determines revenue recognition through the following steps:

	●	Identify the contract, or contracts, with the customer;
	●	Identify the performance obligations in the contract;
	●	Determine the transaction price;
	●	Allocate the transaction price to performance obligations in the contract; and
	●	Recognize revenue when, or as, the Company satisfies performance obligations by transferring the promised good or services.

The Company provides online sportsbook betting services with its technical infrastructure to its direct customers. Sportsbook or sports betting involves a user wagering money on an outcome or series of outcomes occurring. When a user's wager wins, the Company pays the user a pre-determined amount known as fixed odds. Sportsbook revenue is generated by setting odds such that there is a built-in theoretical margin in each sports wagering opportunity offered to users. Sportsbook revenue is generated from users' wagers net of payouts made on users' winning wagers and incentives awarded to users. Each wager placed by a user creates a single performance obligation for the Company. The performance obligation is satisfied once the event wagered on has been completed. Any unsettled wagers are recorded as a players balance liability. Net gaming revenue is the aggregate of gaming wins and losses based on results of each event that customers wager bets on.

Cost of Revenue

Cost of revenue consists primarily of variable costs, principally recurring online platform costs directly associated with revenue-generating activities including payment processing and supporting technology costs, web hosting, regulatory compliance software and Sports Betting privilege taxes.

Stock -based Compensation

The Company records stock-based compensation in accordance with ASC 718 "Compensation- Stock Compensation", using the fair value method. 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 non-employees for services as prescribed by ASC 718, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in Accounting Standards Updated ("ASU") 2018-07.

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.

Sales and Marketing

Sales and marketing expenses consist primarily of expenses associated with advertising and costs related to free to play contests. Advertising costs are expensed as incurred and are included in sales and marketing expense in our condensed consolidated unaudited statements of operations. Advertising costs include those costs associated with communicating with potential customers and generally use some form of media, such as internet, radio, print, television, or billboards. Advertising costs also include costs associated with strategic league and team partnerships. During the three months ended September 30, 2024 and 2023, advertising costs calculated in accordance with U.S. GAAP were $116,362and $1,216,067, respectively.

General and Administrative

General and administrative expenses consist of costs not related to sales and marketing, product and technology or revenue. General and administrative costs include professional services (including legal, regulatory, audit and accounting), rent and facilities maintenance, contingencies and insurance.

Income Taxes

The Company accounts for income taxes under an asset and liability approach. This process involves calculating the temporary and permanent differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The temporary differences result in deferred tax assets and liabilities, which would be recorded on the Company's balance sheet in accordance with ASC 740, which established financial accounting and reporting standards for the effect of income taxes. The Company must assess the likelihood that its deferred tax assets will be recovered from future taxable income, and, to the extent the Company believes that recovery is not likely, the Company must establish a valuation allowance. Changes in the Company's valuation allowance in a period are recorded through the income tax provision on the statements of operations.

ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return.

Under ASC 740-10, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740-10 provides guidance on derecognition, classification, interest, and penalties, accounting in interim periods, disclosure, and transition. As a result of the implementation of ASC 740-10, the Company recognized no material adjustment in the liability for unrecognized income tax benefits.

Based on the uncertainty of future pre-tax income, we fully reserved our net deferred tax assets as of September 30, 2024 and June 30, 2024. In the event we were to determine that we would be able to realize our deferred tax assets in the future, an adjustment to the deferred tax asset would increase income in the period such determination was made. The provision for income taxes represents the net change in deferred tax amounts, plus income taxes paid or payable for the current period.

We follow U.S. GAAP related accounting for uncertainty in income taxes, which provisions include a two-step approach to recognizing, de-recognizing and measuring uncertainty in income taxes. As a result, we did not recognize a liability for unrecognized tax benefits. As of September 30, 2024 and June 30, 2024, we had nounrecognized tax benefits.

Earnings (loss) per Share

Basic net (loss) earnings per common share is computed by dividing net (loss) income by the weighted average number of vested common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number vested of common shares, plus the net impact of common shares (computed using the treasury stock method), if dilutive, resulting from the exercise of dilutive securities. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. As of September 30, 2024 and June 30, 2024, the Company excluded the common stock equivalents summarized below, which entitle the holders thereof to ultimately acquire shares of common stock, from its calculation of earnings per share, as their effect would have been anti-dilutive.

		For the three months ended September 30, 2024			For the year ended June 30, 2024
Stock Options			4,250,000				4,250,000
Series B Preferred Shares			1,169,300				1,169,300
Warrants			10,000,000				10,000,000
Shares issuable upon conversion of convertible notes			2,125,000				2,125,000
Shares issuable upon conversion of line of credit			27,657,613				26,551,338
Total potentially dilutive shares			45,201,913				44,095,638

Recent Accounting Pronouncements

In October 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-06, "Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative" ("ASU 2023-06"). This ASU incorporates certain SEC disclosure requirements into the FASB Accounting Standards Codification ("ASC"). The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of ASC Topics, allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the ASC with the SEC's regulations. The ASU has an unusual effective date and transition requirements since it is contingent on future SEC rule setting. If the SEC fails to enact required changes by June 30, 2027, this ASU is not effective for any entities. Early adoption is not permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): "Improvements to Reportable Segment Disclosures" ("ASU 2023-07") to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. This update is effective beginning with the Company's 2024 fiscal year annual reporting period, with early adoption permitted. This ASU had no impact on the Company as the Company reports on one segment.

In December 2023, the FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures" ("ASU 2023-09") to enhance the transparency and decision-usefulness of income tax disclosures, particularly in the rate reconciliation table and disclosures about income taxes paid. This ASU applies to all entities subject to income taxes. This ASU will be effective for public companies for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

Management does not believe that any other recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on the accompanying consolidated financial statements.

NOTE 2 - EQUIPMENT

The Company's equipment consisted of the following as of:

		September 30, 2024			June 30, 2024
Equipment		$	4,980			$	4,980
Total			4,980				4,980
Less: accumulated depreciation			3,242				2,827
Equipment, net		$	1,738			$	2,153

Depreciation expense of equipment during the three months ended September 30, 2024, and 2023 was $415and $415, respectively.

NOTE 3 - LONG LIVED AND OTHER INTANGIBLE ASSETS

Long-lived and other intangible assets held, net of impairment are comprised of the following at:

		September 30, 2024			June 30, 2024
Developed technology		$	8,083,564			$	7,971,965
Tradenames and trademarks			539,099				539,099
Gaming licenses			135,837				135,837
Total			8,758,500				8,646,901
Less: accumulated amortization			(2,358,414	)			(1,886,606	)
Net carrying value		$	6,400,086			$	6,760,295

Amortization expense of business intellectual property for three months ended September 30, 2024, and 2023, was $444,853and $405,056, respectively. Amortization expense of tradenames for the three months ended September 30, 2024, and 2023, was $26,955and $26,955, respectively. Amortization expense is included in the statement of operations.

As of September 30, 2024, intangible assets consisted of the following:

		Estimated Useful Life			Remaining Weighted Average Useful Life			Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount
Finite lived intangible assets:
Developed technology			5years				3.69Years			$	6,678,303			$	1,751,196			$	4,927,107
Internally developed software			3years				1.69Years				1,391,761				456,854				934,907
Trademarks and tradenames			5years				3.69Years				539,099				141,364				397,735
Website			3years				1.02Years				13,500				9,000				4,500
Total finite lived intangible assets										$	8,622,663			$	2,358,414			$	6,264,249
Indefinite lived intangible assets:
Gaming license			Indefinite							$	135,837			$	-			$	135,837
Total indefinite lived intangible assets:										$	135,837			$	-			$	135,837
Total intangible assets:										$	8,758,500			$	2,358,414			$	6,400,086

The estimated future amortization of intangibles subject to amortization at September 30, 2024 was as follows:

For the Years Ended June 30,		Amount
2025		$	1,514,491
2026			1,862,796
2027			1,443,481
2028			1,443,481
Total		$	6,264,249

NOTE 4 - PLAYERS BALANCES

The players balances were comprised of players betting deposits and contestant prize winnings for promotional events. Players balances were $261,799and $313,758as of September 30, 2024 and June 30, 2024, respectively.

NOTE 5 - CONVERTIBLE DEBT

On August 23, 2023, the Company entered into a Convertible Note Purchase Agreement and a Convertible Promissory Note with an unrelated party in the principal amount of $200,000. On August 28, 2023, the Company entered into a Note Purchase Agreement and a Convertible Promissory Note with another unrelated party in the principal amount of $500,000. On September 1, 2023, the Company entered into a Convertible Note Purchase Agreement and a Convertible Promissory Note with a third unrelated party in the principal amount of $150,000. These Notes are part of a private convertible debt offering of up to $2,000,000the Company is undertaking to raise additional reserve funds required to cover increases in wagers. The outstanding principal under the Notes, which will accrue interest at a rate equal to twelve percent (12%) per annum, is due and payable in a single balloon payment by us on the date that is one year following the date of issuance of each of the Notes. Accrued interest is to be paid monthly in cash beginning the first month after the issuance of each of the Notes. The Company has no right to prepay all or any portion of the outstanding principal under the Notes prior to the Maturity Date. The outstanding principal under the Notes and accrued and unpaid interest are convertible into shares of the Company's common stock, par value $.001per share, at a conversion price equal to 80% of the lowest price per share that we sell shares of our common stock during the period beginning with the date of issuance of each of the Notes until the Maturity Date, and if no shares are sold in such period, at a conversion price equal to $1.00per share. The number of Conversion Shares issuable upon the conversion of the Notes is subject to adjustment from time to time upon the occurrence of certain events such as stock splits or combinations and stock or other distributions of assets to equity holders.

The conversion option was valued by the Company using the Monte-Carlo model.

The following are the significant assumptions used in the Monte-Carlo model. See Note 8.

			Expected volatility				Risk-free interest rate				Expected dividend yield			Expected life (in years)
At September 1, 2023			68.2	%			4.87	%			0	%			2.00

In August 2024 all three of these Convertible Notes were extended for an additional year.

NOTE 6 - NOTES PAYABLE AND NOTES PAYABLE - RELATED PARTY

On December 30, 2020, the Company executed a promissory note with TopSight, a company owned by Zixiao Chen, our former Chief Financial Officer for cash proceeds of $30,000. The note bears interest at 10% per annum and is due in two business days after the demand for payment. On December 17, 2021, TopSight entered into a note purchase and assignment agreement with Eagle Investment Group, LLC, a company controlled by Bruce Cassidy (our former Chief Executive Officer through June 14, 2022) the Chairman of our Board of Directors to assign the note to Eagle Investment Group, LLC. Concurrently, we entered into an Allonge agreement with TopSight to change the noteholder from TopSight to Eagle Investment Group, LLC.

As of September 30, 2024, and June 30, 2024, the principal balance is $30,000and $30,000and accrued interest is $11,246and $10,496, respectively. The interest expense for the three months ended September 30, 2024 and 2023 was $750and $750, respectively.

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. The Company paid $300,000at the closing and entered into a promissory note with Mr. Linss for the remaining $1,700,000of the purchase price. The Note bears interest at a rate of 5% per annum, and requires the following payments: (i) no less than $850,000.00, in aggregate, of one or more payments is due by the 12-month anniversary of the Note; and (ii) a balloon payment for the balance of the Note is due by the earlier of the 24-month anniversary of the Note or five days after the Company's common stock is listed for public trading on either the Nasdaq Stock Market, the New York Stock Exchange, or the NYSE American. On February 19, 2024, the Company entered into a first amendment to the $1,700,000promissory note with John Linss. As per the amendment, $425,000was paid on February 27, 2024 and equal monthly payments of principal and interest of $59,665shall be paid to Mr. Linss monthly, beginning on April 1, 2024 for a period of twenty-four months. The amended maturity date of the note is the earliest of (a) April 1, 2026, (b) upon the occurrence of an uplisting, the fifth day after the occurrence of the uplisting, or (c) upon the occurrence of a change of control. All other terms of the original note remain the same. The Company has evaluated this amendment and has deemed it a debt modification in accordance with the ASC 470 guidance.

The outstanding principal balance at September 30, 2024, is $982,368, with $635,898being classified as Note Payable- Current on the balance sheet, and accrued interest is $100,190. The interest expense for the three months ended September 30, 2024 and 2023 is $30,620and $21,696respectively.

On May 5, 2023, the Company entered into a Promissory Note with Excel Family Partners, LLLP, a company controlled by Bruce Cassidy (our former Chief Executive Officer through June 14, 2022) the Chairman of our Board of Directors in the principal amount of $1,600,000. The Note matured on November 4, 2023, at which time the outstanding principal amount under the Note, along with a flat funding fee of $160,000was payable in full at loan maturity. In connection with entering the Note, the Company issued a Common Stock Warrant to purchase 1,600,000shares of our common stock at an exercise price of $0.25per share (the "Warrant"). The Warrant may be exercised, in whole or in part, at any time through May 4, 2028, on either a cash or cashless basis.

The note payable and the warrants were issued in a single transaction and as such were allocated among the freestanding instruments identified. The warrants were valued by the Company using the Black-Scholes option pricing model with the allocated fair value of $485,017 recorded as a note discount to be amortized over the 6 month life of the note.

The following are the significant assumptions used in the Black-Scholes model:

			Expected volatility				Risk-free interest rate				Expected dividend yield			Expected life (in years)
At May 5, 2023			111.60	%			4.20	%			0	%			5

On September 14, 2023, the principal balance of $1,600,000and the flat funding fee of $160,000was paid in full by the fourth amended line of credit with Excel Family Partners, LLLP (See Note 7).

On May 24, 2023, the Company entered into a short term note payable with a premium finance company to fund their technology services and cyber liability insurance. The total premiums, taxes and fees financed was $434,250at an annual percentage rate of 8.88%. After a down payment of $72,994was made upon execution of the Note, ten monthly payments remained in the amount of $37,744each. The final monthly payment was paid on March 24, 2024.

On May 24, 2024, the Company renewed the short term note payable with the premium finance company to fund their technology services and cyber liability insurance. The total premiums, taxes and fees financed was $318,557at an annual percentage rate of 9.60%. After a down payment of $47,784was made upon execution of the Note, ten monthly payments remained in the amount of $28,382each. The final monthly payment is due on March 24, 2025. The balance of this Note was $177,722and $257,612as of September 30, 2024 and June 30, 2024, respectively, and is included as part of Notes Payable - Current in the balance sheet.

The following represents the future aggregate maturities of the notes payable and notes payable-related party as of September 30, 2024, for each of the five (5) succeeding years and thereafter as follows:

Twelve months ending September 30,		Amount
2025		$	843,620
2026			346,470
2027			-
2028			-
2029			-
Thereafter			-
Total		$	1,190,090

NOTE 7- LINE OF CREDIT - RELATED PARTY

On February 22, 2022, the Company executed a non-revolving line of credit demand note for $250,000with Excel Family Partners, LLLP ("Excel") a company controlled by Bruce Cassidy (our former Chief Executive Officer through June 14, 2022) the Chairman of and sole director our board of directors. The note bears interest at 5% per annum. The Note does not constitute a committed line of credit. Loans under the note are made by Excel in its sole and absolute discretion. On August 16, 2022, the non-revolving line of credit demand note was - amended under the same terms and conditions.

On February 24, 2023, the Company entered into a second amended and restated discretionary non-revolving line of credit demand note with Excel in the principal amount of not more than $4,000,000. The Note amends and restates that certain amended and restated discretionary non-revolving line of credit demand Note. All loans made under the Note accrue interest at a fixed rate per annum equal to 15.0%. The note does not constitute a committed line of credit. Loans under the Note are made by Excel in its sole discretion. Upon repayment of any amount of principal or interest under the Note, we may not reborrow under the note.

The amended note includes a conversion option that Excel may, at its sole option, convert all or any portion of the debt into fully paid and non-assessable shares of common stock of the Company's common stock.at a conversion price in an amount equal to the product of the lowest recent price multiplied by 80%. The lowest price is defined, as of each applicable conversion rate, the lowest price per share that Company has sold one or more Shares to an investor or lender within the 24-month period prior to the applicable conversion date; provided, however, that if no shares were sold within such 24-month period, the lowest recent price will be $0.50per Share. The conversion option was valued by the Company using the Monte-Carlo model. See Notes 1 and 9.

The following are the significant assumptions used in the Monte-Carlo model.

			Expected volatility				Risk-free interest rate				Expected dividend yield			Expected life (in years)
At February 24, 2023			108.5	%			4.84	%			0	%			1.77

The note includes a common stock warrant exercisable up to 4,000,000shares of the Company's common stock for $0.25per share, with an expiration date of February 1, 2028. The warrants were valued by the Company using the Black-Scholes option pricing model.

The following are the significant assumptions used in the Black-Scholes model:

		Expected volatility			Risk-free interest rate			Expected dividend yield			Expected life (in years)
At February 24, 2023			111.60	%			4.20	%			0	%			2

The amended non-revolving line of credit was exchanged and modified on substantially different terms from the non-revolving line of credit demand note it replaced and as such is treated as a debt modification. The Company incurred debt issuance costs of $7,624,859, which is the sum of the fair value of the conversion feature in the note, and the fair value of the warrant. This total amount was included in the debt issuance costs on the accompanying balance sheet, net of amortization, for the year ended June 30, 2023. The Company will amortize the debt issuance costs over sixteen months, which is the estimated life of the debt.

On July 18, 2023, the Company entered into a Third Amended and Restated Discretionary Non-Revolving Line Of Credit Demand Note with Excel Family Partners, LLLP, ("Excel") in the principal amount of not more than $5,000,000(the "Note"). The Note amends and restates that certain Second Amended and Restated Discretionary Non-Revolving Line Of Credit Demand Note between us and Excel entered into on February 24, 2023, in the principal amount of not more than $4,000,000(the "Former Note"). Excel is controlled by Mr. Bruce Cassidy, our Secretary and sole member of our board of directors (the "Board"). The Note does not constitute a committed line of credit. Loans under the Note are made by Excel in its sole and absolute discretion. Upon repayment of any amount of principal or interest under the Note, we may not reborrow under the Note. All loans made under the Note accrue interest at a fixed rate per annum equal to 15.0%. In connection with entering into the Note payable agreement, the Company issued Excel a Common Stock Warrant to purchase 1,000,000shares of our common stock at an exercise price of $0.25per share (the "Warrant"). The Warrant may be exercised, in whole or in part, at any time through July 17, 2028, on either a cash or cashless basis. The Note includes a conversion option that Excel may, at its sole option, convert all or any portion of the debt into fully paid and non-assessable shares of common stock of the Company's common stock.at a conversion price in an amount equal to the product of the lowest recent price multiplied by 80%. The lowest price is defined, as of each applicable conversion rate, the lowest price per share that Company has sold one or more Shares to an investor or lender within the 24-month period prior to the applicable conversion date; provided, however, that if no Shares were sold within such 24-month period, the lowest recent price will be $0.50per Share.

The following are the significant assumptions used in the Black-Scholes model for the warrants:

		Expected volatility			Risk-free interest rate			Expected dividend yield			Expected life (in years)
At July 18, 2023			83.4	%			4.62	%			0	%			4.8

At the date of the third amendment, the remaining unamortized debt issuance costs were $5,393,193. These costs were added to the fair value of the warrants granted as part of the amendment to increase the total debt issuance costs to $5,785,727. As per the terms of the amendment, these total costs will now be amortized over a period of twenty two months.

On September 14, 2023, the Company entered into a Fourth Amended and Restated Discretionary Non-Revolving Line Of Credit Demand Note with Excel Family Partners, LLLP, a Florida limited liability limited partnership ("Excel") in the principal amount of not more than $10,000,000. The Note amends and restates that certain Third Amended and Restated Discretionary Non-Revolving Line Of Credit Demand Note between us and Excel entered into on July 18, 2023 in the principal amount of not more than $5,000,000(the "Former Note"). Excel is controlled by Mr. Bruce Cassidy, our Secretary and sole member of our board of directors (the "Board"). The Note does not constitute a committed line of credit. Loans under the Note are made by Excel in its sole and absolute discretion. Upon repayment of any amount of principal or interest under the Note, we may not reborrow under the Note. In connection with entering into the Note payable agreement, the Company issued Excel a Common Stock Warrant to purchase 3,400,000shares of our common stock at an exercise price of $0.25per share (the "Warrant"). The Warrant may be exercised, in whole or in part, at any time through September 13, 2028, on either a cash or cashless basis. The Note includes a conversion option that Excel may at its sole option, convert all or any portion of the debt into fully paid and non-assessable shares of the Company's common stock at a conversion price in an amount equal to the product of the lowest recent price multiplied by 80%. The lowest price is defined, as of each applicable conversion rate, the lowest price per share that Company has sold one or more Shares to an investor or lender within the 24-month period prior to the applicable conversion date; provided, however, that if no Shares were sold within such 24-month period, the lowest recent price will be $0.50per Share.

The following are the significant assumptions used in the Black-Scholes model for the warrants:

At the date of the fourth amendment, the remaining unamortized debt issuance costs were $5,308,162. These costs were added to the fair value of the warrants granted as part of the amendment to increase the total debt issuance costs to $6,668,666. As per the terms of the amendment, these total costs will now be amortized over a period of twenty months.

As of the date of the Fourth Amended and Restated Discretionary Non-Revolving Line of Credit Demand Note, the aggregate outstanding principal balance was $6,888,801, which includes: (i) the outstanding principal balance under the Former Note of $4,251,877as of July 24, 2023; (ii) the $500,000borrowed under the Former Note on August 17, 2023; (iii) conversion of all accrued and unpaid interest under the Former Note through September 13, 2023 in the amount of $376,924; and (iv) the $1,760,000 borrowed under the Note as of September 14, 2023 to pay in full the bridge loan evidenced by the Promissory Note, dated May 5, 2023, in the principal amount of $1,600,000made by Excel to the Company and the related funding fee due and owing in connection with such bridge loan. See Note 6. On September 15, 2023, the Company borrowed an additional $250,000under the Fourth Amended and Restated Discretionary Non-Revolving Line of Credit Demand Note.

On December 27, 2023, a total of $1,540,000of the principal amount due under the Former Note was assigned from Excel to eight (8) third parties (each, a "Debt Assignee") pursuant to an Assignment and Assumption for each Debt Assignee. The following day, the Company received a total of nine (9) Conversion Notices which elected, in aggregate, that a total of $10,366,653of indebtedness under the Former Note be converted at a conversion price of $0.40per Share (based on the sale by the Company of Shares within the last two years at $0.50per share multiplied by 80%) into 25,916,632Shares (the "Conversion Shares"). Excel converted $8,826,653into 22,066,632Conversion Shares. The Debt Assignees, collectively, converted $1,540,000into an aggregate of 3,850,000Conversion Shares. See Note 10.

The offer, sale and issuance of the Conversion Shares were deemed to be exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), in reliance on Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D promulgated thereunder, as transactions by an issuer not involving a public offering. The converting debt holders acquired the Conversion Shares for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the Conversion Shares upon issuance thereof.

On December 29, 2023, the Company entered into a Fifth Amended and Restated Discretionary Non-Revolving Line Of Credit Demand Note with Excel Family Partners, LLLP, a Florida limited liability limited partnership ("Excel") in the principal amount of not more than $2,000,000(the "Note"). The Note amends and restates that certain Fourth Amended and Restated Discretionary Non-Revolving Line Of Credit Demand Note between us and Excel entered into on September 14, 2023 in the principal amount of not more than $10,000,000(the "Former Note"). Excel is controlled by Mr. Bruce Cassidy, our Chief Executive Officer and Secretary and sole member of our board of directors (the "Board"). The Note does not constitute a committed line of credit. Loans under the Note are made by Excel in its sole and absolute discretion. Upon repayment of any amount of principal or interest under the Note, we may not reborrow under the Note. In connection with entering into the Note payable agreement, the Company issued Excel a Common Stock Warrant to purchase 2,460,000shares of our common stock at an exercise price of $0.25per share (the "Warrant"). The Warrant may be exercised, in whole or in part, at any time through September 13, 2028, on either a cash or cashless basis. The Note includes a conversion option that Excel may, at its sole option, convert all or any portion of the debt into fully paid and non-assessable shares of common stock of the Company's common stock.at a conversion price in an amount equal to the product of the lowest recent price multiplied by 80%. The lowest price is defined, as of each applicable conversion rate, the lowest price per share that Company has sold one or more Shares to an investor or lender within the 24-month period prior to the applicable conversion date; provided, however, that if no Shares were sold within such 24-month period, the lowest recent price will be $0.50per Share.

A total of $10,366,653of indebtedness under the Former Note was converted into shares of common stock (the "Shares") at a conversion price of $0.40per Share (based on the sale by the Company of Shares within the last two years at $0.50per share multiplied by 80%) on December 28, 2023.

The following are the significant assumptions used in the Black-Scholes model for the warrants:

On August 7, 2024, $4,410,000of the balance on the Fifth Amended and Restated Discretionary Non-Revolving Line of Credit Demand Note was transferred to a new Discretionary Non-Revolving Line of Credit Demand Note with Excel Family Partners, LLLP in the principal amount of not more than $5,000,000. The remaining $4,110,000of the balance was transferred to a Sixth Amended and Restated Discretionary Non-Revolving Line of Credit Demand Note with Excel Family Partners, LLLP. See below.

On August 7, 2024, the Company entered into a Sixth Amended and Restated Discretionary Non-Revolving Line of Credit Demand Note with Excel Family Partners, LLLP, a Florida limited liability limited partnership ("Excel") in the principal amount of not more than $4,110,000(the "Note"). The Note amends and restates that certain Fifth Amended and Restated Discretionary Non-Revolving Line Of Credit Demand Note between us and Excel entered into on December 29, 2023 in the principal amount of not more than $2,000,000(the "Former Note"). Excel is controlled by Mr. Bruce Cassidy, our Secretary and sole member of our board of directors (the "Board"). The Note does not constitute a committed line of credit. Loans under the Note are made by Excel in its sole and absolute discretion. Upon repayment of any amount of principal or interest under the Note, we may not reborrow under the Note. The Note includes a conversion option that Excel may, at its sole option, convert all or any portion of the debt into fully paid and non-assessable shares of common stock of the Company's common stock.at a conversion price in an amount equal to the product of the lowest recent price multiplied by 80%. The lowest price is defined, as of each applicable conversion rate, the lowest price per share that Company has sold one or more Shares to an investor or lender within the 24-month period prior to the applicable conversion date; provided, however, that if no Shares were sold within such 24-month period, the lowest recent price will be $0.50per Share.

On August 7, 2024, the Company entered into a new Discretionary Non-Revolving Line of Credit Demand Note with Excel Family Partners, LLLP, a Florida limited liability limited partnership ("Excel") in the principal amount of not more than $5,000,000(the "Note"). Excel is controlled by Mr. Bruce Cassidy, our Secretary and sole member of our board of directors (the "Board"). The Note does not constitute a committed line of credit. Loans under the Note are made by Excel in its sole and absolute discretion. Upon repayment of any amount of principal or interest under the Note, we may not reborrow under the Note. The Note includes a conversion option that Excel may, at its sole option, convert all or any portion of the debt into fully paid and non-assessable shares of common stock of the Company's common stock.at a conversion price in an amount equal to the product of the lowest recent price multiplied by 80%. The lowest price is defined, as of each applicable conversion rate, the lowest price per share that Company has sold one or more Shares to an investor or lender within the 24-month period prior to the applicable conversion date; provided, however, that if no Shares were sold within such 24-month period, the lowest recent price will be $0.50per Share. The Note bears interest at 12% and is due on demand and in no event no later than April 1, 2025.

On August 13, 2024, the Company borrowed an additional $400,000under the new Discretionary Non-Revolving Line of Credit Demand Note with Excel Family Partners, LLP.

On August 28, 2024, the Company borrowed an additional $475,000under the new Discretionary Non-Revolving Line of Credit Demand Note with Excel Family Partners, LLP.

On September 11, 2024, the Company borrowed an additional $450,000under the new Discretionary Non-Revolving Line of Credit Demand Note with Excel Family Partners, LLP.

On September 26, 2024, the Company borrowed an additional $550,000under the new Discretionary Non-Revolving Line of Credit Demand Note with Excel Family Partners, LLP.

As of September 30, 2024, $4,110,00was outstanding on the Sixth Amended and Restated Discretionary Non-Revolving Line of Credit Demand Note with Excel Family Partners, LLLP and $6,285,000was outstanding on the new Discretionary Non-Revolving Line of Credit Demand Note with Excel Family Partners, LLLP

At September 30, 2024, the remaining unamortized debt issuance costs were $689,512. Amortization of $640,662and $935,248was included in interest expense, respectively during the three months ended September 30, 2024 and 2023.

As of September 30, 2024 and June 30, 2024, the aggregate outstanding principal balance of all loans under the Note was $10,395,000 and $7,670,000, respectively and accrued interest was $668,045 and 356,002.

NOTE 8 - DERIVATIVE LIABILITIES

On February 24, 2023, July 18, 2023 and September 14, 2023, the Company entered into the second, third and fourth amended and restated discretionary non-revolving line of credit demand notes ("LOC") with a related party (See Note 7). On August 23, 2023, August 28, 2023 and September 1, 2023, the Company also entered into a Convertible Note Purchase Agreement and a Convertible Promissory Note with three unrelated parties (See Note 5). The LOC and Convertible Promissory Notes contain conversion options that qualify for embedded derivative classification. The fair value of the liability is re-measured at the end of every reporting period and the change in fair value is reported in the statement of operations as a gain or loss on change in fair value of derivatives.

The table below sets forth a summary of the changes in the fair value of the Company's Level 3 financial liabilities for the three months ended September 30, 2024:

Balance at June 30, 2024		$	11,273,000
Change in the fair value of the embedded conversion option			1,652,000
Balance at September 30, 2024		$	12,925,000

The Company uses Level 3 inputs for its valuation methodology for the embedded conversion option liabilities as their fair values were determined by using Monte-Carlo model based on various assumptions.

Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. As required, these are classified based on the lowest level of input that is significant to the fair value measurement. The following table shows the assumptions used in the calculations:

		Expected volatility			Risk-free interest rate			Expected dividend yield			Expected life (in years)
At June 30, 2024			57.5-68.5	%			4.66-5.03	%			0	%			1.17-2.25
At September 30, 2024			61.2-61.5	%			3.66-4.04	%			0	%			.92-2.00

NOTE 9 - STOCKHOLDERS' DEFICIT

The Company is authorized to issue 475,000,000shares of common stock, par value $0.001per share, and 25,000,000shares of preferred stock, par value $0.0001per share; of which 2,000,000shares have been designated as Series A Convertible Preferred Stock, 12,000shares have been designated as Series B Convertible Preferred Stock and 6,700,000shares have been designated as Series C Convertible Preferred Stock.

The Series A Convertible Preferred Stock has a liquidation preference of $0.10per share, has super-voting rights of 100 votes per share. Each share of Series A may be converted into 100shares of common stock at the option of the Holder thereof and without the payment of additional consideration by the Holder thereof, at any time, into shares of Common Stock at a conversion rate of one hundred (100) shares of Common Stock for every one (I) share of Series A Convertible Preferred Stock.

The Series B Convertible Preferred Stock has a liquidation preference of $1.00per share, has super-voting rights, and votes are determined by multiplying (a) the number of Series B shares held by such holder and (b) the conversion ratio, and each Series B share may be converted into 100shares of common stock. Each Holder shall have the right to convert any of all of such Holder's shares of Series B Preferred Stock into shares of common stock at the conversion ratio. Upon the closing of an underwritten, follow-on public offering of shares of the Company's common stock with gross offering proceeds of not less than $6,000,000, each then-outstanding share of Series B Convertible Preferred Stock shall be automatically converted into shares of common stock at the conversion ratio without any affirmative action required of the Holder.

The Series C Convertible Preferred Stock has a liquidation preference of $0.30per share, plus a 6% per annum liquidation coupon compounded annually since the date of issuance paid only upon a liquidation event, have the right to vote for all matters submitted, including the election of directors, and all other matters as required by law. The Series C shares shall automatically convert into common stock by multiplying the number of Series C shares to be converted by the quotient obtained by dividing (x) the liquidation value by (y) the conversion value upon the date that is the earlier of (a) the closing date of an underwritten, follow-on public offering of shares of the Company's common stock with gross offering proceeds of not less than $6,000,000; (b) the date the Company receives written notice from a holder of Series C shares of such holder's desire and intention to convert all or some of such holder's Series C shares; and (c) June 15, 2024.

Series A Convertible Preferred Stock

During the three months ended September 30, 2024 and 2023, there were noissuances of Series A Convertible Preferred Stock and as at September 30, 2024 and June 30, 2024, noshares were outstanding.

Series B Convertible Preferred Stock

During the three months ended September 30, 2024 and 2023, there were noissuances of Series B Convertible Preferred Stock and as at September 30, 2024 and June 30, 2024, 11,693and 11,693shares were outstanding.

Series C Convertible Preferred Stock

On August 16, 2022, John Linss our former Chief Executive Officer and former member of our board of directors was issued 2,980,000shares of our Series C Convertible Preferred Stock as part of an amendment to his employment agreement. The stock was valued at $0.30per share, the recent cash price paid for all previous issuances of Series C Convertible Preferred stock, and vests over a 3-year period unless certain milestones are met, in which case it will fully vest sooner.

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 the 3,313,333shares of Series C Convertible Preferred Stock owned by Linss and Corespeed, LLC. The Company paid $300,000at the closing and entered into a promissory note with Mr. Linss for the remaining $1,700,000of the purchase price.

On June 15, 2024, the board of directors approved the issuance of common shares upon conversion of all outstanding Series C Preferred Stock. A total of 2,799,444shares of common stock was issued upon the conversion of 2,499,998shares of Series C Preferred stock.

As at September 30, 2024 and June 30, 2024, noshares were outstanding.

Common Stock

On December 28, 2023, a total of 25,916,632shares of common stock were issued upon conversion of $10,366,653notes payable. See Note 8. The fair market value of the total shares issued was $12,958,316based on the most recent sales price of common stock ($.50per share). A loss on conversion of debt and related derivative liability in the amount of $798,873was recorded on the statement of operations. See Note 8

On January 8, 2024 the Company sold 400,000shares of common stock to an unrelated party for cash proceeds of $300,000.

On June 15, 2024, the board of directors approved the issuance of common shares upon conversion of all outstanding Series C Preferred Stock. A total of 2,799,444shares of common stock was issued upon the conversion of 2,499,998shares of Series C Preferred stock.

On June 28, 2024, the board of directors approved the issuance of 973,915shares of common stock upon the cashless exercise of 1,043,479warrants.

NOTE 10 - STOCK OPTIONS

On April 10, 2023, the board of directors (the "Board") approved the 2023 stock option plan ("2023 Plan"). The 2023 Plan was subject to the approval of our stockholders within 12 months of the Board's approval. 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 3,250,000shares of our common stock at an exercise price of $0.50per share (the "Awards").

As part of the Awards, on April 10, 2023, our former CEO, Mark Thomas, was granted 800,000ISOs and 200,000NSOs, and our former CFO, Anthony Fidaleo, was granted 250,000ISOs (collectively, the "Officer Awards"). In aggregate on April 10, 2023 the Company granted a total of 3,150,000including the Officer Awards to 16 employees and 6 contractors that vest to 25% of the shares on June 16, 2023 and hereafter, the option Awards will further vest as to 1/48th of the shares monthly for a period of 36 months; provided all vesting is subject to the officer having provided continuous service to us or a related corporation through each such vesting date. 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 Company has calculated these options estimated fair market value at $267,669using the Black-Scholes model, with the following assumptions: expected term 4.0years, stock price $0.50, exercise price $0.50, volatility 111.6%, risk-free rate 4.2%, and no forfeiture rate.

On April 10, 2023, the Company granted 100,000Awards to 1 consultant vest to 1/18th of the shares on May 10, 2023, and hereafter, the option Awards will further vest as to 1/18th of the shares monthly for a period of 17 months; provided all vesting is subject to the consultant having provided continuous service to us or a related corporation through each such vesting date. The Company has calculated these options estimated fair market value at $2,900using the Black-Scholes model, with the following assumptions: expected term 1.5years, stock price $0.50, exercise price $0.50, volatility 111.6%, risk-free rate 4.2%, and no forfeiture rate.

A total of 125,000stock options were forfeited on September 15, 2023 as per the terms of a separation agreement with the former Chief Financial Officer.

Below is a table summarizing the changes in stock options outstanding for the three months ended September 30, 2024:

		Number of Shares Underlying Outstanding Options			Weighted Average Remaining Contractual Life			Weighted Average Exercise Price			Intrinsic Value
Options outstanding as of June 30, 2024			2,075,000				7.65years			$	0.50			$	518,750
Options exercisable as of June 30, 2024			1,517,361				7.65years			$	0.50			$	379,340
Granted			-				-				-				-
Exercised			-				-				-				-
Forfeited or expired			-				-				-			$	-
Options outstanding as of September 30, 2024			2,075,000				7.40years			$	0.50			$	518,750
Options exercisable as of September 30, 2024			1,649,653				7.40years			$	0.50			$	412,413

The Company utilized the Black-Scholes valuation model for estimating fair value of the options. Each grant was evaluated based upon assumptions at the time of the grant. The assumptions used during the three months ended September 30, 2024 were as follows:

		Three Months Ended September 30, 2024
Exercise Price:		$	0.50
Volatility:			111.60	%
Risk Free Rate:			4.20	%
Vesting Period:			10years
Expected Life			1.5years

As of September 30, 2024, all outstanding stock options were issued according to the Company's 2023 Plan. There are 3,835,000unissued shares of common stock available for future issuance under the 2023 Plan.

NOTE 11 - COMMITMENTS AND CONTINGENCIES

Commitments and Contingencies are as follows:

During May 2023, the Company was issued $500,000in a surety bond at an annual premium cost of $12,500and during May 2024, this surety bond was renewed with the same terms. The surety bond is held for Tennessee Sports Wagering and Advisory Council for use and benefit in order for the Company to satisfy state license requirements. There have been no claims against such bonds through September 30, 2024.

Legal matter contingencies

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 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 12 - RELATED PARTY TRANSACTIONS

Transactions with our former Chief Financial Officer:

On February 19, 2024, the Company entered into a first amendment to the $1,700,000promissory note with John Linss, our former Chief Executive Officer and former member of the board of directors, and his wholly owned Corespeed, LLC. As per the amendment, $425,000was paid on February 27, 2024 and equal monthly payments of principal and interest of $59,665shall be paid to Mr. Linss monthly, beginning on April 1, 2024 for a period of twenty-four months. The amended maturity date of the note is the earliest of (a) April 1, 2026, (b) upon the occurrence of an uplisting, the fifth day after the occurrence of the uplisting, or (c) upon the occurrence of a change of control. All other terms of the original note remain the same.

Transactions with our current Chief Executive Officer and current Chairman of our Board of Directors:

On August 16, 2022, the non-revolving line of credit demand note with Excel Family Partners, LLLP ("Excel") a company controlled by Bruce Cassidy (our former Chief Executive Officer through June 14, 2022) the Chairman of our board of directors, which can exert significant influence over the Company, was increased to $2,000,000under the same terms and conditions. See Notes 6, 7 and 8.

On February 24, 2023, the Company entered into a second amended and restated discretionary non-revolving line of credit demand note with Excel in the principal amount of not more than $4,000,000and granted a common stock warrant exercisable up to 4,000,000shares of the Company's common stock. See Notes 6, 7, 8 and 9.

On May 5, 2023, the Company entered into a Promissory Note with Excel Family Partners, LLLP, a company controlled by Bruce Cassidy (our former Chief Executive Officer through June 14, 2022) the Chairman of our Board of Directors in the principal amount of $1,600,000. The Note matures on November 4, 2023, at which time the outstanding principal amount under the Note, along with a flat funding fee of $160,000is due and payable in full at loan maturity. In connection with entering the Note, the Company issued a Common Stock Warrant to purchase 1,600,000shares of our common stock at an exercise price of $0.25per share (the "Warrant"). The Warrant may be exercised, in whole or in part, at any time through May 4, 2028, on either a cash or cashless basis. On September 14, 2023, this Note and the flat funding fee were paid in full from the Discretionary Non-Revolving Line Of Credit Demand Note with Excel Family Partners, LLLP, ("Excel"). See Notes 6, 7, 8 and 9.

On July 18, 2023, the Company entered into a Third Amended and Restated Discretionary Non-Revolving Line Of Credit Demand Note with Excel Family Partners, LLLP, ("Excel") in the principal amount of not more than $5,000,000and granted a common stock warrant exercisable up to 1,000,000shares of the Company's common stock. See Notes 6, 7, 8 and 9.

On September 14, 2023, the Company entered into a Fourth Amended and Restated Discretionary Non-Revolving Line Of Credit Demand Note with Excel Family Partners, LLLP, a Florida limited liability limited partnership ("Excel") in the principal amount of not more than $10,000,000and granted a common stock warrant exercisable up to 3,400,000shares of the Company's common stock. See Notes 6, 7, 8 and 9.

A total of $10,366,653of indebtedness under the Fourth Amended and Restated Discretionary Non-Revolving Line of Credit Demand Note was converted into shares of common stock (the "Shares") at a conversion price of $0.40per Share (based on the sale by the Company of Shares within the last two years at $0.50per share multiplied by 80%) on December 28, 2023.

On December 29, 2023, the Company entered into a Fifth Amended and Restated Discretionary Non-Revolving Line Of Credit Demand Note with Excel Family Partners, LLLP, a Florida limited liability limited partnership ("Excel") in the principal amount of not more than $2,000,000and granted a common stock warrant exercisable up to 2,460,000shares of the Company's common stock. See Notes 8 and 13.

On August 7, 2024, $4,410,000of the balance on the Fifth Amended and Restated Discretionary Non-Revolving Line of Credit Demand Note was transferred to a new Discretionary Non-Revolving Line of Credit Demand Note with Excel Family Partners, LLLP in the principal amount of not more than $5,000,000. The remaining $4,110,000of the balance was transferred to a Sixth Amended and Restated Discretionary Non-Revolving Line of Credit Demand Note with Excel Family Partners, LLLP. See below.

On August 7, 2024, the Company entered into a Sixth Amended and Restated Discretionary Non-Revolving Line of Credit Demand Note with Excel Family Partners, LLLP, a Florida limited liability limited partnership ("Excel") in the principal amount of not more than $4,110,000(the "Note"). The Note amends and restates that certain Fifth Amended and Restated Discretionary Non-Revolving Line Of Credit Demand Note between us and Excel entered into on December 29, 2023 in the principal amount of not more than $2,000,000(the "Former Note"). Excel is controlled by Mr. Bruce Cassidy, our Secretary and sole member of our board of directors (the "Board"). The Note does not constitute a committed line of credit. Loans under the Note are made by Excel in its sole and absolute discretion. Upon repayment of any amount of principal or interest under the Note, we may not reborrow under the Note. The Note includes a conversion option that Excel may, at its sole option, convert all or any portion of the debt into fully paid and non-assessable shares of common stock of the Company's common stock.at a conversion price in an amount equal to the product of the lowest recent price multiplied by 80%. The lowest price is defined, as of each applicable conversion rate, the lowest price per share that Company has sold one or more Shares to an investor or lender within the 24-month period prior to the applicable conversion date; provided, however, that if no Shares were sold within such 24-month period, the lowest recent price will be $0.50per Share.

On August 7, 2024, the Company entered into a new Discretionary Non-Revolving Line of Credit Demand Note with Excel Family Partners, LLLP, a Florida limited liability limited partnership ("Excel") in the principal amount of not more than $5,000,000(the "Note"). Excel is controlled by Mr. Bruce Cassidy, our Secretary and sole member of our board of directors (the "Board"). The Note does not constitute a committed line of credit. Loans under the Note are made by Excel in its sole and absolute discretion. Upon repayment of any amount of principal or interest under the Note, we may not reborrow under the Note. The Note includes a conversion option that Excel may, at its sole option, convert all or any portion of the debt into fully paid and non-assessable shares of common stock of the Company's common stock.at a conversion price in an amount equal to the product of the lowest recent price multiplied by 80%. The lowest price is defined, as of each applicable conversion rate, the lowest price per share that Company has sold one or more Shares to an investor or lender within the 24-month period prior to the applicable conversion date; provided, however, that if no Shares were sold within such 24-month period, the lowest recent price will be $0.50per Share. The Note bears interest at 12% and is due on demand and in no event no later than April 1, 2025.

On August 13, 2024, the Company borrowed an additional $400,000under the new Discretionary Non-Revolving Line of Credit Demand Note with Excel Family Partners, LLP.

On August 28, 2024, the Company borrowed an additional $475,000under the new Discretionary Non-Revolving Line of Credit Demand Note with Excel Family Partners, LLP.

On September 11, 2024, the Company borrowed an additional $450,000under the new Discretionary Non-Revolving Line of Credit Demand Note with Excel Family Partners, LLP.

On September 26, 2024, the Company borrowed an additional $550,000 under the new Discretionary Non-Revolving Line of Credit Demand Note with Excel Family Partners, LLP.

NOTE 13 - SUBSEQUENT EVENTS

In accordance with ASC 855-10, the Company has analyzed its operations subsequent to September 30, 2024, to the date these financial statements were issued, and as of November 8, 2024, there were no other material subsequent events to disclose in these financial statements with the exception of the events below.

Subsequent to the period end, and through November 8, 2024, the Company borrowed an additional $675,000under the new Discretionary Non-Revolving Line of Credit Demand Note with Excel Family Partners, LLP.

On November 1, 2024, the Company entered into an agreement with a sports betting services provider for a term of four years after the software implementation. The terms of the agreement call for an upfront payment in the amount of $240,000and a second payment of $240,000to be paid upon the implementation. The agreement also calls for business fees that will vary based upon yearly gross gaming revenues commencing with the first live launch and ranging from 10% to 14% of net gaming revenues.

On November 6, 2024 the Company sold 666,667shares of common stock to two unrelated parties for cash proceeds of $500,000as part of a private offering.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words "believes," "project," "expects," "anticipates," "estimates," "intends," "strategy," "plan," "may," "will," "would," "will be," "will continue," "will likely result," and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

Overview

As used in this Quarterly Report and unless otherwise indicated, the terms the "Company," "we", "us" and "our" mean VIP Play, Inc., a Nevada corporation formed on April 16, 2020.

In the summer of 2022, our business consisted solely of providing online retail sales of masks and similar products and convention services (together, prior business). Through our e-commerce sales channel, we sold KN-95 facemasks, disposable facemasks, and disinfectant wipes through an online store in the United States of America (US). Through our convention sales channel, we offered convention services, which connected US buyers to Chinese manufacturers.

On June 15, 2022, we hired a new Chief Executive Officer and Chief Financial Officer along with certain key employees of ZenSports, Inc. to explore business opportunities related to software and mobile application development and services related to such technology.

On August 26, 2022, we entered into an Asset Purchase Agreement to purchase certain technological assets, as well as the brand ZenSports, from ZenSports, Inc. The assets were purchased to allow us to offer online sports betting, eSports, DeFi fintech and various entertainment services, on a direct-to-consumer (B2C) and business-to-business basis. We did not acquire the entity ZenSports Inc. On September 12, 2022, we entered into an Asset Purchase Agreement with Excel Members, LLC, a company controlled by Bruce Cassidy, a member of our Board of Directors (the "Board"), to acquire certain assets of a company acquired previously by Excel Members through an assignment for the benefit of creditors. Ultimate Gamer, LLC, which was formerly in the business of organizing and operating in-person and online video game competitions tournament, originally owned these assets. The purchased assets included the brand name Ultimate Gamer.

On September 15, 2022, we entered into an agreement to assign all of the assets in connection with or relating to our prior business owned or used by us (discontinued operations), and to delegate any and all liabilities owed by us, to TopSight Corporation, a company owned by Zixiao Chen, our former Chief Financial Officer.

As a result of the foregoing transactions, we ceased all operations relating to our prior business and commenced operations relating to B2C offerings within online sports betting (current business or business). With our current business, augmented by net new development of products and services, we intend to pursue global business opportunities through a platform we've designed to be a flexible foundation for corporate growth.

Through our ZenSports brand we offer a modern, full-featured, native mobile, and global online sports betting platform incorporating; a sports book, peer-to-peer betting, eSports wagering, loyalty, and player retention.

In May 2023, we received approval on our Tennessee Sports Gaming Operator license, and we officially launched our sports betting operation in Tennessee in June 2023.

Our current business is a mobile app and online-based technology company with no demand for a physical storefront location. The website for our business is https://www.vipplayinc.com. The information on our website is not made a part of this Quarterly Report. Our headquarters address is 1645 Pine Tree Ln, Suite 2, Sarasota, FL 34236. Our phone number is: (866) 783-9435.

Results of Operations for the Three Months Ended September 30, 2024, and 2023

During the three months ended September 30, 2024, and 2023, we incurred net losses from continuing operations of $5,269,382 and $5,058,302, respectively.

For the three months ended September 30, 2024 and 2023, we had negative gaming revenues of $3,337 and $218,624. Negative gaming revenues consisted of net sports betting revenues which commenced in June of 2023 upon the approval of our gaming license. Our negative gaming revenues decreased by approximately $215,000 during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. During the current quarter, we lowered our marketing expenses and betting limits, which led to lower betting handle that would enable us to strategically focus on technology updates and risk management improvements.

The significant driver to our loss in the current period is principally related to the loss on change in fair value of derivatives, along with increases in salaries, wages, and contracting fees to ready our acquired technology for operating in Tennessee as well as legal, professional and abandoned jurisdictional licensing fees associated with our licensing activities and legal fees associated with fundraising. Operating and sales and marketing costs contribute to our losses and are expected to increase over the coming months once we expand our sports betting operations. In addition, we had non-cash expenses contributing to our loss for debt amortization costs of $640,662 and $935,248, respectively, as part of the restructuring of the related party demand line of credit and interest expense on notes payable of $374,201 and $656,583 for the three months ended September 30, 2024 and 2023.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts payable and accrued expenditures, and capital expenditures, including the costs associated with internally developed software and attaining Sports Gaming Operator licenses.

As of September 30, 2024, we had total current assets of $1,067,593, total current liabilities of $26,236,469, and a total working capital deficit of $25,168,876. Net cash used in operating activities was $2,290,520 during the three months ended September 30, 2024, compared to $1,601,081 during the three months ended September 30, 2023. The decrease in the use of cash in operating activities is principally the result of a $1,816,912 decrease in net operating assets and liabilities and an increase in non-cash transactions of $1,338,552, and an increase in the net loss of $211,079.

Net cash used in investing activities remained fairly consistent during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

Net cash provided by financing activities decreased by $16,967 during the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The decrease is primarily due to proceeds from convertible notes issued during the three months ended September 30, 2023, and is partially offset by increased draws from the related party demand line of credit during the three months ended September 30, 2024.

We were incorporated on April 16, 2020. Since inception, our efforts and operations from our prior business to the date of disposition have been devoted primarily to startup and development activities, resulting in negative cash flows and an accumulated deficit from inception through disposition on September 15, 2022. During the three months ended September 30, 2022, we closed on acquisitions of certain assets of ZenSports and Ultimate Gamer and divested our prior business.

We purchased the assets of ZenSports and Ultimate Gamer so we could offer gambling, eSports entertainment, and DeFi opportunities through the acquired technology we are currently enhancing. In January 2023, John Linss our former Chief Executive Officer (CEO) resigned. As a result of this change in leadership and consultation with the Board, we adjusted our business plan to solely focus on sports betting in one jurisdiction, Tennessee, for the foreseeable future. Our current management team believes this singular focus will facilitate the revenue generation process more quickly and cost-effectively by focusing on our limited resources.

As of the filing date of this Quarterly Report, we have ceased all operations relating to our prior business and are focused on executing our adjusted business plan for our current business. Since our current business has a limited history of generating revenues or operating successfully, we will be dependent upon, among other things, achieving a level of profitable operations and receiving additional cash infusions, including securing additional lines of credit and raising additional capital through the placement of preferred and/or common stock in order to implement our business plan. Because of our limited operating history, it is difficult to predict our capital needs on a monthly, quarterly, or annual basis. We will have limited capital available to us if we are unable to raise money through private equity offerings or find alternate forms of financing, which we do not have in place at this time.

Off Balance Sheet Arrangements

As of September 30, 2024, we had no off-balance sheet arrangements.

Going Concern

As of September 30, 2024, we had a working capital deficit of $25,168,876. We had a net loss from operations of $5,269,382 for the three months ended September 30, 2024. We do not expect significant revenues and we expect to incur significant increases in operating costs in the short term as we commence our sports betting operations. The expected significant increases in costs will include, but not be limited to, costs relating to obtaining gaming licenses, technology development, sales and marketing, and legal and professional fees.

These conditions raise substantial doubt about our ability to continue as a going concern for a period of one year from the issuance of these financial statements. Because of these conditions, we will require additional working capital to develop business operations. Management's plans are to raise additional working capital through the sale of debt and/or equity instruments as well as to generate revenues. There are no assurances that we will be able to achieve the level of revenues adequate to generate sufficient cash flow from operations to support our working capital requirements. To the extent that funds generated are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to us. If adequate working capital is not available, we may not be able to continue our operations.

The financial statements do not include any adjustments relating to the recoverability and classification of asset-carrying amounts or the amount and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Item 3. Quantitative and Qualitative Disclosure About Market Risks

A smaller reporting company is not required to provide the information required by this Item.

Item 4. Controls and Procedures

Evaluation of Effectiveness of Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2024. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2024, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.

Changes in Internal Control over Financial Reporting

In connection with our continued monitoring and maintenance of our controls procedures as part of the implementation of Section 404 of the Sarbanes-Oxley Act, we continue to review, test, and improve the effectiveness of our internal controls over financial reporting. There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the first quarter of our fiscal year ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 6. Exhibits

				Incorporated By Reference
Exhibit Number		Exhibit Description		Form		As Exhibit		Filing Date
3.1		Amended and Restated Articles of Incorporation		10-K		3.1		09/24/2024
3.2		Certificate of Designation of Series B Convertible Preferred Stock		8-K		3.1		01/12/2022
3.3*		Amended and Restated Bylaws, Updated for Name Change
10.1		Sixth Amended and Restated Discretionary Convertible Revolving Line Of Credit Demand Note dated as of August 5, 2024 made by KeyStar Corp.		8-K		10.1		08/13/2024
10.2		Discretionary Convertible Revolving Line Of Credit Demand Note dated as of August 6, 2024 made by KeyStar Corp.		8-K		10.2		08/13/2024
10.3		Form of First Amendment to Convertible Note Purchase Agreement of VIP Play, Inc.		8-K		10.1		09/24/2024
31.1*		Certification of Principal Executive Officer filed 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
31.2*		Certification of Principal Financial Officer filed 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
32.1**		Certification of Chief Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certification of Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Filed herewith.
**	Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	VIP PLAY, INC.
	(Registrant)
Date: November 8, 2024
	By:	/s/ James Mackey
		James Mackey
		Chief Financial Officer
		(Principal Financial Officer)

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