Core Insights - Mobile Global Esports Inc. has announced an asset purchase agreement to acquire Reality Sports Online, a prominent fantasy sports platform [1] Company Expansion - The acquisition is aimed at accelerating the company's expansion into fantasy sports and predictive gaming [1] - The transaction is expected to close in the first week of November 2025, pending customary closing conditions [1] Platform Details - Reality Sports Online operates on real-world NFL rules, player contracts, and salary-cap dynamics, enhancing the company's technological and intellectual property portfolio [1]

Company Overview - MOGO was organized in March 2021 to expand the esports business initiated by SII in 2016, focusing on the South Asian markets, particularly India[16]. - The company is a development-stage entity with no significant revenues and a limited operating history since its organization in March 2021[72]. - The esports business operated by the company is the only one in India to organize and sponsor an officially-sanctioned national championship for university esports[137]. - The company is currently in a pre-revenue, early development stage, focusing on building infrastructure for revenue-producing initiatives[138]. Financial Performance - Revenue for the year ended December 31, 2024, was $25,409,000, a significant increase of $20,447,000 (approximately 412%) compared to $4,962,000 in 2023[144]. - The comprehensive loss for the years ended December 31, 2024, and 2023 was approximately $2,332,000 and $6,784,000, respectively[139]. - As of December 31, 2024, the accumulated deficit was approximately $10,643,000, compared to $8,323,000 as of December 31, 2023[139]. - The company expects to incur significant expenses and operating losses for the foreseeable future as it continues to implement its business plan[139]. - Net loss for 2024 was $2,328,295, a decrease of $4,450,961 (approximately 66%) compared to a net loss of $6,779,256 in 2023[144]. - Cash and restricted cash as of December 31, 2024, were approximately $929,000, down from $3,175,000 in 2023[148]. - Net cash used in operating activities for 2024 was approximately $2,107,000, a decrease of $1,467,000 from $3,574,000 in 2023[158]. - The company has an accumulated deficit of approximately $10,643,000 as of December 31, 2024, indicating ongoing financial challenges[166]. Business Strategy and Operations - MOGO's business strategy includes leveraging its relationships with universities and expanding its esports offerings in the region[18]. - MOGO will retain 20% of all Gross Receipts until it equals its distribution fee, followed by retaining further Gross Receipts until it covers all deductible costs[40]. - MOGO allocates the balance of net proceeds from commercialization of university esports as 60% to MOGO and 40% to SII[50]. - MOGO is responsible for all costs and expenses related to executing the business plan, including the creation and marketing of MOGO Games and Content[43]. - The company intends to use proceeds from the IPO and PIPE for operating expenses, marketing, and potential acquisitions of game licenses and technology platform agreements[156]. Market and Competitive Landscape - The competitive landscape is intense, with established companies having greater financial resources, which could hinder the company's ability to gain market share[79]. - The company must attract and retain mobile esports users and viewers, which may require costly marketing efforts[81]. - The esports industry in India faces regulatory scrutiny, with some states banning fantasy sports gambling, which could affect the company's operations[64]. - Economic downturns and adverse conditions in South Asian markets may negatively affect projected broadcasting and sponsorship revenues, which are contingent on consumer disposable income[92]. - Rising inflation and interest rates are likely to reduce disposable income in the company's markets, potentially leading to decreased revenues[93]. Legal and Compliance Risks - The company is not currently aware of any material legal proceedings that could adversely affect its business[85]. - Compliance with privacy laws and data protection regulations is critical, as failures could lead to significant liabilities and loss of customer trust[109]. - The company does not have business liability, disruption, or litigation insurance coverage for its operations in the US or India, exposing it to potential substantial costs[88]. Management and Governance - Management identified material weaknesses in internal controls over financial reporting, including a lack of necessary corporate accounting resources and ineffective risk assessment[190][189]. - The company’s management does not expect its disclosure controls or internal controls to prevent all errors and fraud[188]. - The company has adopted a written code of business conduct and ethics applicable to its directors, officers, and employees[203]. - The Company does not currently have an established Equity Compensation Plan[213]. Shareholder Information - As of December 31, 2024, the company had 27,936,503 shares of common stock outstanding[209]. - The total beneficial ownership of all directors and executive officers is 6,270,000 shares, which is 22.4%[211]. - Brett Rosin, CEO, owns 5,000,000 shares, accounting for 17.9% of total shares[211]. - Armistice Capital Master Fund, Ltd. holds 1,886,793 shares, representing 6.8% ownership[211]. Related Transactions and Fees - Related person transactions exceeding $120,000 in any fiscal year are subject to review and approval by the audit committee[214]. - The fees paid to the auditor included expenses for audit and reviews of consolidated financial statements[216]. - The Company paid its current CEO approximately $24,000 and issued him 5,000,000 shares valued at approximately $30,000 during 2024[208]. - The Company paid the Board Chairman $96,000 for consulting services in 2024, up from $10,000 in 2023[215].

Financial Performance - Total revenue for the nine months ended September 30, 2024, was $1,579, compared to $0 for the same period in 2023[16] - Operating expenses for the nine months ended September 30, 2024, were $1,720,992, a decrease from $3,578,785 in the same period of 2023, representing a reduction of approximately 52%[16] - Net loss attributable to Mobile Global Esports Inc. for the nine months ended September 30, 2024, was $1,713,254, compared to a net loss of $3,546,377 for the same period in 2023, indicating an improvement of about 52%[16] - The company reported a comprehensive loss of $1,718,191 for the nine months ended September 30, 2024, compared to $3,552,247 for the same period in 2023, showing a decrease of about 52%[16] - For the nine months ended September 30, 2024, the net loss was $1,719,213, a decrease of 51.5% compared to a net loss of $3,550,287 for the same period in 2023[21] Cash and Assets - Cash and cash equivalents decreased to $1,290,854 as of September 30, 2024, down from $3,174,703 as of December 31, 2023, reflecting a decline of approximately 59%[14] - Total assets as of September 30, 2024, were $1,636,154, a decrease from $3,421,344 as of December 31, 2023, representing a decline of about 52%[14] - Cash and restricted cash as of September 30, 2024, was $1,290,854, down from $4,514,459 as of September 30, 2023, representing a decrease of 71.5%[21] - Property and equipment net value increased to $83,425,000 as of September 30, 2024, compared to $29,632,000 at December 31, 2023[50] Liabilities and Deficits - Total liabilities decreased to $110,199 as of September 30, 2024, from $324,138 as of December 31, 2023, indicating a reduction of approximately 66%[14] - The accumulated deficit increased to $10,036,023 as of September 30, 2024, from $8,322,769 as of December 31, 2023[14] - The company has an accumulated deficit of $10.0 million as of September 30, 2024[29] Future Outlook - The company expects to continue incurring operating losses for the foreseeable future, raising substantial doubt about its ability to continue as a going concern[29] - The company has no current intention to update forward-looking statements except as required by applicable law, indicating a cautious approach to future projections[11] Operational Activities - The company incurred a net cash used in operating activities of $1,750,597 for the nine months ended September 30, 2024, compared to $2,474,935 for the same period in 2023, indicating a 29.2% improvement[21] - The company made payments for property and equipment totaling $65,557 during the nine months ended September 30, 2024[21] - Operating lease cash payments for the nine months ended September 30, 2024, were approximately $51,000, up from $41,000 in the same period of 2023[51] Management and Governance - The company has a new Chief Executive Officer and is working with consultants to achieve its strategic goals[29] - The Company entered into an executive employment agreement with the new CEO, Brett Rosin, with an annual cash compensation of $96,000 and potential bonuses[74] Shareholder Information - The weighted average common shares outstanding for the nine months ended September 30, 2024, was 21,221,588, compared to 20,421,593 for the same period in 2023[16] - Basic earnings per share (EPS) for the period is calculated based on the weighted average number of common shares outstanding, with diluted EPS assuming all dilutive securities are converted[46] - The Company had 3,568,916 warrants outstanding as of September 30, 2024, with diluted net loss per share being the same as basic net loss per share due to anti-dilutive instruments[72] Miscellaneous - MOGO Pvt Ltd accounted for approximately 28.9% of the company's net loss for the nine months ended September 30, 2024[24] - The Company incurred a total of $82,500 for board stipends during the nine months ended September 30, 2024, compared to $66,000 in the same period of 2023[56] - The fair value of warrants issued for services was $139,440 for the nine months ended September 30, 2024, compared to $207,690 for the same period in 2023[21] - The Company paid approximately $29,000 to terminate all operating lease agreements for its office facilities in India in December 2024[73] - The Company adopted ASU 2016-13 for measuring expected credit losses, but it did not have a material impact on the valuation of its note receivable[48] - Accounts payable decreased significantly to $24,375,000 as of September 30, 2024, from $94,397,000 at December 31, 2023[54]

Financial Performance - The company reported a net loss of $618,627 for the three months ended March 31, 2024, compared to a net loss of $812,084 for the same period in 2023, indicating an improvement of about 23.9%[16] - The company had no revenue reported for the three months ended March 31, 2024, consistent with the same period in 2023[16] - The accumulated deficit increased from $(8,322,769) as of December 31, 2023, to $(8,940,015) as of March 31, 2024, indicating a rise of approximately 7.4%[19] - The total stockholders' equity decreased from $3,097,206 as of December 31, 2023, to $2,524,759 as of March 31, 2024, a decline of about 18.5%[19] - The company incurred interest income of $129 for the three months ended March 31, 2024, compared to $3,647 in the same period of 2023, a decrease of approximately 96.5%[16] - The company’s cash flows from operating activities showed a net cash used of $360,632 for the three months ended March 31, 2024, compared to $687,767 for the same period in 2023, indicating a reduction in cash outflow of about 47.5%[20] Assets and Liabilities - Total assets decreased from $3,421,344 as of December 31, 2023, to $3,035,562 as of March 31, 2024, representing a decline of approximately 11.3%[14] - Cash and restricted cash decreased from $3,174,703 at the beginning of the period to $2,769,620 at the end of the period, a reduction of approximately 12.8%[20] - The total accounts payable and accrued expenses increased to $329,635 as of March 31, 2024, from $152,423 as of December 31, 2023[52] - The company has operating lease liabilities totaling $100,640, with a present value of $92,473 as of March 31, 2024[50] Expenses - General and administrative expenses were $617,374 for the three months ended March 31, 2024, down from $815,731 in the same period of 2023, reflecting a decrease of about 24.2%[16] - For the three months ended March 31, 2024, the company reported depreciation expense of approximately $2,800, compared to $1,000 for the same period in 2023[48] - Cash paid for operating leases was approximately $15,400 for the three months ended March 31, 2024, compared to $12,300 for the same period in 2023[49] Shareholder Information - The weighted average common shares outstanding remained unchanged at 20,421,593 for both periods[16] - As of March 31, 2024, the company had 21,191,593 shares issued and outstanding from an authorized 100,000,000 shares of common stock[57] - At March 31, 2024, there were 3,568,916 warrants outstanding, with diluted net loss per share being the same as basic net loss per share due to anti-dilutive instruments[69] Corporate Developments - The company has a new Chief Executive Officer and is working with consultants to achieve its strategic goals[29] - The company has a reportable segment focused on the development of esports, with 95.3% of total assets located in the United States as of March 31, 2024[46] - The company has incurred related party transactions totaling $30,000 for board stipends during the three months ended March 31, 2024[53] Compliance and Trading Status - The company was notified on April 11, 2023, of non-compliance with Nasdaq's minimum bid price requirement of $1.00 per share, with an initial compliance period until October 9, 2023[70] - On April 18, 2024, the company's common stock was suspended from trading on the Nasdaq Capital Market and currently trades on the OTC Pink Sheets[71] Warrant Information - The estimated fair value of the 2023 Consultant Warrants was $91,000, with $26,000 recognized as expense for the three months ended March 31, 2023[59] - The company recorded total expense of approximately $46,000 and $72,000 during the three months ended March 31, 2024 and 2023, respectively, for warrant amortization[64] - The unamortized warrant expense at March 31, 2024, was approximately $139,000, to be amortized over a weighted-average period of 0.5 years[64] - The company issued 1,886,793 PIPE Warrants with an exercise price of $2.90 per share, which expire 5 years from issuance, with an estimated fair value of $2,093,000[62] - The company issued 172,500 IPO Warrants with an exercise price of $6.60 per share, with an estimated fair value of $474,000[61]

Gaming Audience and Market Growth - The global audience for gaming video content, including esports, reached 1.2 billion viewers in 2020, an 18% increase from 2019[20] - MOGO's esports business is focused on the rapidly-growing Indian market, which is considered one of the largest and fastest-growing esports markets globally[40] Esports Events and Participation - MOGO organized 27 virtual esports tournaments in India from May to December 2021, attracting over 450,000 viewers[21] - The MOGO National Championship 2.0 event in September 2023 featured 16 teams from four geographic regions in India[21] - In 2022, MOGO completed 9 open tournaments over 25 days, 2 inter-university tournaments, and 1 national championship tournament[62] Financials and Funding - MOGO raised over $5 million in 2022, which released SII from its obligation to provide consulting services[26] - MOGO will engage in exclusive negotiations with SII for monetizing esports rights after securing financing of at least $3,500,000[48] - MOGO retains 20% of all Gross Receipts from university esports, with net proceeds allocated 60% to MOGO and 40% to SII[60] - MOGO will pay SII a referral fee of 15% of net revenues from management agreements with athletes[58] Partnerships and Agreements - MOGO issued 2,650,000 restricted common shares to SII as part of the Founders Agreement[25] - MOGO has a non-exclusive license to utilize esports rights granted by SII, including the right to develop and promote esports tournaments[32] - MOGO's partnership with SII includes rights to utilize Team Logos and Name and Likeness for promotional activities[33] - MOGO's consulting services from SII included opportunities in esports within the South Asian region and global university esports[26] - MOGO's esports business began in 2016, partnering with AIU, representing 854 universities, under a 10-year renewable agreement[42] - MOGO has exclusive rights to develop and monetize mobile esports events in collaboration with AIU and EUSAI, which has contracts with 92 leading Indian universities[42] Management and Operations - MOGO is responsible for executing the business plan for esports, including marketing and distribution of MOGO Games and related content[56] - MOGO has retained a team to advise on expanding its esports business, focusing on various revenue streams[66] - MOGO owns all intellectual property rights related to the tournaments and associated marketing[64] - MOGO's management rights for athletes extend until seven years after the management agreement commencement or until the end of the Management Term[57] - MOGO is required to reimburse SII 50% of any excess participation amounts owed to AIU or Participating Universities, up to 20% of the Licensor Participation received[35]

Financial Performance - The net loss attributable to Mobile Global Esports Inc. for the nine months ended September 30, 2023, was $3,546,377, compared to a net loss of $547,889 for the same period in 2022, indicating a substantial increase in losses[16]. - Operating expenses for the nine months ended September 30, 2023, totaled $3,578,785, compared to $1,846,683 for the same period in 2022, reflecting an increase of approximately 94%[16]. - The company reported no revenue for the three and nine months ended September 30, 2023, consistent with the same periods in 2022[16]. - The company incurred a comprehensive loss of $3,552,247 for the nine months ended September 30, 2023, compared to $1,847,936 for the same period in 2022, indicating a worsening financial position[16]. - The net loss per share attributable to common stockholders for the nine months ended September 30, 2023, was $(0.17), compared to $(0.03) for the same period in 2022[16]. - For the nine months ended September 30, 2023, the net loss was $3,550,287 compared to a net loss of $547,889 for the same period in 2022, indicating a significant increase in losses[21]. - The company incurred net cash used by operating activities of $2,474,935 for the nine months ended September 30, 2023, compared to $371,885 for the same period in 2022[21]. - The Company recorded total expense of approximately $69,000 and $208,000 for the three and nine months ended September 30, 2023, respectively, compared to $46,000 and $139,000 for the same periods in 2022[64]. - The Company incurred sponsorship expenses of approximately $24,000 with an entity that shares common ownership with a stockholder during the nine months ended September 30, 2023[52]. Assets and Liabilities - Total assets decreased from $9,256,801 on December 31, 2022, to $6,285,397 as of September 30, 2023, representing a decline of approximately 32%[14]. - Current liabilities increased significantly from $207,816 to $553,565, marking a rise of about 167%[14]. - Cash reserves decreased from $7,539,674 on December 31, 2022, to $4,514,459 as of September 30, 2023, a reduction of about 40%[14]. - The total stockholders' equity decreased from $9,010,533 on December 31, 2022, to $5,665,976 as of September 30, 2023, a decline of about 37%[14]. - The total stockholders' equity as of September 30, 2023, was $5,665,976, a decrease from $9,747,400 as of September 30, 2022[19]. - Total accounts payable and accrued expenses increased to $380,620 as of September 30, 2023, compared to $80,960 as of December 31, 2022, primarily due to accrued payroll and payroll taxes of $90,626[50]. - The Company has operating lease liabilities totaling $130,941 as of September 30, 2023, with a present value of $117,564 after accounting for imputed interest[49]. Shareholder Information - The weighted average common shares outstanding increased from 17,256,256 in 2022 to 20,421,593 in 2023, representing an increase of approximately 18%[16]. - The Company has authorized the issuance of 100,000,000 shares of common stock, with 20,421,593 shares issued and outstanding as of September 30, 2023[56]. - The Company has entered into agreements to issue up to 350,000 shares of common stock to various consultants in the future[68]. - The Company issued common stock from an initial public offering, net of stock issuance costs, totaling $5,464,932[19]. Cash Flow and Investments - The company reported cash and restricted cash of $4,514,459 as of September 30, 2023, down from $9,469,521 at the end of the same period in 2022[21]. - The company reported a net cash increase of $3,045,215 for the nine months ended September 30, 2023, compared to an increase of $9,231,319 for the same period in 2022[21]. - The Company has paid approximately $1,258,000 to a supplier for the development of a software platform, which is not yet in service, and an additional $200,000 for the development of a mobile application as of September 30, 2023[47]. - The Company has committed to pay a supplier $1,200,000 for the development of an Esports Platform, with the software currently in Beta testing and expected to be in service by Q4 2023 or early 2024[66]. - The Company paid $200,000 towards the acquisition of intellectual property for an App under development and agreed to issue 400,000 shares of common stock to the supplier[67]. Warrants and Expenses - The fair value of warrants issued for services was $207,690 for the nine months ended September 30, 2023, compared to $139,440 for the same period in 2022[21]. - The Company issued 170,000 warrants during the nine months ended September 30, 2023, with an estimated fair value of $91,000, of which $68,250 was recognized as an expense[59]. - The estimated fair value of the PIPE Warrants was approximately $2,093,000, while the Placement Agent Warrants had an estimated fair value of approximately $516,000[62]. - The unamortized warrant expense as of September 30, 2023, was approximately $255,000, to be amortized over a weighted-average period of 0.7 years[64]. - The IPO Warrants issued in July 2022 have an exercise price of $6.60 per share and an estimated fair value of approximately $474,000[61]. Other Information - The Company has a controlling interest of 99% in MOGO Pvt Ltd, which contributed approximately 9.2% of the company's net loss for the nine months ended September 30, 2023[24]. - The Company has not identified any impairments of long-lived assets to date, with ongoing reviews for realizability[35]. - As of September 30, 2023, the Company reported property and equipment, net, of $27,271, an increase from $16,822 as of December 31, 2022, reflecting a depreciation expense of approximately $1,000 for the nine months ended September 30, 2023[46]. - The cash paid for operating leases for the nine months ended September 30, 2023, approximated $41,000, with an operating lease cost recorded of approximately $43,000[48]. - Advertising expenses for the three and nine months ended September 30, 2023, totaled approximately $29,000 and $39,000, respectively, compared to nil for the same periods in 2022[70].

Financial Performance - The company reported a net loss of $1,703,845 for the six months ended June 30, 2023, compared to a net loss of $891,352 for the same period in 2022, indicating an increase in losses of approximately 91%[16] - For the six months ended June 30, 2023, the net loss was $1,703,845 compared to a net loss of $177,265 for the same period in 2022, representing an increase in loss of approximately 865%[20] - The net loss per share attributable to common stockholders for the six months ended June 30, 2023, was $(0.08), compared to $(0.04) for the same period in 2022[16] Operating Expenses - Operating expenses for the six months ended June 30, 2023, were $1,732,102, significantly higher than $915,962 for the same period in 2022, reflecting an increase of approximately 89%[16] - General and administrative expenses included approximately $13,000 in advertising costs for the six months ended June 30, 2023, compared to nil for the same period in 2022[66] - The Company paid a total of $178,000 in compensation to its CEO and CFO during the six months ended June 30, 2023[50] Assets and Liabilities - Total current assets decreased from $8,132,921 as of December 31, 2022, to $6,119,374 as of June 30, 2023, representing a decline of approximately 24.8%[14] - Cash and cash equivalents decreased from $7,539,674 as of December 31, 2022, to $6,061,078 as of June 30, 2023, a reduction of about 19.6%[14] - The total stockholders' equity decreased from $9,010,533 as of December 31, 2022, to $7,444,682 as of June 30, 2023, a decline of about 17.4%[14] - The accumulated deficit increased from $(1,549,388) as of December 31, 2022, to $(3,251,331) as of June 30, 2023, representing a deterioration of approximately 109.5%[18] - The company’s total liabilities increased from $246,268 as of December 31, 2022, to $316,809 as of June 30, 2023, an increase of approximately 28.5%[14] Cash Flow - Net cash used by operating activities for the six months ended June 30, 2023 was $952,225, significantly higher than $116,119 for the same period in 2022[20] - The company reported a net cash used in investing activities of $429,490 for the six months ended June 30, 2023, with no such activities reported in the same period of 2022[20] - Cash and restricted cash as of June 30, 2023 totaled $6,084,693, a decrease from $7,559,674 at the beginning of the period[20] Software Development and Investments - As of June 30, 2023, the Company paid approximately $1,241,000 for the development of a software platform, which is currently in Beta testing and expected to be in service in Q3 or Q4 2023[63] - The Company has entered into an agreement for the development of a mobile application and made payments of $200,000 towards this development as of June 30, 2023[64] - The company incurred $416,074 in advances to suppliers for software during the six months ended June 30, 2023, with no such expenses reported in the same period of 2022[20] Other Financial Metrics - The company reported interest income of $28,257 for the six months ended June 30, 2023, compared to $24,610 for the same period in 2022, reflecting an increase of approximately 14%[16] - The company reported a depreciation expense of $2,124 for the six months ended June 30, 2023, compared to no depreciation expense in the same period of 2022[20] - The accumulated depreciation for property and equipment increased from $35 as of December 31, 2022, to $2,159 as of June 30, 2023[45] Accounts Payable and Lease Liabilities - Total accounts payable and accrued expenses increased to $167,427 as of June 30, 2023, compared to $80,960 as of December 31, 2022, reflecting a significant rise of 106%[49] - The Company recorded operating lease costs of approximately $28,000 for the six months ended June 30, 2023, with cash paid for operating leases approximating $26,600[47] - The present value of operating lease liabilities as of June 30, 2023, is $130,846, with total future lease payments amounting to $147,574[48] Stock and Warrants - The Company issued 170,000 warrants with an exercise price of $3.00 per share during the six months ended June 30, 2023, with an estimated fair value of $91,000[56] - The Company has authorized the issuance of 100,000,000 shares of common stock, with 20,421,593 shares issued and outstanding as of June 30, 2023[54] - The Company has committed to issue up to 350,000 shares of common stock in the future as part of agreements with consultants[65] Impact of MOGO Pvt Ltd - MOGO Pvt Ltd comprised approximately 9.3% of the company's net loss for the six months ended June 30, 2023, indicating its impact on overall financial performance[22]

Financial Performance - The company reported a net loss of $812,084 for the three months ended March 31, 2023, compared to a net loss of $91,482 for the same period in 2022, indicating an increase in losses of approximately 789%[16] - Operating expenses for the three months ended March 31, 2023, were $815,731, significantly higher than $91,482 for the same period in 2022, reflecting an increase of approximately 791%[16] - The company had no revenue reported for the three months ended March 31, 2023, consistent with the same period in 2022[16] - Due to the net loss incurred, diluted net loss per share is the same as basic net loss per share for all periods presented[71] Assets and Liabilities - Total current assets decreased from $8,132,921 as of December 31, 2022, to $7,444,163 as of March 31, 2023, representing a decline of approximately 8.5%[14] - The company's accumulated deficit increased from $1,549,388 as of December 31, 2022, to $2,360,480 as of March 31, 2023, representing an increase of approximately 52.2%[14] - The total liabilities rose from $246,268 as of December 31, 2022, to $428,417 as of March 31, 2023, indicating an increase of approximately 73.7%[14] - Cash and cash equivalents decreased from $7,559,674 at the beginning of the period to $6,794,473 at the end of the period, a decrease of approximately 10.1%[21] - Total accounts payable and accrued expenses increased to $222,846 as of March 31, 2023, compared to $80,960 as of December 31, 2022, with significant increases in accrued consulting and professional fees and other accrued expenses[54] Shareholder Information - The weighted average common shares outstanding increased from 16,809,800 in Q1 2022 to 20,421,593 in Q1 2023, an increase of approximately 21.5%[16] - The Company has authorized the issuance of 100,000,000 shares of common stock, with 20,421,593 shares issued and outstanding as of March 31, 2023[59] Compensation and Expenses - The Company’s CEO and CFO received a total compensation of $52,500 during the three months ended March 31, 2023, reflecting the company's commitment to its leadership[55] - The Company recorded total expense of approximately $72,000 for warrant amortization in Q1 2023, compared to $46,000 in Q1 2022[66] Warrants and Commitments - The Company issued 170,000 2023 Consultant Warrants with an exercise price of $3.00, vesting 25% in Q1 2023 and the remainder quarterly through December 31, 2023[60] - The estimated fair value of the 2023 Consultant Warrants was $91,000, with $26,000 recognized as expense for Q1 2023[61] - The estimated fair value of the PIPE Warrants was approximately $2,093,000, with 1,886,793 warrants issued at an exercise price of $2.90[64] - The estimated fair value of the IPO Warrants was approximately $474,000, with 172,500 warrants issued at an exercise price of $6.60[63] - The Company has a commitment of $1,200,000 for the development of an Esports Platform, with $1,041,074 paid as of March 31, 2023[68] Other Financial Information - The Company has $23,305 in restricted cash as of March 31, 2023, up from $20,000 as of December 31, 2022, held in an escrow account from the initial public offering[31] - The cash paid for operating leases for the three months ended March 31, 2023, approximated $11,700, with an operating lease cost recorded of approximately $12,300[51] - The Company has a total of $142,273 in present value of operating lease liabilities as of March 31, 2023, with future lease payments totaling $162,464[52] - The Company has made advance payments totaling $480,000 for potential future services and a deposit of $100,000 for the potential acquisition of an intangible asset as of March 31, 2023[48] - The Company has outstanding principal of approximately $45,000 under a financing agreement for insurance policies, with monthly payments of $15,848 due until June 2023[57] - The Company had an unamortized warrant expense of approximately $576,000 as of March 31, 2023, to be amortized over a weighted-average period of 1.6 years[66] - The Company has no material uncertain tax positions for any of the reporting periods presented, indicating a stable tax position[45] - The Company has no material litigation that could impact its financial position[67] Property and Equipment - As of March 31, 2023, the Company reported property and equipment, net, of $29,399, an increase from $16,822 as of December 31, 2022, reflecting a depreciation expense of approximately $1,000 for the three months ended March 31, 2023[49] MOGO Pvt Ltd Impact - MOGO Pvt Ltd comprised approximately 10.2% of the company's net loss for the three months ended March 31, 2023, compared to nil for the same period in 2022[24]

Financial Performance - Comprehensive loss for the year ended December 31, 2022, was approximately $1,286,000, compared to $262,000 for the period from Inception (March 11, 2021) to December 31, 2021[188]. - General and administrative expenses increased to $1,286,362 in 2022 from $262,360 in 2021, reflecting a rise of $1,024,002, primarily due to increased payroll and related expenses[193]. - As of December 31, 2022, the company had an accumulated deficit of approximately $1,549,000[188]. Cash Flow - Cash and restricted cash as of December 31, 2022, was $7,559,674, up from $238,202 as of December 31, 2021[194]. - Net cash used in operating activities for the year ended December 31, 2022, was $1,444,130, compared to $44,624 for the period from Inception to December 31, 2021, an increase of $1,399,506[202]. - Net cash provided by financing activities for the year ended December 31, 2022, was $9,810,709, compared to $282,826 for the period from Inception to December 31, 2021, an increase of $9,527,883[205]. Capital Raising and Investments - MOGO Inc. raised approximately $9,842,000 in net proceeds from its IPO and private equity placement in July and September 2022[188]. - The company intends to use net proceeds from the IPO and PIPE for operating expenses, marketing, event expenses, and potential acquisitions of game licenses and technology platform agreements[200]. - MOGO Inc. acquired a 99% ownership stake in MOGO Esports Private Limited during 2022, expanding its presence in the esports market[184]. Lease and Asset Management - The total fixed lease payments over three years for new office space in India is approximately $67,000[206]. - The Company has not recorded any impairment losses on long-lived assets to date[214]. Company Classification and Reporting - As an emerging growth company, the Company has opted out of extended transition periods for new accounting standards[215]. - The Company will cease to be an emerging growth company if total annual gross revenues exceed $1.07 billion or if it issues more than $1.0 billion in nonconvertible debt within three years[216]. - The Company is classified as a smaller reporting company, presenting only two years of audited financial statements[217]. - There are currently no off-balance sheet arrangements reported by the Company[218]. - The Company does not have any quantitative and qualitative disclosures about market risk applicable at this time[219].

[Part I. Financial Information](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section details the company's financial position, operating results, and cash flows, highlighting its pre-revenue stage and significant capital infusion from financing activities [Condensed Financial Statements](index=5&type=section&id=Item%201.%20Condensed%20Financial%20Statements) The company is in a pre-revenue stage, reporting a net loss of $547,889 for the nine months ended September 30, 2022, with its financial position significantly strengthened by an IPO and a private placement, resulting in cash and cash equivalents of $9.47 million [Condensed Balance Sheets](index=5&type=section&id=Condensed%20Balance%20Sheets) The balance sheet reflects a substantial increase in cash and total assets primarily due to proceeds from the Initial Public Offering and a private placement Balance Sheet Highlights (unaudited) | Account | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $9,469,521 | $238,202 | | Total current assets | $9,635,546 | $301,200 | | **Total Assets** | **$9,935,546** | **$301,200** | | **Liabilities & Equity** | | | | Total current liabilities | $188,146 | $31,814 | | Total stockholders' equity | $9,747,400 | $269,386 | | **Total Liabilities and Stockholders' Equity** | **$9,935,546** | **$301,200** | - The significant increase in cash and total assets is primarily due to proceeds from the Initial Public Offering (IPO) and a private placement that occurred in 2022[14](index=14&type=chunk)[51](index=51&type=chunk) [Condensed Statements of Operations](index=6&type=section&id=Condensed%20Statements%20of%20Operations) The company generated no revenue during the reported periods, with the net loss increasing significantly due to higher general and administrative expenses Operating Results (unaudited) | Period | Revenue | General & Admin Expenses | Net Loss | Net Loss Per Share | | :--- | :--- | :--- | :--- | :--- | | **Three Months Ended Sep 30, 2022** | $0 | $369,302 | $(370,624) | $(0.02) | | **Nine Months Ended Sep 30, 2022** | $0 | $546,567 | $(547,889) | $(0.03) | - The company generated no revenue during the reported periods, with the net loss increasing significantly, driven by higher general and administrative expenses as the company scaled its operations post-inception[16](index=16&type=chunk) [Condensed Statements of Cash Flows](index=9&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Financing activities were the primary source of cash, driven by proceeds from the issuance of common stock in an IPO and a private placement, while cash was used for software development Cash Flow Summary for the Nine Months Ended Sep 30, 2022 (unaudited) | Activity | Cash Flow | | :--- | :--- | | Net cash used by operating activities | $(371,885) | | Net cash used by investing activities | $(300,000) | | Net cash provided by financing activities | $9,903,204 | | **Net increase in cash and cash equivalents** | **$9,231,319** | - Financing activities were the primary source of cash, driven by net proceeds from the issuance of common stock in an IPO and a private placement, totaling approximately **$9.9 million**[22](index=22&type=chunk)[83](index=83&type=chunk) - Cash used in investing activities consisted of a **$300,000** advance payment to a supplier for software development[22](index=22&type=chunk)[45](index=45&type=chunk) [Notes to Financial Statements](index=10&type=section&id=Notes%20to%20Financial%20Statements) The notes detail the company's incorporation, its rights to commercialize esports events in India, significant capital raises through an IPO and PIPE, and commitments for platform development - The company was incorporated in March 2021 and has rights to commercialize esports events for **76 universities in India**[23](index=23&type=chunk) - In July 2022, the company raised gross proceeds of **$6.9 million** through an IPO, and in September 2022, it raised an additional **$5.0 million** through a private equity placement (PIPE)[51](index=51&type=chunk) - The company has committed to a total cost of **$1,200,000** for the development of an Esports Platform, with **$300,000** paid as of September 30, 2022[45](index=45&type=chunk) - In October 2022, the company established a subsidiary in India, MOGO Esports Pvt Ltd, for which operations have not yet commenced[43](index=43&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's formation to expand an existing esports business in India, focusing on university-level competitions, noting its pre-revenue stage with an accumulated deficit of approximately $800,000, and operations financed through an IPO and a PIPE, which raised combined net proceeds of approximately $9.89 million, believed sufficient for about two years of operational needs, with the increase in net loss attributed to higher G&A expenses as the company builds its infrastructure [Overview and Recent Events](index=18&type=section&id=Overview%20and%20Recent%20Events) The company was formed in March 2021 to expand an esports business in India, currently operating at a deficit, and has recently secured significant funding through an IPO and PIPE - The company was formed in March 2021 to expand an esports business started by Sports Industry of India (SII) in 2016, focusing on the Indian university esports market[60](index=60&type=chunk) - As of September 30, 2022, the company had an accumulated deficit of approximately **$800,000** and expects to incur significant expenses and operating losses for the foreseeable future[63](index=63&type=chunk) Recent Financing Activities (2022) | Event | Gross Proceeds | Net Proceeds | | :--- | :--- | :--- | | **IPO (July 2022)** | $6,900,000 | ~$5,465,000 | | **PIPE (September 2022)** | $5,000,001 | ~$4,422,000 | [Results of Operations](index=20&type=section&id=Results%20of%20Operations) The company has not generated any revenue to date, and general and administrative expenses have significantly increased due to scaling operations and public company costs - The company has not generated any revenue or cost of revenue to date[67](index=67&type=chunk) - General and administrative expenses for the nine months ended Sep 30, 2022, were **$546,567**, a significant increase from **$28,985** in the prior period, driven by increased payroll, insurance, public company costs, professional fees, and approximately **$139,000** in non-cash expense for warrants issued for services[72](index=72&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) The company's cash position significantly improved due to substantial proceeds from financing activities, which management believes will be sufficient for approximately two years of operations - As of September 30, 2022, the company had cash and cash equivalents of **$9,469,521**, up from **$238,202** at the end of 2021[73](index=73&type=chunk) - Management believes the net proceeds from the IPO and PIPE will be sufficient to meet cash and operational requirements for approximately two years[75](index=75&type=chunk) - Net cash provided by financing activities was **$9.9 million** for the nine months ended Sep 30, 2022, primarily from the IPO and PIPE, compared to **$0.31 million** in the prior period from common stock sales[83](index=83&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that this item is not applicable, indicating it does not have significant exposure to market risks such as interest rate risk, foreign currency exchange risk, or commodity price risk at this stage - The company has determined that quantitative and qualitative disclosures about market risk are not applicable for this reporting period[88](index=88&type=chunk) [Controls and Procedures](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of September 30, 2022, with no material changes to internal control over financial reporting identified during the quarter - Based on an evaluation as of September 30, 2022, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[89](index=89&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[90](index=90&type=chunk) [Part II. Other Information](index=24&type=section&id=Part%20II.%20Other%20Information) This section covers the company's legal status, identifies key business risks, and lists the exhibits filed with the quarterly report [Legal Proceedings](index=24&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not currently subject to any material legal proceedings or claims - The company is not currently subject to any legal proceedings or claims[91](index=91&type=chunk) [Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) The company identifies numerous risks associated with its development-stage business, including market acceptance uncertainty, reliance on a limited license, dependence on third-party technology, regulatory challenges, and the need for future financing - The business is a development-stage company with a limited operating history and no guarantee of achieving profitability[107](index=107&type=chunk) - The company will require additional financing to fully fund its business plan, and there is no certainty such financing will be available on reasonable terms[111](index=111&type=chunk)[112](index=112&type=chunk) - The business relies on a license from Sports Industry of India (SII) for rights to **76 Indian universities**, which is limited in scope and term, and subject to risks such as universities withdrawing or SII defaulting on its obligations[99](index=99&type=chunk)[101](index=101&type=chunk)[103](index=103&type=chunk) - Operations are concentrated in India, exposing the company to regulatory uncertainty (especially regarding games of skill vs. chance), political instability, and foreign currency exchange risks[96](index=96&type=chunk)[98](index=98&type=chunk)[133](index=133&type=chunk) [Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the quarterly report, including officer certifications (pursuant to Sarbanes-Oxley Act Sections 302 and 906) and the financial statements formatted in iXBRL - The exhibits filed with the Form 10-Q include CEO and CFO certifications and interactive data files (iXBRL)[162](index=162&type=chunk)[164](index=164&type=chunk)