Golden Matrix (GMGI) - 2024 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents unaudited consolidated financial statements, management's discussion, market risk, and internal controls Item 1. Financial Statements This section presents Golden Matrix Group's unaudited consolidated financial statements for Q1 2024 and 2023, including detailed notes Consolidated Balance Sheets This section details the company's financial position, including assets, liabilities, and equity for Q1 2024 and FY2023 Balance Sheet Metrics | Metric | January 31, 2024 ($) | October 31, 2023 ($) | | :----------------------------- | :--------------- | :--------------- | | Total Assets | $37,097,153 | $35,582,817 | | Total Liabilities | $4,950,412 | $4,479,423 | | Total Shareholders' Equity | $32,146,741 | $31,103,394 | | Cash | $17,292,978 | $17,100,280 | | Goodwill | $10,381,710 | $10,381,710 | Consolidated Statements of Operations and Comprehensive Income This section details financial performance, including revenues, gross profit, net income, and comprehensive income for Q1 2024 and 2023 Operations and Comprehensive Income Metrics | Metric | Three Months Ended Jan 31, 2024 ($) | Three Months Ended Jan 31, 2023 ($) | | :------------------------------------ | :------------------------------ | :------------------------------ | | Total Revenues | $11,843,882 | $10,777,679 | | Gross Profit | $3,375,260 | $2,443,034 | | Net Income (Loss) | $74,505 | $(443,521) | | Basic Net Income (Loss) Per Share | $0.00 | $(0.01) | | Diluted Net Income (Loss) Per Share | $0.00 | $(0.01) | | Comprehensive Income (Loss) | $272,396 | $(291,262) | Consolidated Statement of Shareholders' Equity This section outlines changes in shareholders' equity, including common stock, paid-in capital, and accumulated deficit Shareholders' Equity Metrics | Metric | January 31, 2024 ($) | January 31, 2023 ($) | | :----------------------------- | :--------------- | :--------------- | | Total Shareholders' Equity | $32,146,741 | $30,516,389 | | Common Stock Shares Outstanding | 36,615,932 | 36,099,526 | | Additional Paid-in Capital | $57,794,735 | $55,690,495 | | Accumulated Deficit | $(25,773,092) | $(25,118,368) | Consolidated Statements of Cash Flow This section presents cash flows from operating, investing, and financing activities for Q1 2024 and 2023 Cash Flow Metrics | Metric | Three Months Ended Jan 31, 2024 ($) | Three Months Ended Jan 31, 2023 ($) | | :-------------------------------- | :------------------------------ | :------------------------------ | | Net Cash Provided by Operating Activities | $8,175 | $401,653 | | Net Cash Used in Investing Activities | $(1,511) | $(60,923) | | Net Cash Provided by Financing Activities | $0 | $0 | | Net Increase in Cash | $192,698 | $474,224 | | Cash at End of Quarter | $17,292,978 | $15,423,897 | Notes to the Consolidated Financial Statements This section provides detailed explanations of accounting policies, significant estimates, and specific financial line items - The notes clarify the company's business segments (B2B and B2C), revenue recognition policies, and the impact of acquisitions like RKings and GMG Assets on operations[32][34][47] - Significant estimates are made for contingent liabilities, stock-based compensation, and collectability of accounts receivable[48] - The company is actively pursuing funding for the Meridian Purchase Agreement, which involves substantial cash and equity consideration[42][265] NOTE 1 - BASIS OF PRESENTATION AND ACCOUNTING POLICIES This note outlines business segments, revenue recognition methods, and accounting policies for business combinations - Golden Matrix Group operates in two segments: B2B (SaaS for online casino/sports betting, primarily Asia Pacific) and B2C (pay-to-enter prize competitions in UK via RKings, online casino in Mexico via Mexplay)[32][33][34][35] - Revenue recognition follows FASB Topic 606, with distinct methods for software usage, third-party content royalties, prize competition ticket sales, and online casino operations[59][60][61][62][64] - The company uses the acquisition method for business combinations, recognizing identifiable assets and liabilities at fair value and expensing acquisition-related costs[47] NOTE 2 – ACCOUNTS RECEIVABLE, NET This note details net accounts receivable and related collection matters Accounts Receivable, Net | Metric | January 31, 2024 ($) | October 31, 2023 ($) | | :----------------------- | :--------------- | :--------------- | | Accounts Receivable, net | $4,031,349 | $3,551,383 | - $20,492 is still outstanding from Citibank due to erroneously posted ACH transfers[84] - No allowance for doubtful accounts was recorded for both periods[85] NOTE 3 – ACCOUNTS RECEIVABLE – RELATED PARTY This note provides information on related party accounts receivable balances Accounts Receivable – Related Parties | Metric | January 31, 2024 ($) | October 31, 2023 ($) | | :------------------------------------ | :--------------- | :--------------- | | Accounts Receivable – Related Parties | $296,472 | $331,246 | NOTE 4 – PREPAID EXPENSES This note details prepaid expenses, including gaming license fee prepayments Prepaid Expenses | Metric | January 31, 2024 ($) | October 31, 2023 ($) | | :-------------------------- | :--------------- | :--------------- | | Total Prepaid Expenses | $142,992 | $103,271 | | Prepayment for Gaming License Fee | $56,194 | $8,528 | NOTE 5 – SHORT-TERM DEPOSITS This note describes short-term deposits and related office lease renewals Short-term Deposits | Metric | January 31, 2024 ($) | October 31, 2023 ($) | | :----------------- | :--------------- | :--------------- | | Short-term Deposit | $53,838 | $51,971 | - The office lease in Australia was renewed for an additional 3 years on December 11, 2023[89] NOTE 6 – ACQUISITIONS This note details GMG Assets and RKings acquisitions, including financial contributions and consideration - The company acquired 100% of GMG Assets (effective Aug 1, 2022) for £25,000 (approximately $30,708) to facilitate RKings' operations[92] GMG Assets Contribution (3 months ended Jan 31, 2024) | Metric | ($) | | :------------------------------------------------ | :---------- | | Revenues | $1,330,351 | | Net Income | $73,947 | - The company completed the acquisition of 100% of RKings by November 4, 2022, with a total consideration paid through January 31, 2024, of $10,896,960[96][97] RKings Contribution (3 months ended Jan 31, 2024) | Metric | ($) | | :------------------------------------------------ | :---------- | | Revenues | $5,688,657 | | Net Income | $632,592 | NOTE 7 – INTANGIBLE ASSETS – SOFTWARE PLATFORM, WEBSITE DEVELOPMENT COSTS, TRADEMARKS AND NON-COMPETE AGREEMENTS This note outlines intangible assets, their amortization, and related development costs Intangible Assets | Metric | January 31, 2024 ($) | October 31, 2023 ($) | | :-------------------------------- | :--------------- | :--------------- | | Net Definite-Lived Intangible Assets | $2,145,137 | $2,245,341 | Amortization Expenses | Metric | ($) | | :-------------------------------- | :--------------- | | Three Months Ended Jan 31, 2024 | $111,546 | | Three Months Ended Jan 31, 2023 | $106,666 | - Website development costs for RKings' and Mexplay's websites were capitalized and amortized over 3 years[105] - Trademarks ($2,000,000) are amortized over 10 years, and non-compete agreements ($600,000) over 5 years[106] NOTE 8 – ACCOUNTS PAYABLE – RELATED PARTIES This note provides information on related party accounts payable balances Accounts Payable – Related Parties | Metric | January 31, 2024 ($) | October 31, 2023 ($) | | :----------------------------- | :--------------- | :--------------- | | Accounts Payable – Related Parties | $3,627 | $12,921 | NOTE 9 – DEFERRED REVENUES This note details deferred revenue balances Deferred Revenues | Metric | January 31, 2024 ($) | October 31, 2023 ($) | | :--------------- | :--------------- | :--------------- | | Deferred Revenues | $130,560 | $108,106 | NOTE 10 – CUSTOMER DEPOSITS This note outlines customer deposit balances for B2B and B2C segments Customer Deposits | Metric | January 31, 2024 ($) | October 31, 2023 ($) | | :------------------------------------ | :--------------- | :--------------- | | Total Customer Deposits | $291,238 | $348,620 | | B2B Segment Deposits | $268,266 | $328,417 | | B2C Segment (Mexico) User Account Balances | $22,972 | $20,203 | NOTE 11 – RELATED PARTY TRANSACTIONS This note details related party transactions, including executive compensation and affiliated agreements - CEO Anthony Brian Goodman's base salary increased to $174,240 (effective Sep 1, 2023), and 125,000 RSUs vested on Jan 17, 2024[116][117] - COO Weiting 'Cathy' Feng's base salary increased to $145,200 (effective Sep 1, 2023), and 62,500 RSUs vested on Jan 17, 2024[120] Revenues from Articulate Pty Ltd (Related Party) | Metric | ($) | | :---------------------------------------------- | :--------------- | | Three Months Ended Jan 31, 2024 | $65,226 | | Three Months Ended Jan 31, 2023 | $186,643 | - The company entered into a Software License Agreement with Elray Resources Inc. (where CEO and COO also serve as officers) effective Dec 1, 2022, with operations becoming fully integrated and operational as of Jan 16, 2024. No revenues from Elray were recorded for the periods presented[142][150][151] NOTE 12 - EQUITY This note details equity, including common stock, stock options, RSUs, and share repurchase programs Common Stock Shares Outstanding | Metric | January 31, 2024 | October 31, 2023 | | :----------------------------- | :--------------- | :--------------- | | Common Stock Shares Outstanding | 36,615,932 | 36,162,932 | Compensation Cost Related to Stock Options | Metric | ($) | | :--------------------------------------- | :--------------- | | Three Months Ended Jan 31, 2024 | $61,679 | | Three Months Ended Jan 31, 2023 | $132,525 | Compensation Cost Related to RSUs (Related Parties) | Metric | ($) | | :------------------------------------------------ | :--------------- | | Three Months Ended Jan 31, 2024 | $515,281 | | Three Months Ended Jan 31, 2023 | $510,425 | RSU Activity | Metric | RSUs | | :-------------------------- | :--------------- | | RSUs Outstanding (Oct 31, 2023) | 2,082,000 | | RSUs Forfeited | (341,500) | | RSUs Vested | (453,000) | | RSUs Outstanding (Jan 31, 2024) | 1,287,500 | - A common stock repurchase program approved on March 29, 2023, for up to $2 million, expired on September 29, 2023, with 14,594 shares purchased and subsequently cancelled[184][187][188] NOTE 13 – SEGMENT REPORTING AND GEOGRAPHIC INFORMATION This note presents revenues, COGS, and long-lived assets by business segment and geographic region Revenues by Segment (3 months ended Jan 31, 2024) | Metric | ($) | | :---------------------------------------------- | :--------------- | | B2B | $4,620,710 (39%) | | B2C | $7,223,172 (61%) | Revenues by Geographic Region (3 months ended Jan 31, 2024) | Metric | ($) | | :------------------------------------------------------ | :--------------- | | Asia Pacific | $4,620,710 (39%) | | UK | $7,019,008 (59%) | | Latin America | $204,164 (2%) | COGS by Segment (3 months ended Jan 31, 2024) | Metric | ($) | | :------------------------------------------ | :--------------- | | B2B | $3,237,072 (38%) | | B2C | $5,231,550 (62%) | COGS by Geographic Region (3 months ended Jan 31, 2024) | Metric | ($) | | :---------------------------------------------------- | :--------------- | | Asia Pacific | $3,237,072 (38%) | | UK | $5,205,021 (61%) | | Latin America | $26,529 (1%) | Long-lived Assets (as of Jan 31, 2024) | Metric | ($) | | :-------------------- | :--------------- | | Asia Pacific | $384,489 | | UK | $12,316,210 | | Latin America | $201,989 | NOTE 14 – INCOME TAXES This note details income tax provision, UK tax payable, and US/Mexico tax positions Provision for Income Taxes | Metric | ($) | | :-------------------------------- | :--------------- | | Three Months Ended Jan 31, 2024 | $262,180 | | Three Months Ended Jan 31, 2023 | $145,686 | UK Income Tax Payable | Metric | ($) | | :-------------------- | :--------------- | | January 31, 2024 | $664,444 | | October 31, 2023 | $476,485 | - UK operations (RKings and GMG Assets) are subject to a statutory tax rate of approximately 25% of net income[198] - US operations have sufficient net operating losses to offset current net income, resulting in $0 tax liability[195][197] - Mexico operations (Golden Matrix MX) commenced revenue generation in March 2023 and had no income tax expense for the period[202][204] NOTE 15 - COMMITMENTS AND CONTINGENCIES This note outlines commitments and contingencies, including an acquisition holdback dispute and operating lease liabilities - The company is in a dispute with Mr. Paul Hardman regarding a $636,650 holdback amount from the RKings acquisition, which is accrued as a liability[208] Operating Lease Commitments | Metric | ($) | | :-------------------------------- | :--------------- | | Operating Lease Right-of-Use Asset (Jan 31, 2024) | $335,702 | | Operating Lease Right-of-Use Asset (Oct 31, 2023) | $56,643 | | Current Operating Lease Liability (Jan 31, 2024) | $81,086 | | Current Operating Lease Liability (Oct 31, 2023) | $59,089 | | Non-current Operating Lease Liability (Jan 31, 2024) | $257,077 | | Non-current Operating Lease Liability (Oct 31, 2023) | $0 | NOTE 16 - MERIDIAN PURCHASE AGREEMENT This note details the Meridian acquisition, including consideration, closing conditions, and post-acquisition ownership - The company is acquiring 100% of Meridian Companies, which operate online sports betting and casino in over 15 jurisdictions across Europe, Africa, and Central and South America[216] - Total consideration includes $30 million cash (up to $20M from Meridian's cash on hand), 82,141,857 restricted common shares ($3.00/share), 1,000 Series C Voting Preferred Stock, $5 million cash + 5 million restricted shares (contingent), $20 million cash (deferred), and $15 million in promissory notes[217] - The required closing date for the Meridian Purchase Agreement was extended from March 31, 2024, to June 30, 2024[228] - Upon closing, Meridian Sellers will collectively own approximately 70% of the company's outstanding common stock and 67% of voting shares[224] NOTE 17 – SUBSEQUENT EVENTS This note describes significant events after the reporting period, specifically RSU grants - On February 14, 2024, 146,400 RSUs were granted to employees and consultants, subject to continued service through vesting dates[229] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition, results of operations, and cash flows for Q1 2024 versus prior year General Information This section provides context for financial discussion, including forward-looking statements and market data - The discussion should be read in conjunction with the 2023 Annual Report on Form 10-K and includes forward-looking statements subject to risks[230][231] - Market data and statistical information are based on independent industry publications, believed to be reliable, but estimates involve assumptions and uncertainties[234] Overview This section summarizes business segments, operational highlights, growth strategies, and financing needs - The company operates in B2B (SaaS for iGaming, Asia Pacific) and B2C (UK prize competitions, Mexico online casino)[239][240] - As of Jan 31, 2024, B2B systems had over 8.3 million registered players and 808+ unique casino/live game operations[242] - As of Jan 31, 2024, RKings (UK B2C) had over 338,000 registered users, and Mexplay (Mexico B2C) had over 84,000 registered users, generating $204,164 in revenues for the quarter[244] - Key growth strategies include expanding global reach, investing in sales/marketing for new markets (Africa, Latin America, US), diversifying prizes, developing proprietary gaming content, and pursuing synergistic acquisitions like Meridian[250][260] - The company is self-sustaining but may need equity or debt financing for strategic acquisitions, particularly the Meridian Purchase Agreement[246][253][256] Results of Operations This section analyzes the company's revenues, costs of goods sold, gross profit, and expenses for the reporting period - The company achieved net income of $74,505 for the three months ended January 31, 2024, a significant improvement from a net loss of $(443,521) in the prior year[308] - Gross profit increased by $932,226, driven by an accrued liability adjustment and higher margins in the B2C segment[296] - General and administrative expenses increased due to higher payroll costs and operating expenses for Mexplay's marketing and transaction fees[300] Revenues This section details revenue streams by category, explaining changes compared to the prior year Revenue by Category | Revenue Category | Three Months Ended Jan 31, 2024 ($) | Three Months Ended Jan 31, 2023 ($) | Change ($) | | :-------------------------------------- | :------------------------------ | :------------------------------ | :------- | | Total Revenues | $11,843,882 | $10,777,679 | +$1,066,203 | | B2B IP Gaming Revenues | $68,099 | $189,381 | -$121,282 | | B2B Reselling Gaming Content Revenues | $4,552,611 | $4,035,076 | +$517,535 | | B2C Prize Competition Revenues | $7,019,008 | $6,553,222 | +$465,786 | | B2C Online Casino in Mexico Revenues | $204,164 | $0 | +$204,164 | - The decrease in B2B IP gaming revenues is due to the company focusing on appointing more resellers of third-party gaming content and reducing its reliance on related parties[276] - The increase in B2B reselling gaming content revenues is partly due to a $639,895 adjustment of an accrued liability[278] - B2C prize competition revenues increased due to the introduction of an expanded tournament platform at RKings[285] - B2C online casino in Mexico revenues are new, as Mexplay became operational in March 2023[286] Costs of goods sold This section analyzes cost of goods sold by category, explaining changes compared to the prior year Cost of Goods Sold by Category | COGS Category | Three Months Ended Jan 31, 2024 ($) | Three Months Ended Jan 31, 2023 ($) | Change ($) | | :-------------------------------------- | :------------------------------ | :------------------------------ | :------- | | Total Cost of Goods Sold | $8,468,622 | $8,334,645 | +$133,977 | | B2B Amortization of Consultants Options | $49,651 | $120,054 | -$70,403 | | B2B COGS from Reselling Gaming Content | $3,187,421 | $3,081,356 | +$106,065 | | B2C COGS for Prizes | $5,205,021 | $5,133,235 | +$71,786 | | B2C COGS for Online Casino in Mexico | $26,529 | $0 | +$26,529 | - The decrease in B2B amortization of consultant options is due to certain stock options being fully amortized in prior fiscal years[289] - The increase in B2B COGS from reselling gaming content is attributed to increased diversity and usage of gaming content via the company's GM-Ag system[290] - The increase in B2C COGS for prizes is mainly attributable to the increase in revenues from GMG Assets[293] - B2C COGS for the online casino in Mexico is new, as the casino was not operational in the prior period[294] Gross Profit and Gross Profit Margin This section discusses gross profit and gross profit margin, highlighting key change drivers Gross Profit and Margin Analysis | Metric | Three Months Ended Jan 31, 2024 ($) | Three Months Ended Jan 31, 2023 ($) | Change (%) | | :----------------- | :------------------------------ | :------------------------------ | :------- | | Gross Profit | $3,375,260 | $2,443,034 | +$932,226 | | Gross Profit Margin | 28% | 23% | +5% | | B2B Gross Profit Margin | 30% | 24% | +6% | | B2C Gross Profit Margin | 28% | 22% | +6% | - The increase in gross profit and margin is mainly due to an accrued liability adjustment in the B2B segment and the introduction of higher-margin tournaments in the B2C segment[296][297] General and administrative expenses This section details general and administrative expenses, explaining changes compared to the prior year General and Administrative Expenses | Metric | Three Months Ended Jan 31, 2024 ($) | Three Months Ended Jan 31, 2023 ($) | Change ($) | | :-------------------------------- | :------------------------------ | :------------------------------ | :------- | | General and Administrative Expenses | $2,336,792 | $2,037,295 | +$299,497 | - The increase is mainly due to increased payroll costs of $54,906 in the B2B segment and increased operating expenses of $256,986 for Mexplay operations (marketing, payment gateway transaction fees, accounting service fees)[300] General and administrative expenses – Related parties This section details G&A expenses involving related parties, including stock-based compensation and salaries General and Administrative Expenses – Related Parties | Metric | Three Months Ended Jan 31, 2024 ($) | Three Months Ended Jan 31, 2023 ($) | | :------------------------------------------ | :------------------------------ | :------------------------------ | | General and Administrative Expenses – Related Parties | $759,264 | $734,694 | | Stock-based Compensation (Related Parties) | $527,309 | $510,425 | | Consulting and Salary Expenses (Related Parties) | $231,955 | $211,798 | - The increase in consulting and salary expenses was mainly due to increases in salaries to the company's directors and officers[302] Interest expense This section reports interest expense for the three months ended January 31, 2024 and 2023 Interest Expense | Metric | Three Months Ended Jan 31, 2024 ($) | Three Months Ended Jan 31, 2023 ($) | | :--------------- | :------------------------------ | :------------------------------ | | Interest Expense | $600 | $998 | Interest income This section reports interest income for the three months ended January 31, 2024 and 2023 Interest Income | Metric | Three Months Ended Jan 31, 2024 ($) | Three Months Ended Jan 31, 2023 ($) | | :------------- | :------------------------------ | :------------------------------ | | Interest Income | $39,264 | $11,905 | Foreign exchange gain This section reports foreign exchange gain for the three months ended January 31, 2024 and 2023 Foreign Exchange Gain | Metric | Three Months Ended Jan 31, 2024 ($) | Three Months Ended Jan 31, 2023 ($) | | :----------------- | :------------------------------ | :------------------------------ | | Foreign Exchange Gain | $18,817 | $20,213 | Provision for income taxes This section details income tax provision, explaining changes and segment-specific tax positions Provision for Income Taxes | Metric | Three Months Ended Jan 31, 2024 ($) | Three Months Ended Jan 31, 2023 ($) | Change ($) | | :------------------------ | :------------------------------ | :------------------------------ | :------- | | Provision for Income Taxes | $262,180 | $145,686 | +$116,494 | - The increase is primarily due to higher UK gross profits in the B2C segment[306] - No income tax provision for the B2B segment due to operating losses carried forward[306] Net income (loss) attributable to the Company This section reports net income or loss, explaining primary factors contributing to the change Net Income (Loss) Attributable to the Company | Metric | Three Months Ended Jan 31, 2024 ($) | Three Months Ended Jan 31, 2023 ($) | Change ($) | | :------------------------------------------ | :------------------------------ | :------------------------------ | :------- | | Net Income (Loss) Attributable to the Company | $74,505 | $(443,521) | +$518,026 | - The increase is primarily due to a $932,226 increase in gross profit, partially offset by a $299,497 increase in G&A expenses and a $116,494 increase in income taxes[308] Liquidity and Capital Resources This section assesses cash position, working capital, and funding for operations and strategic acquisitions Liquidity and Capital Resources Metrics | Metric | January 31, 2024 ($) | October 31, 2023 ($) | | :---------------------- | :--------------- | :--------------- | | Cash | $17,292,978 | $17,100,280 | | Working Capital | $19,501,130 | $18,373,253 | - The company is self-sustaining through operations and believes current cash flows are sufficient for working capital for the next 12 months and beyond, excluding the Meridian acquisition[312] - The Meridian Purchase Agreement requires $70 million in total, with an initial $30 million cash payment at closing (up to $20 million potentially from Meridian's cash on hand), necessitating external funding through debt or equity[261][265] - A contested holdback payment of approximately $636,650 related to the RKings acquisition is accrued as a liability but is expected to be met without burdening the company[263][314] Critical Accounting Policies and Estimates This section discusses critical accounting policies and estimates, noting any material changes - No material changes to critical accounting policies and estimates since the October 31, 2023, Form 10-K[325] - Key estimates include bad debts, accrued liabilities, goodwill, and contingencies[325] - Foreign currency translation adjustments are recognized in accumulated other comprehensive income (loss) in equity, while realized foreign currency translation adjustments are in other income[325] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Golden Matrix Group, Inc. is not required to provide quantitative and qualitative disclosures about market risk - The company is not required to provide quantitative and qualitative disclosures about market risk as it is a 'smaller reporting company'[326] Item 4. Controls and Procedures The company's CEO and CFO concluded that disclosure controls and procedures were effective as of January 31, 2024, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO evaluated the effectiveness of the company's disclosure controls and procedures as of January 31, 2024, and concluded they were effective[327] - There have been no material changes in internal control over financial reporting during the three months ended January 31, 2024[328] PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits Item 1. Legal Proceedings The company is not currently a party to any material legal proceedings and is unaware of any contemplated against it, believing that any current proceedings will not materially adversely affect its financial position - The company is not currently involved in any material legal proceedings[331] - The outcome of litigation is inherently uncertain, but management believes current proceedings will not have a material adverse effect on financial condition or operating results[331] Item 1A. Risk Factors This section outlines key risks and uncertainties affecting the company, including funding, operations, and acquisitions - Risks include the need for additional financing, economic downturns, reliance on third-party content, ability to manage growth and compete, regulatory compliance, intellectual property protection, management reliance, international operations, and stock volatility[332][334] - Specific risks related to the Meridian Purchase Agreement include dilution, costs, ability to meet closing conditions, and integration challenges[334] - No material changes from the risk factors disclosed in the October 31, 2023, Form 10-K[335] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports on unregistered equity sales and any purchases by the issuer or affiliates - No unregistered sales of equity securities occurred during the quarter ended January 31, 2024, or subsequently[336] - No purchases of equity securities by the issuer or affiliated purchasers[337] Item 3. Defaults Upon Senior Securities This section confirms the absence of defaults upon senior securities during the reporting period - No defaults upon senior securities[338] Item 4. Mine Safety Disclosures This section states that mine safety disclosures are not applicable to the company's operations - Not Applicable[339] Item 5. Other Information This section reports on Rule 10b5-1 trading plans adopted or terminated by directors or officers - No Rule 10b5-1 trading plans were adopted or terminated by directors or officers during the quarter ended January 31, 2024[340] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including amendments and required certifications - Includes the Second Amendment to the Meridian Purchase Agreement dated January 22, 2024[341] - Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act are filed/furnished[343][344] SIGNATURES This section confirms the report's official signing by the President, CEO, CFO, and CCO - The report is signed by Anthony Brian Goodman (President and CEO) and Omar Jimenez (CFO & CCO) on March 14, 2024[347][348]