UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
For
the quarterly period ended
Commission
File Number:
| (Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s
telephone number:
(Former name or former address, if changed since last report): N/A
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
(Title of each class)
Indicate
by check mark 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.
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).
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 | ☐ | |
| ☒ | 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 February 10, 2025, was shares, par value $ per share.
VIP Play, Inc.
Form 10-Q
Table of Contents
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Our financial statements included in this Form 10-Q are as follows:
| 1 |
VIP PLAY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| December 31, 2024 | June 30, 2024 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Cash reserved for users | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Other assets: | ||||||||
| Equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Debt issuance costs, net | ||||||||
| Security deposit | ||||||||
| Total other assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accrued expenses - related party | ||||||||
| Players balances | ||||||||
| Notes payable – current | ||||||||
| Notes payable - related party, net of discount | ||||||||
| Convertible notes, net | ||||||||
| Line of credit - related party | ||||||||
| Derivative liability | ||||||||
| Total current liabilities | ||||||||
| Long-term liabilities: | ||||||||
| Notes payable - long-term | ||||||||
| Total long-term liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-1 |
VIP PLAY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS - Continued
| December 31, 2024 | June 30, 2024 | |||||||
| (unaudited) | ||||||||
| Stockholders’ deficit: | ||||||||
| Preferred stock, $ par value, shares authorized | ||||||||
| Series A preferred stock, shares designated, and shares issued and outstanding as of December 31, 2024, and June 30, 2024, respectively | ||||||||
| Series B preferred stock, shares designated, and shares issued and outstanding as of December 31, 2024, and June 30, 2024, respectively | ||||||||
| Series C preferred stock, shares designated, and shares issued and outstanding as of December 31, 2024, and June 30, 2024, respectively | ||||||||
| Common stock, $ par value, shares authorized, and shares issued and outstanding as of December 31, 2024, and June 30, 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-2 |
VIP PLAY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
| For the three months ended December 31, | For the six months ended December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Gaming revenues | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Costs of gaming revenue | ||||||||||||||||
| Net gaming loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Operating expenses: | ||||||||||||||||
| Salaries and wages | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Sales and marketing | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Impairment of developed technology and tradename | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Other income (expense): | ||||||||||||||||
| Other income | ||||||||||||||||
| Gain (loss) on change in fair value of derivative | ( | ) | ( | ) | ||||||||||||
| Loss on extinguishment of debt | ( | ) | ( | ) | ||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expense - related party | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other income (expense) | ( | ) | ( | ) | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Net loss per common share - basic and diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average number of common shares outstanding - basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-3 |
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 $0.0001 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, 2023 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||||||
| Fair value of vested incentive stock options | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Fair value of warrant granted for as part of amended related party demand line of credit | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Net loss for the period | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2023 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||||||
| Fair value of vested incentive stock options | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Fair value of warrant granted for as part of amended related party demand line of credit | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon conversion of debt | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Warrant granted for consulting services | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Net loss for the period | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-4 |
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 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||||||
| Fair value of vested incentive stock options | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Change in par value of common stock | - | - | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Net loss for the period | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2024 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||||||
| Fair value of vested incentive stock options | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for cash, net of offering costs | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Net loss for the period | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-5 |
VIP PLAY, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
For the Six Months Ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Amortization of debt issuance costs – related party | ||||||||
| Non-cash compensation | ||||||||
| Depreciation and amortization | ||||||||
| Incentive stock option expense | ||||||||
| Discount on related party note payable | ||||||||
| Impairment of developed technology and tradename | ||||||||
| Loss on extinguishment of debt | ||||||||
| (Gain) loss on change in fair value of derivative | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Accounts payable and accrued expenses - related party | ||||||||
| Players balances | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Cash paid for capitalized software | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from issuance of common stock, net of issuance costs | ||||||||
| Proceeds from line of credit, related party | ||||||||
| Proceeds from convertible notes | ||||||||
| Repayments of note payable, current | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
| NET CHANGE IN CASH | ( | ) | ( | ) | ||||
| CASH AT BEGINNING OF PERIOD | ||||||||
| CASH AT END OF PERIOD | $ | $ | ||||||
| DISCLOSURE OF CASH AND CASH RESERVERD FOR USERS: | ||||||||
| CASH | ||||||||
| CASH RESERVED FOR USERS | ||||||||
| CASH AT END OF PERIOD | $ | $ | ||||||
| SUPPLEMENTAL INFORMATION: | ||||||||
| Interest paid | $ | $ | ||||||
| NON-CASH FINANCING AND INVESTING ACTIVITIES: | ||||||||
| Common stock issued upon conversion of debt | $ | $ | ||||||
| Derivative and warrants issued upon conversion of debt | $ | $ | ||||||
| Insurance financing | $ | $ | ||||||
| Payoff of related party note payable with related party line of credit | $ | $ | ||||||
| Common stock and warrants issued for offering costs | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-6 |
VIP PLAY, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 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 primary 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. On December 10, 2024, the Company entered into a Casino and Sportsbook Online Operations Agreement with a license holder in West Virginia. This agreement grants the Company to the right to seek and obtain licenses from the appropriate governing authority to offer and operate interactive online gaming services in West Virginia via the Internet, mobile or other remote or electronic device or data network. See Note 11.
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.
| F-7 |
Operating results for the three and six month period ended December 31, 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.
| F-8 |
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 $
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 December 31, 2024, the Company’s
cash balance did
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 December 31, 2024 and June 30, 2024, approximately $
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 |
| F-9 |
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 $
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. See Note 3.
| F-10 |
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 recorded impairment charges of $
Lease Commitments
On
October 1, 2023, the Company entered into a lease for office space in Miami, Florida. The lease expired on
On
February 4, 2024, the Company entered into a lease for office space in Sarasota, Florida. The lease expired on
Total
rental expense for the three months ended December 31, 2024 and 2023 was $
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.
| F-11 |
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 six months ended December 31, 2024, or 2023.
| Description | Total fair value at December 31, 2024 | Quoted prices in Active markets (level 1) | Significant other observable inputs | Significant unobservable inputs (level 3) | ||||||||||||
| Derivative liability (1) | $ | $ | $ | $ | ||||||||||||
| 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) | $ | $ | $ | $ | ||||||||||||
| (1) |
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 December 31, 2024, and June 30, 2024, the Company had a derivative liability of $
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 $
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.
| F-12 |
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.
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 December 31, 2024 and 2023, advertising costs calculated in accordance with U.S.
GAAP were $
| F-13 |
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 December 31, 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 December
31, 2024 and June 30, 2024, we had
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 December 31, 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 six December 31, 2024 | For the year ended | |||||||
| Stock Options | ||||||||
| Series B Preferred Shares | ||||||||
| Warrants | ||||||||
| Shares issuable upon conversion of convertible notes | ||||||||
| Shares issuable upon conversion of line of credit | ||||||||
| Total potentially dilutive shares | ||||||||
| F-14 |
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 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.
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” ASU No. 2023-07 requires all annual disclosures currently required by Topic 280 to be included in interim financial statements and requires disclosure of significant segment expenses regularly provided to the chief operating decision maker (“CODM”), a description of other segment items by reportable segment, and applicable additional measures of segment profit or loss used by the CODM when allocating resources and assessing business performance. The ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 on a retrospective basis. We do not expect the adoption of ASU No. 2023-07 to have a material impact on our consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses,” which requires additional disclosure of the nature of expenses included in the income statement in response to requests from investors for more information about an entity’s expenses. The new standard requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. The new guidance is effective for annual periods beginning after December 15, 2027. The Company is currently evaluating the impact of the new standard on the Company’s consolidated financial statements and related disclosures and does not believe it will have a material impact on its consolidated financial statements or its disclosures.
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.
| F-15 |
NOTE 2 - EQUIPMENT
The Company’s equipment consisted of the following as of:
| December 31, 2024 | June 30, 2024 | |||||||
| Equipment | $ | $ | ||||||
| Total | ||||||||
| Less: accumulated depreciation | ||||||||
| Equipment, net | $ | $ | ||||||
Depreciation
expense of equipment during the three months ended December 31, 2024, and 2023 was $
NOTE 3 - LONG LIVED AND OTHER INTANGIBLE ASSETS
Long-lived and other intangible assets held, net of impairment are comprised of the following at:
| December 31, 2024 | June 30, 2024 | |||||||
| Developed technology | $ | $ | ||||||
| Tradenames and trademarks | ||||||||
| Gaming licenses | ||||||||
| Total | ||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| Less: impairment | ( | ) | ||||||
| Net carrying value | $ | $ | ||||||
Amortization
expense of business intellectual property for three months ended December 31, 2024, and 2023, was $
During
the three months ended December 31, 2024 the Company entered into an agreement with a sports betting services provider. See Note 11.
As per the terms of the agreement, the Company will integrate our new VIP Play application into the sportsbook as provided by the new
provider. The Company expects to launch the new application at the end of March 2025. As of December 31, 2024, the Company has ceased
development of the ZenSports technology. As per ASC 360-10, Impairment or Disposal of Long-Lived Assets, these events triggered an impairment
test of our finite lived asset as listed below and the carrying amount was deemed to be unrecoverable. An impairment loss of $
As of December 31, 2024, intangible assets consisted of the following, net of impairment:
| Estimated Useful Life | Remaining Weighted Average Useful Life | Gross Carrying Amount, Net of Impairment | Accumulated Amortization | Net Carrying Amount | ||||||||||||||
| Indefinite lived intangible assets: | ||||||||||||||||||
| Gaming license | $ | $ | $ | |||||||||||||||
| Total indefinite lived intangible assets: | $ | $ | $ | |||||||||||||||
| F-16 |
NOTE 4 - PLAYERS BALANCES
The
players balances were comprised of players betting deposits and contestant prize winnings for promotional events. Players balances were
$
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 $
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 | % | % | % | |||||||||||
In August 2024 all three of these Convertible Notes were extended for an additional year.
NOTE 6 – NOTES PAYABLE AND NOTES PAYABLE - RELATED PARTY
As
of December 31, 2024, and June 30, 2024, a principal amount of $
On
February 27, 2023, the Company entered into Stock Redemption and Purchase Agreement with John Linss, our former Chief Executive Officer
and former member of the board of directors, and his wholly owned Corespeed, LLC for the purchase of Series C Convertible Preferred Stock
owned by Linss’ Corespeed, LLC. The Company paid $
The
outstanding principal balance at December 31, 2024, is $
On
May 5, 2023, the Company entered into a Promissory Note with Excel Family Partners, LLLP, a company controlled by Bruce Cassidy (our
Chief Executive Officer and the Chairman of our Board of Directors) in the principal amount of $
| F-17 |
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 $
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 | % | % | % | |||||||||||
On
September 14, 2023, the principal balance of $
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 $
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 $
On
November 6, 2024, the Company entered into a short term note payable with a premium finance company to fund their excess and surplus
insurance. The total premiums, taxes and fees financed was $
| F-18 |
The following represents the future aggregate maturities of the notes payable and notes payable-related party as of December 31, 2024, for each of the five (5) succeeding years and thereafter as follows:
| Twelve months ending December 31, | Amount | |||
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total | $ | |||
NOTE 7- LINE OF CREDIT - RELATED PARTY
On
February 22, 2022, the Company executed a non-revolving line of credit demand note for $
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 $
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
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 | % | % | % | |||||||||||
The
note includes a common stock warrant exercisable up to
| F-19 |
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 | % | % | % | |||||||||||
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 $
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 $
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 | % | % | % | |||||||||||
At
the date of the third amendment, the remaining unamortized debt issuance costs were $
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 $
| F-20 |
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 September 13, 2023 | % | % | % | |||||||||||
At
the date of the fourth amendment, the remaining unamortized debt issuance costs were $
As
of the date of the Fourth Amended and Restated Discretionary Non-Revolving Line of Credit Demand Note, the aggregate outstanding principal
balance was $
On
December 27, 2023, a total of $
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 $
| F-21 |
A
total of $
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 December 27, 2023 | % | % | % | |||||||||||
On
August 7, 2024, $
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
$
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 $
During
the three and six months ended December 31, 2024, the Company borrowed $
As
of December 31, 2024, $
At
December 31, 2024, the remaining unamortized debt issuance costs were $
As
of December 31, 2024 and June 30, 2024, the aggregate outstanding principal balance of all loans under the Note was $
| F-22 |
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 six months ended December 31, 2024:
| Balance at June 30, 2024 | $ | |||
| Change in the fair value of the embedded conversion option | ( | ) | ||
| Balance at December 31, 2024 | $ |
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 | - | % | - | % | % | - | ||||||||
| At December 31, 2024 | - | % | - | % | % | - | ||||||||
NOTE 9 - STOCKHOLDERS’ DEFICIT
The Company is authorized to issue shares of common stock, par value $ per share, and shares of preferred stock, par value $ per share; of which shares have been designated as Series A Convertible Preferred Stock, shares have been designated as Series B Convertible Preferred Stock and shares have been designated as Series C Convertible Preferred Stock.
The
Series A Convertible Preferred Stock has a liquidation preference of $
The
Series B Convertible Preferred Stock has a liquidation preference of $
| F-23 |
The
Series C Convertible Preferred Stock has a liquidation preference of $
Series A Convertible Preferred Stock
During
the six months ended December 31, 2024 and 2023, there were
Series B Convertible Preferred Stock
During
the six months ended December 31, 2024 and 2023, there were
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 shares of our Series C Convertible Preferred Stock as part of an amendment to his employment agreement. The stock was valued at $ per share, the recent cash price paid for all previous issuances of Series C Convertible Preferred stock, and vests over a -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 shares of Series C
Convertible Preferred Stock owned by Linss and Corespeed, LLC. The Company paid $
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 shares of common stock was issued upon the conversion of shares of Series C Preferred stock.
As of December 31, 2024 and June 30, 2024, shares were outstanding.
Common Stock
On
December 28, 2023, a total of shares of common stock were issued upon conversion of $
On January 8, 2024 the Company sold shares of common stock to an unrelated party for cash proceeds of $.
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 shares of common stock was issued upon the conversion of shares of Series C Preferred stock.
On
June 28, 2024, the board of directors approved the issuance of shares of common stock upon the cashless exercise of
| F-24 |
On November 6, 2024 the Company sold shares of common stock to two unrelated parties for cash proceeds of $ as part of a private offering. The Company also issued shares of common stock, warrants and accrued $ as compensation to a placement agent in connection with the offering. The warrants were valued using the Black Scholes model and had a fair value of $. 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 November 6, 2024 | % | % | % | |||||||||||
The common stock and warrants were fully expensed during the six months ended December 31, 2024 and netted against the value of the common stock as offering costs.
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 shares of our common stock at an exercise price of $ per share (the “Awards”).
As
part of the Awards, on April 10, 2023, our former CEO, Mark Thomas, was granted ISOs and NSOs, and our former CFO, Anthony
Fidaleo, was granted ISOs (collectively, the “Officer Awards”). In aggregate on April 10, 2023 the Company granted
a total of including the Officer Awards to 16 employees and 6 contractors that vest to % 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 $
On
April 10, 2023, the Company granted Awards 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 $
A total of stock options were forfeited on September 15, 2023 as per the terms of a separation agreement with the former Chief Financial Officer.
| F-25 |
Number of Shares Underlying Outstanding Options | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | Intrinsic Value | |||||||||||||
| Options outstanding as of June 30, 2024 | years | $ | $ | |||||||||||||
| Options exercisable as of June 30, 2024 | years | $ | $ | |||||||||||||
| Granted | - | - | ||||||||||||||
| Exercised | - | - | ||||||||||||||
| Forfeited or expired | - | $ | - | |||||||||||||
| Options outstanding as of December 31, 2024 | years | $ | $ | |||||||||||||
| Options exercisable as of December 31, 2024 | years | $ | $ | |||||||||||||
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.
As of December 31, 2024, all outstanding stock options were issued according to the Company’s 2023 Plan. There are unissued 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 $
On November 1, 2024 (and then amended on January 8, 2025), the Company entered into an agreement with a sports betting services provider. Pursuant to the terms of the Agreement, the provider has agreed to provide certain services to the Company to use through their software platform over which gaming and betting transactions with their customers are conducted, including back-office software, player account management software, geo-location software and/or services, e-wallet software and/or services, websites and mobile applications, any underlying operating software, mobile platforms, or other means of remote communication. The Services are to be provided on a non-transferable, non-sub-licensable and non-exclusive basis for a term of five years after the first live launch in respect of the business to consumer sports betting activities that we intend to carry out in certain states, countries or territories. The terms of the agreement call for two lump sum payments, as well as ongoing business fees calculated as a percentage of net gaming revenue that will vary based upon yearly gross gaming revenues commencing with the first live launch.
On December 10, 2024, the Company entered into a Casino and Sportsbook Online Operations Agreement dated as of December 9, 2024 with Wheeling Island Gaming, Inc., a Delaware corporation, that is the duly licensed owner and operator of the casino commonly referred to as Wheeling Island Hotel Casino Racetrack located near Wheeling, West Virginia.
The operator is the holder of a license from the West Virginia Lottery Commission which permits Operator to operate, manage, administer, and make available online gaming services in West Virginia. Operator does not directly operate online gaming services in West Virginia, such as sports wagering and interactive wagering. Pursuant to the terms and conditions of the Agreement, Operator has granted the Company the right to seek and obtain licenses from the appropriate governing authority to offer and operate interactive online gaming services in West Virginia via the Internet, mobile or other remote or electronic device or data network. Interactive gaming services covered by the Agreement include online poker games, online casino games and online sports wagering.
The initial term of the Agreement is for ten years from the date on which the Company’s online gaming services are approved for users to play in accordance with West Virginia gaming laws. Provided that there is not a material breach then continuing by the Company under the Agreement beyond any applicable notice and cure period, and the Agreement has not otherwise been terminated in accordance with its terms, the Company has the right to renew the Agreement.
The terms of the Agreement call for a non-refundable fee to be paid in two equal installments, one within 30 business days from the Signing Date and the second within 90 business days from the Signing Date. The Agreement also requires the Company to pay Operator a percentage of their annual net gaming revenue from the Services, minus a minimum annual revenue guarantee payment to be paid in equal quarterly installments.
| F-26 |
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 $
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 Chief Executive Officer and the Chairman of our board of directors), which can exert significant
influence over the Company, was increased to $
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 $
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 $
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 $
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 $
A
total of $
| F-27 |
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 $
On
August 7, 2024, $
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
$
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 $
NOTE 13 - SUBSEQUENT EVENTS
In accordance with ASC 855-10, the Company has analyzed its operations subsequent to December 31, 2024, to the date these financial statements were issued, and as of February 10, 2025, 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 February 10, 2025, the Company borrowed an additional $
On February 5, 2025, the Company issued shares of common stock for placement agent fees related to the November 6th private offering in lieu of cash compensation, which was accrued on December 31, 2024 as discussed in Footnote 9.
On February 7, 2025, the Company entered into a Player Account Management Services Agreement for a term of four years to enhance its online gaming platform offerings. The terms of the agreement call for a combination of upfront fees as well as monthly platform fees that will vary based upon monthly net gaming revenues.
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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.
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.
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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.
On November 1, 2024 (and then amended on January 8, 2025), we entered into an agreement with a sports betting services provider. Pursuant to the terms of the Agreement, the provider has agreed to provide certain services to us to use through their software platform over which gaming and betting transactions with customers are conducted, including back-office software, player account management software, geo-location software and/or services, e-wallet software and/or services, websites and mobile applications, any underlying operating software, mobile platforms, or other means of remote communication. The services are to be provided on a non-transferable, non-sub-licensable and non-exclusive basis for a term of five years after the first live launch in respect of the business to consumer sports betting activities that we intend to carry out in certain states, countries or territories.
On December 10, 2024, we entered into a Casino and Sportsbook Online Operations Agreement dated as of December 9, 2024 with Wheeling Island Gaming, Inc., a Delaware corporation, that is the duly licensed owner and operator of the casino commonly referred to as Wheeling Island Hotel Casino Racetrack located near Wheeling, West Virginia.
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 December 31, 2024, and 2023
During the three months ended December 31, 2024, and 2023, we incurred net losses from continuing operations of $5,863,947 and $8,788,233, respectively.
For the three months ended December 31, 2024 and 2023, we had gaming revenues of $22,181 and negative gaming revenues of $610,199. Negative gaming revenues consisted of net sports betting revenues which commenced in June of 2023 upon the approval of our gaming license. Our gaming revenues increased by approximately $632,000 during the three months ended December 31, 2024 as compared to the three months ended December 31, 2023 as a result of operational and risk management procedures, technological improvement to our Sports Gaming System software, and a revamped rewards and marketing program.
The significant driver to our loss in the current period is principally related to impairment expense of our intangible assets partially offset by the gain on change in fair value of derivatives. 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.
Results of Operations for the Six Months Ended December 31, 2024, and 2023
During the six months ended December 31, 2024, and 2023, we incurred net losses from continuing operations of $11,133,329 and $13,846,535, respectively.
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For the six months ended December 31, 2024 and 2023, we had gaming revenues of $17,829 and negative gaming revenues of $828,822. Negative gaming revenues consisted of net sports betting revenues which commenced in June of 2023 upon the approval of our gaming license. Our gaming revenues increased by approximately $847,000 during the six months ended December 31, 2024 as compared to the six months ended December 31, 2023 as a result of operational and risk management procedures, technological improvement to our Sports Gaming System software, and a revamped rewards and marketing program.
The significant driver to our loss in the current period is principally related to impairment expense of our intangible assets partially offset by the gain on change in fair value of derivatives. 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.
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 December 31, 2024, we had total current assets of $916,682, total current liabilities of $24,839,873, and a total working capital deficit of $23,923,191. Net cash used in operating activities was $4,814,929 during the six months ended December 31, 2024, compared to $5,980,248 during the six months ended December 31, 2023. The decrease in the use of cash in operating activities is principally the result of a $2,337,805 decrease in net operating assets and a decrease in the net loss of $2,713,206.
Net cash used in investing activities remained fairly consistent during the six months ended December 31, 2024, compared to the six months ended December 31, 2023.
Net cash provided by financing activities decreased by $1,289,605 during the six months ended December 31, 2024, compared to the six months ended December 31, 2023. The decrease is primarily due to proceeds from convertible notes issued during the six months ended December 31, 2023.
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.
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Off Balance Sheet Arrangements
As of December 31, 2024, we had no off-balance sheet arrangements.
Going Concern
As of December 31, 2024, we had a working capital deficit of $23,923,191. We had a net loss from operations of $11,133,329 for the six months ended December 31, 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 December 31, 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 December 31 2024, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting related to the restatement of our March 31, 2024 form 10Q.
Planned Remediation of Material Weaknesses
Management is actively engaged in implementing remediation plans to address the material weaknesses described above. These remediation efforts include preparation of written documentation of our internal control policies and procedures, and an increase to personnel and technical accounting expertise within the accounting function.
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 and have made significant improvements to date. 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 second 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 other than the ongoing remediation efforts noted above.
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PART II - OTHER INFORMATION
Item 6. Exhibits
| * | Filed herewith. |
| ** | Furnished herewith. |
| 6 |
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: February 10, 2025 | ||
| By: | /s/ James Mackey | |
| James Mackey | ||
| Chief Financial Officer | ||
| (Principal Financial Officer) | ||
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EXHIBIT 31.1
CERTIFICATION PURSUANT TO
EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Bruce A. Cassidy, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q for the quarter ended December 31, 2024 (this “report”) of VIP Play, Inc.; | |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | ||
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: February 10, 2025 | By: | /s/ Bruce A. Cassidy |
| Bruce A. Cassidy | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATION PURSUANT TO
EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, James Mackey, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q for the quarter ended December 31, 2024 (this “report”) of VIP Play, Inc.; | |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | ||
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: February 10, 2025 | By: | /s/ James Mackey |
| James Mackey | ||
| Chief Financial Officer | ||
| (Principal Financial Officer) |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), the undersigned officer of VIP Play, Inc., a Nevada corporation (the “Company”), does hereby certify, to the best of his knowledge, that:
| (1) | The Quarterly Report on Form 10-Q for the quarter ending December 31, 2024 (the “Report”) of the Company complies in all material respects with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
| Date: February 10, 2025 | By: | /s/ Bruce A. Cassidy |
| Bruce A. Cassidy | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) |
EXHIBIT 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), the undersigned officer of VIP Play, Inc., a Nevada corporation (the “Company”), does hereby certify, to the best of his knowledge, that:
| (1) | The Quarterly Report on Form 10-Q for the quarter ending December 31, 2024 (the “Report”) of the Company complies in all material respects with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
| Date: February 10, 2025 | By: | /s/ James Mackey |
| James Mackey | ||
| Chief Financial Officer | ||
| (Principal Financial Officer) |