High Roller Technologies, Inc.: Form 10-Q for the period ended Jun 30, 2026

You should read the following management’s discussion and analysis (“MD&A”) in conjunction with the information set forth within the unaudited condensed consolidated financial statements and related notes included in this Quarterly Report. Some of the information contained in this MD&A or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the “Forward-Looking Statements" and "Risk Factors" sections of this Quarterly Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following MD&A.

OUR BUSINESS

The Company was incorporated in Delaware in 2021 as a holding company, with the intent to seek an initial public offering on a United States securities exchange. In January 2022 we launched HighRoller.com to deliver more immersive real money gaming experiences for the iCasino market. Prior to our transition to the HighRoller.com Platform we operated our online iCasino activities under the casinoroom.com domain name. We operate an online gaming business offering casino games to customers in various jurisdictions worldwide under the HighRoller.com, Kassuuu.com and fruta.com domain names principally utilizing our Estonian license.

We are an evolving and growth-oriented global online gaming operator focused on providing its customers with the most exciting, enjoyable and compelling online experience on the market. Our experienced operational management team actively oversees engagement with its players and partners. The Company’s Platform is based around a set of gaming products, which the Company refers to as “iCasino” and is offered to players in select markets throughout the world. We currently offer more than 6,000 games from over 90 providers, representing largely the entire range of iCasino games which are most attractive to our player base including video slots, blackjack, roulette, baccarat, craps, and video poker. A number of the Company’s games are available to play with a live dealer including blackjack, video poker, roulette, baccarat, craps, Game Shows and other popular live games.

On April 14, 2026, the Company entered into the Collaboration Agreement with Crypto.com Derivatives North America ("CDNA"), a CFTC-registered designated contract market, derivatives clearing organization, and affiliate of Crypto.com, to launch an event-based prediction markets offering initially in the United States. Under the terms of the Collaboration Agreement, the Company intends to operate as a NFA -registered Guaranteed Introducing Broker and establish a relationship with Crypto.com's CFTC-registered Futures Commission Merchant, enabling the Company to offer CDNA's event contracts to customers across its existing distribution channels. The partnership is designed to allow customers to trade event contracts spanning finance, sports, entertainment and other approved categories through a regulated, user-friendly platform. Management believes this partnership represents a significant strategic growth opportunity that leverages the Company's established premium brand, customer-facing platform, and online gaming expertise to compete in a rapidly emerging regulated category. The Collaboration Agreement establishes Crypto.com and its affiliates as the Company's provider of prediction contracts across its U.S. distribution channels. Operating under its ROLR brand, the Company will enter the predictive market opening a new vertical for revenue generation. Under the terms of the Agreement, the Company is not precluded from pursuing additional licenses related to the operation of prediction markets.

On June 24, 2026, ROLR, a wholly owned subsidiary of the Company, was awarded a Guaranteed Introducing Broker license by the National Futures Association. This license allows ROLR to launch its prediction markets operations. ROLR's introducing broker operations are guaranteed by OG Markets US, Inc. doing business as Crypto.com FCM, which will carry customer accounts introduced through the ROLR platform and provide transaction processing, custody, and related regulatory infrastructure.

Through our Platform we provide iCasino, or online casino, consisting of the full suite of games available in land-based casinos, such as blackjack, roulette, baccarat, poker, and slot machines. We generate revenue through hold, or gross winnings, as users play against the house. We believe iCasino provides lower volatility versus land-based casinos due to easier advance-based predictions on gaming rules and statistics.

We currently are present and active in several markets around the world. We anticipate license approval in the regulated Ontario market will occur in approximately the second half of 2026. No assurance can be given that these efforts will prove successful. Our business may suffer if we are unable to open new geographical markets or if we are unable to continue expanding within existing markets.

We have implemented a multi-brand strategy to launch new brands utilizing our current licenses and using our existing resources. The scalability of our Platform allows the Company to use existing resources to launch new brands that provide access to new target demographics and generate new revenues through existing player acquisition channels while maintaining the current cost structure with nominal incremental costs. The conversion of marketing spend into new player acquisition or existing player reactivation on our current and future portfolio of brands will ultimately determine where player acquisition funds are spent on a market-to-market basis. While no assurances can be given that these efforts will be successful, and management’s time as well as nominal incremental costs may be spent with limited financial results, management believes that this strategy mitigates any material negative impact on operations or financial position by leveraging scalable processes and technologies within our Platform. If market reception is successful, a new brand may generate material revenue. We soft launched our second active brand, Fruta.com, in December 2023, allowing select players to test the website prior to going live in February 2024. In September 2025 we launched our third brand, Kassuuu.com.

We obtain our iCasino game offerings from over 90 suppliers such as Pragmatic Play, Push Gaming, Evolution Gaming for Live Dealer Services, Big Time Gaming, Red Tiger Gaming, Play’n Go, Netent, Quickspin and others. These content and gaming licenses are subject to standard revenue-share agreements, whereby suppliers receive a percentage of the net gaming revenue generated from their respective casino games and payment combinations, including agreed upon fixed costs.

Our plan is to excite the iCasino industry by focusing on streaming and social experiences based on real money gaming experiences for the customer.

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During the first half of 2022, we rebranded our iCasino operations from CasinoRoom.com to HighRoller.com and concurrently commenced to reposition our legacy gaming operator “CasinoRoom.com” into an online casino ratings and reviews portal that would generate high-value leads and targeted search engine traffic (SEO) for HighRoller.com and customer leads for other casinos particularly in markets that we do not serve. On December 31, 2025 we divested Casinoroom.com. See Note 17 for details.

Spike Up Media, is one of a handful of globally foremost providers of lead generation and we believe that our association with Spike Up provides high-quality, cost-effective lead generation converting into active customers which together with our favorable customer acquisition costs and customer retention will result in favorable gross operating margins.

Below is a quarterly breakdown for the periods indicated of the non-financial key performance indicators of

 quarterly active users, defined as the number of users who placed at least one bet during a respective quarter;

 quarterly unique depositing customers (“UDCs”), defined as the number of unique users who made at least one deposit during a respective quarter; and

 quarterly wagers, defined as the total amount of real money bets placed by our users.

We believe that we provide an attractive proposition which extends beyond a dynamic base product offering to one that has a broad selection of entertaining and exciting content having more than 6,000 slot and other iCasino games, with a number of our most popular games being available to play with a live dealer, such as blackjack, video poker, roulette, baccarat, and craps sourced from over 90 content providers. We provide loyalty program offers with generous cash back, inviting hospitality experiences, other welcoming introductory services and longer play incentives. All players are treated to an attractive welcome package of bonuses and free spins on popular slots. Players are also treated to rewards on an ongoing basis, based upon their engagement with the platform, the player is instantly rewarded with free spins at the slots they prefer at their then stake levels of play. We focus on a rapid registration process and allow players one tap search to discover and select their games of choice. Our players also appreciate rapid payment processing through our automated cashier.

We currently accept wagers in multiple currencies. We generated more than $63.0 million and $137.4 million in bets during the three and six months ended June 30, 2026, respectively, and $153.2 million and $306.4 million in customer-paid real money bets during the three and six months ended June 30, 2025, respectively, utilizing our HighRoller.com, Fruta.com and Kassuuu.com domain names. During the three and six months ended June 30, 2026, the average revenue per user was $414 and $403, respectively, as compared to approximately $340 and $248 per user for the same periods in 2025, respectively. User deposits were $10.1 million and $22.1 million during the three and six months ended June 30, 2026, respectively, as compared to deposits of almost $24.4 million and $47.1 million during the same periods in 2025, respectively. During the three and six months ended June 30, 2026, we had 9,607 and 20,820 active users, respectively, as compared to 19,675 and 49,621 active users for the same periods in 2025, respectively. Furthermore, during the three and six months ended June 30, 2026, we had 796 and 2,096 first time depositors, respectively, as compared to 6,050 and 21,743 first time depositors for the same periods in 2025, respectively. During the three and six months ended June 30, 2026, we had 6,791 and 15,324 unique depositors, respectively, as compared to 17,036 and 44,325 unique depositors for the same periods in 2025, respectively. Our net gaming revenue was $2.8 million and $6.2 million for the three and six months ended June 30, 2026, respectively, as compared to $5.8 million and $11.0 million for the same periods in 2025, respectively.

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Our gaming operations extend across international markets by arrangements that utilize licenses authorized by other local and remote authorities. We expect that new geographical markets will be material additional drivers of our revenue growth and profit in subsequent years. Through our relationship with Spike Up we are able to outsource parts of our marketing department, resulting in access to broader industry knowledge than would otherwise be readily available to us, as well as give us the ability to scale much quicker and more effectively than many of our competitors. By way of illustration, when entering a new market we will need to hire additional staff, familiarize ourselves with such matters as demographics, language, favorable selling points, pitfalls to avoid, competitor presentations and operations, and other market specific facts through expensive and time-consuming testing and data gathering. Our access to Spike Up’s extensive experience and market data provides us immediate market intelligence and allows us to drive viable leads in most active casino markets from the time that we access those markets. We anticipate that this accelerated new market entry will reduce costs and allow for earlier market acceptance than that which we might be able to achieve on a standalone basis. We believe that the most efficient allocation of our resources does not currently allow us to build, design and deploy proprietary games and as a result we focus our resources on aggregating and curating iCasino games from over 90 dedicated game development studios. This is not inclusive of discontinued operations. See footnote 17 for more details.

RECENT DEVELOPMENTS

GIB LICENSE FROM THE NFA

On June 24, 2026, ROLR, a wholly owned subsidiary of the Company, was awarded a Guaranteed Introducing Broker license by the National Futures Association. This license allows ROLR to launch its prediction markets operations when ready. ROLR's introducing broker operations are guaranteed by OG Markets US, Inc., doing business as Crypto.com FCM, which will carry customer accounts introduced through the ROLR platform and provide transaction processing, custody, and related regulatory infrastructure.

MUTUAL COLLABORATION AGREEMENT

On April 14, 2026, the Company entered into the Mutual Collaboration Agreement with Foris DAX Markets, Inc., d/b/a Crypto.com, and its affiliates, including North American Derivatives Exchange, Inc. d/b/a Crypto.com | Derivatives North America ("CDNA") and Foris DAX FCM, LLC.

Pursuant to the Collaboration Agreement, the Company will initially serve as a guaranteed introducing broker and plans to procure an introducing broker license shortly thereafter, for the purpose of soliciting customers to trade event-based derivative contracts in CDNA's Predictions product class on the CDNA trading system. The Company is responsible for, among other things, developing, implementing, and maintaining a technology platform, available as a mobile application, through which end-user customers may access and trade Predictions Contracts. CDNA will be the exclusive provider of Predictions Contracts through the Company's technology in the United States for the first 24 months of the term of the Collaboration Agreement. The Collaboration Agreement has an initial term of two years, with automatic renewal for a 12-month period, unless terminated earlier in accordance with its provisions. Under the terms of the Agreement, the Company is not precluded from pursuing additional licenses related to the operation of prediction markets.

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RESULTS OF OPERATIONS

The following table sets forth a summary of our unaudited condensed consolidated results of operations for the periods indicated. The results of historical periods are not necessarily indicative of the results of operations for any future period.

(in thousands, except share and per share data)

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FINANCIAL HIGHLIGHTS AND TRENDS

The following table sets forth a summary of our financial results for the periods indicated:

(amounts in thousands, except per share amounts)

(1) Adjusted EBITDA is a non-GAAP financial measure. See "Non-GAAP Information" below for additional information about this measure and a reconciliation of this measure to the most directly comparable financial measure calculated in accordance with U.S. GAAP.

(2) Adjusted loss per share is a non-GAAP financial measure. See "Non-GAAP Information" below for additional information about this measure and a reconciliation of this measure to the most directly comparable financial measure calculated in accordance with U.S. GAAP.

NON-GAAP INFORMATION

This Report includes Adjusted EBITDA and Adjusted Loss Per Share, which are non-GAAP financial measures that we use to supplement our results presented in accordance with U.S. GAAP. We believe Adjusted EBITDA and Adjusted Loss Per Share are useful in evaluating our operating performance, similar to measures reported by our publicly-listed U.S. competitors, and regularly used by security analysts, institutional investors and other interested parties in analyzing operating performance and prospects. Adjusted EBITDA and Adjusted Loss Per Share are not intended to be a substitute for any U.S. GAAP financial measure. As calculated, they may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.

We define and calculate Adjusted EBITDA as net loss from continuing operations before the impact of interest income and expense, income tax provision or benefit, and depreciation and amortization, and further adjusted for the following items: stock-based compensation; and other non-recurring and non-operating costs or income, as described in the reconciliation below.

We define and calculate Adjusted Loss Per Share as basic loss per share attributable to common stockholders before the impact of amortization of acquired intangible assets; stock-based compensation; and other non-recurring and non-operating costs or income, as described in the reconciliation below.

We include non-GAAP financial measures because they are used by management to evaluate our core operating performance and trends and to make strategic decisions regarding the allocation of capital and new investments. Adjusted EBITDA and Adjusted Loss Per Share exclude certain expenses that are required in accordance with U.S. GAAP because they are non-recurring items (for example, in the case of severance costs), non-cash expenditures (for example, in the case of amortization of acquired intangible assets, depreciation and amortization and stock-based compensation), or non-operating items which are not related to our underlying business performance (for example, in the case of interest expense).

ADJUSTED EBITDA

The table below presents the Company's Adjusted EBITDA reconciled to our net loss, which is the most directly comparable financial measure calculated in accordance with U.S. GAAP, for the periods indicated:

(in thousands)

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(1) Includes restricted shares, stock options, equity-settled restricted share units, cash-settled restricted share units and equity-settled performance-based restricted share units granted to employees and directors net of shares withheld for taxes (including related employer payroll taxes).

(2) Includes amortization of intangible assets generated through business acquisitions and depreciation of property and equipment, amortization of contract costs, and amortization of internally developed software and other intangible assets. Excludes amortization of right of use assets.

(3) Includes severance costs and non-recurring compensation payments.

REVENUE

Net gaming revenue decreased by $4.8 million or 43.8% to $6.2 million during the six months ended June 30, 2026, as compared to $11.0 million during the six months ended June 30, 2025. This is due to continuing focus on the prediction market along with continued implementation of the new marketing plan focusing on more valuable customers.

Net gaming revenue decreased by $3.0 million or 51.5% to $2.8 million during the three months ended June 30, 2026, as compared to $5.8 million during the three months ended June 30, 2025 due to the Company exiting various markets after the second quarter of 2025 and the Company’s continued implementation of a refined marketing strategy along with a more focused effort on the prediction market.

The Company’s revenue by country for those with significant revenue for the periods indicated are as follows:

(in thousands)

(in thousands)

DIRECT OPERATING COSTS

Direct operating costs (related party) decreased by $0.3 million or 50.4%, to $0.3 million during the six months ended June 30, 2026, as compared to $0.7 million for the six months ended June 30, 2025, which is primarily related to the shift in marketing strategy from revenue sharing that began in the prior quarter but will increase later in the year and falls in line with the decrease in revenue.

Direct operating costs (other) decreased by $2.6 million or 55.5%, to $2.1 million during the six months ended June 30, 2026, as compared to $4.8 million for the six months ended June 30, 2025, which is primarily related to a decrease in affiliate revenue sharing along with lower payment provider fees which is in line with decreased revenue.

Of the total direct operating costs of $2.4 million and $5.4 million for the six months ended June 30, 2026, and 2025, respectively, $0.3 million and $2.3 million, respectively, was related to revenue share paid to marketing partners for the successful acquisition of revenue generating players through their marketing channels.

Direct operating costs (related party) decreased by $0.2 million or 59.3%, to $0.1 million during the three months ended June 30, 2026, as compared to $0.4 million for the three months ended June 30, 2025, this decrease is approximately in line with the percentage decrease in revenue.

Direct operating costs (other) decreased by $1.5 million or 58.6%, to $1.0 million for the three months ended June 30, 2026, as compared to $2.5 million for the three months ended June 30, 2025, due to cost efficiencies identified within payment fees, game provider fees and affiliate revenue share, which resulted in a greater percentage decrease when compared to the percentage change in revenue.

Of the total direct operating costs of $1.2 million and $2.9 million for the three months ended June 30, 2026, and 2025, respectively, $0.3 million and $1.2 million, respectively, was related to revenue share paid to marketing partners for the successful acquisition of revenue generating players through their marketing channels.

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GENERAL AND ADMINISTRATIVE

Total general and administrative expenses were $7.9 million for the six months ended June 30, 2026, as compared to $6.2 million for the six months ended June 30, 2025.

General and administrative expenses (other) increased by $1.7 million or 28.1%, to $7.9 million for the six months ended June 30, 2026, as compared to $6.2 million for the six months ended June 30, 2025. The increase was primarily driven by an increase for warrant expense related to the public offering in January 2026 and higher spend preparing for entrance in the prediction market.

Total general and administrative expenses were $3.4 million for the three months ended June 30, 2026, as compared to $2.9 million for the three months ended June 30, 2025.

General and administrative expenses (other) increased by $0.5 million or 18.8%, to $3.4 million for the three months ended June 30, 2026, as compared to $2.8 million for the three months ended June 30, 2025. The increase was primarily driven by an increase in spend for preparation of entrance in the prediction market.

ADVERTISING AND PROMOTIONS

Total advertising and promotion expenses were $0.9 million for the six months ended June 30, 2026, as compared to $3.7 million for the six months ended June 30, 2025.

Advertising and promotions expenses (related party) decreased by $0.5 million or 56.6%, to $0.4 million for the six months ended June 30, 2026, as compared to $0.9 million for the six months ended June 30, 2025. The decrease is primarily attributable to the decrease in commission costs and commission listing costs related to the revised marketing strategy. Prediction market-related marketing spend began in the second quarter and will continue to increase throughout the year.

Advertising and promotions expenses (other) decreased by $2.3 million or 83.1%, to $0.5 million for the six months ended June 30, 2026, as compared to $2.8 million for the six months ended June 30, 2025. The decrease is attributable to marketing strategy optimization offset by additional marketing spend for the prediction market in the quarter.

Total advertising and promotion expenses were $0.5 million for the three months ended June 30, 2026, as compared to $0.9 million for the three months ended June 30, 2025.

Advertising and promotions expenses (related party) increased by $0.1 million or 36.6%, to $0.3 million for the three months ended June 30, 2026, as compared to $0.2 million for the three months ended June 30, 2025. The increase is primarily attributable to the increase in marketing spend for the prediction market.

Advertising and promotions expenses (other) decreased by $0.5 million or 66.1%, to $0.2 million for the three months ended June 30, 2026, as compared to $0.7 million for the three months ended June 30, 2025. The decrease is attributable to marketing strategy optimization offset by prediction market spend.

PRODUCT AND SOFTWARE DEVELOPMENT

Total product and software expenses were $0.4 million for the six months ended June 30, 2026, as compared to $0.4 million for the six months ended June 30, 2025.

Product and software development expenses (other) increased by $0.1 million or 14.4%, to $0.4 million for the six months ended June 30, 2026 as compared to $0.4 million for the six months ended June 30, 2025.

Total product and software expenses were $0.2 million for the three months ended June 30, 2026, as compared to $0.2 million for the three months ended June 30, 2025.

Product and software development expenses (other) increased by $0.0 million or 10.1%, to $0.2 million for the three months ended June 30, 2026 as compared to $0.2 million for the three months ended June 30, 2025.

LOSS FROM OPERATIONS

Loss from operations was $5.5 million for the six months ended June 30, 2026, as compared to a loss of $4.7 million for the six months ended June 30, 2025, primarily due to the Company revising the marketing strategy and investment into the planned entry into the prediction market vertical.

Loss from operations was $2.5 million for the three months ended June 30, 2026, as compared to a loss of $1.1 million for the three months ended June 30, 2025, primarily due to the Company revising the marketing strategy and investment into the planned entry into the prediction market vertical.

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INTEREST EXPENSE, NET

Interest income, net was $0.2 million for the six months ended June 30, 2026, as compared to interest expense, net was $0.1 million for the six months ended June 30, 2025, due to private placement proceeds being placed in an interest bearing account.

Interest income, net was $0.15 million for the three months ended June 30, 2026, as compared to interest expense, net was $0.05 million for the three months ended June 30, 2025, due to private placement proceeds being placed in an interest-bearing account.

LOSS BEFORE INCOME TAXES

Loss before income taxes was $5.3 million for the six months ended June 30, 2026, as compared to loss before income taxes of $4.8 million for the six months ended June 30, 2025.

Loss before income taxes was $2.3 million for the three months ended June 30, 2026, as compared to loss before income taxes of $1.1 million for the three months ended June 30, 2025.

INCOME TAX EXPENSE (BENEFIT)

Income tax expense (benefit) was $47 thousand and $54 thousand for the six months ended June 30, 2026 and 2025, respectively.

Income tax expense (benefit) was $31 thousand and $37 thousand for the three months ended June 30, 2026 and 2025, respectively.

NET LOSS FROM CONTINUING OPERATIONS

Net loss was $5.3 million for the six months ended June 30, 2026, as compared to net loss of $4.9 million for the six months ended June 30, 2025.

Net loss was $2.4 million for the three months ended June 30, 2026, as compared to net loss of $1.2 million for the three months ended June 30, 2025.

OTHER TRENDS IMPACTING OUR BUSINESS

Our results of operations can and generally do fluctuate due to other factors such as level of customer engagement, online casino results and other factors that are outside of our control or that we cannot reasonably predict. Our quarterly financial performance depends on our ability to attract and retain customers. Customer engagement in our online offerings may vary due to, among other things, customer satisfaction with our platform, our offerings and those of our competitors, our marketing efforts, public sentiment or an economic downturn. As customer engagement varies, so may our quarterly financial performance.

Our quarterly and annual financial results may also be impacted by the number and amount of betting losses and jackpot payouts we experience. Although our losses are limited per stake to a maximum payout in our online casino offering, when looking at bets across a period of time, these losses can be significant. As part of our online casino offerings, we offer local progressive jackpot games that are operated by us and larger progressive jackpots which are “global,” operating across multiple operators and guaranteed by our game suppliers. Each time a customer plays one of our local progressive jackpot games, we contribute a portion of the amount bet to the jackpot for that game or group of games. When a progressive jackpot is won, the jackpot is paid out and is reset to a predetermined base amount. As winning the jackpot is determined by a random mechanism, we cannot foresee when a jackpot will be won and we do not insure against jackpot payouts. Paying the local progressive jackpot decreases our cash position and, depending upon the size of the jackpot, payouts may have a significant negative effect on our cash flow and financial condition. Global progressive jackpots are guaranteed and paid by the game suppliers and are not a liability directly affecting us.

We operate within the global gaming and entertainment industry, which is comprised of diverse products and offerings that compete for consumers’ time and disposable income. We face and expect to continue to face significant competition from other industry players both within existing and new markets including from competitors with access to more resources or experience. Customer demands for new and innovative offerings and features require us to continue to invest in new technologies and content to improve the customer experience. Many jurisdictions in which we operate or intend to operate in the future have unique regulatory and/or technological requirements, which require us to have robust, scalable networks and infrastructure, and agile engineering and software development capabilities. The global gaming and entertainment industry has seen significant consolidation, regulatory change and technological development over the last few years, and we expect this trend to continue into the foreseeable future, which may create opportunities for us but may also create competitive and margin pressures.

LIQUIDITY AND CAPITAL RESOURCES

We measure liquidity in terms of our ability to fund the cash requirements of our business operations, including working capital and capital expenditure needs, contractual obligations and other commitments, with cash flows from operations. Our current working capital needs relate mainly to supporting our existing businesses, the growth of these businesses in their existing markets and their expansion into other geographic regions, as well as our employees’ compensation and benefits. Historically, we have relied on affiliates and related party relationships to support our working capital needs for operations.

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We had $18.0 million in cash and cash equivalents as of June 30, 2026 (excluding customer cash deposits, which we segregate from our operating cash balances on behalf of our real-money customers for all jurisdictions and products, and restricted cash). For the six months ended June 30, 2026 we had net loss of $5.3 million and had net cash used in operations of $5.9 million. As of June 30, 2026, we had an accumulated deficit of $29.6 million and working capital of $14.8 million.

We had $2.1 million in cash and cash equivalents as of December 31, 2025 (excluding customer cash deposits, which we segregate from our operating cash balances on behalf of our real-money customers for all jurisdictions and products, and restricted cash). For the year ended December 31, 2025 we had net income of $0.7 million and had net cash used in operations of $3.2 million. As of December 31, 2025, we had an accumulated deficit of $24.3 million and negative working capital of $3.7 million.

At June 30, 2026 and December 31, 2025, we did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.

CASH FLOWS

The following table shows our cash flows from operating activities, investing activities and financing activities for the stated periods:

(in thousands)

Net cash used in operations during the six months ended June 30, 2026, increased by $1.4 million to $5.9 million as compared to net cash used in operations of $4.4 million during the six months ended June 30, 2025. The increase during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, is primarily due to increased cash outflows related to the continuing implementation of a marketing strategy and entrance into a new market.

Net cash used in investing activities during the six months ended June 30, 2026, was $1.9 million as compared to net cash used in investing activities of $0.3 million during the six months ended June 30, 2025. Of the increase $1.6 million is attributable to the investment for planned entry into the prediction market vertical.

Net cash provided by financing activities for the six months ended June 30, 2026 was $23.8 million as compared to net cash used in financing activities of $0.1 million for the six months ended June 30, 2025, and is related to the private and direct offering in January of 2026 with proceeds of $23.4 million.

Restricted cash (current) was $0.5 million and $0.6 million at June 30, 2026 and December 31, 2025, respectively.

CRITICAL ACCOUNTING ESTIMATES

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenue and expenses. Some of those judgments can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Significant estimates include those related to assumptions used in accruals for potential legal and other liabilities, recovery of amounts held in escrow, realization of intangible assets, share-based compensation, accrued jackpots and the realization of deferred tax assets.

The following critical accounting estimates affect the more significant judgements and estimates used in the preparation of our unaudited condensed consolidated financial statements.

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IMPAIRMENT OF LONG-LIVED ASSETS

Our long-lived assets consist of property and equipment, operating lease-right of use assets and indefinite lived assets (i.e. trademarks, domain names and gaming license).

We evaluate long-lived assets for indicators of impairment at least annually or when events or changes in circumstances indicate that their carrying amounts may not be recoverable. The factors that would be considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the long-lived asset is used and the effects of obsolescence, demand, competition and other economic factors. If indicators of impairment are identified, we perform an undiscounted cash flow analysis of the long-lived assets. Asset groups are written down only to the extent that their carrying value is lower than their respective fair value. Fair values of the asset group are determined by discounting the cash flows at a rate that approximates the cost of capital of a market participant.

Indefinite-lived intangible assets consist of trademarks, domain names and gaming license. Indefinite-lived intangible assets are not amortized; rather they are tested for impairment at least annually, or more frequently if adverse events or changes in circumstances indicate that the carrying value may not be recoverable. In addition, management evaluates whether events and circumstances continue to support an indefinite useful life. Impairment tests are performed, at a minimum, in the fourth quarter of each year.

To test indefinite-lived intangible assets for impairment, we first assess the qualitative factors to determine whether it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative impairment test. If we determine that it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, then the quantitative impairment test is performed. The qualitative assessment requires the consideration of factors such as recent market transactions, macroeconomic conditions, and changes in projected future cash flows. The quantitative assessment compares the fair value of an indefinite-lived intangible asset to its carrying amount. If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized for the excess. Fair values of indefinite-lived intangible assets are determined based on discounted cash flows, market capitalization and use of domains for IR.

The Company conducted an impairment analysis with respect to the HighRoller domain name and the Estonia gaming license at June 30, 2026 and December 31, 2025 which concluded that the fair value, determined using a discounted cash flow analysis, substantially exceed their carrying value, and thus they were not impaired. Projected cash flows included an estimated commission fee for referring a player who opens an account with a deposit to an online gaming site, as well as future revenue sharing agreements for those customers based upon net gaming revenue over an estimated gaming period ranging from approximately 5 months to 12 months and the intrinsic resale value of the Estonia gaming license. The Company did not have any impairment of indefinite-lived intangible assets during the year. Therefore, no further impairment considerations were deemed necessary on the HighRoller domain name as of June 30, 2026 and December 31, 2025.

We did not have any impairment of indefinite-lived intangible assets for the year ended December 31, 2025 or the period ended June 30, 2026.

SHARE-BASED COMPENSATION

We record share-based compensation in accordance with ASC 718, *Compensation-Stock Compensation (“*ASC 718”) and recognize share-based compensation expense in the period in which a grantee is required to provide service, which is generally over the vesting period of the individual share-based payment award. Compensation expense for awards with performance conditions is not recognized until it is probable that the performance target will be achieved. Compensation expense for awards is recognized over the requisite service period on a straight-line basis. Forfeitures are accounted for as they occur.

Unit awards are classified as either an equity award or a liability award depending on whether the award contains certain repurchase provisions. Equity-classified awards are valued as of the grant date based upon the price of the underlying unit or share and a number of assumptions, including volatility, performance period, risk-free interest rate and expected dividends. Liability-classified awards are valued at fair value at each reporting date.

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GOING CONCERN

ASC 205-40 Presentation of Financial Statements - Going Concern, requires management to assess the reporting entity's ability to continue as a going concern. In accordance with this guidance, we have evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the Consolidated Financial Statements are issued.

Determining the extent to which conditions or events raise substantial doubt about our ability to continue as a going concern requires significant judgement and estimation by us. Our significant estimates related to this analysis may include identifying business factors such as revenue growth and profitability used in the forecasted financial results. We believe that the estimated values used in our going concern analysis are based on reasonable assumptions. However, such assumptions are inherently uncertain and actual results could differ materially from those estimates.

INCOME TAXES

We comply with the accounting and reporting requirements of ASC 740, *Income Taxes (“*ASC 740”), which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances in respect of deferred tax assets are provided for, if necessary, to reduce deferred tax assets to amounts more likely than not to be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. Any interest and penalties related to uncertain tax positions will be recognized as a component of income tax expense.

EMERGING GROWTH COMPANY ACCOUNTING ELECTION

Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable. We are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended, and have elected to take advantage of the benefits of this extended transition period. The Company remains an emerging growth company and is expected to continue to take advantage of the benefits of the extended transition period. This may make it difficult or impossible to compare the Company financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions for emerging growth companies because of the potential differences in accounting standards used.

EVALUATION OF DISCLOSURE CONTROL AND PROCEDURES

As of June 30, 2026, the end of the period covered by this Form 10-Q, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2026, we maintained effective disclosure controls and procedures at the reasonable assurance level. The following material weaknesses have been remediated:

 In 2022, the Company identified certain deficiencies in its internal processes for preparing condensed consolidated financial statements that, in the aggregate, constituted a material weakness in internal control over financial reporting.

 Beginning in 2023 and continuing through the current period, the Company has materially strengthened its finance and accounting function. These enhancements include the appointment of a Chief Financial Officer, a Controller, and a Director of Accounting and Financial Reporting, supported by additional qualified accounting personnel. As a result, the Company believes it now has the resources, qualifications, and infrastructure necessary to meet its obligations under U.S. GAAP and applicable SEC reporting requirements and to operate effective internal controls on a sustained basis.

MANAGEMENT’S REMEDIATION MEASURES

Management is committed to maintaining a strong internal control environment. Accordingly, management implemented a plan that included the following:

 Established and continue to maintain appropriate staff levels to support proper segregation of duties.

 Ensure that personnel performing key control activities possess the requisite qualifications and experience.

 Designed and implemented enhanced review procedures and processes across the financial close and reporting cycle.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

Except as described above, there have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(d) and 15d-15(d) under the Exchange Act) during the period ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We are not required to comply with the auditor attestation requirement of Section 404 of the Sarbanes-Oxley Act while we qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012.

INHERENT LIMITATIONS ON EFFECTIVENESS OF CONTROLS AND PROCEDURES

The Company’s management, including the Chief Executive Officer and Chief Financial Officer, believes that disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, management does not expect that the disclosure controls and procedures or the internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in “Part I, Item 1A. Risk Factors” in the Form 10-K. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.

As of the date of this Quarterly Report, there were no material changes to the risks and uncertainties described in the section titled “Risk Factors” in the Form 10-K during the six months ended June 30, 2026 other than as set forth below:

RISKS RELATED TO OUR COLLABORATION AGREEMENT WITH CRYPTO.COM

Our new Predictions Contracts business segment is dependent on our relationship with Crypto.com and its affiliates, and any disruption to that relationship could materially and adversely affect our business, financial condition, and results of operations.

Pursuant to the Collaboration Agreement entered into on April 14, 2026, and after we have satisfied all licensing and other requirements, we will serve as a guaranteed introducing broker for the purpose of soliciting customers to trade event-based derivative contracts in the Predictions product class offered by North American Derivatives Exchange, Inc. d/b/a Crypto.com | Derivatives North America ("CDNA"). Our ability to operate in this business segment is substantially dependent on the continuation and success of this relationship. The Collaboration Agreement has an initial term of two years with automatic renewal for a 12-month period, and CDNA is the exclusive provider of Predictions Contracts through our technology platform in the United States for the first 24 months of the term. There can be no assurance that the Collaboration Agreement will be renewed beyond its initial or any renewal term, or that the terms of any renewal will be favorable to us. A termination or non-renewal of the Collaboration Agreement, or a material deterioration in our relationship with Crypto.com or its affiliates, could result in a loss of a significant portion of the revenues associated with this business segment and could require us to write off technology development costs and other investments we have made in connection with this initiative.

We are subject to regulatory risks associated with event-based derivative contracts, which are subject to evolving and uncertain regulatory frameworks.

Event-based derivative contracts, including the Predictions Contracts offered through our technology platform, are a relatively novel financial product class that is subject to heightened regulatory scrutiny. The regulatory framework governing event-based derivatives in the United States continues to evolve, and federal or state regulators, including the Commodity Futures Trading Commission ("CFTC"), may adopt new rules, guidance, or enforcement actions that could restrict or prohibit the offering of certain types of event-based derivative contracts or impose additional requirements on market participants, including introducing brokers such as us. Changes in the regulatory environment could limit the types of Predictions Contracts available on the CDNA trading system, reduce customer demand for such products, increase our compliance costs, or otherwise materially and adversely affect our ability to operate this business segment. In addition, there can be no assurance that CDNA will maintain all necessary regulatory approvals and designations required to operate its exchange and offer the Predictions Contracts, and any loss or suspension of such approvals could materially impair our business.

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Our role as a guaranteed introducing broker subjects us to regulatory obligations and potential liability.

We will be entering the prediction market as a guaranteed introducing broker. As such, we will be subject to registration and compliance obligations under applicable federal regulations, including those administered by the CFTC and the National Futures Association ("NFA"). We will be required to comply with rules governing customer solicitation, anti-money laundering, know-your-customer procedures, recordkeeping, and other regulatory requirements. Any failure to maintain our registration status, to comply with applicable rules and regulations, or to adequately supervise our operations could result in enforcement actions, fines, penalties, or the suspension or revocation of our registration, any of which could materially and adversely affect our business and reputation. Furthermore, as a guaranteed introducing broker, our guarantee agreement with the applicable futures commission merchant may expose us to financial and legal risks in the event of customer defaults, trading losses, or regulatory proceedings.

The market for event-based derivative contracts is nascent and may not develop as we anticipate.

The market for event-based derivative contracts, including the Predictions Contracts offered through our technology platform, is relatively new and still developing. Customer demand for these products may not grow at the rate we expect, or at all, and the market may be subject to significant volatility in trading volumes and customer engagement. Public perception of event-based derivatives, could negatively affect customer adoption, attract adverse media coverage, or prompt regulatory action. If the market for Predictions Contracts does not develop as we anticipate, or if customer demand is insufficient to support the economics of our investment in this business segment, our business, financial condition, and results of operations could be materially and adversely affected.

We are exposed to counterparty risk and reputational risk associated with our collaboration partners.

Our business in the Predictions Contracts segment is closely associated with Crypto.com and its affiliates, including CDNA and Foris DAX FCM, LLC. Any adverse developments affecting these entities, including financial difficulties, regulatory actions, cybersecurity incidents, negative publicity, or reputational harm, could also adversely affect our business and reputation, even if we are not directly involved in or responsible for such developments. The cryptocurrency and digital asset industries with which Crypto.com is associated have experienced periods of significant volatility, regulatory uncertainty, and public scrutiny, and any negative developments in these industries could have a spillover effect on our Predictions Contracts business segment and on customer and investor confidence in our company.