Meridian Holdings swings to $14.7M Q3 2026 loss
Brazilian regulatory restrictions and operating losses led to impairment charges, while revenue increased over the first nine months.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Meridian Holdings Inc. (MRDN) reported third-quarter 2026 revenue of $46.0 million, compared with $47.3 million a year earlier, and a net loss of $14.7 million versus net income of $413,802. For the nine months ended September 30, 2026, revenue was $146.3 million, compared with $133.3 million, while net loss was $10.6 million versus $3.6 million.
The quarter included $5.9 million of goodwill impairment and $5.6 million of intangible-asset impairment. Meridian attributed the intangible charge to Brazilian regulatory restrictions and continued operating losses. It said a Brazilian provisional measure issued September 25, 2026, prohibits fixed-odds sports betting and online casino-style betting in Brazil, including offerings by foreign operators to people in Brazil; the Brazilian gaming license and Magicbet777 domain and player database were reduced to zero. Operating cash flow was $17.7 million for the nine months, compared with $17.1 million a year earlier, while cash and equivalents were $16.0 million at September 30, 2026, versus $18.1 million at December 31, 2025.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNine-month revenue reached $146.3 million, versus $133.3 million in 2025.
Negative
- Moderate pointThird-quarter net loss was $14.7 million, versus $413,802 income.
- Moderate pointBrazilian restrictions were linked to $5.6 million of intangible-asset impairment. 5.4% of market cap
Filing Explained
At September 30, 2026, the balance sheet reports 12,681,533 common shares outstanding and $15,625,672 of noncurrent related-party consideration payable.
Form 10-Q is the unaudited quarterly report that updates interim financial statements, risks and liquidity. The report shows 12,681,533 common shares outstanding at
The nine-month equity statement records 28,560 shares issued for vested restricted stock units and 12,054 shares issued for services.
At September 30, the balance sheet reports
Key Figures
Key Terms
goodwill impairment financial
held-to-maturity financial
Level 3 financial
Multi-Period Excess Earnings Method financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were MRDN's third-quarter 2026 results?
What were MRDN's revenue and net loss for the first nine months of 2026?
Why did MRDN impair its Brazilian gaming assets?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from __________ to __________
Commission File Number:
Meridian Holdings Inc. |
(Exact name of registrant as specified in its charter) |
| ||
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
| | |
(Address of principal executive offices) |
| (Zip Code) |
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
|
| The (The NASDAQ Capital Market) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
|
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of November 10, 2026, there were
MERIDIAN HOLDINGS INC.
TABLE OF CONTENTS
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Special Note Regarding Forward-Looking Statements |
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PART I. FINANCIAL INFORMATION |
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Item 1. | Financial Statements |
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Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
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Item 4. | Controls and Procedures |
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PART II. OTHER INFORMATION |
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Item 1. | Legal Proceedings |
| 70 |
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Item 1A. | Risk Factors |
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Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
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Item 3. | Defaults Upon Senior Securities |
| 78 |
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Item 4. | Mine Safety Disclosures |
| 78 |
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Item 5. | Other Information |
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Item 6. | Exhibits |
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| 2 |
| Table of Contents |
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Information included in this Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”) and the Private Securities Litigation Reform Act of 1995. This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Meridian Holdings Inc. (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of the Company’s control which could cause actual results to differ materially from the results expressed or implied in the forward-looking statements, including, but not limited to:
| · | our need for significant additional financing to grow and expand our operations, complete acquisitions and pay post-closing amounts due in connection therewith, including in connection with the MeridianBet Group (as defined below) acquisition; | ||
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| · | dilution caused by the conversion of outstanding preferred stock and warrants, and/or acquisitions; | ||
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| · | the Company’s ability to complete acquisitions, and the available funding for such acquisitions, disruptions caused by acquisitions, and other risks associated therewith; | ||
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| · | the reliance on suppliers of third-party gaming content and the cost of such content; | ||
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| · | the ability of the Company to obtain additional gaming licenses and maintain existing gaming licenses; | ||
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| · | the Company’s ability to maintain the listing of its common stock on the Nasdaq Capital Market; | ||
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| · | the ability of the Company to manage growth; | ||
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| · | the Company’s expectations for future growth, revenues, and profitability; | ||
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| · | the Company’s expectations regarding future plans and timing thereof; | ||
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| · | the Company’s reliance on its management; | ||
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| · | the fact that Aleksandar Milovanović has voting control over the Company; | ||
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| · | related party relationships as well as conflicts of interest related thereto; | ||
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| · | the potential effect of economic downturns, recessions, changes in interest rates and inflation, and market conditions, including recessions, decreases in discretionary spending and therefore demand for our products, and increases in the cost of capital, related thereto, among other affects thereof, on the Company’s operations and prospects as a result of increased inflation, increasing interest rates, global conflicts and other events; | ||
| · | the Company’s ability to protect its proprietary information and intellectual property (IP); | ||
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| · | the ability of the Company to compete in its market; | ||
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| · | the effect of current and future regulation, the Company’s ability to comply with regulations (both current and future) and potential penalties in the event it fails to comply with such regulations and changes in the enforcement and interpretation of existing laws and regulations and the adoption of new laws and regulations or changes in prior laws or regulations that may unfavorably impact our business; | ||
| 3 |
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| · | the risks associated with gaming fraud, user cheating and cyber-attacks; | ||
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| · | risks associated with failures, disruptions, defects or inaccuracies in the Company's internally developed software, technology infrastructure, third-party systems, content providers and external data feeds (including sports event data), as well as cybersecurity incidents, hacking, and other technology-related failures on which the Company's operations rely; | ||
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| · | risks relating to inventory management; | ||
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| · | foreign exchange and currency risks; | ||
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| · | the outcome of contingencies, including legal proceedings in the normal course of business and outside the normal course of business; | ||
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| · | the ability to compete against existing and new competitors; | ||
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| · | the ability to manage expenses associated with sales and marketing and necessary general and administrative and technology investments; | ||
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| · | general consumer sentiment and economic conditions that may affect levels of discretionary customer purchases of the Company’s products, including potential recessions and global economic slowdowns; | ||
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| · | the risk of loss if a customer or counterparty to a financial instrument fails to meet its contractual obligations; principally from receivables from customers and transactions with financial institutions with which the Company deposits its surplus funds or mandatory deposits of funds for licensing purposes; | ||
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| · | the risk that the Company will have difficulty meeting its obligations associated with its financial liabilities that are settled by delivering cash or another financial asset; | ||
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| · | the risk that changes in market prices – such as foreign exchange rates and interest rates, will affect the Company’s income or the value of its holdings of financial instruments; | ||
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| · | the risks relating to protection of the players’ deposits; | ||
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| · | risks that participants in a sports event intentionally lose or alter the outcome, leading to an unexpected outcome and potentially resulting in a higher payout than expected; | ||
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| · | regulatory developments and operational uncertainties in Brazil and other countries that could adversely affect our business, financial condition and results of operations; | ||
| · | changes in Australian gambling laws and regulations that could materially and adversely affect our use of Australian trade promotion lottery as part of our business; | ||
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| · | risks related to potential value-added tax liabilities in the United Kingdom; and | ||
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| · | those risks set forth below under, and incorporated by reference into, “Part II. Other Information—Item 1A. Risk Factors”, below. | ||
These statements are not guarantees of future performance or results. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this Report.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10‑Q. While we believe that such information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.
You should read the matters described in “Part II. Other Information—Item 1A. Risk Factors” and the other cautionary statements made in this Report, and incorporated by reference herein, as being applicable to all related forward-looking statements wherever they appear in this Report. We cannot assure you that the forward-looking statements in this Report will prove to be accurate and therefore prospective investors are encouraged not to place undue reliance on forward-looking statements. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.
| 4 |
| Table of Contents |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Meridian Holdings Inc. and Subsidiaries | ||||||||
Consolidated Balance Sheets | ||||||||
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| As of |
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| As of |
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| September 30, 2026 |
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| December 31, 2025 |
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| (Audited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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Accounts receivable, net |
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Accounts receivable – related parties |
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Taxes receivable |
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Inventory |
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Prepaid expenses |
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Other current assets |
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Total current assets |
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Non-current assets: |
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Goodwill & intangible assets, net |
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Property, plant & equipment, net |
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Investments |
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Deposits |
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Operating lease right-of-use assets |
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Other non-current assets |
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Total non-current assets |
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Total assets |
| $ |
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| $ |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable and accrued liabilities |
| $ |
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Accounts payable - related parties |
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Current portion of operating lease liability |
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Current portion of long-term loan |
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Taxes payable |
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Other current liabilities |
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Deferred revenues |
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Contingent liability |
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Current portion of consideration payable – related parties |
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Current portion of consideration payable |
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Total current liabilities |
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Non-current liabilities: |
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Non-current portion of operating lease liability |
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Non-current portion of long-term loan |
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Other non-current liabilities |
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Consideration payable – related parties |
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Total non-current liabilities |
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Total liabilities |
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Shareholders’ equity: |
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Preferred stock: $ |
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Preferred stock, Series C: $ |
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Common stock: $ |
| $ |
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Stock payable |
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Stock payable – related party |
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Additional paid-in capital |
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Treasury stock, at cost ( |
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Accumulated other comprehensive income (loss) |
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Accumulated deficit |
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Total shareholders’ equity of MRDN |
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Noncontrolling interests |
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Total equity |
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Total liabilities and equity |
| $ |
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| $ |
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See accompanying notes to consolidated financial statements.
| 5 |
| Table of Contents |
Meridian Holdings Inc. and Subsidiaries | ||||||||||||||||
Consolidated Statements of Operations and Comprehensive Income | ||||||||||||||||
(Unaudited) | ||||||||||||||||
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| Three Months Ended |
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| Nine Months Ended |
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| September 30, |
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| September 30, |
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| 2026 |
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Revenues |
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Cost of goods sold |
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Gross profit |
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Operating expenses |
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Selling, general and administrative expenses |
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Impairment of goodwill |
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Impairment of intangible assets |
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Total operating expenses |
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Loss from operations |
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Other income (expense): |
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Interest expense |
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Interest earned |
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Foreign exchange loss/gain |
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Other income |
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Total other income (expense) |
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Net income (loss) before tax |
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Provision for income taxes |
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Net income (loss) |
| $ | ( | ) |
| $ |
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| $ | ( | ) |
| $ | ( | ) | |
Less: Net loss attributable to noncontrolling interest |
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Net income (loss) attributable to MRDN |
| $ | ( | ) |
| $ |
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| $ | ( | ) |
| $ | ( | ) | |
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Weighted average common shares outstanding: |
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Basic |
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Diluted |
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Net income (loss) per common share attributable to MRDN: |
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Basic |
| $ | ( | ) |
| $ |
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| $ | ( | ) |
| $ | ( | ) | |
Diluted |
| $ | ( | ) |
| $ |
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Net income (loss) |
| $ | ( | ) |
| $ |
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| $ | ( | ) |
| $ | ( | ) | |
Foreign currency translation adjustments |
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Comprehensive income (loss) |
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Less: Comprehensive loss attributable to noncontrolling interest |
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Comprehensive income (loss) attributable to MRDN |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ |
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See accompanying notes to consolidated financial statements.
| 6 |
| Table of Contents |
Meridian Holdings Inc. and Subsidiaries
Consolidated Statement of Shareholders’ Equity
(Unaudited)
For the Nine Months Ended September 30, 2026
|
| Preferred Stock- Series B |
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| Preferred Stock – Series C |
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| Common Stock |
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| Treasury Stock |
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| Additional Paid-in |
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| Stock |
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| Stock Payable – Related |
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| Accumulated Other Comprehensive Income |
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| Accumulated |
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| Total Equity of |
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| Non-controlling |
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| Total Shareholders’ |
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| Shares |
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| Amount |
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| Shares |
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| Amount |
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| Shares |
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| Amount |
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| Shares |
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| Amount |
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| Capital |
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| Payable |
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| Party |
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| (Loss) |
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| deficit |
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| MRDN |
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| interest |
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| Equity |
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Balance at December 31, 2025 |
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| - |
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| $ |
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| $ |
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| $ |
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| (17,062 | ) |
| $ | ( | ) |
| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ | ( | ) |
| $ |
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| $ |
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| $ |
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Cancellation of fractional shares resulting from a reverse stock split |
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| - |
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| - |
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| - |
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|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | |||||||||
Shares issued for vested RSUs |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Shares issued for services |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Fair value of stock-based compensation |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Reserve increase |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
| |||||||||||
Cumulative translation adjustment |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | |||||||||
Profit (loss) for the period |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | ||||||||
Balance at September 30, 2026 |
|
| - |
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
| (17,062 | ) |
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
| |||||||||||
See accompanying notes to consolidated financial statements.
| 7 |
| Table of Contents |
For the Three Months Ended September 30, 2026
|
| Preferred Stock- Series B |
|
| Preferred Stock – Series C |
|
| Common Stock |
|
| Treasury Stock |
|
| Additional Paid-in |
|
| Stock |
|
| Stock Payable – Related |
|
| Accumulated Other Comprehensive Income |
|
| Accumulated |
|
| Total Equity of |
|
| Non-controlling |
|
| Total Shareholders’ |
| ||||||||||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Payable |
|
| Party |
|
| (Loss) |
|
| deficit |
|
| MRDN |
|
| interest |
|
| Equity |
| ||||||||||||||||
Balance at June 30, 2026 |
|
| - |
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
| (17,062 | ) |
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
| |||||||||||
Shares issued for services |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Fair value of stock-based compensation |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Cumulative translation adjustment |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | |||||||||
Profit (loss) for the period |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | ||||||||
Balance at September 30, 2026 |
|
| - |
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
| (17,062 | ) |
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
| |||||||||||
See accompanying notes to consolidated financial statements.
| 8 |
| Table of Contents |
For the Nine Months Ended September 30, 2025
|
| Preferred Stock- Series B |
|
| Preferred Stock – Series C |
|
| Common Stock |
|
| Treasury Stock |
|
| Additional Paid-in |
|
| Stock |
|
| Stock Payable - Related |
|
| Subscription |
|
| Accumulated Other Comprehensive Income |
|
| Accumulated |
|
| Total Equity of |
|
| Non-controlling |
|
| Total Shareholders’ |
| |||||||||||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Payable |
|
| Party |
|
| Receivable |
|
| (Loss) |
|
| Earnings |
|
| MRDN |
|
| Interest |
|
| Equity |
| |||||||||||||||||
Balance at December 31, 2024 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
| (4,983 | ) |
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||||||||||
Shares issued for vested RSUs |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Shares issued for cashless exercise of options |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Shares issued for services |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Acquisition of non-controlling interest |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | |||||||||||
Shares issued for settlement of True-up liability |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Share issued for debt conversion |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Shares issued under ATM Program |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Fair value of stock-based compensation |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cumulative translation adjustment |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
| ||||||||||||
Reserve Increase |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
| ||||||||||||
Loss for the period |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | |||||||||
Balance at September 30, 2025 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
| (4,983 | ) |
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||||||||||
See accompanying notes to consolidated financial statements.
| 9 |
| Table of Contents |
For the Three Months Ended September 30, 2025
|
| Preferred Stock- Series B |
|
| Preferred Stock – Series C |
|
| Common Stock |
|
| Treasury stock |
|
| Additional Paid-in |
|
| Stock |
|
| Stock Payable - Related |
|
| Subscription |
|
| Accumulated Other Comprehensive Income |
|
| Accumulated |
|
| Total Equity of |
|
| Non-controlling |
|
| Total Shareholders’ |
| |||||||||||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Payable |
|
| Party |
|
| Receivable |
|
| (Loss) |
|
| Earnings |
|
| MRDN |
|
| Interest |
|
| Equity |
| |||||||||||||||||
Balance at June 30, 2025 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
| (4,983 | ) |
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||||||||||
Shares issued for vested RSUs |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Shares issued for services |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Shares issued for settlement of True-up liability |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Share issued for debt conversion |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Shares issued under ATM Program |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Fair value of stock-based compensation |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cumulative translation adjustment |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | |||||||||
Reserve Increase |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Profit (loss) for the period |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
| ||||||||||||
Balance at September 30, 2025 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
| (4,983 | ) |
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||||||||||
See accompanying notes to consolidated financial statements.
| 10 |
| Table of Contents |
Meridian Holdings Inc. and Subsidiaries | |||||||||
Consolidated Statements of Cash Flow | |||||||||
(Unaudited) | |||||||||
|
|
| |||||||
|
| Nine Months Ended |
| ||||||
|
| September 30, |
| ||||||
|
| 2026 |
|
| 2025 |
| |||
Cash flows from operating activities: |
|
|
|
|
|
| |||
Net loss |
| $ | ( | ) |
| $ | ( | ) | |
Adjustments to reconcile net loss to cash provided by operating activities: |
|
|
|
|
|
|
|
| |
Fair value of stock-based compensation |
|
|
|
|
|
| |||
Non-cash interest expense related to debt discount amortization |
|
|
|
|
|
| |||
Amortization of intangible assets |
|
|
|
|
|
| |||
Depreciation of property, plant and equipment |
|
|
|
|
|
| |||
Loss on valuation / Impairment |
|
|
|
|
|
| |||
Bad debt expense |
|
|
|
|
|
| |||
Non-cash one off items |
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
| |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
| |
(Increase) decrease in accounts receivable |
|
| ( | ) |
|
| ( | ) | |
(Increase) decrease in accounts receivable – related party |
|
| ( | ) |
|
|
| ||
(Increase) decrease in taxes receivable |
|
| ( | ) |
|
|
| ||
(Increase) decrease in prepaid expenses |
|
|
|
|
|
| |||
(Increase) decrease in other current assets |
|
| ( | ) |
|
|
| ||
(Increase) decrease in inventories |
|
|
|
|
| ( | ) | ||
(Increase) decrease in deposits |
|
|
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(Increase) decrease in other non-current assets |
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Increase (decrease) in accounts payable and accrued liabilities |
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Increase (decrease) in accounts payable – related party |
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Increase (decrease) in taxes payable |
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Increase (decrease) in deferred revenues |
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Increase (decrease) in customer deposit |
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Increase (decrease) in other current liabilities |
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Increase (decrease) in other liabilities |
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Increase (decrease) in operating lease liabilities |
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Net cash provided by operating activities |
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Cash flows from investing activities: |
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Cash paid for intangible assets |
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| ( | ) | |
Cash paid for investments |
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| ( | ) | ||
Cash paid for property, plant and equipment |
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| ( | ) |
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| ( | ) | |
Cash paid for purchase of subsidiaries |
|
| ( | ) |
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| ( | ) | |
Cash distribution to former owners of MeridianBet Group in connection with the Purchase |
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Net cash used in investing activities |
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Cash flows from financing activities: |
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Repayment on debt |
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Repayment of lease |
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Payments of fractional shares |
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Proceeds from dividends |
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Proceeds from loans and borrowings |
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Proceeds from sale of stock |
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Net cash used in financing activities |
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Effect of exchange rate changes on cash |
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Net increase (decrease) in cash and cash equivalents |
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Cash and cash equivalents at beginning of year |
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Cash and cash equivalents at end of the quarter |
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Supplemental cash flows disclosures |
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Interest paid |
| $ |
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| $ |
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Tax paid |
| $ |
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| $ |
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Non-cash financing activities |
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Common stock issued for vested RSUs |
| $ |
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| $ |
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Debt conversion |
| $ |
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| $ |
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Acquisition of minority interest |
| $ |
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| $ |
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Shares issued for settlement of True-up liability |
| $ |
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| $ |
| |||
See accompanying notes to consolidated financial statements.
| 11 |
| Table of Contents |
Meridian Holdings Inc. and Subsidiaries
Notes to the Consolidated Financial Statements
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION AND ACCOUNTING POLICIES
Organization and Operations
Meridian Holdings Inc. (together with its consolidated subsidiaries, collectively, “MRDN” “we”, “our”, “us”, or the “Company”) is incorporated and registered in the State of Nevada, (i) operates online sports betting, online casino, and gaming operations in 19 jurisdictions across Europe, Africa and Central and South America, (ii) is an innovative provider of enterprise Software-as-a-Service (“SaaS”) solutions for online casino operators and online sports betting operators, commonly referred to as iGaming operators, and (iii) offers pay-to-enter prize competitions in the United Kingdom (UK) and leads trade promotions in Australia, providing members with free prizes.
The Company is a well-established brand and operator in the sports betting and gaming industry, spanning across 19 markets in Europe, Central and South America, and Africa. The Company employs approximately 1,200 personnel, operating both online (mobile and web) and approximately 700 company-owned or franchised betting shops, with a primary focus (in those shops) on sports betting, slot machines and virtual games. Of those 700 shops, approximately 260 are owned by the Company’s subsidiaries and approximately 440 shops are owned by franchisees. This is complemented by a variety of slot machines and online casinos, eSports, fixed odds games, and other entertainment options, contingent on the regulatory parameters of the specific jurisdictions. While sports betting is a primary focus, the Company’s online casino revenue has grown significantly over the past years. Following the closing of the MeridianBet Acquisition (discussed and defined below) and effective April 1, 2024, the Company, through Golden Matrix (discussed and defined below), develops and owns online gaming intellectual property (IP) for international customers, located primarily in the Asia Pacific region. As part of the MeridianBet Acquisition, the Company acquired a proprietary Internet gaming enterprise software system that provides unique casino and live game operations on GM-Ag System. In addition, following the MeridianBet Acquisition, the Company broadened its operations in pay-to-enter prize competitions in the UK.
On April 9, 2024, Golden Matrix completed the acquisition (the “MeridianBet Acquisition”) of
In connection with the MeridianBet Acquisition, on April 9, 2024, the Company (A) issued
The MeridianBet Purchase Agreement is described in greater detail below under “Note 22 – MeridianBet Group Purchase Agreement”.
| 12 |
| Table of Contents |
On August 16, 2024, the Company entered into a Share Exchange Agreement to acquire an
Following the completion of the MeridianBet Acquisition, MeridianBet Group became the Company’s primary operating platform and the principal driver of the Company’s consolidated revenue and strategic growth initiatives.
Change of Control
As a result of the closing of the MeridianBet Purchase Agreement, and on April 9, 2024, the Meridian Sellers obtained majority voting control over the Company, with each of the Meridian Sellers obtaining voting rights as follows:
| • | |
| • | |
| • |
The total of the shares referenced above amount to
Prior to the closing of the MeridianBet Purchase Agreement, Mr. Anthony Brian Goodman, the then Chief Executive Officer and then director of the Company, held voting control over the Company due to his beneficial
Series C Preferred Stock
On April 4, 2024, in contemplation of the closing of the transactions contemplated by the MeridianBet Purchase Agreement, and pursuant to the power provided to the Company by the Articles of Incorporation of the Company, as amended, the Company’s Board of Directors approved the adoption of, and filing of, a Certificate of Designation of Golden Matrix Group, Inc. Establishing the Designation, Preferences, Limitations and Relative Rights of Its Series C Preferred Stock (the “Series C Designation”), which was filed with, and became effective with, the Secretary of State of Nevada on the same date. The Series C Designation designated 1,000 shares of Series C Preferred Stock, which were issued to the Meridian Sellers at the closing of the MeridianBet Acquisition.
Reverse Stock Split and Name Change
On February 26, 2026, the Company filed both (a) a Certificate of Change with the Secretary of State of the State of Nevada (the “Certificate of Change”) to effectuate a reverse stock split of the Company’s authorized, issued and outstanding shares of common stock, at a ratio of 1-for-12 (the “Reverse Split”), in accordance with Nevada Revised Statutes (“NRS”) Section 78.209; and (b) a Certificate of Amendment to the Company’s Articles of Incorporation, as amended, to affect a name change of the Company to “Meridian Holdings Inc.” (the “Name Change”). Both the Certificate of Change and Certificate of Amendment were approved solely by the Board of Directors of the Company in accordance with the NRS.
| 13 |
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Both the Reverse Split and the Name Change became effective on March 3, 2026 at 12:01 a.m. ET (the “Effective Time”).
At the Effective Time, the total number of shares of common stock authorized for issuance under the Company’s Articles of Incorporation was divided by 12 (from 300 million to 25 million); the total number of issued and outstanding shares of common stock of the Company was divided by 12 (from 151.7 million shares to 12.6 million shares); and the total number of shares of common stock held by each stockholder of the Company was converted automatically into the number of shares of common stock equal to the number of issued and outstanding shares of common stock held by each such stockholder immediately prior to the Reverse Split divided by 12. No fractional shares were issued in connection with the Reverse Split, and stockholders who would otherwise be entitled to receive a fractional share instead received cash in lieu of such fractional share, based upon the closing sale price of the common stock on the trading day immediately prior to the Effective Time as reported on the Nasdaq Capital Market.
There was no change to the par value of the common stock or preferred stock of the Company or the authorized or outstanding shares of preferred stock of the Company in connection with the Reverse Split; provided that the conversion ratio of such preferred stock was adjusted equitably in connection with the Reverse Split.
In addition, the number of shares of common stock issuable upon exercise of our stock options and other equity awards (including shares reserved for issuance under the Company’s equity compensation plans) were proportionately adjusted by the applicable administrator, using the 1-for-12 ratio, and rounded down to the nearest whole share, to be effective at the Effective Time, pursuant to the terms of the Company’s equity plans. The conversion rates of our preferred stock will also be adjusted in a ratio of 1-for-12. The number of shares issuable upon exercise of our outstanding warrants to purchase shares of common stock outstanding at the Effective Time was also equitably adjusted pursuant to the terms of such securities in connection with the 1-for-12 Reverse Split. In addition, the exercise price for each outstanding stock option and warrant will be increased in inverse proportion to the 1-for-12 split ratio such that upon an exercise, the aggregate exercise price payable by the optionee or warrant holder to the Company for the shares subject to the option or warrant will remain approximately the same as the aggregate exercise price prior to the Reverse Split, subject to the terms of such securities.
The effects of the Reverse Split and Name Change have been retroactively applied throughout this Report, unless otherwise stated.
Interim Financial Statements
These unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the consolidated financial statements do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These consolidated financial statements should be read in conjunction with the financial statements for the fiscal year ended December 31, 2025, and notes thereto, which are included in the Company’s Annual Report on Form 10-K which the Company filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2026.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and its majority-owned subsidiaries. Intercompany balances and transactions have been eliminated.
The Company accounts for business combinations using the acquisition method of accounting in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 805, “Business Combinations”. Identifiable assets acquired, and liabilities assumed, in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. Any adjustments to the purchase price allocation are made during the measurement period, not exceeding one year from the acquisition date, in accordance with ASC 805. The Company recognizes any non-controlling interest in the acquired subsidiary at fair value. The excess of the purchase price and the fair value of non-controlling interest in the acquired subsidiary over the fair value of the identifiable net assets of the subsidiary is recognized as goodwill. Identifiable assets with finite lives are amortized over their useful lives. Acquisition-related costs are expensed as incurred.
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| Table of Contents |
Use of Estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include contingent liability, stock-based compensation, warrant valuation, accrued expenses and collectability of accounts receivable. The Company evaluates its estimates on an on-going basis and bases its estimates on historical experience and on various other assumptions the Company believes to be reasonable. Due to inherent uncertainties, actual results could differ from those estimates.
Fair Value of Financial Instruments
The Company has adopted the provisions of ASC Topic 820, “Fair Value Measurements”, which defines fair value, establishes a framework for measuring fair value in US GAAP, and expands disclosures about fair value measurements. ASC 820 does not require any new fair value measurements, but it does provide guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. The fair value hierarchy distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs).
The hierarchy consists of three levels:
| · | Level 1 - Quoted prices in active markets for identical assets or liabilities. |
| · | Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets of liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
| · | Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
The Company uses Level 3 inputs for its valuation methodology for its assets and liabilities.
Financial instruments consist principally of cash, accounts receivable, prepaid expenses, intangible assets, accounts payable, accrued liabilities, and customer deposits. The carrying amounts of such financial instruments in the accompanying balance sheets approximate their fair values due to their relatively short-term nature. It is management’s opinion that the Company is not exposed to any significant currency or credit risks arising from these financial instruments.
Investment in Debt Securities
The Company invests in sovereign debt securities issued by foreign governments. These investments are classified as debt securities and accounted for in accordance with ASC Topic 320, Investments — Debt Securities.
Classification:
The Company classifies its debt securities at the time of purchase as either:
| · | Available-for-sale (“AFS”), or |
| · | Held-to-maturity (“HTM”), |
based on management’s intent and ability to hold the securities to maturity.
As of September 30, 2026, the Company’s sovereign bond investments are classified as HTM.
HTM securities are recorded at amortized cost and adjusted for the amortization of premiums and accretion of discounts using the effective interest method.
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| Table of Contents |
Investment in Equity Securities
The Company accounts for investments in equity securities based on the level of ownership interest and the degree of influence over the investee.
Investments in equity securities in which the Company holds less than 20% of the outstanding ownership interest and does not have significant influence are generally accounted for under the fair value method. Under this method, such investments are carried at fair value, with changes in fair value recognized in earnings, unless another measurement basis is required under applicable accounting guidance.
Investments in equity securities in which the Company holds 20% or more of the outstanding ownership interest, or otherwise has the ability to exercise significant influence over the investee’s operating and financial policies, are generally accounted for under the equity method. Under the equity method, the investment is initially recorded at cost and subsequently adjusted for the Company’s proportionate share of the investee’s net income or loss, distributions received, and other changes in the investee’s equity.
As of September 30, 2026, the Company’s equity investments are classified under the fair value method.
Foreign Currency Translation and Transactions
The functional currency of our foreign operations is generally the local currency. For these foreign entities, we translate their financial statements into U.S. dollars using average exchange rates for the period for income statement amounts and using end-of-period exchange rates for assets and liabilities. We record these translation adjustments in accumulated other comprehensive income (loss), a separate component of equity, in our consolidated balance sheets. During the three months ended September 30, 2026, and 2025, the Company had foreign currency translation adjustments of $(
We record exchange gains and losses resulting from the conversion of transaction currency to functional currency as a component of other income (expense). The Company incurred foreign exchange gains and (losses) of $(
Cash
The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company has no cash equivalents at September 30, 2026 and December 31, 2025.
Allowance for Doubtful Accounts
The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on known troubled accounts, historical experience, and other currently available evidence. As of September 30, 2026, and December 31, 2025, the allowance for doubtful accounts was $
| 16 |
| Table of Contents |
Intangible Assets
Intangible assets are capitalized when a future benefit is determined. Intangible assets are amortized over the anticipated useful life of the intangible asset.
Software Development Costs
The Company capitalizes internal software development costs subsequent to establishing technological feasibility of a software application in accordance with guidelines established by ASC 985-20-25 “Costs of Software to Be Sold, Leased, or Marketed”, requiring certain software development costs to be capitalized upon the establishment of technological feasibility. The establishment of technological feasibility and the ongoing assessment of the recoverability of these costs require considerable judgment by management with respect to certain external factors such as anticipated future revenue, estimated economic life, and changes in software and hardware technologies. Amortization of the capitalized software development costs begins when the product is available for general release to customers. Capitalized costs are amortized based on the straight-line method over the remaining estimated economic life of the product.
Other intangible assets
Other intangible assets, including customer relationships, patents, and trademarks, that are acquired by the Company and have finite useful lives, are at cost less accumulated amortization and any accumulated impairment losses. Costs incurred after the asset is placed in service are recognized in the income statement as incurred.
Impairment of Intangible Assets
In accordance with ASC 350-30-65 “Goodwill and Other Intangible Assets”, the Company assesses the impairment of identifiable intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers important, which could trigger an impairment review include the following:
| 1. | Significant underperformance compared to historical or projected future operating results; |
| 2. | Significant changes in the manner or use of the acquired assets or the strategy for the overall business; and |
| 3. | Significant negative industry or economic trends. |
When the Company determines that the carrying value of an intangible asset may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent to the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows.
During the three months ended September 30, 2026, the Company identified impairment indicators related to its Brazilian gaming operations due to adverse regulatory developments and continued operating losses.
Following the issuance of Brazilian Provisional Measure No. 1,394/2026 on September 25, 2026, which prohibits fixed-odds sports betting and online casino-style betting throughout Brazil, including offerings by foreign operators to persons in Brazil, management performed an impairment assessment in accordance with ASC 360, considering projected future cash flows, estimated fair values, and the expected future economic benefits of the underlying intangible assets.
Based on this assessment, the Company concluded that certain intangible assets were impaired and recognized an impairment loss of approximately $
| 17 |
| Table of Contents |
Additionally, the Company recognized an impairment loss of approximately $
The impairment losses were recognized in the consolidated statements of operations and comprehensive loss. As a result, the carrying amounts of the Brazilian gaming license, the Magicbet777 domain and associated player database, and the Media Games Malta trademarks were reduced to zero as of September 30, 2026.
Intangible assets that have finite useful lives are amortized over their useful lives. The Company incurred amortization expenses of $
Goodwill
Goodwill is tested for impairment at the reporting unit level. In accordance with ASC Topic 350 Intangibles - Goodwill and Other (“ASC 350”), our business is classified into two reporting units: Golden Matrix and MeridianBet Group. We review and evaluate our goodwill for potential impairment at a minimum annually, or more frequently if circumstances indicate that impairment is possible.
In testing goodwill for impairment, we have the option to begin with a qualitative assessment, commonly referred to as “Step 0”, to determine whether it is more likely than not that the fair value of a reporting unit containing goodwill is less than its carrying value. This qualitative assessment may include, but is not limited to, reviewing factors such as macroeconomic conditions, industry and market considerations, cost factors, entity-specific financial performance and other events, including changes in our management, strategy and primary user base. If we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then perform a quantitative goodwill impairment analysis by comparing the carrying amount to the fair value of the reporting unit. In estimating the fair value of the reporting unit, we may use key assumptions such as revenue growth rates, gross margin, and estimated costs for future periods as well as peer group market valuation multiples and discount rates. If the carrying amount exceeds the fair value, goodwill will be written down to the fair value and recorded as impairment expense in the consolidated statements of operations. We perform our impairment testing annually and when circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.
During the three months ended September 30, 2026, the Company identified indicators that the fair value of its Golden Matrix reporting unit may be below its carrying amount, including continued operating losses and a revised forecast. The Company performed an interim quantitative impairment test as of September 30, 2026, estimating fair value using a weighted combination of a discounted cash flow method and a market capitalization method. The carrying amount exceeded the estimated fair value, and the Company recognized a goodwill impairment charge of $
The changes in the carrying value of goodwill were as follows:
|
| Total |
| |
Balance as of December 31, 2025 |
| $ |
| |
Foreign currency translation adjustment |
|
|
| |
Goodwill recognized during the period |
|
|
| |
Goodwill impairment |
|
| ( | ) |
Balance as of September 30, 2026 |
| $ |
| |
| 18 |
| Table of Contents |
Inventories
Prizes
RKingsCompetitions Ltd., (“RKings”) and Classics For a Cause purchase prizes to be awarded to winners of prize competitions and giveaways; these prizes are recorded as inventory. Inventory is stated at the lower of cost or net realizable value, using the specific identification method. Costs include expenditures incurred in the normal course of business in bringing stocks to their present location and condition. Full provision is made for obsolete and slow-moving items. Net realizable value comprises actual or estimated selling price (net of discounts) less all costs to complete and costs incurred in marketing and selling of the prize inventory. The inventory of prizes was $
Retail Bar Goods
The Company’s inventory is composed of goods for retail bars. Inventory is stated at the lower of cost or net realizable value, using the first-in, first-out (“FIFO”) method. Costs include expenditures incurred in the normal course of business in bringing inventory to their present location and condition. Full provision is made for obsolete and slow-moving items. Net realizable value comprises actual or estimated selling price (net of discounts) less all costs to complete. Inventory of goods for retail bars was $
As of September 30, 2026, and December 31, 2025, total inventory was $
Property, Plant and Equipment
Plant and machinery, fixtures, fittings, and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed pursuant to the straight-line method over the useful life as follows:
|
| Useful Life in Years |
| |
Land |
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| |
Buildings |
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| |
Slots and machines |
|
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| |
Equipment & Furniture |
|
| ||
Computers |
|
| ||
Televisions |
|
|
| |
Leasehold improvement |
|
|
| |
Software |
|
| ||
Licenses |
| up to |
| |
Other intangible assets |
|
|
|
The depreciable life of leasehold improvements is limited by the expected lease term. Those leases with an indefinite or undefined lease period are assigned a useful life of
| 19 |
| Table of Contents |
Revenue Recognition
The Company currently has four distinctive revenue streams:
(i) Revenues from retail and online betting and casino.
Revenues from retail and online betting and casino include revenues derived from sports betting (sportsbook, the exchange sports betting product and pari-mutuel betting products), fixed odds games betting, online games and online casino, peer-to-peer games including online bingo and online poker and franchise royalties based on the operating results of the franchisee. Revenues are recognized exclusive of value-added tax.
(ii) Revenues from pay-to-enter prize competitions and trade promotions.
The Company generates revenues from sales of prize competitions tickets directly to customers in the UK, for prizes ranging from automobiles to jewelry, as well as travel and entertainment experiences. Additionally, it offers VIP subscriptions that provide customers in Australia with access to trade promotions and free giveaways, including classic cars.
(iii) Revenues from royalties charged on the use of third-party gaming content.
For the royalty charged on the use of third-party gaming content, the Company acquires the third-party gaming content for a fixed cost and resells the content at a margin.
(iv) Revenues from bars.
The Company also generates revenues from sales of drinks in the bars.
Pursuant to FASB Topic 606, Revenue Recognition, our company recognizes revenues by applying the following steps:
Step 1: Identify the contract with a customer.
Step 2: Identify the separate performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the separate performance obligations in the contract.
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.
(i) Revenues from retail and online betting and casino.
Revenues from sportsbook betting activities represent the net gain or loss from betting activities in the period plus (where material) the gain or loss on the revaluation of open positions at period end and is stated net of the cost of customer promotions and bonuses incurred in the period. These positions are recognized initially at fair value and subsequently at fair value through profit or loss, within the revenue line; this represents the Company’s principal activity. Customer promotions (including free bets) and bonuses are deducted from sportsbook betting revenue. At each reporting period-end, no fair value was recognized based on the materiality of the open position.
Revenue from the exchange sports betting product represents commission earned on betting activity and is recognized on the date the outcome for an event is settled.
Revenues from fixed odds games and the online casinos represent net winnings (“customer drop”), being amounts staked, net of customer winnings, and is stated net of customer promotions and bonuses incurred in the period. Revenue from pari-mutuel betting products represents a percentage of stake and is recognized on settlement of the event and is stated net of customer promotions and bonuses in the period.
Revenue from peer-to-peer games represents commission income (“rake”) and tournament fees earned from games completed by the period end and is stated net of the cost of customer promotions and bonuses incurred in the period.
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| Table of Contents |
(ii) Revenues from pay-to-enter prize competitions and trade promotions.
Revenues from prize competition ticket sales occur when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Payments for prize competitions received in advance of services being rendered are recorded as deferred revenue and recognized as revenue when control of the prize has been transferred to the winner of prize competitions.
Revenues from VIP subscriptions are recognized over the subscription period on a straight-line basis, as the customer receives continuous access to benefits, including trade promotions and free giveaways. Revenues are recorded when the subscription is activated, and the performance obligations, such as offering exclusive content and promotions, are fulfilled over time.
(iii) Revenues from royalties charged on the use of third-party gaming content.
Revenues from the royalty charged on the use of third-party gaming content occur when the Company acts as a distributor of third-party gaming content which is utilized by the client. The counterparty pays consideration in exchange for the gaming content utilized. The Company only recognizes the revenue at the month end when the usage of the gaming content occurs, and the revenue is based on the actual usage of the gaming content.
(iv) Revenues from bars.
Revenues from sales of drinks to customers are recognized when the drink or service is provided to the customers.
The Company offers various incentives to build loyalty, encourage and engage users on the platforms, and the costs of incentives are recorded as a reduction to the amount recognized as revenue for service fees.
Revenues are recognized exclusive of value-added tax (VAT).
Other Income
Other income is related to income from marketing services for third-party advertising in MeridianBet Group betting shops, sale of fixed assets, VAT refunds, income from compensation for damages, income from reduction of liabilities and other income that is not directly related to the Company’s core activity.
For the three months ended September 30, 2026, and 2025, other income amounted to $
For the nine months ended September 30, 2026, and 2025, other income amounted to $
Income Taxes
In accordance with US GAAP, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted rates expected to be in effect during the year in which the differences reverse. Deferred tax assets generally represent items that can be used as a tax deduction or credit in our tax return in future years for which the tax benefit has already been reflected on our Consolidated Statements of Earnings. Deferred tax liabilities generally represent items that have already been taken as a deduction on our tax return but have not yet been recognized as an expense in our Consolidated Statements of Earnings. The effect on deferred tax assets and liabilities due to a change in tax rates is recognized in income tax expense in the period that includes the enactment date.
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| Table of Contents |
Our deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not (a likelihood of more than 50 percent) that some portion or all of the deferred tax assets will not be realized. We evaluate the realizability of deferred income tax assets for each of the jurisdictions in which we operate. If we experience cumulative pretax income in a particular jurisdiction in the three-year period including the current and prior two years, we normally conclude that the deferred income tax assets will more likely than not be realizable and no valuation allowance is recognized, unless known or planned operating developments would lead management to conclude otherwise. However, if we experience cumulative pretax losses in a particular jurisdiction in the three-year period including the current and prior two years, we then consider a series of factors in the determination of whether the deferred income tax assets can be realized. These factors include historical operating results, known or planned operating developments, the period of time over which certain temporary differences will reverse, consideration of the utilization of certain deferred income tax liabilities, tax law carryback capability in the particular country, and prudent and feasible tax planning strategies. After evaluation of these factors, if the deferred income tax assets are expected to be realized within the tax carryforward period allowed for that specific country, we would conclude that no valuation allowance would be required. To the extent that the deferred income tax assets exceed the amount that is expected to be realized within the tax carryforward period for a particular jurisdiction, we establish a valuation allowance.
We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Judgment is required in evaluating tax positions and determining income tax provisions. We reevaluate the technical merits of our tax positions and may recognize an uncertain tax benefit in certain circumstances, including when: (1) a tax audit is completed; (2) applicable tax laws change, including a tax case ruling or legislative guidance; or (3) the applicable statute of limitations expires. We recognize potential accrued interest and penalties associated with unrecognized tax positions in income tax expense.
For the year ended December 31, 2025, the Company adopted Accounting Standards Update (ASU) 2023-09, Improvements to Income Tax Disclosures, on a prospective basis. In December 2023, the FASB issued ASU 2023-09, Income Taxes - Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. The amendments in ASU 2023-09 are effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company adopted this new guidance for the year ended December 31, 2025 and it did not have a material effect on the Company's Consolidated Financial Statements.
Earnings Per Common Share
Basic net earnings per share of common stock are computed by dividing net earnings available to common shareholders by the weighted-average number of common stock shares (Common Shares) outstanding during the period. Diluted net earnings per Common Share are determined using the weighted-average number of Common Shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.
The dilutive effect of outstanding stock options and warrants is reflected in diluted earnings per share by application of the treasury stock method. The dilutive effect of outstanding convertible securities is reflected in diluted earnings per share by application of the if-converted method.
| 22 |
| Table of Contents |
The following is a reconciliation of basic and diluted earnings per common share for the three months and nine months ended September 30, 2026 and 2025:
|
| For the three months ended |
|
| For the nine months ended |
| ||||||||||
|
| September 30, |
|
| September 30, |
| ||||||||||
|
| 2026 |
|
| 2025 |
|
| 2026 |
|
| 2025 |
| ||||
Basic earnings (loss) per common share |
|
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|
| ||||
Numerator: |
|
|
|
|
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|
|
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| ||||
Net income (loss) available to common shareholders |
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ | ( | ) | |
Denominator: |
|
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|
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|
Weighted average common shares outstanding |
|
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| ||||
|
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|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per common share |
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ | ( | ) | |
|
|
|
|
|
|
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|
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|
Diluted earnings (loss) per common share |
|
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Numerator: |
|
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|
|
Net income (loss) available to common shareholders |
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ | ( | ) | |
Denominator: |
|
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|
Weighted average common shares outstanding |
|
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| ||||
Preferred shares |
|
| - |
|
|
|
|
|
| - |
|
|
| - |
| |
Restricted stock units |
|
| - |
|
|
|
|
|
| - |
|
|
| - |
| |
Stock payable |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Stock payable – related party |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Adjusted weighted average common shares outstanding |
|
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|
Diluted earnings (loss) per common share |
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ | ( | ) | |
Treasury Stock
Treasury stock is carried at cost.
Stock-Based Compensation
The Stock-based compensation expense is recorded as a result of stock options, restricted stock units and restricted stock granted in return for services rendered. The share-based payment arrangements with employees were accounted for under ASC 718, “Compensation - Stock Compensation”. In 2018, the FASB issued ASU 2018-07, which simplifies the accounting for share-based payments granted to non-employees for goods and services. Under the ASU, most of the guidance on such payments to non-employees would be aligned with the requirements for share-based payments granted to employees.
The expenses related to the stock-based compensation are recognized on each reporting date. The amount is calculated as the difference between total expenses incurred and the total expenses already recognized.
Stock-based compensation was $
Recent Issued Accounting Pronouncements
The Company did not adopt any new accounting pronouncements during the three months ended September 30, 2026 that had a material impact on its consolidated financial statements.
NOTE 2 – ACCOUNTS RECEIVABLE, NET
Accounts receivable are carried at their estimated collectible amounts. Trade accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition.
Trade receivables are generated mostly from receivables from (i) resale of online gaming content (ii) the franchise partners for business-to-business (B2B) services, (iii) Agents for unpaid retail revenue, and (iv) receivables from the payment providers.
| 23 |
| Table of Contents |
Receivables related to resale of online gaming content and B2B services amount to $
Receivables from payment providers in Bosnia amount to $
The Company has accounts receivable of $
NOTE 3 – ACCOUNTS RECEIVABLE – RELATED PARTY
Accounts receivable from related party are carried at their estimated collectible amounts. Related party accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition. The Company has accounts receivable from several related parties including Top Level doo Serbia, and Network System Development GMBH.
The accounts receivable from related parties amount to $
NOTE 4 – TAXES RECEIVABLE
Taxes receivable mainly include stamps, duties, local taxes assets and corporate income taxes. Taxes receivable are $
Description |
| As of September 30, 2026 |
|
| As of December 31, 2025 |
| ||
Corporate income taxes receivable |
| $ |
|
| $ |
| ||
VAT refund receivables |
|
|
|
|
|
| ||
Municipality taxes refund receivable |
|
|
|
|
|
| ||
Total taxes receivable |
| $ |
|
| $ |
| ||
NOTE 5 – PREPAID EXPENSES
The balances of prepaid expenses are $
Description |
| As of September 30, 2026 |
|
| As of December 31, 2025 |
| ||
Prepayments to suppliers |
| $ |
|
| $ |
| ||
Prepaid payroll expense |
|
|
|
|
|
| ||
Prepaid rent |
|
|
|
|
|
| ||
Prepaid license |
|
|
|
|
|
| ||
Prepaid sponsorship/advertising |
|
|
|
|
|
| ||
Prepaid cash rewards |
|
|
|
|
|
| ||
Other prepayments |
|
|
|
|
|
| ||
Total prepaid assets |
| $ |
|
| $ |
| ||
| 24 |
| Table of Contents |
NOTE 6 – OTHER CURRENT ASSETS
As of September 30, 2026, and December 31, 2025, other current assets are $
Description |
| As of September 30, 2026 |
|
| As of December 31, 2025 |
| ||
Other current receivables |
| $ |
|
| $ |
| ||
Accrued income |
|
|
|
|
|
| ||
Employee receivables |
|
|
|
|
|
| ||
Other current investments |
|
|
|
|
|
| ||
Allowance for bad debt |
|
| ( | ) |
|
| ( | ) |
Total other current assets |
| $ |
|
| $ |
| ||
Other current receivables include government refunds for maternity leave reimbursements, interest receivables, employee advances, and receivables for thefts and damages.
As of September 30, 2026, the total allowance for bad debt amounts to $
NOTE 7 – ACQUISITIONS
Golden Matrix and Aleksandar Milovanović; Zoran Milošević, and Snežana Božović (MeridianBet Group) MeridianBet Purchase Agreement
Please refer to “Note 22 – MeridianBet Group Purchase Agreement”, for a discussion of the MeridianBet Purchase Agreement, pursuant to which effective April 1, 2024, Golden Matrix (legal acquirer/accounting acquiree) acquired MeridianBet Group (legal acquiree/accounting acquirer) from the Meridian Sellers.
Classics Holding Acquisition
On August 16, 2024, the Company entered into a Share Exchange Agreement to acquire an 80% ownership interest in Classics Holdings from NJF Exercise Physiologists Pty Ltd and Think Tank Enterprises Pty Ltd (collectively the “Classics Sellers”).
Classics Holdings, through its wholly-owned subsidiary, Classics For a Cause Pty Ltd, is an independent online trade promotions company in Australia, which operates a well-established business-to-consumer (B2C) platform that offers paid members access to a wide range of discounts from retailers across Australia. Classics For a Cause rewards its members with free entries into promotional giveaways, which feature luxury and classic motor vehicles, exotic motor vehicles, and caravans.
Pursuant to the Share Exchange Agreement, the Classics Sellers agreed to sell the Company
| (1) | |
| (2) | a cash payment of AUD $6,780,000 (USD $ |
| (3) | a cash payment of AUD $33,808 representing |
| (4) | up to an additional AUD $500,000 (USD $ |
| (5) | the right to certain earnout payments as discussed below. |
| 25 |
| Table of Contents |
The Classics Sellers had the right to each earn additional cash and stock consideration based on Classics Holdings’ total net profit from the Closing Date until June 30, 2025, of which half was deemed earned. As of December 31, 2025, the Company paid AU$500,000 (US$
On August 21, 2024, the Company closed the Share Exchange Agreement, which had an effective date of August 1, 2024.
The Share Exchange Agreement also required that the Classics Sellers and the Company enter into a Shareholders Agreement (the “Shareholders Agreement”), which was entered into and became effective on August 16, 2024.
In accordance with FASB ASC Section 805, “Business Combinations”, the Company has accounted for the Share Exchange Agreement transaction as a business combination using the acquisition method. Due to the continuity of operations that will remain after the acquisition, the acquisition was considered the acquisition of a “business”.
The Company accounts for business combinations in accordance with FASB ASC 805, “Business Combinations”. The fair value of purchase consideration for the acquisition has been allocated to the assets acquired and liabilities assumed based on a valuation of their respective fair values.
The assets and liabilities of Classics Holdings have been recorded at their fair value at the acquisition date and are included in the Company’s consolidated financial statements.
The calculation of the purchase price and the assets acquired, and liabilities assumed in the Share Exchange Agreement are as follows:
Calculation of Purchase Price and Purchase Price Allocation
Purchase price buildup |
| Amount |
| |
Fair value of 67,532 restricted shares at $25.02 per share |
| $ |
| |
Closing cash consideration of AUD $6,780,000 based on the Exchange Rate on August 1, 2024 |
| $ |
| |
A cash payment of AUD $33,808 representing 80% of the agreed value of the net assets of Classics on the effective date of August 1, 2024 |
| $ |
| |
Fair value of Holdback Cash consideration of AUD $500,000 |
| $ |
| |
Fair value of 8,416 Earnout shares at $12.12 per share (Share price on October 28, 2025) |
| $ |
| |
Earnout Cash of AUD $910,000 based on Exchange rate on October 28, 2025 |
| $ |
| |
Purchase price |
| $ |
| |
Fair value of non-controlling interest |
|
| 1,422,000 |
|
Equity value |
| $ |
| |
Add: Current liabilities |
|
|
| |
Add: Deferred tax liabilities |
|
|
| |
Total equity and liabilities |
| $ |
| |
|
|
|
|
|
Allocation to assets |
|
|
|
|
Cash and cash equivalents |
| $ |
| |
Prepaid expenses |
|
|
| |
Inventory, prizes |
|
|
| |
Accounts receivable |
|
|
| |
Property, Plant & Equipment, net |
|
|
| |
Total tangible assets |
| $ |
| |
|
|
|
|
|
Intangible assets |
|
|
|
|
In-house Software |
| $ |
| |
Trade Names and Trademarks |
|
|
| |
Non‐Compete Agreements |
|
|
| |
Customer Relationships |
|
|
| |
Total intangible assets |
| $ |
| |
|
|
|
|
|
Goodwill |
|
|
| |
Total assets allocated |
| $ |
| |
| 26 |
| Table of Contents |
Acquisition of Minority Interest in Meridian Gaming S.A.C. Peru and Meridian Worldwide Ltd. Cyprus.
The MeridianBet Purchase Agreement required the purchase of the minority shares of certain subsidiaries of the MeridianBet Group.
Based on this, on September 3, 2024,
The total purchase price was $
Additionally, on October 3 and November 8, 2024,
The total purchase price was $
Acquisition of Fair Bet Limited
On January 14, 2026, Meridian Gaming Holdings Limited, through its wholly-owned subsidiary Meridian Gaming Ltd. Malta (the “Meridian Gaming Malta”), entered into and closed a Share Purchase Agreement (the “SPA”) to
Fair Bet operates a retail betting business in Malta, comprising nine (9) retail betting shops, and holds a gaming license issued by the Malta Gaming Authority (license number MGA/B2C/195/2011), which remains valid through November 2028. The Company expressly did not acquire and does not intend to continue the white-label online casino operation previously operated by Fair Bet, which was retained by the Fair Bet Sellers under a separate arrangement.
Pursuant to the SPA, the parties agreed that, notwithstanding the legal closing date of January 14, 2026, the Meridian Gaming Malta shall be deemed to have assumed full operational control and economic benefit of Fair Bet from August 1, 2025 (the “Operational Takeover Date”). Accordingly, all revenues and expenses of Fair Bet accruing from the Operational Takeover Date are for the account of Meridian Gaming Malta.
| 27 |
| Table of Contents |
Purchase Price and Payment Terms
The total purchase price for all
| · | An upfront payment of EUR |
|
|
|
| · | Three (3) equal monthly installments of EUR |
The final installment was paid on April 15, 2026, and the change of ownership has been registered with the Malta Business Registry (MBR), making Meridian Gaming Holdings Limited Malta the owner of the entity.
In addition, pursuant to the SPA, within eight (8) months from the closing date, Fair Bet is required to repay to the Sellers, on a pro-rata basis, shareholder loans totaling approximately EUR
All liabilities, obligations, costs, and expenses of Fair Bet economically attributable to the period up to and including July 31, 2025 remain the sole responsibility of the Fair Bet Sellers. Any liabilities incurred from August 1, 2025 onwards are for the account of Meridian Gaming Malta.
Purchase Price Allocation
In accordance with FASB ASC Section 805, Business Combinations, the Company has accounted for the acquisition of Fair Bet Limited as a business combination using the acquisition method. The following table presents the preliminary purchase price allocation as of the Closing Date:
Calculation of Purchase Price and Preliminary Estimated Purchase Price Allocation
|
| EUR |
|
| USD |
| ||
Purchase Price |
|
|
|
|
|
| ||
Cash consideration for 100% of issued share capital |
| € |
|
| $ |
| ||
Total Purchase Price |
| € |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Allocation to Tangible Assets (Net) |
|
|
|
|
|
|
|
|
Property, plant & equipment, net |
| € |
|
| $ |
| ||
Net working capital |
| € | ( |
|
| $ | ( |
|
Long-term liability |
| € | ( |
|
| $ | ( |
|
Total net tangible assets |
| € | ( |
|
| $ | ( |
|
|
|
|
|
|
|
|
|
|
Allocation to Intangible Assets |
|
|
|
|
|
|
|
|
Gaming license |
| € |
|
| $ |
| ||
Customer relationships |
| € |
|
| $ |
| ||
Trade names and trademarks |
| € |
|
| $ |
| ||
Total identified intangible assets |
| € |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Goodwill |
| € |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Total assets allocated |
| € |
|
| $ |
| ||
| 28 |
| Table of Contents |
Goodwill is measured as the excess of the purchase price over the net of the acquisition-date fair values of the identifiable assets acquired and liabilities assumed. Goodwill represents the assembled workforce, the value of the established network of retail betting shops across Malta, and expected synergies with the Company's existing gaming operations.
Identified Intangible Assets
Gaming License — The Malta Gaming Authority license (MGA/B2C/195/2011), valid through November 2028, was valued at EUR
Customer Relationships — Customer relationships were valued at EUR
Trade Names and Trademarks — The "Fairbet" trade name was valued at EUR
The preliminary purchase price allocation is subject to revision upon completion of the final valuation of assets acquired and liabilities assumed. Any adjustments to the preliminary allocation will be made within the measurement period as permitted under FASB ASC 805.
NOTE 8 – INTANGIBLE ASSETS – SOFTWARE, LICENSES, TRADEMARKS, DEVELOPED TECHNOLOGY, CUSTOMER RELATIONSHIPS, AND NON-COMPETE AGREEMENTS
Software represents software licenses as well as the costs of internally developed gaming software. Capitalized software costs are amortized based on the straight-line method over the remaining estimated economic life of the product.
During the nine months ended September 30, 2026, and 2025, respectively, total additions to software amounted to $
Intangible construction in process mainly represents the development of new software in Montenegro and Malta for a sports betting platform. During the nine months ended September 30, 2026, and 2025, respectively, costs of $
We anticipate that the majority of intangible construction in progress will be placed in service in stages during 2027, depending on the progress of software development.
Licenses relate to operational gaming licenses issued in Bosnia, Cyprus and Brazil. During the nine months ended September 30, 2026, and 2025, respectively, costs of $
During the nine months ended September 30, 2026, the Company recognized an impairment loss of $
| 29 |
| Table of Contents |
Other intangible assets relate to retail agent partner relationships and online customer relationships identified in the acquisition of Bit Tech Tanzania in the gross amount of $
During the nine months ended September 30, 2026, the Company recognized an impairment loss of $
Amortization expenses related to intangible assets were $
The following table details the carrying values of the Company’s intangible assets:
Definite-lived intangible assets |
| As of September 30, 2026 |
|
| As of December 31, 2025 |
| ||
Intangible construction in process |
| $ |
|
| $ |
| ||
Licenses |
|
|
|
|
|
| ||
Software |
|
|
|
|
|
| ||
Trademarks and tradenames |
|
|
|
|
|
| ||
Developed technology |
|
|
|
|
|
| ||
Customer relationships |
|
|
|
|
|
| ||
Non-compete agreement |
|
|
|
|
|
| ||
Other intangible assets |
|
|
|
|
|
| ||
Gross intangible assets |
|
|
|
|
|
| ||
Less: accumulated impairment and amortization |
|
|
|
|
|
|
|
|
Licenses amortization |
|
| ( | ) |
|
| ( | ) |
Software amortization |
|
| ( | ) |
|
| ( | ) |
Trademarks and tradenames amortization |
|
| ( | ) |
|
| ( | ) |
Developed technology |
|
|
|
|
| ( | ) | |
Customer relationships |
|
| ( | ) |
|
| ( | ) |
Non-compete agreement |
|
|
|
|
| ( | ) | |
Other intangible assets amortization |
|
| ( | ) |
|
| ( | ) |
Total accumulated impairment and amortization |
|
| ( | ) |
|
| ( | ) |
Net definite-lived intangible assets |
| $ |
|
| $ |
| ||
The table below shows expected amortization expenses for the next five years of intangible assets recorded as of September 30, 2026:
Year Ending December 31, |
| Estimated Amortization |
| |
2026 (remaining three months) |
|
|
| |
2027 |
|
|
| |
2028 |
|
|
| |
2029 |
|
|
| |
2030 |
|
|
| |
Thereafter |
|
|
| |
Total future amortization |
|
|
| |
| 30 |
| Table of Contents |
NOTE 9 – PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, net, consists of the following for the periods indicated:
Description |
| As of September 30, 2026 |
|
| As of December 31, 2025 |
| ||
Land |
| $ |
|
| $ |
| ||
Buildings, net |
|
|
|
|
|
| ||
Slots and machines, net |
|
|
|
|
|
| ||
Equipment, net |
|
|
|
|
|
| ||
Computers, net |
|
|
|
|
|
| ||
Televisions, net |
|
|
|
|
|
| ||
Investment in third party property, plant and equipment |
|
|
|
|
|
| ||
Total property, plant and equipment, net |
| $ |
|
| $ |
| ||
Investment in third party property represents leasehold improvements that are in rented premises for retail betting.
Depreciation expenses were $
NOTE 10 – DEPOSITS AND OTHER NON-CURRENT ASSETS
As of September 30, 2026, and December 31, 2025, deposits and prepaid assets are $
|
| As of September 30, 2026 |
|
| As of December 31, 2025 |
| ||
Deposits for rent & office leases |
| $ |
|
| $ |
| ||
Deposits for retail betting |
|
|
|
|
|
| ||
Deposits for internet betting |
|
|
|
|
|
| ||
Other prepayments |
|
|
|
|
|
| ||
Other deposits |
|
|
|
|
|
| ||
Total deposits and prepaid assets |
| $ |
|
| $ |
| ||
Betting and casino deposits are long term deposits held with the following banks: NLB Komercijalna bank, EFG-Direktna bank, Halk bank, Bank Postanska Stedionica, and Fibank, as security for the permission granted to operate in a particular region.
Other deposits are long-term deposits with EFG Direktna bank and Nova bank for open credit lines and e-commerce services.
The deposits with NLB Komercijalna bank accrue interest at the rates of
As of September 30, 2026, and December 31, 2025, other non-current assets were $
|
| As of September 30, 2026 |
|
| As of December 31, 2025 |
| ||
Long term loan |
| $ |
|
| $ |
| ||
Long-term investment |
|
|
|
|
|
| ||
Deferred tax assets |
|
|
|
|
|
| ||
Total other non-current assets |
| $ |
|
| $ |
| ||
| 31 |
| Table of Contents |
In connection with its gaming operations in Brazil, the Company, through its subsidiary Meridian Gaming Brasil SPE Ltda. (“Meridian Brazil”), entered into a contractual arrangement with a third-party operator to establish a silent partnership (Sociedade em Conta de Participação, or “SCP”) for the operation of online gaming activities under Meridian Brazil's federal gaming license.
In December 2025,
NOTE 11 – INVESTMENTS
Investments in Marketable Securities
Investments in marketable equity securities, classified as trading securities, are measured at fair value on a recurring basis using quoted prices in active markets and are therefore classified within Level 1 of the fair value hierarchy. The Company holds less than a 5% interest in these securities. Changes in fair value are recognized in earnings within the consolidated statements of operations.
The balance of our marketable securities was as follows:
|
| As of September 30, 2026 |
|
| As of December 31, 2025 |
| ||
Marketable equity securities - Telekom Srpske |
|
|
|
|
|
| ||
Marketable equity securities – BH Telekom |
|
|
|
|
|
| ||
Total Marketable equity securities |
| $ |
|
| $ |
| ||
Gains and losses to measure our investments in marketable equity at fair value were included in the other income. These represent unrealized gains and losses arising from changes in market value at the reporting date.
For the nine months ended September 30, 2026 and 2025, the carrying value of the investment was adjusted to its fair value, and accordingly, unrealized loss in the amount of $
Debt Securities Held to Maturity
The Company classifies certain investments in government debt securities as held-to-maturity because it has the positive intent and ability to hold these securities until their contractual maturity. Accordingly, these investments are carried at amortized cost, net of any allowance for expected credit losses.
During October 2025, subsidiaries within the MeridianBet Group purchased Eurobonds issued by the Republic of Serbia and the Republic of Romania. These investments bear fixed coupon interest and mature between 2032 and 2033.
| 32 |
| Table of Contents |
As of September 30, 2026, debt securities held to maturity consisted of the following:
Security |
| ISIN |
| Maturity |
| Amortized Cost |
|
| Gross Unrealized Gains |
|
| Gross Unrealized Losses |
|
| Fair Value |
| ||||
Republic of Serbia Eurobonds - Meridian Tech Ltd. (Serbia) |
| XS2580270275 |
| September 26, 2033 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Republic of Romania Eurobonds - Meridian Tech Ltd. (Serbia) |
| XS3021378032 |
| July 11, 2032 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Republic of Romania Eurobonds - Meridianbet Ltd. (Montenegro) |
| XS3021378032 |
| July 11, 2032 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
The following table reconciles the Company's investments reported on the consolidated balance sheet as of September 30, 2026:
Investments |
| Amount |
| |
Held-to-maturity debt securities (amortized cost) |
|
|
| |
Marketable equity securities |
|
|
| |
Total investments |
| $ |
| |
Interest income earned on held-to-maturity debt securities is recognized using the effective interest method and is included in interest income in the consolidated statements of operations.
The fair values of the held-to-maturity debt securities are based on quoted market prices or other observable market inputs.
The Company evaluated the held-to-maturity debt securities for expected credit losses in accordance with ASC 326. As of September 30, 2026, no allowance for expected credit losses was recorded, as management determined that the securities have a low risk of credit loss.
NOTE 12 – OPERATING LEASE RIGHT OF USE ASSETS AND LIABILITIES
Under ASU No. 2016-02, Leases (Topic 842), lessees are required to recognize all leases (with the exception of short-term leases) on the balance sheet as a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The standard was adopted using a modified retrospective approach.
The Company (through its subsidiaries and affiliates) has entered into operating leases, the Company also has several financing lease agreements. As the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate based on information available at commencement to determine the present value of the lease payments. Right-of-use assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease term is typically assessed at
The lease cost for the three months ended September 30, 2026, and 2025, was $
The lease cost for the nine months ended September 30, 2026, and 2025, was $
As of September 30, 2026, and December 31, 2025, the right-of-use assets were $
| 33 |
| Table of Contents |
Maturities of lease liabilities as of September 30, 2026, were as follows:
|
| Operating Lease |
| |
2026 |
| $ |
| |
2027 |
|
|
| |
2028 |
|
|
| |
2029 |
|
|
| |
2030 |
|
|
| |
Thereafter |
|
|
| |
Total lease payments |
|
|
| |
Less imputed interest |
|
|
| |
Present value of lease liability |
| $ |
| |
NOTE 13 – ACCOUNTS PAYABLE – RELATED PARTIES
The accounts payable to related parties include management’s compensation payable of $
NOTE 14 – TAXES PAYABLE
The taxes payable include tax amounts due for stamps, duties, and corporate income tax as noted below:
As of September 30, 2026, and December 31, 2025, taxes payable are $
|
| As of September 30, 2026 |
|
| As of December 31, 2025 |
| ||
Stamps, duties and other taxes |
|
|
|
|
|
| ||
Corporate income tax payable |
|
|
|
|
|
| ||
Total taxes payable |
| $ |
|
| $ |
| ||
NOTE 15 – SHORT-TERM AND LONG-TERM LOANS
Unicredit Bank Facility
On May 1, 2024, effective May 16, 2024, Meridian Serbia entered into a Facility Agreement dated as of April 30, 2024 (the “Facility Agreement”) with Unicredit Bank Serbia JSC Belgrade (“Unicredit Bank”). UniCredit Bank agreed to loan Meridian Serbia up to 2,350,000,000 Serbian dinars (approximately $
A total of $
The Loan is secured by a mortgage on substantially all of Meridian Serbian’s real estate; a pledge by Golden Matrix Serbia of all the outstanding capital stock of Meridian Serbia; a pledge by the Company of all of its ownership in Golden Matrix Serbia; and an assignment of Meridian Serbia’s insurance policies.
On May 16, 2024, the Company entered into a Guaranty Agreement in favor of Unicredit Bank to guarantee in full the repayment of the Loan.
The Loan bears interest at the one-month BELIBOR rate, plus 3.15% per annum (currently approximately
| 34 |
| Table of Contents |
The Loan is repayable in installments, beginning six months after May 16, 2024, and payable in full by the maturity date, May 17, 2027. The first installment was paid on November 16, 2024.
The Company recorded a debt discount of $
For the nine months ended September 30, 2026, the Company paid $
The contract defines a Financial Covenant stipulating that the financial ratio (Net Debt/Ebitda) must be less than or equal to 3x, with compliance monitored by the bank. As of September 30, 2026, the requirement under the Financial Covenant has been met.
On April 9, 2025, Meridian Serbia entered into a short-term credit line agreement, in the amount of RSD 117,182,900 (equivalent to EUR 1,000,000; approximately $
Hipotekarna Bank Facility
On March 21, 2024, MeridianBet Montenegro entered into a long-term loan, in the amount of EUR 2,000,000 (approximately $
For the nine months ended September 30, 2026, the Company paid $
Igor Salindrija Facility
On April 1, 2024, Meridian Malta entered into a long-term loan, in the amount of EUR 2,000,000 (approximately $
On January 5, 2026, the Company and Igor Salindrija entered into Addendum No. 1 to the loan agreement, which amended the repayment schedule while leaving all other terms and conditions unchanged. Under the amended repayment schedule, the outstanding principal was to be repaid in four installments of EUR
On April 2, 2026, the Company and Igor Salindrija entered into Addendum No. 2 to the Igor Salindrija loan agreement. Under the amended terms, the parties acknowledged that the outstanding principal balance as of April 1, 2026 was EUR
| 35 |
| Table of Contents |
On October 13, 2026, with effect from September 1, 2026, the Company and Igor Salindrija entered into Addendum No. 3 to the Igor Salindrija loan agreement. Under the amended terms, the parties acknowledged that the outstanding principal balance as of September 1, 2026 was EUR
For the nine months ended September 30, 2026, the Company paid $
Makerplay Entretenimento & Marketing Limitada Facility
On December 1, 2025, the Company entered into a loan agreement with Makerplay Entretenimento & Marketing Limitada (“Makerplay”), under which the Company received a loan in the amount of R$5,500,000 (approximately $
Loans from former shareholders of Fair Bet Limited
On January 14, 2026, the Company entered into a Share Purchase Agreement (“SPA”) to acquire Fair Bet Limited. Pursuant to the terms of the SPA, the Company assumed an existing shareholder loan that had been provided to Fair Bet Limited by its former shareholders prior to the acquisition. The SPA provides that Fair Bet Limited is obligated to repay the outstanding shareholder loans to the former shareholders. The outstanding loan balance at the acquisition date was approximately EUR 264,783 and is recognized as a short-term financial liability in the accompanying consolidated financial statements. The liability is measured at amortized cost and is reduced as repayments are made.
For the nine months ended September 30, 2026, the Company paid $
As of September 30, 2026, long term liabilities amount to $
Maturities of loans as of September 30, 2026 and December 31, 2025, are as follows:
Loans |
| As of September 30, 2026 |
|
| As of December 31, 2025 |
| ||
Within 1 year |
| $ |
|
| $ |
| ||
After 1 year |
|
|
|
|
|
| ||
Present value of loan liability |
| $ |
|
| $ |
| ||
| 36 |
| Table of Contents |
NOTE 16 – OTHER LIABILITIES
Other Current Liabilities
As of September 30, 2026, and December 31, 2025, other current liabilities were $
Description |
| As of September 30, 2026 |
|
| As of December 31, 2025 |
| ||
Staff costs payable |
| $ |
|
| $ |
| ||
Other current payables |
|
|
|
|
|
| ||
Rent deposits received |
|
|
|
|
|
| ||
Customer deposit |
|
|
|
|
|
| ||
Total other current liabilities |
| $ |
|
| $ |
| ||
Other current payables include any amounts due to parties that do not meet the requirements to be classified as accounts payable, such as interest payable, fines, penalties, employee receivables, and fees.
Other Non-Current Liabilities
As of September 30, 2026, and December 31, 2025, other non-current liabilities were $
|
| As of September 30, 2026 |
|
| As of December 31, 2025 |
| ||
Leases payable |
| $ |
|
| $ |
| ||
Retirement benefits |
|
|
|
|
|
| ||
Total other non-current liabilities |
| $ |
|
| $ |
| ||
NOTE 17 – RELATED PARTY TRANSACTIONS
All related-party transactions have been recorded at the amount of consideration established and agreed to by the related parties.
Articulate Pty Ltd, 50% owned by Marla Goodman (wife of the Company’s former Chief Executive Officer) and 50% owned by Mr. Goodman, the Company’s former Chief Executive Officer
On April 1, 2024, following the MeridianBet Acquisition, the Company assumed a March 1, 2018 License Agreement between Articulate Pty Ltd (“Articulate”) and Golden Matrix, in which Articulate received a license from the Company to use the GM2 Asset technology and agreed to pay Golden Matrix a usage fee calculated as a certain percentage of the monthly content and software usage within the GM2 Asset system.
The License Agreement was mutually terminated, effective January 1, 2025. As of September 30, 2026 and December 31, 2025, the amount receivable from Articulate was $
Elray Resources Inc., Mr. Goodman, the Company’s former CEO, serves as CEO& Director of Elray, and Ms. Feng, the Company’s former COO, serves as Treasurer and Director of Elray.
On April 1, 2024, the Company assumed a December 7, 2022, Software License Agreement between Golden Matrix and Elray Resources, Inc. (“Elray”), in which the Company granted Elray a license for the use and further distribution of certain of Golden Matrix’s online games. The license provides Elray the right to use the online games solely for the purpose of running an online blockchain casino enterprise.
During the nine months ended September 30, 2026, and 2025, revenues from Elray were $
| 37 |
| Table of Contents |
Top Level doo Serbia and Network System Development GMBH
The accounts receivable-related party from Top Level doo Serbia and Network System Development GMBH, amounts to $
NOTE 18 – EQUITY
The historical shareholders’ equity of MeridianBet Group (the accounting acquirer /legal acquiree) prior to the reverse merger (the MeridianBet Acquisition) has been retrospectively adjusted (a recapitalization) for the equivalent number of shares received by the former owners of MeridianBet Group as required under ASC 805.
Preferred Stock
The Company has
As of September 30, 2026, and December 31, 2025,
As of September 30, 2026, and December 31, 2025,
As of September 30, 2026, and December 31, 2025,
Common Stock
As of September 30, 2026, and December 31, 2025,
Common Stock Transactions
As of December 31, 2025, the Company had accrued quarterly salary compensation of $
In June 2026, the Company, Zoran Milošević and Snežana Božović, mutually agreed to reduce the number of shares to be issued in settlement of the accrued salary compensation to reflect shares previously issued to each of them upon the vesting of restricted stock units under the Company's 2023 Equity Incentive Plan. Accordingly, the number of shares to be issued in settlement of the accrued salary compensation was reduced by
On December 15, 2025, the Company entered into a Sponsorship Agreement with Dejan Petković, a former professional soccer player, to serve as the Company's brand ambassador in Brazil. On July 10, 2026, the parties executed an amendment expanding his engagement to a global brand ambassador role and revising the compensation terms. Under the amended agreement, the Company agreed to pay total compensation of $
| 38 |
| Table of Contents |
On September 29, 2026, Meridian Tech Društvo Sa Ograničenom Odgovornošću Beograd, a private limited company organized under the laws of the Republic of Serbia and wholly-owned subsidiary of the Company (“Meridian Serbia”), and Zoran Milošević, the Chief Executive Officer of the Company and Meridian Serbia (the “Executive”), and the Company, entered into a First Amendment to Employment Agreement (the “Employment Amendment”). The Employment Amendment amended that certain Employment Agreement entered into between Meridian Serbia and the Executive with a start date of June 1, 2024 (the “Employment Agreement”). Pursuant to the Employment Amendment, effective as of January 1, 2026, the Executive agreed to reduce his annual salary to $
2018 Equity Incentive Plan
The following table represents the stock option activity for the nine months ended September 30, 2026:
Options |
| Number Outstanding |
|
| Weighted Average Exercise Price |
| ||
Options Outstanding as of December 31, 2025 |
|
|
|
| $ |
| ||
Options expired |
|
| ( | ) |
|
|
| |
Options exercised |
|
|
|
|
| - |
| |
Options Outstanding as of September 30, 2026 |
|
| - |
|
| $ |
| |
Options Exercisable as of September 30, 2026 |
|
|
|
| $ | - |
| |
The total compensation cost related to stock options granted was $
2022 Equity Incentive Plan (the “2022 Plan”)
The 2022 Plan provides an opportunity for any employee, officer, director or consultant of the Company, subject to limitations provided by federal or state securities laws, to receive (i) incentive stock options (to eligible employees only); (ii) nonqualified stock options; (iii) restricted stock; (iv) restricted stock units, (v) stock awards; (vi) shares in performance of services; (vii) other stock-based awards; or (viii) any combination of the foregoing. In making such determinations, the Board of Directors may take into account the nature of the services rendered by such person, his or her present and potential contribution to the Company’s success, and such other factors as the Board of Directors of the Company in its discretion shall deem relevant.
The following table represents Restricted Stock Unit (RSU) activity under the 2022 Plan for the nine months ended September 30, 2026:
RSUs |
| Number Outstanding |
| |
RSUs Outstanding as of December 31, 2025 |
|
|
| |
RSUs granted |
|
| - |
|
RSUs forfeited |
|
| ( | ) |
RSUs vested and settled in shares of common stock |
|
| - |
|
RSUs Outstanding as of September 30, 2026 |
|
|
| |
| 39 |
| Table of Contents |
2023 Equity Incentive Plan (the “2023 Plan”)
The 2023 Plan provides an opportunity for any employee, officer, director or consultant of the Company, subject to limitations provided by federal or state securities laws, to receive (i) incentive stock options (to eligible employees only); (ii) nonqualified stock options; (iii) restricted stock; (iv) restricted stock units, (v) stock awards; (vi) shares in performance of services; (vii) other stock-based awards; or (viii) any combination of the foregoing. In making such determinations, the Board of Directors may take into account the nature of the services rendered by such person, his or her present and potential contribution to the Company’s success, and such other factors as the Board of Directors of the Company in its discretion shall deem relevant. Subject to adjustment in connection with the payment of a stock dividend, a stock split or subdivision or combination of the shares of common stock, or a reorganization or reclassification of the Company’s common stock, the aggregate number of shares of common stock which may be issued pursuant to awards
The following table represents the RSUs activity under the 2023 Plan for the nine months ended September 30, 2026:
RSUs |
| Number Outstanding |
| |
RSUs Outstanding as of December 31, 2025 |
|
|
| |
RSUs granted |
|
| - |
|
RSUs forfeited |
|
| ( | ) |
RSUs vested |
|
| ( | ) |
RSUs Outstanding as of September 30, 2026 |
|
|
| |
The total compensation cost related to RSUs was $
NOTE 19 – SEGMENT REPORTING AND GEOGRAPHIC INFORMATION
The Company operates its business through three operating segments – MeridianBet Group, GMAG, RKings & CFAC (discussed in greater detail below), which are based on its business activities and organization. The reportable segments are segments of the Company for which separate financial information is available and for which operating results are evaluated regularly by the Company’s chief operating decision maker (“CODM”) in deciding how to allocate resources as well as in assessing performance.
The Company’s chief operating decision maker is a management function comprised of two individuals. These two individuals are the Company’s Chief Executive Officer and Chief Financial Officer. The Company’s chief operating decision makers and management utilize revenues and operating income as the primary profit measures for its reportable segments.
| 40 |
| Table of Contents |
The Company’s three reportable segments are as follows:
· | MeridianBet Group – This segment includes revenues from retail sports betting, retail casinos, online sports betting, online casinos, and bars operated by MeridianBet Group companies across Serbia, Bosnia, Montenegro, Africa, Central and South America, and other European regions. |
· | GMAG – This segment generates revenue through the Company’s resale of third-party gaming content, primarily serving customers in the Asia-Pacific region. |
· | RKings & CFAC – This segment includes revenues from pay-to-enter prize competitions and trade promotions, conducted through RKings in the UK and Classics in Australia. |
In addition to these reportable segments, the Company has certain corporate costs that are not directly attributable to its brands and, therefore, are not allocated to its segments. Such costs primarily include certain share-based compensation, and holding company expenses including administrative, legal fees, audit fees, and filing fees. In addition, certain other costs are not allocated to segments, including impairment costs, and restructuring costs which include charges or expenses attributable to acquisition-related costs. The segment structure is consistent with how the Company’s CODM plans and allocates resources, manages the business and assesses performance. All intercompany revenues are eliminated in consolidation and are not reviewed when evaluating segment performance.
The following table presents the key performance information of the Company’s reportable segments:
|
| For the three months ended |
| |||||||||||||
|
| September 30, 2026 |
| |||||||||||||
|
| MeridianBet Group |
|
| GMAG |
|
| RKings & CFAC |
|
| Total |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Revenues |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Cost of revenue |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Segment gross profit |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Salaries and wages |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Professional fees |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Marketing expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Rents and utilities |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Bad debt expense |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Segment income/(loss) from operations |
|
|
|
|
| ( | ) |
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Holding company expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Stock-based compensation expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Impairment loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Depreciation expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Amortization expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total income/(loss) from operations |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | ( | ) |
| 41 |
| Table of Contents |
|
| For the nine months ended |
| |||||||||||||
|
| September 30, 2026 |
| |||||||||||||
|
| MeridianBet Group |
|
| GMAG |
|
| RKings & CFAC |
|
| Total |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Revenues |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Cost of revenue |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Segment gross profit |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Salaries and wages |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Professional fees |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Marketing expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Rents and utilities |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Bad debt expense |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Segment income/(loss) from operations |
|
|
|
|
| ( | ) |
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Holding company expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Stock-based compensation expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Impairment loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Depreciation expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Amortization expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total income/(loss) from operations |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | ( | ) |
Total revenues by geographic region are as follows:
|
| For the three months ended |
|
| For the nine months ended |
| ||||||||||
|
| September 30, 2026 |
|
| September 30, 2025 |
|
| September 30, 2026 |
|
| September 30, 2025 |
| ||||
UK |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Europe (UK-Excl.) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Central and South America |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Asia Pacific (Australia Excl.) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Australia |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Africa |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Assets and liabilities are not separately analyzed or reported to the CODM and are not used to assist in decisions surrounding resource allocation and assessment of segment performance. As such, an analysis of segment assets and liabilities has not been included in this financial information.
NOTE 20 – EFFECTIVE TAX RATE
We are subject to federal and state income taxes in the United States, as well as income taxes in the foreign jurisdictions in which we operate. Our effective tax rate was -
NOTE 21 – COMMITMENTS AND CONTINGENCIES
Legal Matters
The Company may be involved, from time to time, in litigation or other legal claims and proceedings involving matters associated with or incidental to our business, including, among other things, matters involving breach of contract claims, and other related claims and vendor matters; however, none of the aforementioned matters are currently pending, except as discussed below. The Company believes that we are not exposed to matters that will individually, or in the aggregate, have a material adverse effect on our financial condition or results of operations.
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Notwithstanding the above, the outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting period for amounts in excess of management’s expectations, the Company’s financial condition and operating results for that reporting period could be materially adversely affected.
The Company is involved in a dispute with one of its Cyprus subsidiaries’ minority owners. Meridian Malta owns 51% of the Cypriot company, Fair Champions Meridian Ltd. (“Fair Champions”). Meridian Malta and the minority shareholders of Fair Champions are engaged in two related court actions. They were also engaged in another two court actions (one from each side) in which they were seeking the liquidation of Fair Champions. These liquidation applications were closed without damages. The former proceedings are pending in the District Court of Limassol, Cyprus, being 1) Case No. 1080/2017, filed on 08/05/2017; and 2) Case No. 418/2017, filed on February 17, 2017.
Meridian Malta is carrying out a dispute with the Greek tax authorities (acting through the Audit Centre for Large Enterprises), before the competent Greek Courts. The MeridianBet Group has conducted business remotely (i.e., via internet) in Greece through Meridian Malta. Meridian Malta—like two dozen other remote betting entities—is locked in a tax dispute with the Greek tax authorities relating to tax years 2012 through 2014. The Greek authorities issued initial assessments, which Meridian Malta then appealed. The bases of the appeals included arguments that (i) Greece unlawfully assessed Meridian Malta’s tax liability; and (ii) Meridian Malta paid taxes on its Greek revenues in Malta, so it is exempt from further taxes under the two countries’ double taxation treaty. The appeals are at various stages of adjudication. These actions, instituted in December 2018 and April 2019, are pending in the Administrative Court of Appeal of Athens and the Supreme Court of Greece, respectively. The action relating to tax year 2012, pending before the Administrative Court of Appeal of Athens, has been resolved in the Company’s favor: by Decision No. 2957/2025 the Court rejected the appeal of the Tax Office, no cassation was filed before the Supreme Court within the statutory deadline, which has now expired, and the Company has obtained the relevant court certificate confirming that the case is final. The Company is vigorously defending the remaining dispute and believes that it will be resolved in the Company’s favor, but out of prudence, the Company has accrued a tax expense of $
The Company is in a dispute with Mr. Paul Hardman, one of the former owners of RKings, regarding certain consideration totaling approximately $
The Company is involved in various labor and tax-related disputes in the ordinary course of business. These matters include, but are not limited to, employee claims, wage and hour disputes, and tax assessments by regulatory authorities. The majority of disputes relate to labor disputes with former employees of the MeridianBet Group, which represents more than 90% of the total number of disputes. While the outcomes of such matters are inherently uncertain, based on current information and management’s assessment, none of these disputes are expected to have a material impact on the Company’s financial position, results of operations, or cash flows. The Company continues to monitor these matters and will update its disclosures as necessary should any material developments arise.
UK Value Added Tax – RKings
The Company's UK subsidiary, RKings operates an online prize competition business. There is ongoing uncertainty regarding the application of UK Value Added Tax ("VAT") legislation to certain prize competition activities, including whether such activities qualify for exemption from VAT.
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The Company is monitoring developments in the interpretation and application of the relevant VAT legislation, including the potential implications for RKings' historical and future operations.
Depending on the ultimate interpretation and application of the VAT rules, RKings could become subject to additional VAT liabilities relating to prior periods, together with potential interest and penalties.
Based on the information currently available, management has not recorded a liability in connection with this matter, as it has not concluded that a loss is probable. However, management considers a loss to be reasonably possible. Due to the uncertainties surrounding the interpretation of the relevant legislation, the periods potentially affected and the ultimate outcome of any assessment, the Company is currently unable to reasonably estimate the amount or range of any potential loss.
NOTE 22 – MERIDIANBET GROUP PURCHASE AGREEMENT
On January 12, 2023, Golden Matrix entered into a Sale and Purchase Agreement of Share Capital (the “Original Purchase Agreement”) with the Meridian Sellers, the owners of MeridianBet Group.
On June 28, 2023, Golden Matrix entered into an Amended and Restated Sale and Purchase Agreement of Share Capital dated June 27, 2023, with the Meridian Sellers on June 28, 2023 (as amended from time to time, the “A&R Purchase Agreement”).
On April 9, 2024,
Pursuant to the terms of the MeridianBet Purchase Agreement, Golden Matrix was also required to pay the Meridian Sellers:
Promissory Notes
The Notes in the aggregate amount of $
On April 27, 2026, and effective for all purposes as of April 9, 2026, the Meridian Sellers and the Company entered into a First Amendment to Promissory Notes (the “First Amendment”), which amended each of the promissory notes to extend the due date thereof to November 9, 2026, effective as of April 9, 2026, and pursuant to which each of the Meridian Sellers waived any prior defaults which have occurred under the notes.
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On September 28, 2026, the Company entered into a Second Amendment to the Promissory Notes. Pursuant to the amendment, the maturity date of the Promissory Notes was extended to November 1, 2031, and the requirement for monthly interest payments was eliminated. The Promissory Notes will no longer accrue interest unless an event of default occurs, in which case interest will accrue at the lesser of 12% per annum or the maximum rate permitted by applicable law. The Company may settle the outstanding balance, in whole or in part, at any time prior to the maturity date at its sole discretion.
Fourth Amendment to Amended and Restated Sale and Purchase Agreement of Share Capital and Related Transactions
On June 17, 2024, and effective on April 9, 2024, the Company and the Meridian Sellers entered into a Fourth Amendment to Amended and Restated Sale and Purchase Agreement of Share Capital (the “Fourth Amendment”), which amended the MeridianBet Purchase Agreement to (a) clarify the previous payment of $
The Deferred Cash Convertible Promissory Note is convertible into shares of common stock of the Company, at any time, from time to time, at the option of Milovanović, with written notice to the Company, based on a conversion price, determined at the option of Milovanović of either (A) (i) the average closing sales price of the Company’s common stock on the Nasdaq market over the thirty trading day period ending on the trading day immediately preceding the date of the conversion notice; (ii) minus a discount of 15%; or (B) $36.00, subject to a floor of $24.00 per share.
On July 1, 2024 and July 31, 2024, a total of $
On January 13, 2025, Mr. Milovanović converted the $
Fifth Amendment to Amended and Restated Sale and Purchase Agreement of Share Capital
As part of the consideration for the MeridianBet Acquisition, we agreed to pay the Meridian Sellers (i) $
On October 1, 2024, and effective on October 1, 2024, we and the Meridian Sellers entered into a Fifth Amendment to Amended and Restated Sale and Purchase Agreement of Share Capital (the “Fifth Amendment”), which amended the MeridianBet Purchase Agreement to (a) provide that the Company had the option, in its sole discretion, to accelerate the issuance of the Contingent Shares; and (b) to satisfy the payment of the Contingent Cash Consideration owed to the Meridian Sellers as follows:
October 2024 Debt Conversion Agreement
Also on October 1, 2024, the Company entered into a Debt Conversion Agreement (the “October 2024 Debt Conversion Agreement”) with each of the Meridian Sellers. Pursuant to the October 2024 Debt Conversion Agreement, the Company and
Pursuant to the October 2024 Debt Conversion Agreement, which included customary representations and warranties of the parties, the Meridian Sellers agreed that the shares of common stock issuable in connection therewith were in full and complete satisfaction of the portions of the Contingent Cash Consideration payable to such persons.
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Sixth Amendment to Amended and Restated Sale and Purchase Agreement of Share Capital
On, and effective on, April 9, 2025, we and the Meridian Sellers entered into a Sixth Amendment to Amended and Restated Sale and Purchase Agreement of Share Capital (the “Sixth Amendment”), which amended the MeridianBet Purchase Agreement to
Seventh Amendment to Amended and Restated Sale and Purchase Agreement of Share Capital
On, and effective on, August 21, 2025,
Also on August 21, 2025, the Company entered into a Post-Closing Cash Conversion Agreement with Milovanović, Milošević, and Božović.
Pursuant to the August 2025 Cash Conversion Agreement, the Company and
Eighth Amendment to Amended and Restated Sale and Purchase Agreement of Share Capital
On September 9, 2025, and effective on, August 29, 2025, we and the Sellers entered into an Eighth Amendment to Amended and Restated Sale and Purchase Agreement of Share Capital (the “Eighth Amendment”), which amended the MeridianBet
Between September 9, 2025 and September 26, 2025, the Company issued an aggregate of
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Ninth Amendment to Amended and Restated Sale and Purchase Agreement of Share Capital
On November 7, 2025, and effective on, October 9, 2025, we and the Sellers entered into a
On November 7, 2025, the Company issued
Additionally, pursuant to the Ninth Amendment, the due date of the remaining 18 Month Non-Contingent Post-Closing Cash Consideration owed to the Sellers ($
Tenth Amendment to Amended and Restated Sale and Purchase Agreement of Share Capital
On September 28, 2026, the Company entered into a Tenth Amendment to the Amended and Restated Sale and Purchase Agreement of Share Capital with the Meridian Sellers.
Series C Preferred Stock
On April 4, 2024, in contemplation of the closing of the transactions contemplated by the MeridianBet Purchase Agreement, and pursuant to the power provided to Golden Matrix by the Articles of Incorporation of Golden Matrix, as amended, Golden Matrix’s Board of Directors approved the adoption of, and filing of, a Certificate of Designation of Golden Matrix. Establishing the Designation, Preferences, Limitations and Relative Rights of Its Series C Preferred Stock (the “Series C Designation”), which was filed with, and became effective with, the Secretary of State of Nevada on the same date. The Series C Designation designated 1,000 shares of Series C Preferred Stock. The
The below is a summary of the rights and preferences of the Series C Preferred Stock:
Voting Rights. The holders of the Series C Preferred Stock, voting as a class, vote together with the holders of the Company’s common stock on all shareholder matters. At each vote, each share of Series C Preferred Stock entitles the holder 625 votes on all matters presented to the Company’s shareholders for a vote of shareholders, whether such vote is taken in person at a meeting or via a written consent (625,000 votes in aggregate for all outstanding shares of Series C Preferred Stock).
Additionally, for so long as (a) the Company’s Board of Directors has at least five members; and (b) the Meridian Sellers collectively beneficially own more than 40% of the Company’s outstanding common stock (without taking into account shares voted by, or convertible into pursuant to, the Series C Preferred Stock) and for so long as the Series C Preferred Stock is outstanding, the holders of the Series C Preferred Stock, voting separately, have the right to appoint two members to the Company’s Board of Directors. If (x) the Company’s Board of Directors has less than five members, or (y) the Meridian Sellers ever collectively beneficially own 40% or less of the Company’s outstanding common stock, the holders of the Series C Preferred Stock, voting separately, have the right to appoint one member to the Board of Directors. The holders of the Series C Preferred Stock also have the sole right to remove such persons appointed by the Series C Preferred Stock and to fill vacancies of such appointees.
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See also the following table summarizing the above director appointment rights provided to the holders of the Series C Preferred Stock:
Percent Beneficial Ownership of Common Stock held by the Meridian Sellers |
| Total Directors on the Board of Directors |
|
Total Directors the Holders of the Series C Preferred Stock Can Appoint |
Greater than 40% |
| Five |
| Two |
| Less than five |
| One | |
40% or less, but at least 10% |
| Any number |
| One |
Less than 10% |
| Any number |
| None (because under that threshold, the Series C Preferred Stock automatically converts into common stock, meaning the Director-appointment right terminates) |
The Series C Preferred Stock also requires the consent of the holders of at least a majority of the issued and outstanding shares of Series C Preferred Stock to (i) amend any provision of the designation of the Series C Preferred Stock, (ii) increase or decrease (other than by redemption or conversion) the total number of authorized shares of any preferred stock of the Company, (iii) adopt or authorize any new designation of any preferred stock, (iv) amend the Articles of Incorporation of the Company in a manner which adversely affects the rights, preferences and privileges of the Series C Preferred Stock, (v) effect an exchange, or create a right of exchange, cancel, or create a right to cancel, of all or any part of the shares of another class of shares into shares of Series C Preferred Stock, (vi) issue any additional shares of preferred stock, or (vii) alter or change the rights, preferences or privileges of the shares of Series C Preferred Stock so as to affect adversely the shares of Series C Preferred Stock.
Dividend Rights. None.
Liquidation Preference. None.
Conversion Rights. The holders of the Series C Preferred Stock have the right to convert each share of Series C Preferred Stock into shares of the Company’s common stock at a conversion rate equal to one-twelfth (1/12) of a share of the Company’s common stock for each share of Series C Preferred Stock, subject to further adjustment as provided in the Certificate of Designation, including adjustments for stock splits, reverse stock splits, and similar recapitalizations.
The Series C Preferred Stock also provides for the automatic conversion of all outstanding shares of Series C Preferred Stock into common stock of the Company, at the then-effective conversion rate, on the date that the aggregate beneficial ownership of the Company’s common stock (calculated pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended), calculated without regard to any shares of common stock issuable upon conversion of the Series C Preferred Stock, of the Meridian Sellers (collectively), falls below 10% of the Company’s common stock then outstanding, determined without giving effect to the shares of common stock issuable upon conversion of the Series C Preferred Stock, or on the first business day thereafter that the Company becomes aware of such event.
Redemption Rights. None.
Transfer Rights. The Series C Preferred Stock is not transferrable by the Meridian Sellers.
Nominating and Voting Agreement
On April 9, 2024, as a required term of, and in connection with, the closing of the MeridianBet Purchase Agreement, the Company entered into a Nominating and Voting Agreement (the “Voting Agreement”) between the Company, Anthony Brian Goodman, the Company’s then Chief Executive Officer and director, Luxor Capital LLC, which is owned and controlled by Mr. Goodman, and each of the Meridian Sellers.
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Pursuant to the Voting Agreement, the Meridian Sellers and Mr. Goodman agreed for two years following the closing of the MeridianBet Purchase Agreement (i.e., until April 9, 2026) to:
| (1) | vote their voting shares of the Company “For” appointment of those director nominees, nominated to the Board of Directors from time to time by the independent Nominating and Corporate Governance Committee of the Board of Directors of the Company (the “Committee”) which Committee is required to be composed of two members (one appointed by the members of the Board of Directors not appointed by the Meridian Sellers and one appointed by the member(s) of the Board of Directors appointed by the Meridian Sellers); and |
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| (2) | not vote their shares to remove any directors nominated by the Committee, subject to certain rights to withhold votes for certain persons disqualified from serving as a member of the Board of Directors as described in the Voting Agreement. |
The Voting Agreement also included restrictions on the ability of the Meridian Sellers to transfer shares of the Company which they hold, unless such transferees entered into a joinder to the Voting Agreement and included a provision allowing any member of the Board nominated by the Meridian Sellers to share confidential information with the Meridian Sellers, but otherwise prohibiting them from sharing such confidential information with any other person.
The Voting Agreement expired pursuant to its terms on April 9, 2026.
Day-to-Day Management Agreement
Also on April 9, 2024, as a required term of, and in connection with, the closing of the MeridianBet Purchase Agreement, Golden Matrix and Zoran Milošević (one of the Meridian Sellers) entered into a Day-to-Day Management Agreement (“Management Agreement”), which prohibits the Company or its executives from materially interfering in the operation of the business of, and day-to-day operations of, the MeridianBet Group by its current leadership (i.e., Mr. Milošević, as Chief Executive Officer of MeridianBet Group), while the Voting Agreement is in place. The purpose of the agreement is to ensure the continued running of the MeridianBet Group in the ordinary course, for a finite period of time, by one or more individuals who (i) have grown such entities to their current, profitable levels, earning them an important level of corporate and business knowledge; and (ii) have the native-language abilities to easily communicate with mid-level and low-level employees, among other material advantages. The violation of that materiality-based restriction would also raise an option for the Meridian Sellers to suspend or terminate (at their discretion) the Voting Agreement. The Management Agreement does not, other than in connection with the day-to-day operations of MeridianBet Group, restrict the Board of Directors or management’s ability to manage MeridianBet Group or the Company as a whole.
Pursuant to the Management Agreement, Mr. Milošević serves as the manager of MeridianBet Group and supervises and directs the day-to-day operation of MeridianBet Group as Chief Executive Officer thereof. The initial term of the Management Agreement is two years (i.e., until April 9, 2026), unless otherwise extended with the mutual agreement of the parties. Mr. Milošević has the right to terminate the Management Agreement immediately upon the termination of the Voting Agreement; and Mr. Milošević has the right to terminate the Voting Agreement immediately upon the expiration or termination of the Management Agreement.
If Mr. Milošević were to pass away, become materially disabled, or cease to be our or a MeridianBet Group employee during the term of the Management Agreement, then the Management Agreement would not terminate, and instead the other Meridian Sellers would have the right to substitute another person in Mr. Milošević’s role.
In consideration for the services agreed to be provided by Mr. Milošević under the Management Agreement, the Company will pay Mr. Milošević $10 per year.
Pursuant to the Management Agreement, at least once per calendar year, but more frequently at the request of Mr. Milošević and/or the Company’s Chief Executive Officer (the “CEO”)(but not more frequently than semi-annually), Mr. Milošević shall prepare a budget for the upcoming year (or such shorter period as the parties may in their discretion determine) for MeridianBet Group (the “Budget”), which is required to be approved by the CEO.
The Management Agreement expired pursuant to its terms on April 9, 2026.
Reverse Merger
Immediately following the MeridianBet Acquisition, the Meridian Sellers collectively owned approximately 69.2% of the Company’s outstanding shares of common stock (with Milovanović owning 58.8%), and 67.0% of the Company’s outstanding voting shares (with Milovanović owning 57.0%). As a result of the MeridianBet Acquisition, the Meridian Sellers became the majority stockholders of the Company and received rights to appoint certain persons to the Board of Directors of the Company pursuant to the Series C Preferred Stock (as discussed in greater detail above under “Series C Preferred Stock”).
The MeridianBet Acquisition has been accounted for as a business combination for accounting purposes, with MeridianBet Group being deemed the accounting acquirer and Golden Matrix being deemed the accounting acquiree. Therefore, the historical basis of MeridianBet Group’s assets and liabilities have not been remeasured as a result of the acquisition. As described more fully in “Note 1 – Basis of Presentation and Accounting Policies” and above, the assets and liabilities of Golden Matrix have been recorded at their fair value at the acquisition date and are included in the Company’s consolidated financial statements. In identifying MeridianBet Group as the acquiring entity, the companies considered the structure of the acquisition, the relative equity ownership and the largest portion of the voting rights, in the combined companies after the closing of the acquisition, along with the composition of the board of directors.
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The consolidated financial information has been prepared using the acquisition method of accounting in accordance with ASC Topic 805, “Business Combinations” (“ASC 805”), which requires, among other things, that assets acquired, and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date. The acquisition method of accounting uses the fair value concepts defined in ASC Topic 820, “Fair Value Measurement” (“ASC 820”). The fair value of purchase consideration was allocated to the assets acquired and liabilities assumed based on their respective fair values, and the allocation is final.
The following is the allocation of the purchase price to acquired identifiable assets and assumed liabilities:
Purchase Price Allocation |
| Amounts |
| |
Cash and cash equivalents |
| $ |
| |
Account receivable, net |
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| |
Inventory, prizes |
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| |
Property, plant & equipment |
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| |
Other assets |
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liabilities |
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| ( | ) |
Net tangible assets |
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| |
Goodwill |
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| |
Intangible assets |
|
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| |
Fair value of total estimated purchase consideration transferred |
| $ |
| |
NOTE 23 – SUBSEQUENT EVENTS
Issuance of Common Stock
On October 6, 2026, the Company issued
Brazil
In accordance with Brazilian Provisional Measure No. 1,394/2026, the Company’s Brazilian subsidiary ceased accepting new customer deposits on September 25, 2026, and its betting website and applications became unavailable on October 6, 2026.
Igor Salindrija Loan
On October 13, 2026, with effect from September 1, 2026, the Company entered into Addendum No. 3 to the Igor Salindrija loan agreement.
Officer Appointment
On October 2, 2026, the Board of Directors appointed Zhe ‘Scott’ Yan as Chief Accounting Officer, Principal Financial Officer and Principal Accounting Officer.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
General Information
The following discussion should be read in conjunction with the financial statements for the fiscal year ended December 31, 2025 and notes thereto, which the Company filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2026 as part of our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report”) and Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our 2025 Annual Report.
Statements made in this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” are subject to forward-looking statements and various risks and should be read in connection with the “Special Note Regarding Forward-Looking Statements”, above and “Risk Factors”, described below and incorporated by reference into this Report, as described below.
As used in this Report, “EUR”, “€” or “Euros” means the official currency of the member states of the European Union; “GBP”, “£” or “Pounds” means the currency of the United Kingdom and its associated territories; “USD”, “$” or “dollars” means U.S. dollars; “RSD” or “dinars” means the Serbian Dinar, the official currency of Serbia; “AUD” means Australian dollars, “BRL” or “R$” means the Brazilian Real, the official currency of Brazil, “PEN” means the Peruvian Sol, the official currency of Peru, and “TZS” means the Tanzanian Shilling, the official currency of Tanzania, provided that all dollar amounts in this Report are in U.S. dollars unless otherwise stated.
Our Business
We (i) operate online sports betting, online casino, and gaming operations in 19 jurisdictions across Europe, Africa and Central and South America, (ii) are an innovative provider of enterprise Software-as-a-Service (“SaaS”) solutions for online casino operators and online sports betting operators, commonly referred to as iGaming operators, and (iii) offer pay-to-enter prize competitions in the United Kingdom (UK) and lead trade promotions in Australia, providing members with free prizes.
Online Sports Betting, Online Casino, And Gaming Operations
We are a well-established brand and operator in the sports betting and gaming industry, spanning across 19 markets in Europe, Central and South America, and Africa. We employ approximately 1,200 personnel, operating both online (mobile and web) and approximately 700 company-owned or franchised betting shops, with a primary focus (in those shops) on sports betting, slot machines, and virtual games. Of those 700 shops, approximately 260 are owned by our subsidiaries and approximately 440 shops are owned by franchisees. This is complemented by a variety of slot machines and online casinos, eSports, fixed odds games, and other entertainment options, contingent on the regulatory parameters of the specific jurisdictions. While sports betting is a primary focus, our online casino revenue has grown significantly over the past several years.
Our proprietary technology enables the development of scalable systems capable of operating in multiple jurisdictions and currencies, all the while leveraging the same technical infrastructure for odds setting and risk management. Our technology platform ensures consistency in odds setting and risk management across all the markets that they operate in.
Additionally, our approach to our markets is flexible and omni-channel, encompassing (for example) iOS, Android, mobile browser, desktop, SMS, SST, and USSD applications (discussed in greater detail below) and technologies (as well as customary retail operations). This omni-channel approach seeks to ensure that consumers can access our offerings in different ways, but is also, in certain jurisdictions, essential to overcoming some of the technological challenges faced by consumers in those territories. This approach ensures our customers across diverse regions and connectivity levels can engage with our content and have the same level of user experience.
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More specifically, our technological platforms include:
| · | iOS and Android services: We offer dedicated mobile applications for both iOS and Android users, providing a seamless and user-friendly experience for those who prefer betting on the go. |
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| · | Mobile Browser: Our mobile website is optimized for various mobile browsers, ensuring that customers can access these services conveniently from their mobile devices, even without the need for a dedicated app. |
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| · | Desktop: For customers who prefer a traditional desktop experience, we offer a comprehensive desktop platform that provides a wide range of betting options. |
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| · | SMS (Short Message Service): In regions with limited internet connectivity, such as parts of Africa, we offer SMS betting services. Customers can place bets and receive updates through text messages, making sports betting accessible to a broader audience. |
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| · | SST (Simplified Service Text): Similar to SMS, SST allows customers to place bets and receive information via text messages, ensuring that users with basic mobile phones or limited internet access can still enjoy our services. |
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| · | USSD (Unstructured Supplementary Service Data): USSD is a critical channel in regions where internet access is limited. It enables users to interact with our platform through a simple, menu-based system on their mobile phones. Customers can place bets, check odds, and manage their accounts using USSD, providing inclusivity in markets with varying levels of technological infrastructure. |
A significant component of our revenue is derived from our comprehensive sports betting offerings, which cover over approximately 800 different leagues, providing more than approximately 11 million bets on over approximately 20,000 sporting events each month, inclusive of in-play betting. Notably, the sports betting technology, odds setting, and risk management platforms are proprietary to us.
Our sports betting services cover a wide range of sports, events, and markets to cater to diverse player local preferences. They offer betting options for traditional sports such as soccer (football), basketball, tennis, table tennis, volleyball, handball, ice hockey, American football, baseball, rugby, cricket, horse racing, and more. Additionally, they provide opportunities for betting on emerging trends like e-football and e-sports. In addition to conventional sports, our portfolio extends to niche markets like futsal, floorball, snooker, badminton, beach volleyball, darts, water polo, golf, biathlon, cycling, boxing, martial arts, alpine skiing, skiing, Formula 1, motor sports, NASCAR, kabaddi, and even sports specials related to major competitions. Moreover, we offer betting on political events where regulatory conditions permit, and even allow customers to propose their own bets, provided they meet ethical and legal requirements and are measurable.
Our innovative use of machine learning technologies within our platform serves enhanced customer experiences by offering tailored bets and continuously updated odds over an extensive range of events. This significantly reduces the requirement for manual oversight and intervention.
We offer a diverse and multifaceted portfolio of betting options that extends beyond traditional sports betting. We offer a portfolio of gaming products including casino games, slots, roulette, and other random number generator (RNG) games. We also own our own casino development studio, which has thus far produced 101 proprietary titles, which are available online, where regulatory approval is granted, catering to customers on our proprietary casino platform. RNG games are games in which the outcome is determined by a random element generated by a computer algorithm. These games rely on chance rather than skill or strategy to determine the results.
Our casino offerings include a mix of in-house developed games from Expanse Studios and a selection of titles from renowned third-party casino providers. These providers include Games Global, BluOcean, Relax, Oryx, Playtech, iSoftbet, Leap, Evolution, Easit, Amusnet, Thunderkick, Spribe, Habanero, PG Soft, Greentube, EvoPlay, Wazdan, Pragmatic Play, Playson, Fazi, Endorphina, Spearhead, CT Interactive, Kiron, and Platipus. We have established revenue-sharing agreements with such providers to offer a wide variety of casino games, ensuring a diverse and engaging casino experience for our players via a vibrant and ever-expanding casino game library.
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We have a dedicated iGaming section that covers eSports competitions and allows betting on gaming tournaments. This section caters to the growing interest in competitive gaming and includes popular titles such as CS:GO, Dota 2, Fortnite, LoL, Valorant, Rainbow Six, Crossfire, King of Glory, and more. This diverse range allows us to cater to the preferences of eSports enthusiasts.
We also provide extensive coverage of eSports events, encompassing major tournaments such as The International (Dota 2), League of Legends World Championship, and CS:GO Majors. Additionally, we align our coverage with significant European and international eSports tournaments according to the European competition calendar. This approach ensures that customers have access to a broad spectrum of eSports events, adhering to regulatory guidelines. We also utilize ethical advertising practices and partnerships with specialized gaming websites to connect with eSports enthusiasts effectively.
We offer in-play betting for eSports matches, enabling customers to place bets during the live progression of the games. This real-time betting feature enhances the eSports betting experience while ensuring that we comply with regulatory standards. To maintain the integrity of eSports betting and prevent unethical practices like match-fixing, we collaborate closely with international eSports federations. This partnership allows us to monitor eSports events and swiftly respond to any suspicious activities. In the event of any concerns, we proactively engage with national law enforcement authorities to uphold fair play and regulatory compliance.
We understand that player preferences and market dynamics can vary significantly. To address these differences across the group’s many jurisdictions, we have implemented several unique features and tailored offerings, including:
| · | Localized content: In all markets, we provide localized content and promotions to align with city, country, and regional preferences. This includes language-specific interfaces, promotions tied to local events, and culturally relevant gaming experiences and consumer patterns. |
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| · | Customer engagement: We prioritize responsible gaming and offer tools such as deposit and loss limits, time-out features, and self-exclusion options. These tools empower players to manage their gaming experiences responsibly. |
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| · | Innovative Betting Options: Our “Empty Bets” feature allows customers to propose their own bets, fostering a sense of engagement and personalization. These bets are subject to stringent ethical and legal criteria and must be measurable. These bets are strictly prohibited from involving any unethical or illegal events or activities. We maintain a strong commitment to upholding the highest ethical standards in all aspects of their operations, including innovative betting options. |
Beyond our direct B2C operations, we also operate an indirect B2B franchise model. Under this model, we license our proprietary sports betting technology to local partners, who can operate under our brand or their own brand. This diversifies our revenue stream, enabling us to leverage our technology for added income, while expanding our brand presence.
Status of Development Efforts for New or Enhanced Products, Trends in Market Demand and Competitive Conditions
We are diligently invested in research and development initiatives to attempt to stay at the forefront of our industry and meet the ever-evolving needs of our diverse customer base. As part of this strategy, our developmental efforts are primarily focused on enhancing product offerings, refining user experience, and bolstering our proprietary sports betting technology.
Our products and services compete in a market characterized by rapid technological advances, which means evolving standards in software technology and frequent new product introductions and enhancements that may render the existing ones obsolete. We attempt to continuously refine our software and technology offerings especially in terms of more intensive customer specification, segmentation and personalization, as well as to address regulatory changes in the markets in which we operate and plan to operate. We believe that in order to remain competitive, we need to continuously modify and enhance our technology platform and service offerings.
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In the realm of technological advancement, one of the key development initiatives currently in progress is our integration of advanced Machine Learning (ML) technologies into our sports betting platform. The incorporation of these sophisticated technologies aims to personalize and enrich the betting experience for individual users by offering tailored bets, real-time updating of odds across a vast range of events, and further reducing the need for human oversight. This is expected to not only create a more dynamic, responsive, and intuitive betting experience, but also present a significant competitive advantage in a market where customer experience is paramount.
In terms of market trends, we believe that demand for online betting is on a significant upward trajectory globally, partially due to the lasting impact of the COVID-19 pandemic, which has accelerated the shift from traditional, physical betting shops to online platforms. The industry-wide transition towards mobile betting is another recent major trend, spurred on by the increased penetration of smartphones and improved internet connectivity. In response to these trends, we have successfully implemented an omni-channel approach to our markets, including iOS, Android, mobile browser, desktop, SMS, SST, USSD as well as retail segment (each as discussed above).
With regard to competitive conditions, the betting industry continues to be highly competitive, with new entrants emerging frequently. However, we have maintained a robust competitive position, owing to our advanced technological infrastructure, diversified product portfolio, personalized customer experience, and prudent regulatory compliance. We are focused on maintaining and enhancing this competitive edge through continuous innovation, customer-centricity, and adaptability.
A Provider of Enterprise Software-as-a-Service (“SaaS”) Solutions
Following the closing of the MeridianBet Acquisition and effective April 1, 2024, we, through Golden Matrix, own and operate a proprietary online gaming aggregation and enterprise software platform (the “GM-Ag System”) that serves international customers, primarily in the Asia Pacific region.
The GM-Ag System is an integrated iGaming platform that connects licensed gaming content providers with licensed online gaming operators. The system aggregates gaming content from multiple third-party suppliers and makes such content available to customers through a single technical integration.
Under distribution agreements with licensed and accredited gaming content providers, we have the right to distribute and resell third-party game content to our customers. The content portfolio includes slot games, table games (such as roulette, blackjack and poker), sportsbook offerings, lottery products and live dealer games.
The GM-Ag System provides two principal advantages to licensed online gaming operators.
| · | First, the platform enables operators to access a broad portfolio of third-party gaming content providers through a single technical integration. This aggregation model significantly reduces the time, cost and operational complexity typically associated with establishing multiple direct integrations with individual content suppliers. |
|
|
|
| · | Second, the GM-Ag System offers operators a suite of technology-driven tools designed to support customer acquisition, engagement and retention. These tools include marketing automation capabilities, loyalty program management systems, real-time player analytics and reporting functionalities, which allow operators to manage and optimize player activity across multiple gaming verticals. |
A Provider of Pay To Enter Prize Competitions And Online Trade Promotions Platform
We engage in competition operations in the United Kingdom via our subsidiary RKingsCompetitions Ltd., (“RKings”). We operate competitions to win prizes online such as cars, motorbikes, watches, technology, holidays, luxury gadgets and other items by offering pay to enter prize competitions throughout the UK which are not gambling or a lottery and RKings does not offer B2C online sports betting and/or online casino services. The participants are provided with a route to free entry to the prize competitions as required by UK law. We refer to these as “pay to enter prize competitions”.
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As a purely online business, we have been focusing on enhancing the products and experience we offer to both new and existing players by improving the functionality and responsiveness of the RKingsCompetitions.com website, enhancing the prize values, and reducing the ticket prices.
In addition, we, through GMG Assets Limited, provide the winners of RKings’ prizes with the option of accepting the cash value of the prize. In doing so, GMG Assets purchases the prize from the winner for cash and sells the prize to wholesalers at a margin.
On August 16, 2024, we entered into a Share Exchange Agreement to acquire an 80% ownership interest in Classics Holdings Co. Pty Ltd (“Classics Holdings”). Classics Holdings, through its wholly-owned subsidiary, Classics For A Cause Pty Ltd (“Classics For a Cause”), is an independent online trade promotions company, located in Australia, which operates a well-established business-to-consumer (B2C) platform that offers paid members access to a wide range of discounts from retailers across Australia. Classics For a Cause rewards its members with free entries into promotional giveaways, which feature luxury and classic motor vehicles, and exotic motor vehicles. On August 21, 2024, we closed the transactions contemplated by the Share Exchange Agreement, which was effective as of August 1, 2024.
Recent Regulatory Updates
Brazil—Prohibition on Fixed-Odds Sports Betting and Online Casinos
Brazilian Provisional Measure No. 1,394/2026, issued September 25, 2026, reverses Brazil’s prior framework for legalized fixed-odds betting. That framework was introduced by Law No. 13,756/2018 and further regulated by Law No. 14,790/2023. The measure repeals the relevant chapter of the 2018 law and nearly all of the 2023 law. It prohibits the operation, offering, intermediation and advertising of fixed-odds sports betting and online casino-style betting throughout Brazil, in physical and virtual form, including offerings by foreign operators to persons located in Brazil. Other legally authorized lottery formats remain unaffected.
The measure provides for termination of existing federal, state and Federal District betting authorizations 30 days after publication, without refunds of licensing fees or government compensation, and prohibits new authorizations. New customer deposits were barred beginning on September 25, 2026. Customers could request withdrawal of their balances until October 5, 2026, and betting websites and applications were required to become unavailable starting October 6, 2026. The measure also establishes procedures for returning remaining customer balances, wagers whose results had not been determined by the applicable shutdown deadline (which are voided and refunded in full) and prizes owed. It prohibits related advertising and sponsorships, subject to applicable transitional provisions, and prohibits payment processing except for transactions necessary to close operations and return customer funds. It establishes blocking mechanisms and administrative penalties while preserving operators’ outstanding regulatory, tax and reporting obligations. Separately, pending Bill No. 5,477/2026 would establish criminal offenses relating to fixed-odds betting, including proposed penalties of four to six years’ imprisonment and a fine for operating such betting, and two to four years’ imprisonment and a fine for specified advertising, solicitation and financial-facilitation activities. These proposed offenses have not taken effect.
The measure took effect upon publication. As of the date of this Report, it remains pending congressional consideration for conversion into permanent law, and the initial deadline for deliberation is November 23, 2026, subject to extension. Industry associations have separately petitioned the Federal Supreme Court to suspend the measure, and the Attorney General’s Office has defended it. The constitutional challenges remain pending, and the Court has scheduled a public hearing for November 3, 2026.
See also the risk factor entitled “Regulatory developments and operational uncertainties in Brazil could adversely affect our business, financial condition and results of operations.”, under Part II, Item 1A, “Risk Factors”, below.
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United Kingdom—VAT Treatment of Prize Draws
On February 17, 2026, the UK government answered a Parliamentary Question tabled on February 9, 2026. The answer set out HMRC’s position that prize draws offering both paid and free entry routes are not eligible for VAT exemption and that paid entries are subject to VAT at the standard rate of 20%. Such arrangements commonly include a free postal entry route which, provided the applicable statutory requirements are satisfied, may enable the draw to operate without being regulated as a lottery under the Gambling Act 2005. However, compliance with those gambling law requirements does not itself determine the arrangement’s VAT treatment. In summer 2026, HMRC began writing to operators in the sector asking them to review their VAT accounting and correct any errors identified. This creates potential exposure for operators that have treated paid entries as exempt, including potential liabilities for historical VAT, interest and, depending on the circumstances, penalties.
The principal unresolved issue is whether paid entries in such arrangements nevertheless fall within the UK’s VAT exemption for betting, gaming and lotteries contained in Group 4 of Schedule 9 to the Value Added Tax Act 1994. There remains a dispute as to whether the classification of such arrangements under UK gambling legislation determines their treatment for VAT purposes. The First-tier Tribunal heard Omaze’s appeal concerning the VAT treatment of its paid prize draw entries on October 16, 2026, with a decision expected in spring 2027. Omaze has stated that it has paid UK VAT since 2021 and that it is one of a limited number of prize-draw operators HMRC has required to do so. As of the date of this Report, the outcome remains pending and the anticipated decision date is not a binding deadline. Although the decision of the Tribunal may provide significant guidance for the prize draw sector, its application will depend on the arrangements considered and any subsequent appeals. Pending resolution, affected operators face uncertainty over historical liabilities, future pricing and margins, and the availability of related input VAT recovery.
See also the risk factor entitled “Our UK prize competition business may be subject to significant historical and future value-added tax liabilities, which could materially adversely affect our business, financial condition, results of operations and cash flows”, under Part II, Item 1A, “Risk Factors”, below.
Australia—Limitations on Trade Promotion Gambling Services
On August 26, 2026, Australia’s Interactive Gambling Amendment (Gambling Reform) Act 2026 (Cth) received Royal Assent. It amends the Interactive Gambling Act 2001 (Cth) (IGA) as part of a broader package intended to reduce online gambling harms. The reforms address wagering advertising, customer inducements, self-exclusion and enforcement against illegal gambling services, as well as online lottery products and the definition of trade promotion gambling services. The amendments relevant to trade promotions commence on January 1, 2027. Their purpose is to narrow the circumstances in which a chance-based promotion can operate under the trade promotion exclusion. This has particular implications for businesses offering recurring prize draws along with memberships or subscription fees.
Under the amended definition, to be considered a trade promotion gambling service, a promotion must meet four cumulative conditions:
| 1. | Its sole or primary purpose must be promoting trade. |
| 2. | The promotion must be incidental to supplying goods or services by the service provider or the person for whom the service is provided. |
| 3. | Entry into the promotion must require no payment other than for goods or services at fair market value. |
| 4. | Participation in a promotion must not be offered on an ongoing or recurring basis as part of a system of continuous or repeated draws. |
A separate qualification applies where the service is provided by a qualifying registered charity, subject to the Minister’s power to determine that a service does not qualify. The Minister may also determine that a service is, or is not, a trade promotion gambling service. A state or territory trade promotion permit will not, by itself, bring a service within the federal definition. Consequently, affected operators may need to restructure or discontinue offerings to Australian customers before commencement, and continued operation outside the applicable exclusions may attract enforcement under the IGA.
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See also the risk factor entitled “Changes in Australian gambling laws and regulations could materially and adversely affect our use of Australian trade promotion lottery as part of our business.”, under Part II, Item 1A, “Risk Factors”, below.
Cash Requirements, Liquidity and Capital Resources
We had $15,981,765 cash on hand and a working capital deficit of $9,100,473 as of September 30, 2026. We believe our cash on hand is sufficient to meet our current working capital and capital expenditure requirements for a period of at least twelve months. We will continue to evaluate our long-term operating performance and cash needs and we believe we are well positioned to continue to fund the long-term operations of our business. We may raise additional equity and debt funding in the future, including up to $16.9 million that is available to be sold under our November 22, 2024, Equity Distribution Agreement in at-the-market offerings, subject to potential limitations on such sales pursuant to the “baby shelf” Form S-3 rules, which prevent us from selling more than 1/3rd of our float every 12 months.
Our material cash requirements include the following contractual obligations:
Debt:
The Company currently has the following outstanding debts:
| 1. | Unicredit Bank Facility; |
| 2. | Igor Salindrija Facility; |
| 3. | Makerplay Entretenimento & Marketing Limitada Facility; and |
| 4. | Loans from former shareholders of Fair Bet Limited. |
The outstanding balances of these debt facilities as of September 30, 2026 and December 31, 2025 are presented below:
| As of September 30, |
|
| As of December 31, |
| |||
Description |
| 2026 |
| 2025 | ||||
Unicredit Bank Facility |
| $ | 6,045,008 |
|
| $ | 13,327,795 |
|
Hipotekarna Bank Facility |
| $ | - |
|
| $ | 307,496 |
|
Igor Salindrija Facility |
| $ | 638,357 |
|
| $ | 2,350,000 |
|
Makerplay Entretenimento & Marketing Limitada Facility |
| $ | 1,061,592 |
|
| $ | 999,564 |
|
Loans from former shareholders of Fair Bet Limited |
| $ | 198,466 |
|
| $ | - |
|
See “Note 15 – Short-Term and Long-Term Loans” in the notes to the financial statements included under “Part I. Financial Information—Item 1. Financial Statements”, for more details on these debts.
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Consideration payable to the former owners of MeridianBet Group:
As discussed in greater detail in “Note 22 – MeridianBet Group Purchase Agreement”, in the notes to the financial statements included under “Part I. Financial Information—Item 1. Financial Statements”, the Company incurred the following payment obligations in connection with the MeridianBet Acquisition:
Consideration payable to the former owners of MeridianBet Group |
| Cash Consideration Due |
|
| Cash Consideration Paid |
|
| Paid In Meridian Holdings Inc. Shares |
|
| Cash Consideration Balance as of September 30, 2026 |
| ||||
Closing Cash Consideration |
| $ | 12,000,000 |
|
| $ | 12,000,000 |
|
| $ | - |
|
| $ | - |
|
Deferred Cash Consideration |
|
| 18,000,000 |
|
|
| 11,498,409 |
|
|
| 6,501,591 |
|
|
| - |
|
Contingent Post-Closing Cash Consideration due 5 days after the six-month anniversary of the Closing |
|
| 5,000,000 |
|
|
| 1,709,642 |
|
|
| 3,290,358 |
|
|
| - |
|
12 Month Non-Contingent Post-Closing Cash Consideration |
|
| 10,000,000 |
|
|
| 369,540 |
|
|
| 9,630,460 |
|
|
| - |
|
18 Month Non-Contingent Post-Closing Cash Consideration |
|
| 10,000,000 |
|
|
| 674,328 |
|
|
| 8,700,000 |
|
|
| 625,672 |
|
Promissory Note Consideration |
|
| 15,000,000 |
|
|
| - |
|
|
| - |
|
|
| 15,000,000 |
|
Total |
| $ | 70,000,000 |
|
| $ | 26,251,919 |
|
| $ | 28,122,409 |
|
| $ | 15,625,672 |
|
Pursuant to the amendments to the MeridianBet Group Purchase Agreement and the related promissory notes, the remaining outstanding consideration of $15,625,672 as of September 30, 2026 is due on November 1, 2031. The Company may, at its sole discretion, settle all or any portion of the outstanding consideration at any time prior to the maturity date, without any obligation to make earlier payments.
Liquidity and capital resources
Description |
| As of September 30, 2026 |
|
| As of December 31, 2025 |
| ||
Cash and cash equivalents |
| $ | 15,981,765 |
|
| $ | 18,078,300 |
|
Working capital (deficit) |
| $ | (9,100,473 | ) |
| $ | (24,128,745 | ) |
Shareholders’ equity |
| $ | 36,656,213 |
|
| $ | 48,338,626 |
|
The Company had $15,981,765 of cash on hand at September 30, 2026 and total assets of $97,468,691 ($32,516,844 of which were current assets) and a working capital deficit of $9,100,473 as of September 30, 2026. The working capital deficit was mainly due to $6,705,268 of current portion of long-term loans included in current liabilities, as well as $24,710,733 of accounts payable. Included in total assets at September 30, 2026 was $2,954,668 of goodwill and $21,726,143 in net intangible assets, as discussed in greater detail above under “Note 8 – Intangible Assets – Software, Licenses, Trademarks, Developed Technology, Customer Relationships, and Non-Compete Agreements”, in the notes to the financial statements included under “Part I. Financial Information—Item 1. Financial Statements”.
The Company had $18,078,300 cash on hand at December 31, 2025 and total assets of $118,078,800 ($35,438,153 of which were current assets) and a working capital deficit of $24,128,745 as of December 31, 2025. The working capital deficit was mainly due to $10,581,035 of current portion of long-term loans included in current liabilities, as well as $16,199,672 of current consideration payable to the Meridian Sellers. Included in total assets at December 31, 2025 was $8,450,955 of goodwill and $26,463,965 in net intangible assets, as discussed in greater detail above under “Note 8 – Intangible Assets – Software, Licenses, Trademarks, Developed Technology, Customer Relationships, and Non-Compete Agreements”, in the notes to the financial statements included under “Part I. Financial Information—Item 1. Financial Statements”.
The decrease in cash of $(2,096,535) between September 30, 2026, and December 31, 2025, was mainly due to the repayment of debt and cash used in investing activities, offset by cash provided by operating activities, as discussed in greater detail below under “Cash Flows”.
Our financial focus is on long-term, sustainable growth in revenue with the goal of marginal increases in expenses. We believe that our operations are highly scalable, and we plan to continuously add new products to our offerings with the anticipation that they will provide successful revenue growth.
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In the future, we may be required to seek additional capital, including to pay amounts due pursuant to the terms of the MeridianBet Group Purchase Agreement, and to repay outstanding debt as discussed above, by selling additional debt or equity securities, which may include up to $16.9 million that is available to be sold under our November 22, 2024, Equity Distribution Agreement in at-the-market offerings, or may otherwise be required to bring cash flows in balance when we approach a condition of cash insufficiency. The sale of additional equity or debt securities, if accomplished, may result in dilution to our then shareholders. Financing may not be available in amounts or on terms acceptable to us, or at all. In the event we are unable to raise additional funding and/or obtain revenues sufficient to support our expenses, we may be forced to scale down our operations, which could cause our securities to decline in value.
See “Note 15 – Short-Term and Long-Term Loans” in the notes to the financial statements included under “Part I. Financial Information—Item 1. Financial Statements”, for more details on the Company’s debts and lending facilities.
Cash flows
|
| Nine Months Ended September 30, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
Cash provided by operating activities |
| $ | 17,739,427 |
|
| $ | 17,149,595 |
|
Cash used in investing activities |
| $ | (6,127,253 | ) |
| $ | (15,106,190 | ) |
Cash used in financing activities |
| $ | (11,290,224 | ) |
| $ | (17,124,592 | ) |
Cash flows from operating activities include net loss adjusted for certain non-cash expenses, and changes in operating assets and liabilities. Non-cash expenses for the nine months ended September 30, 2026, mainly include loss on impairment, amortization expenses on intangible assets, depreciation on property plant and equipment and bad debt expense.
The Company generated cash from operating activities of $17,739,427 during the nine months ended September 30, 2026, due primarily to $11,530,653 of impairment losses, a $4,438,351 increase in accounts payable and accrued liabilities, $3,913,460 of amortization expenses relating to intangible assets, and $3,959,472 of depreciation expenses, which was mainly offset by a $10,599,813 net loss, and a $1,154,473 increase in other current assets.
The Company generated cash from operating activities of $17,149,595 during the nine months ended September 30, 2025, due primarily to a $6,169,306 increase in accounts payable and accrued liabilities, $3,003,054 of stock-based compensation, $2,025,763 of non-cash interest expense related to debt discount amortization, $7,193,854 of amortization expenses relating to intangible assets, and $4,193,434 of depreciation expenses, which was mainly offset by a $3,576,306 net loss, a $1,430,867 increase in inventories, and a $1,414,498 increase in accounts receivable.
During the nine months ended September 30, 2026, cash used in investing activities was $6,127,253, which was primarily due to $980,390 paid to acquire subsidiaries, $3,064,459 spent on intangible assets, and $1,508,404 spent on property, plant and equipment.
During the nine months ended September 30, 2025, cash used in investing activities was $15,106,190, which was primarily due to $1,709,971 of consideration paid to the former owners of MeridianBet Group in connection with the Meridian Purchase, $715,650 of consideration paid to acquire subsidiaries, $8,229,598 spent on intangible assets, and $4,424,257 spent on property, plant and equipment.
During the nine months ended September 30, 2026, cash used in financing activities was $11,290,224, which was primarily due to repayments on debt of $9,043,611 and a repayment of lease of $2,245,498. Lease payments relate to regular monthly rent for the Company’s retail betting locations and offices, recognized under ASC 842.
During the nine months ended September 30, 2025, cash used in financing activities totaled $17,124,592. This was primarily driven by debt repayments of $17,989,308 and lease repayments of $1,999,714, partially offset by $1,172,000 in loan proceeds, attributable to short-term credit line agreement in the amount of EUR 1,000,000 (approximately $1,172,000) from UniCredit Bank, and $1,692,430 in net proceeds after commissions, from the sale of common stock under the Distribution Agreement as part of at-the-market sales.
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The Company had a net decrease in cash of $2,096,535 for the nine months ended September 30, 2026, which is mainly due to repayment of debt, and cash used in investing activities, offset by cash provided by operating activities.
Equity Distribution Agreement
On November 22, 2024, we entered into an Equity Distribution Agreement with Craig-Hallum Capital Group LLC. Pursuant to the Distribution Agreement, the Company may sell, at its option, up to an aggregate of $20 million in shares of its common stock through Craig-Hallum, as sales agent. Sales of the common stock made pursuant to the Distribution Agreement, if any, will be made under a Registration Statement on Form S-3. Subject to the terms and conditions of the Distribution Agreement, Craig-Hallum may sell the shares, if any, only by methods deemed to be an “at the market” offering as defined in Rule 415 promulgated under the Securities Act, including without limitation sales made directly through The Nasdaq Capital Market, by means of ordinary brokers’ transactions, in negotiated transactions, to or through a market maker other than on an exchange or otherwise, at market prices prevailing at the time of sale, at prices related to such prevailing market prices, or at negotiated prices and/or any other method permitted by law. The Company is not obligated to sell, and Craig-Hallum is not obligated to buy or sell, any shares of common stock under the Distribution Agreement.
The Company will pay Craig-Hallum a commission equal to 3.00% of any gross proceeds from the sale of shares of the Company’s common stock under the Distribution Agreement. Pursuant to the terms of the Distribution Agreement, the Company also provided Craig-Hallum with customary indemnification rights and has agreed to reimburse Craig-Hallum for certain specified expenses up to $50,000, plus up to $5,000 for each future quarterly period that the Distribution Agreement remains in place. The offering of common stock pursuant to the Distribution Agreement will terminate upon the earlier of (i) the sale of all of the common stock subject to the Distribution Agreement and (ii) the termination of the Distribution Agreement by the Company or Craig-Hallum. Either party may terminate the agreement in its sole discretion at any time upon written notice to the other party.
As of the date of this Report, we are eligible to sell up to an additional $16.9 million under the Distribution Agreement, subject to the terms thereof and subject to the limitations of Form S-3, which prohibit us, for so long as our non-affiliate market capitalization remains below $75 million, from selling securities valued at more than one-third of our non-affiliate float every 12 months.
Adjusted EBITDA – Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization
In addition to our results calculated under generally accepted accounting principles in the United States (“GAAP”), we also present EBITDA and Adjusted EBITDA below. EBITDA and Adjusted EBITDA are “non-GAAP financial measures” presented as a supplemental measure of the Company’s performance. They are not presented in accordance with GAAP. The Company uses EBITDA and Adjusted EBITDA as a metric of profits and successful operations management. In particular, we use Adjusted EBITDA as a milestone for the purposes of certain incentive compensation programs applicable to some of our officers and directors, in order to evaluate our Company’s performance and determine whether certain restricted stock units and cash bonuses will vest as of the end of December 31, 2025. EBITDA means net loss before interest, taxes, depreciation and amortization. Adjusted EBITDA means EBITDA before stock-based compensation, unrealized foreign exchange gain or loss, severance costs related to the termination of executive officers and directors, impairment losses related to goodwill and other intangible assets, and restructuring costs which include charges or expenses attributable to acquisition related costs. EBITDA and Adjusted EBITDA should be viewed as supplemental to, and not as an alternative for net income or loss calculated in accordance with GAAP.
EBITDA and Adjusted EBITDA are presented because management believes they provide useful supplemental information to investors regarding the Company’s operating performance by excluding certain non-cash items and non-recurring or one-time items, thereby facilitating period-to-period comparisons. EBITDA and Adjusted EBITDA are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry. EBITDA and Adjusted EBITDA are unaudited, and have limitations as an analytical tool, and you should not consider them in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are: EBITDA and Adjusted EBITDA do not reflect cash expenditures, or future or contractual commitments; EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, capital expenditures or working capital needs; EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments; although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. In addition, other companies in this industry may calculate EBITDA and Adjusted EBITDA differently than the Company does, limiting its usefulness as a comparative measure. The Company’s presentation of these measures should not be construed as an inference that future results will be unaffected by unusual or nonrecurring items. We compensate for these limitations by providing a reconciliation of such non-GAAP measures to the most comparable GAAP measure, below. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view non-GAAP measures in conjunction with the most directly comparable GAAP financial measure.
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Reconciliation of EBITDA and Adjusted EBITDA to Net income (loss):
|
| Three Months Period Ended |
|
| Nine Months Period Ended |
| ||||||||||
|
| September 30, 2026 |
|
| September 30, 2025 |
|
| September 30, 2026 |
|
| September 30, 2025 |
| ||||
Net income (loss) |
| $ | (14,729,840 | ) |
| $ | 413,802 |
|
| $ | (10,599,813 | ) |
| $ | (3,576,306 | ) |
+ Interest expense |
|
| 246,253 |
|
|
| 510,636 |
|
|
| 900,164 |
|
|
| 3,463,665 |
|
- Interest income |
|
| (135,040 | ) |
|
| (62,036 | ) |
|
| (176,172 | ) |
|
| (122,856 | ) |
+ Taxes |
|
| 179,668 |
|
|
| 201,636 |
|
|
| 1,498,922 |
|
|
| 355,960 |
|
+ Depreciation |
|
| 1,338,467 |
|
|
| 1,413,163 |
|
|
| 3,959,472 |
|
|
| 4,193,434 |
|
+ Amortization |
|
| 1,356,786 |
|
|
| 2,575,834 |
|
|
| 3,913,460 |
|
|
| 7,193,854 |
|
EBITDA |
| $ | (11,743,706 | ) |
| $ | 5,053,035 |
|
| $ | (503,967 | ) |
| $ | 11,507,751 |
|
+ Stock-based compensation |
|
| 386,240 |
|
|
| 546,415 |
|
|
| 537,005 |
|
|
| 3,003,054 |
|
+ Restructuring costs |
|
| - |
|
|
| 128,156 |
|
|
| - |
|
|
| 278,090 |
|
- Unrealized foreign exchange gain or (loss) |
|
| 155,451 |
|
|
| (900,672 | ) |
|
| 686,799 |
|
|
| (825,368 | ) |
+ Impairment losses on intangible assets |
|
| 11,530,653 |
|
|
| - |
|
|
| 11,530,653 |
|
|
| - |
|
+ Severance costs |
|
| 30,000 |
|
|
| - |
|
|
| 318,741 |
|
|
| - |
|
Adjusted EBITDA |
| $ | 358,638 |
|
| $ | 4,826,934 |
|
| $ | 12,569,231 |
|
| $ | 13,963,527 |
|
Results of Operations
Three months ended September 30, 2026, compared to the three months ended September 30, 2025.
The following table summarizes the consolidated results of operations for the interim periods indicated, and the changes between the periods.
|
| Three Months Ended September 30, |
|
|
|
|
| |||||||||
|
| 2026 |
|
| 2025 |
|
| $Change |
|
| %Change |
| ||||
Revenue |
| $ | 45,964,912 |
|
| $ | 47,316,308 |
|
| $ | (1,351,396 | ) |
|
| (2.9 | )% |
Cost of goods sold (COGS) |
|
| 21,151,756 |
|
|
| 20,929,885 |
|
|
| 221,871 |
|
|
| 1.1 | % |
Gross profit |
|
| 24,813,156 |
|
|
| 26,386,423 |
|
|
| (1,573,267 | ) |
|
| (6.0 | )% |
Selling, general and administrative expenses |
|
| 28,193,166 |
|
|
| 26,774,044 |
|
|
| 1,419,122 |
|
|
| 5.3 | % |
Impairment of goodwill |
|
| 5,903,000 |
|
|
| - |
|
|
| 5,903,000 |
|
| n/m |
| |
Impairment of intangible assets |
|
| 5,627,653 |
|
|
| - |
|
|
| 5,627,653 |
|
| n/m |
| |
Total operating expenses |
|
| 39,723,819 |
|
|
| 26,774,044 |
|
|
| 12,949,775 |
|
|
| 48.4 | % |
Income (loss) from operations |
|
| (14,910,663 | ) |
|
| (387,621 | ) |
|
| (14,523,042 | ) |
| n/m |
| |
Interest expense |
|
| 246,253 |
|
|
| 510,636 |
|
|
| (264,383 | ) |
|
| (51.8 | )% |
Interest earned |
|
| 135,040 |
|
|
| 62,036 |
|
|
| 73,004 |
|
|
| 117.7 | % |
Foreign exchange gain (loss) |
|
| (102,655 | ) |
|
| 817,201 |
|
|
| (919,856 | ) |
| n/m |
| |
Other income |
|
| 574,359 |
|
|
| 634,458 |
|
|
| (60,099 | ) |
|
| (9.5 | )% |
Provision for income taxes |
|
| 179,668 |
|
|
| 201,636 |
|
|
| (21,968 | ) |
|
| (10.9 | )% |
Net income (loss) |
|
| (14,729,840 | ) |
|
| 413,802 |
|
|
| (15,143,642 | ) |
| n/m |
| |
Net loss attributable to noncontrolling interest |
|
| (1,473,443 | ) |
|
| (152,212 | ) |
|
| (1,321,231 | ) |
|
| (868.0 | )% |
Net income (loss) attributable to MRDN |
| $ | (13,256,397 | ) |
| $ | 566,014 |
|
| $ | (13,822,411 | ) |
| n/m |
| |
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| Table of Contents |
“N/m” means not meaningful.
Revenue. Revenue decreased by $1,351,396, or 2.9%, to $45,964,912 for the three months ended September 30, 2026, from $47,316,308 for the three months ended September 30, 2025. The decrease in revenues was primarily attributable to a decline in revenues from the RKings and CFAC segment, which decreased by $2,187,681, or approximately 19.3%, from $11,322,042 for the three months ended September 30, 2025, to $9,134,361 for the three months ended September 30, 2026. The decline was primarily driven by increased market competition, which adversely affected customer acquisition and engagement, resulting in reduced participation in prize competitions and lower overall sales volumes.
Revenues from online casino from MeridianBet Group increased by $2,516,906 , or 17%, to $17,116,084 for the three months ended September 30, 2026, from $14,599,178 for the three months ended September 30, 2025, mainly due to the increase in the offer of online casino games from different providers to 2,500+ and the integration of 10+ new providers (including AIR Dice, Push Gaming and EGT Digital), as well as Betsoft, in Q3 2026, while in the same quarter Fazi was integrated in Malta, and revenues from online sports betting decreased by $1,587,660, or 15%, to $8,694,709 for the three months ended September 30, 2026, from $10,282,369 for the three months ended September 30, 2025, due to unfavorable football results in the opening matches at the start of the European football season, which resulted in a lower online sports betting margin of 7.4%, compared to 8.2% in the same quarter last year. Revenues from retail sports betting and retail casino decreased by $204,669, or 3%, to $6,534,270 for the three months ended September 30, 2026, from $6,738,939 for the three months ended September 30, 2025, mainly due to unfavorable football results in the opening matches at the start of the European football season which resulted in a lower retail sports betting margin of 10.7%, compared to 13.6% in the same quarter last year. Despite this, we opened 2 new locations in Serbia (Šajkaš in July and Užice Plaza in September 2026) and relocated Jakovo to a larger location in August 2026, which have already begun delivering strong revenues for the fourth quarter of 2026. The growth of retail casino revenue was primarily driven by 100+ new slot machines, mostly of the Impera brand (Novomatic), which has also resulted in increased revenues. Accordingly, we managed to increase our retail casino margin to 15% in the third quarter of 2026, compared to 14.7% in the same quarter last year.
COGS. Costs of goods (COGS) sold increased by $221,871, or 1.1%, to $21,151,756 for the three months ended September 30, 2026, from $20,929,885 for the three months ended September 30, 2025. Cost of goods sold from the RKings and CFAC segment decreased by $1,416,165, or approximately 16.9%, from $8,385,104 for the three months ended September 30, 2025, to $6,968,939 for the three months ended September 30, 2026. The decrease was primarily attributable to a reduction in the average prize value per competition. Although the total number of competitions increased during the period, the lower average prize value resulted in an overall decrease in the cost of goods sold. MeridianBet Group COGS from online casino, online sports betting, retail casino, retail sports betting, bars and franchise fees increased by $1,413,428 in total, or 14%, to $11,798,436 for the three months ended September 30, 2026, from $10,385,008 for the three months ended September 30, 2025, mainly due to the increase in the variable amounts of gaming tax and software fee costs which were in line with the increase in income from online casinos, online sports betting, retail casinos and retail sports betting.
Gross profit. Gross profit decreased by $1,573,267, or 6.0%, to $24,813,156 for the three months ended September 30, 2026, from $26,386,423 for the three months ended September 30, 2025. Gross profit from the RKings and CFAC segment decreased by $771,516, or approximately 26.3%, from $2,936,938 for the three months ended September 30, 2025, to $2,165,422 for the three months ended September 30, 2026. The decrease was primarily attributable to lower revenues resulting from increased market competition, which was partially offset by a reduction in cost of goods sold. The segment's gross profit margin decreased from 25.9% to 23.7%, as the decline in revenues outpaced the reduction in cost of goods sold. MeridianBet Group gross profit from online casinos increased by $1,090,060 or 11%; gross profit from online sports betting decreased by $1,395,440, or 20%, and gross profit from retail sports betting and retail casino decreased by $376,477 or 8% for the three months ended September 30, 2026, compared to the three months ended September 30, 2025. The decrease in gross profits was due to the decrease in the revenues as discussed above.
Selling, General and Administrative Expenses. Selling, general and administrative expenses (“SG&A”) consisted primarily of stock-based compensation, depreciation expenses, amortization expenses, salary and wages, professional fees, marketing expenses, bad debt expenses, rents and utilities, as discussed below.
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Stock-based compensation (included in SG&A) for the three months ended September 30, 2026, was $386,240, compared to $546,415 for the three months ended September 30, 2025, representing a $160,175 decrease from the prior period. The decrease was primarily attributable to lower compensation expense recognized in connection with previously granted restricted stock units (“RSUs”), as the majority of these awards had fully vested and the related compensation expense had been fully recognized in prior periods.
Amortization expenses for the three months ended September 30, 2026, were $1,356,786, compared to $2,575,834 for the three months ended September 30, 2025, a $1,219,048, or 47.3% decrease from the prior period. The decrease was primarily attributable to the impairment of intangible assets recognized in the prior year, which reduced the amortizable asset base.
Salaries and wages for the three months ended September 30, 2026, were $6,852,033, compared to $6,550,945 for the three months ended September 30, 2025, a $301,088 or 4.6% increase from the prior period, which was due mainly to increased headcount to both support revenue growth and to enable the entry into new markets for the current period, as well as an increase in employee salaries, compared to the prior period.
Professional fees for the three months ended September 30, 2026, were $815,261, compared to $933,433 for the three months ended September 30, 2025, a $118,172 or 12.7% decrease from the prior period. The decrease was primarily attributable to lower legal and advisory fees due to fewer acquisition, financing, and other corporate transaction activities during the current period.
Marketing expenses for the three months ended September 30, 2026, were $7,272,596, compared to $6,888,120 for the three months ended September 30, 2025, a $384,476 or 5.6% increase from the prior period, which was primarily driven by the intensified marketing campaigns around the FIFA World Cup held in the United States, Mexico and Canada. The tournament significantly boosted customer interest and betting activity, while the UX enhancements introduced in preparation for the FIFA World Cup, including new features and visual presentation updates, continued to support user engagement beyond the end of the competition.
Bad debt expenses for the three months ended September 30, 2026, were $965,865, compared to $60,310 for the three months ended September 30, 2025, a $905,555 increase for the period, which was primarily attributable to the increased bad debt associated with the Company’s resale of gaming content business. During the three months ended September 30, 2026, the Company recognized bad debt expenses and subsequently wrote off approximately $130,238 and $127,110 in outstanding receivables from Articulate Pty Ltd (“Articulate”), which is owned by Anthony Brian Goodman, our former Chief Executive Officer and his wife, and Elray Resources Inc. (“Elray”), which Mr. Goodman serves as CEO and Director of, and which Ms. Weiting ‘Cathy’ Feng, the Company’s former COO, serves as Treasurer and Director of, respectively, due to prolonged non-payment and management’s determination that these balances were uncollectible. In addition, the Company recorded an allowance for doubtful accounts of approximately $500,000 related to another third-party customer, based on management’s assessment of the customer’s financial condition, ability to meet its payment obligations, and the collectability of the outstanding receivable.
Rents and utilities for the three months ended September 30, 2026, were $2,575,092, compared to $2,209,303 for the three months ended September 30, 2025, a $365,789 or 16.6% increase from the prior period, which was mainly due to the opening of new betting shops, which contributed to the growth of rent and utility costs, as well as the general increase in heating, electricity, telephone and internet costs, due to inflationary trends.
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Impairment of Goodwill and Impairment of Intangible Assets. Impairment losses for the three months ended September 30, 2026, were $11,530,653, compared to $0 for the three months ended September 30, 2025. The significant increase in impairment losses was primarily attributable to the goodwill impairment charges associated with the Golden Matrix reporting unit. During the three months ended September 30, 2026, in preparation of the filing of this Report, the Company identified indicators that the fair value of its Golden Matrix reporting unit may be below its carrying amount, including continued operating losses and a revised forecast. The Company performed an interim quantitative impairment test as of September 30, 2026, estimating fair value using a weighted combination of a discounted cash flow method and a market capitalization method. The carrying amount exceeded the estimated fair value, and the Company recognized a goodwill impairment charge of $5.9 million. Following the charge, goodwill allocated to the Golden Matrix reporting unit was $2.0 million. In addition, during the three months ended September 30, 2026 in preparation of the filing of this Report, the Company identified impairment indicators related to its Brazilian gaming operations due to adverse regulatory developments and continued operating losses. Following the issuance of Brazilian Provisional Measure No. 1,394/2026 on September 25, 2026, which prohibits fixed-odds sports betting and online casino-style betting throughout Brazil, including offerings by foreign operators to persons in Brazil, management performed an impairment assessment in accordance with ASC 360. Based on projected future cash flows and estimated fair values, the Company recognized an impairment loss of approximately $5.5 million, consisting of $4.1 million related to its Brazilian gaming license, and $1.4 million related to the Magicbet777 domain and associated player database, which were previously acquired by the Company as part of its expansion into the Brazilian gaming market. Following the acquisition, the acquired players were migrated to the Company's Meridianbet platform, through which the Company conducted its Brazilian gaming operations. The impairment was primarily attributable to regulatory restrictions imposed on online gaming operations in Brazil, which significantly reduced the expected future cash flows and economic benefits associated with these assets. Additionally, the Company recognized an impairment loss of approximately $92,000 related to trademarks acquired in connection with the acquisition of Media Games Malta in July 2024. Media Games Malta ceased its operations in January 2026 as part of the Company's business restructuring decision to discontinue certain operations. As a result of the cessation of operations, management determined that the associated trademarks were no longer expected to generate future economic benefits and recognized an impairment charge of approximately $92,000 during the three months ended September 30, 2026. See also, “Note 1 - Basis of Presentation and Accounting Policies—Impairment of Intangible Assets” and “—Goodwill”, in the notes to consolidated financial statements, above.
Total operating expenses. Total operating expenses, including selling, general and administrative expenses and impairment losses, increased by $12,949,775, or 48.4%, to $39,723,819 for the three months ended September 30, 2026, from $26,774,044 for the three months ended September 30, 2025.
Interest expense. Interest expense decreased by $264,383, or 51.8%, to $246,253 for the three months ended September 30, 2026, from $510,636 for the three months ended September 30, 2025. The decrease was primarily attributable to the Company's continued repayment of outstanding loan balances, resulting in lower interest expense during the period.
Interest earned. Interest earned increased by $73,004, to $135,040 for the three months ended September 30, 2026, from $62,036 for the three months ended September 30, 2025. The increase was mainly due to interest income from Eurobonds.
Foreign exchange loss. Foreign exchange loss increased by $919,856, to $102,655 for the three months ended September 30, 2026, compared to a foreign exchange gain of $817,201 for the three months ended September 30, 2025. The increase in loss was primarily driven by volatility and unfavorable fluctuations in the EUR/RSD/USD exchange rates, which impacted the remeasurement of the Company’s monetary assets and liabilities denominated in euros and Serbian dinars. Volatility in the euro and Serbian dinar against the U.S. dollar, as well as across other currencies used by the Group, including differences between average and period-end exchange rates, resulted in higher unrealized foreign exchange losses.
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Other Income. Other income is related to income from marketing services for third-party advertising in MeridianBet Group betting shops, sale of fixed assets, value-added-tax (VAT) refunds, income from compensation for damages, income from reduction of liabilities and other income that is not directly related to the Company's core activity. For the three months ended September 30, 2026, and 2025, other income amounted to $574,359 and $634,458, respectively.
Provision for income taxes. We are subject to federal and state income taxes in the United States, as well as income taxes in the foreign jurisdictions in which we operate. Our effective tax rate was -16.47% and -11.05% for the nine months ended September 30, 2026 and 2025, respectively. In addition, our effective tax rate was -1.23% and 32.76% for the three months ended September 30, 2026 and 2025, respectively. The change in the effective tax rate for the nine months ended September 30, 2026, compared with the same period in 2025, was primarily due to a change in the jurisdictional mix of income.
Net loss attributable to noncontrolling interest. Net loss attributable to noncontrolling interest in the acquired entity is measured at the proportionate share of each acquired entity, and for (a) Meridian Gaming Brazil SPE Ltda in the percentage of 30% (b) Fair Champions Meridian Ltd. Cyprus in the percentage of 49%, and (c) Classics Holding Pty Ltd Australia in the percentage of 20%. For the three months ended September 30, 2026 and 2025, net loss attributable to noncontrolling interests amounted to $1,473,443 and $152,212, respectively, representing an increase of $1,321,231. The increase was primarily attributable to higher net losses incurred by Meridian Gaming Brazil SPE Ltda. during the three months ended September 30, 2026, principally resulting from the impairment charges recognized in connection with its gaming operations in Brazil, as discussed above.
Net income (loss) attributable to MRDN. Net loss attributable to MRDN was $13,256,397 for the three months ended September 30, 2026, compared to net income of $566,014 for the three months ended September 30, 2025, representing an unfavorable change of $13,822,411. The change from net income to net loss was primarily attributable to impairment charges recognized during the period, lower revenues and gross profit, and increased operating expenses, as discussed above.
Nine months ended September 30, 2026, compared to the nine months ended September 30, 2025.
The following table summarizes the consolidated results of operations for the interim periods indicated, and the changes between the periods.
|
| Nine Months Ended September 30, |
|
|
|
|
| |||||||||
|
| 2026 |
|
| 2025 |
|
| $Change |
|
| %Change |
| ||||
Revenue |
| $ | 146,262,781 |
|
| $ | 133,284,729 |
|
| $ | 12,978,052 |
|
|
| 9.7 | % |
Cost of goods sold (COGS) |
|
| 66,450,465 |
|
|
| 58,325,326 |
|
|
| 8,125,139 |
|
|
| 13.9 | % |
Gross profit |
|
| 79,812,316 |
|
|
| 74,959,403 |
|
|
| 4,852,913 |
|
|
| 6.5 | % |
Selling, general and administrative expenses |
|
| 77,595,267 |
|
|
| 77,757,891 |
|
|
| (162,624 | ) |
|
| (0.2 | )% |
Impairment of goodwill |
|
| 5,903,000 |
|
|
| - |
|
|
| 5,903,000 |
|
| n/m |
| |
Impairment of intangible assets |
|
| 5,627,653 |
|
|
| - |
|
|
| 5,627,653 |
|
| n/m |
| |
Total operating expenses |
|
| 89,125,920 |
|
|
| 77,757,891 |
|
|
| 11,368,029 |
|
|
| 14.6 | % |
Income (loss) from operations |
|
| (9,313,604 | ) |
|
| (2,798,488 | ) |
|
| (6,515,116 | ) |
|
| (232.8 | )% |
Interest expense |
|
| 900,164 |
|
|
| 3,463,665 |
|
|
| (2,563,501 | ) |
|
| (74.0 | )% |
Interest earned |
|
| 176,172 |
|
|
| 122,856 |
|
|
| 53,316 |
|
|
| 43.4 | % |
Foreign exchange gain (loss) |
|
| (676,924 | ) |
|
| 1,187,414 |
|
|
| (1,864,338 | ) |
| n/m |
| |
Other income |
|
| 1,613,629 |
|
|
| 1,731,537 |
|
|
| (117,908 | ) |
|
| (6.8 | )% |
Provision for income taxes |
|
| 1,498,922 |
|
|
| 355,960 |
|
|
| 1,142,962 |
|
|
| 321.1 | % |
Net income (loss) |
|
| (10,599,813 | ) |
|
| (3,576,306 | ) |
|
| (7,023,507 | ) |
|
| (196.4 | )% |
Net loss attributable to noncontrolling interest |
|
| (1,769,261 | ) |
|
| (326,367 | ) |
|
| (1,442,894 | ) |
|
| (442.1 | )% |
Net income (loss) attributable to MRDN |
| $ | (8,830,552 | ) |
| $ | (3,249,939 | ) |
| $ | (5,580,613 | ) |
|
| (171.7 | )% |
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“N/m” means not meaningful.
Revenue. Revenue increased by $12,978,052, or 9.7%, to $146,262,781 for the nine months ended September 30, 2026, from $133,284,729 for the nine months ended September 30, 2025.
Revenues from online casino from MeridianBet Group increased by $8,139,161, or 21%, to $46,857,477 for the nine months ended September 30, 2026, from $38,718,317 for the nine months ended September 30, 2025, mainly due to the increase in the offer of online casino games from different providers to 2,500+ and the integration of 10+ new providers (including AIR Dice, Push Gaming and EGT Digital), as well as Betsoft, an online casino game provider, and in Malta integrated FAZI, a provider of slot and table games. Additionally, the new game “Gates of Olympia”, launched by the Company’s studio Expanse, became one of the top 3 most popular games in the first nine months of 2026.
Revenues from online sports betting increased by $3,515,074, or 12%, to $33,519,292 for the nine months ended September 30, 2026, from $30,004,218 for the nine months ended September 30, 2025, mainly due to introduction of additional live streaming coverage across a wider range of sporting events, which had a positive impact by increasing customer engagement and time spent on the platform. It is also important to note that, despite the betting margin being below expectations, no measures were taken to reduce the competitiveness of the odds offered. Maintaining attractive odds helped preserve the appeal of the Sports Betting offering and supported continued customer engagement. This affected the overall online sports betting margin for the nine-month period, which decreased from 9.1% to 8.9% in 2026.
Revenues from retail sports betting and retail casino increased by $2,655,098, or 15%, to $20,876,689 for the nine months ended September 30, 2026, from $18,221,592 for the nine months ended September 30, 2025. Retail casino revenue increased by $2,387,703, or 24%, to $12,502,707, primarily driven by 100+ new slot machines, mostly of the Impera brand (Novomatic), which has proven very successful, resulting in a retail casino margin of 15% in the third quarter, compared to 14.7% in the same quarter last year. Retail sports betting revenue increased by $267,395, or 3%, to $8,373,983, supported by the expansion of our retail network in Serbia, where we opened 2 new locations (Šajkaš, Serbia in July 2026 and Užice Plaza, Serbia in September 2026) and relocated our Jakovo, Serbia location to a larger location in August 2026, which is already delivering strong revenues.
Revenues from the RKings and CFAC segment decreased by $844,481, or approximately 2.6%, from $32,884,664 for the nine months ended September 30, 2025, to $32,040,183 for the nine months ended September 30, 2026. The decrease was primarily attributable to lower transaction volumes and average customer spending, driven by increased market competition, changes in customer purchasing behavior, and reduced effectiveness of certain digital advertising channels, which adversely affected customer acquisition and engagement.
COGS. Costs of goods (COGS) sold increased by $8,125,139, or 13.9%, to $66,450,465 for the nine months ended September 30, 2026, from $58,325,326 for the nine months ended September 30, 2025. MeridianBet Group COGS from online casino, online sports betting, retail casino, retail sports betting, bars and franchise fees increased by $8,084,367, or 30%, to $34,839,701 for the nine months ended September 30, 2026, from $26,755,333 for the nine months ended September 30, 2025, mainly due to the increase in the variable amounts of gaming tax and software fee costs which were in line with the increase in income from online casinos, online sports betting, retail casinos and retail sports betting.
Gross profit. Gross profit increased by $4,852,913, or 6.5%, to $79,812,316 for the nine months ended September 30, 2026, from $74,959,403 for the nine months ended September 30, 2025. MeridianBet Group gross profit from online casinos increased by $4,001,045 or 15%; gross profit from online sports betting increased by $1,245,448 , or 6%, and gross profit from retail sports betting and retail casino increased by $1,102,096 or 9% for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. The increase in gross profits was due to the increase in the revenues as discussed above. Gross profit from the RKings and CFAC segment decreased by $1,702,469, or approximately 19.0%, from $8,960,603 for the nine months ended September 30, 2025, to $7,258,134 for the nine months ended September 30, 2026. The decrease was primarily attributable to lower revenues and an increase in cost of goods sold during the period, resulting in a decline in the segment's gross profit margin from 27.2% to 22.7%.
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Selling, general and administrative expenses. Selling, general and administrative expenses consisted primarily of stock-based compensation, depreciation expenses, amortization expenses, salary and wages, professional fees, marketing expenses, bad debt expenses, rents and utilities, as discussed below.
Stock-based compensation (included in SG&A) for the nine months ended September 30, 2026, was $537,005, compared to $2,914,451 for the nine months ended September 30, 2025, representing a $2,377,446 decrease from the prior period. The decrease was primarily attributable to fewer RSUs granted to the Company’s employees and directors, fewer shares issued for services during the period, and the reversal of previously accrued stock-based quarterly salary compensation for the Company’s executives. The reversal resulted from an agreement entered into in June 2026 with certain executives to reduce the number of shares to be issued in settlement of accrued salary compensation, reflecting shares that had previously been issued upon the vesting of restricted stock units under the Company's 2023 Equity Incentive Plan.
Amortization expenses for the nine months ended September 30, 2026, were $3,913,460, compared to $7,193,854 for the nine months ended September 30, 2025, a $3,280,394, or 45.6% decrease from the prior period. The decrease was primarily attributable to the impairment of intangible assets recognized in the prior year, which reduced the amortizable asset base.
Salaries and wages for the nine months ended September 30, 2026, were $21,128,625, compared to $19,683,749 for the nine months ended September 30, 2025, a $1,444,876 or 7.3% increase from the prior period, which was due mainly to increased headcount to both support revenue growth and to enable the entry into new markets for the current period, as well as an increase in employee salaries, compared to the prior period.
Professional fees for the nine months ended September 30, 2026, were $2,813,944, compared to $3,009,083 for the nine months ended September 30, 2025, a $195,139 or 6.5% decrease from the prior period. The decrease was primarily attributable to lower legal and advisory fees due to fewer acquisition, financing, and other corporate transaction activities during the current period.
Marketing expenses for the nine months ended September 30, 2026, were $19,535,860, compared to $19,639,498 for the nine months ended September 30, 2025, a $103,638 or 0.5% decrease from the prior period.
Bad debt expenses for the nine months ended September 30, 2026, were $1,163,524, compared to $229,239 for the nine months ended September 30, 2025, a $934,285 increase for the period, which was primarily attributable to the increased bad debt associated with the Company’s resale of gaming content business. During the nine months ended September 30, 2026, the Company recognized bad debt expenses and subsequently wrote off approximately $130,238 and $127,110 in outstanding receivables from Articulate and Elray, respectively, due to prolonged non-payment and management’s determination that these balances were uncollectible. In addition, the Company recorded an allowance for doubtful accounts of approximately $500,000 related to another third-party customer, based on management’s assessment of the customer’s financial condition, ability to meet its payment obligations, and the collectability of the outstanding receivable.
Rents and utilities for the nine months ended September 30, 2026, were $6,702,573, compared to $5,718,607 for the nine months ended September 30, 2025, a $983,966 or 17.2% increase from the prior period, which was mainly due to the opening of new betting shops, which contributed to the growth of rent and utility costs, as well as the general increase in heating, electricity, telephone and internet costs, due to inflationary trends.
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Impairment of Goodwill and Impairment of Intangible Assets. Impairment losses for the nine months ended September 30, 2026, were $11,530,653, compared to $0 for the nine months ended September 30, 2025. The significant increase in impairment losses was primarily attributable to the goodwill impairment charges associated with the Golden Matrix reporting unit. During the three months ended September 30, 2026, in connection with the preparation of this Report, the Company identified indicators that the fair value of its Golden Matrix reporting unit may be below its carrying amount, including continued operating losses and a revised forecast. The Company performed an interim quantitative impairment test as of September 30, 2026, in connection with the preparation of this Report, estimating fair value using a weighted combination of a discounted cash flow method and a market capitalization method. The carrying amount exceeded the estimated fair value, and the Company recognized a goodwill impairment charge of $5.9 million. Following the charge, goodwill allocated to the Golden Matrix reporting unit was $2.0 million. In addition, during the three months ended September 30, 2026, in connection with the preparation of this Report, the Company identified impairment indicators related to its Brazilian gaming operations due to adverse regulatory developments and continued operating losses. Following the issuance of Brazilian Provisional Measure No. 1,394/2026 on September 25, 2026, which prohibits fixed-odds sports betting and online casino-style betting throughout Brazil, including offerings by foreign operators to persons in Brazil, management performed an impairment assessment in accordance with ASC 360. Based on projected future cash flows and estimated fair values, the Company recognized an impairment loss of approximately $5.5 million, consisting of $4.1 million related to its Brazilian gaming license, and $1.4 million related to the Magicbet777 domain and associated player database, which were previously acquired by the Company as part of its expansion into the Brazilian gaming market. Following the acquisition, the acquired players were migrated to the Company's Meridianbet platform, through which the Company conducted its Brazilian gaming operations. The impairment was primarily attributable to regulatory restrictions imposed on online gaming operations in Brazil, which significantly reduced the expected future cash flows and economic benefits associated with these assets. Additionally, the Company recognized an impairment loss of approximately $92,000 related to trademarks acquired in connection with the acquisition of Media Games Malta in July 2024. Media Games Malta ceased its operations in January 2026 as part of the Company's business restructuring decision to discontinue certain operations. As a result of the cessation of operations, management determined that the associated trademarks were no longer expected to generate future economic benefits and recognized an impairment charge of approximately $92,000 during the three months ended September 30, 2026. See also, “Note 1 - Basis of Presentation and Accounting Policies—Impairment of Intangible Assets” and “—Goodwill”, in the notes to consolidated financial statements, above.
Total operating expenses. Total operating expenses, including selling, general and administrative expenses and impairment losses, increased by $11,368,029, or 14.6%, to $89,125,920 for the nine months ended September 30, 2026, from $77,757,891 for the nine months ended September 30, 2025.
Interest expense. Interest expense decreased by $2,563,501, or 74%, to $900,164 for the nine months ended September 30, 2026, from $3,463,665 for the nine months ended September 30, 2025. The decrease primarily reflects the repayment of an October 2024 Secured Convertible Note in early April 2025, resulting in no interest accruals for the October 2024 Secured Convertible Note during the current year. In addition, the Company continued to repay the outstanding balances of its other loans, which further reduced interest expense during the period.
Interest earned. Interest earned increased by $53,316, to $176,172 for the nine months ended September 30, 2026, from $122,856 for the nine months ended September 30, 2025. The increase was mainly due to interest income from Eurobonds.
Foreign exchange gain (loss). Foreign exchange results decreased by $1,864,338, to a loss of $676,924 for the nine months ended September 30, 2026, compared to a gain of $1,187,414 for the nine months ended September 30, 2025. The decrease was primarily driven by volatility and unfavorable fluctuations in the EUR/RSD/USD exchange rates, which impacted the remeasurement of the Company’s monetary assets and liabilities denominated in euros and Serbian dinars. Volatility in the euro and Serbian dinar against the U.S. dollar, as well as across other currencies used by the Group, including differences between average and period-end exchange rates, resulted in higher unrealized foreign exchange losses.
Other Income. Other income is related to income from marketing services for third-party advertising in MeridianBet Group betting shops, sale of fixed assets, value-added-tax (VAT) refunds, income from compensation for damages, income from reduction of liabilities and other income that is not directly related to the Company's core activity. For the nine months ended September 30, 2026, and 2025, other income amounted to $1,613,629 and $1,731,537, respectively.
Provision for income taxes. We are subject to federal and state income taxes in the United States, as well as income taxes in the foreign jurisdictions in which we operate. Our effective tax rate was -16.47% and -11.05% for the nine months ended September 30, 2026 and 2025, respectively. In addition, our effective tax rate was -1.23% and 32.76% for the three months ended September 30, 2026 and 2025, respectively. The change in the effective tax rate for the nine months ended September 30, 2026, compared with the same period in 2025, was primarily due to a change in the jurisdictional mix of income.
Net loss attributable to noncontrolling interest. Net loss attributable to noncontrolling interest in the acquired entity is measured at the proportionate share of each acquired entity, and for (a) Meridian Gaming Brazil SPE Ltda in the percentage of 30% (b) Fair Champions Meridian Ltd. Cyprus in the percentage of 49%, and (c) Classics Holding Pty Ltd Australia in the percentage of 20%. For the nine months ended September 30, 2026, and 2025, net loss attributable to noncontrolling interest amounted to $1,769,261 and $326,367, respectively. The increase was primarily attributable to higher net losses incurred by Meridian Gaming Brazil SPE Ltda. during the nine months ended September 30, 2026, principally resulting from the impairment charges recognized in connection with its gaming operations in Brazil, as discussed above.
Net income (loss) attributable to MRDN. Net loss attributable to MRDN increased by $5,580,613 to $8,830,552 for the nine months ended September 30, 2026, from a net loss of $3,249,939 for the nine months ended September 30, 2025. The increase was mainly due to impairment charges recognized during the period and increased operating expenses, partially offset by higher revenues and gross profit, as discussed above.
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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The discussion and analysis of the Company’s financial condition and results of operations are based upon its consolidated unaudited financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these unaudited financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an on-going basis, management evaluates past judgments and estimates, including those related to bad debts, accrued liabilities, goodwill and contingencies. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable 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. Actual results may differ from these estimates under different assumptions or conditions. The accounting policies and related risks described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Commission on March 31, 2026, are those that depend most heavily on these judgments and estimates. As of September 30, 2026, there had been no material changes to any of the critical accounting policies contained therein. “Note 1 – Basis of Presentation and Accounting Policies,” of the notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Commission on March 31, 2026, describes the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements. The critical accounting estimates include transactions, assets, liabilities and obligations that are stated in foreign local currency and their conversion to US currency. Resulting loss on currency conversions related to assets and liabilities is recognized in shareholders’ equity in accumulated other comprehensive income (loss) on the Company’s consolidated balance sheets and foreign currency transaction gains and losses are recognized in other income (expense) in the consolidated statements of operations and comprehensive income.
Item 3. Quantitative And Qualitative Disclosures About Market Risk
Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined in Item 10(f)(1) of Regulation S-K.
Item 4. Controls and Procedures
Disclosure controls and procedures
The Company’s Chief Executive Officer (the principal executive officer) and Chief Accounting Officer (principal financial officer and principal accounting officer) have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2026. Based upon such evaluation, the Chief Executive Officer and the Chief Accounting Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in our reports filed with the Commission pursuant to the Exchange Act, is recorded properly, processed, summarized and reported within the time periods specified in the rules and forms of the Commission and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Accounting Officer, to allow timely decisions regarding required disclosures.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the three months ended September 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. However, on October 2, 2026, the Board of Directors of the Company promoted Mr. Zhe ‘Scott’ Yan, the Company’s then financial accounting manager, to the roles of Chief Accounting Officer, Principal Financial Officer and Principal Accounting Officer of the Company, effective immediately. In connection with such promotion, Mr. William Scott, the President, Chief Financial Officer, Treasurer and Chairman of the Board of Directors of the Company, ceased serving as Principal Financial Officer and Principal Accounting Officer of the Company effective October 2, 2026. Mr. Scott continues to serve as President, Chief Financial Officer, Treasurer and Chairman of the Board of Directors of the Company.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Although we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we are not currently a party to any material legal proceeding, except as discussed under “Note 21 – Commitments and Contingencies”, under the heading Legal Matters, in the notes to the financial statements included under “Part I. Financial Information—Item 1. Financial Statements”, which are incorporated by reference into this “Item 1. Legal Proceedings”. In addition, we are not aware of any material legal or governmental proceedings against us or contemplated to be brought against us. The impact and outcome of litigation, if any, is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We believe the ultimate resolution of any such current proceeding will not have a material adverse effect on our continued financial position, results of operations or cash flows; however, the outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting period for amounts in excess of management’s expectations, the Company’s financial condition and operating results for that reporting period could be materially adversely affected.
Item 1A. Risk Factors
There have been no material changes from the risk factors previously disclosed in Part I, Item 1A of the Company’s Form 10-K for the year ended December 31, 2025, filed with the Commission on March 31, 2026 (the “Form 10-K”), under the heading “Risk Factors”, except as discussed below, and investors should review the risks provided in the Form 10-K and below, prior to making an investment in the Company. The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in the Form 10-K, under “Risk Factors” and below, any one or more of which could, directly or indirectly, cause the Company’s actual financial condition and operating results to vary materially from past, or from anticipated future, financial conditions and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price.
Failures, disruptions, defects or errors in our internally developed software and technology infrastructure could harm our business, reputation and results of operations.
Our online casino and sports wagering platforms depend on the continuous, reliable operation of complex, internally developed and proprietary software, as well as the underlying technology infrastructure, including servers, databases, cloud hosting environments, networks, and related systems, that together support real-time wagering, account management, payment processing, and responsible gaming controls. This software and infrastructure may contain undetected errors, bugs, or design defects, particularly as we update existing platforms, deploy new features, integrate acquired technology, or scale to accommodate increased user volume or new jurisdictions. Any such defects, or any failure, outage, or degradation in performance of our systems, whether caused by software errors, hardware failures, capacity constraints, power outages, natural disasters, human error, or other causes, could result in incorrect bet settlement, erroneous odds or payouts, inability of customers to place or settle wagers, or extended service interruptions, particularly during high-traffic periods such as major sporting events. Any of the foregoing could result in customer dissatisfaction and attrition, negative publicity, regulatory scrutiny or enforcement action, litigation, financial losses (including losses arising from mispriced or mis-settled wagers), and harm to our brand and competitive position, any of which could materially and adversely affect our business, financial condition, and results of operations.
We rely on third-party systems, platform providers, and content providers to operate our business, and any failure, disruption, or deterioration in these relationships or systems could materially harm our operations.
We depend on a variety of third parties to operate our online casino and sports betting products, including third-party gaming platform and content providers, payment processors and banking partners, cloud hosting and content-delivery providers, geolocation and identity-verification vendors, and other technology and service providers. We do not fully control the operation, security, or reliability of these third-party systems. If any of these providers experiences an outage, service degradation, security breach, financial distress, insolvency, or termination of its relationship with us, or if we are unable to renew agreements with key providers on commercially reasonable terms (or at all), we may be unable to offer affected games or services, may experience delayed or interrupted service to our customers, and may be required to transition to alternative providers on short notice, which could be costly, time-consuming, and disruptive. Certain of our third-party providers may also be single points of failure for particular products or markets, increasing our exposure to any disruption of their systems. Any of these events could result in loss of customers and revenue, reputational harm, and regulatory consequences, and could materially and adversely affect our business and results of operations.
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We depend on external data feeds, including sports event and odds data, and any inaccuracy, delay, or interruption in this data could result in improper bet settlement, financial losses, and regulatory exposure.
Our sports wagering operations depend on data feeds licensed from third-party data providers for real-time sports scores, statistics, event outcomes, and in certain situations, pricing/odds information, which we use to offer markets, price wagers, and settle bets. We also rely on external data and content feeds to support certain online casino products. If these data feeds are delayed, interrupted, inaccurate, incomplete, or manipulated (whether due to technical failure, provider error, loss of a data licensing relationship, or other causes), we may be unable to offer or may be forced to suspend certain betting markets, may settle wagers incorrectly, or may be exposed to arbitrage or advantage betting by customers exploiting stale or erroneous data. Errors in official event data can also lead to disputes with customers over bet settlement, potential financial liability, negative publicity, and regulatory inquiries or sanctions in jurisdictions that impose specific integrity or data-accuracy requirements on licensed operators. Any loss of access to reliable, timely sports data, or a material increase in the cost of licensing such data, could impair our ability to compete effectively and could materially and adversely affect our business and results of operations.
Cybersecurity incidents, hacking, or other technology-related attacks against us or our third-party providers could disrupt our operations, compromise sensitive data, and expose us to significant liability and reputational harm.
Our business involves the collection, storage, and processing of large volumes of sensitive customer information, including personal, financial, and payment data, as well as proprietary business and wagering data. Our systems, and the systems of the third parties on which we rely, are targets for cyberattacks, including hacking, ransomware, denial-of-service attacks, phishing and social engineering, credential-stuffing and account takeover attempts, malware, and other efforts by increasingly sophisticated bad actors, including organized groups seeking to defraud our platform or manipulate wagering outcomes. Despite our investment in security controls, we may not be able to anticipate, detect, or prevent all such attempts, and a successful cybersecurity incident could result in unauthorized access to or disclosure, loss, or misuse of customer or company data; theft of funds; manipulation or corruption of wagering, payout, or account data; extended platform outages; and compromise of the integrity of our games and betting markets. Any such incident could subject us to significant remediation costs, litigation, regulatory investigations and penalties (including under applicable data privacy and gaming laws), loss of gaming licenses in one or more jurisdictions, increased insurance costs, loss of customer trust, and reputational harm, any of which could materially and adversely affect our business, financial condition, and results of operations. In addition, because techniques used to obtain unauthorized access change frequently and are often not recognized until launched against a target, we may be unable to implement adequate preventative measures in time.
Disruptions in the availability of our computer systems, through cyber-attacks or otherwise, could damage our computer or telecommunications systems, impact our ability to service our customers, adversely affect our operations and the results of operations, and have an adverse effect on our reputation. The costs to us to eliminate or alleviate security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and the efforts to address these problems could result in interruptions, delays, cessation of service and loss of existing or potential customers and may impede our sales, distribution and other critical functions. We may also be subject to regulatory penalties and litigation by customers and other parties whose information has been compromised, all of which could have a material adverse effect on our business, results of operations and cash flows.
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We face cyber security risks that could result in damage to our reputation and/or subject us to fines, payment of damages, lawsuits and restrictions on our use of data.
Our information systems and data, including those we maintain with our third-party service providers, may be subject to cyber security breaches. Computer programmers and hackers may be able to penetrate our network security and misappropriate, copy or pirate our confidential information or that of third parties, create system disruptions or cause interruptions or shutdowns of our internal systems and services. Our website may become subject to denial-of-service attacks, where a website is bombarded with information requests eventually causing the website to overload, resulting in a delay or disruption of service. Computer programmers and hackers also may be able to develop and deploy viruses, worms and other malicious software programs that attack our products or otherwise exploit any security vulnerabilities of our products. There is a growing trend of advanced persistent threats being launched by organized and coordinated groups against corporate networks to breach security for malicious purposes.
The techniques used to obtain unauthorized, improper, or illegal access to our systems, our data or customers' data, disable or degrade service, or sabotage systems are constantly evolving and have become increasingly complex and sophisticated, may be difficult to detect quickly, and often are not recognized or detected until after they have been launched. Although we have developed systems and processes designed to protect our data and customer data and to prevent data loss and other security breaches and expect to continue to expend significant resources to bolster these protections, there can be no assurance that these security measures will provide absolute security, as demonstrated by the incident described below.
There has been in the past, and may in the future be, losses or unauthorized access to or releases of confidential information, including personally identifiable information, that could subject the Company to significant reputational, financial, legal and operational consequences. It is increasingly difficult to differentiate legitimate from illegitimate claims and therefore take reasonable and appropriate action.
The Company's business requires it to use, transmit and store confidential information including, among other things, personally identifiable information ("PII") with respect to the Company's customers and employees. The Company devotes significant resources to network and data security, including through the use of encryption and other security measures intended to protect its systems and data. But these measures cannot provide absolute security, and losses or unauthorized access to or releases of confidential information have occurred, including the incident described above, and could occur again, and could materially adversely affect the Company's reputation, financial condition and operating results. The Company's business also requires it to share confidential information with third parties. Although the Company takes steps to secure confidential information that is provided to third parties, such measures are not always effective, and losses or unauthorized access to or releases of confidential information have occurred and could recur, which could materially adversely affect the Company's reputation, financial condition and operating results.
For example, on May 26, 2026, the Company received a communication from a threat actor claiming to have obtained sensitive customer information by accessing a former employee’s credentials. The threat actor demanded payment from the Company in exchange for not publicly disclosing this information. Following receipt of such communication, the Company could not confirm the details of the threat actor’s allegations. The collective claimed to have information including, in certain cases, unique citizen identification numbers, ID card and passport data, home addresses, and other identifying information.
Upon receipt of that threat actor’s claims, the Company immediately investigated various potential infiltration methods used by the threat actor and confirmed that it was likely that some information was exfiltrated. However, the Company has not been able to quantify the information taken. The Company then considered whether and how to patch its methods to contain, assess and remediate the alleged incident. The Company believes such prophylactic actions have been successful and, since the initiation of its responsive efforts, it has not observed any evidence of new unauthorized activity. Still, the Company’s investigation, monitoring, and related activities are ongoing. The Company is actively engaged with local law enforcement and government partners in connection with the incident described herein. The Company is and will continue implementing further measures to strengthen its security environment and protect its customers. Although the Company has taken remedial measures, the Company cannot guarantee that all effects of the incident have been fully identified, remediated, or mitigated. If this threat actor’s claims were realized, the Company could face lawsuits, purported class actions, regulatory investigations and enforcement actions (and related fines, penalties, consent decrees, or other regulatory obligations), remediation costs, notification costs, reputational harm, loss of customers, contractual and business impacts, insurance premium increases (or loss of coverage), and increased cybersecurity compliance costs. Any of the foregoing consequences, individually or in the aggregate, could have a material adverse effect on the Company’s business, financial condition, results of operations, and reputation, and consequently, the value of the Company’s securities.
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The effects of the above may result in a material adverse effect on our operations, cash flow, future prospects, and the value of our securities.
Nevertheless, to the Company’s knowledge, the incident has not resulted in any material disruption to, or impact on, the Company's operations, its financial condition or results of operations.
Additionally, as with all companies, our security measures may not be sufficient for all eventualities and may be vulnerable to hacking, employee error, malfeasance, system error, faulty password management or other irregularities. In addition to the risks relating to general confidential information described above, the Company is also subject to specific obligations relating to payment card data. Under payment card rules and obligations, if cardholder information is potentially compromised, the Company could be liable for associated investigatory expenses and could also incur significant fees or fines if the Company fails to follow payment card industry data security standards. The Company could also experience a significant increase in payment card transaction costs or lose the ability to process payment cards if it fails to follow payment card industry data security standards, which would materially adversely affect the Company’s reputation, financial condition and operating results.
Regulatory developments and operational uncertainties in Brazil could adversely affect our business, financial condition and results of operations.
The gaming and sports betting industry in Brazil is subject to an evolving regulatory environment, including licensing requirements, operating restrictions, taxation and other compliance obligations. In September 2026, the Brazilian government introduced significant regulatory changes affecting the gaming and sports betting market, which have created substantial uncertainty regarding the Company's existing operations and future business prospects in Brazil.
These regulatory developments have adversely affected the recoverability of certain assets associated with the Company's Brazilian operations. As a result, during the quarter ended September 30, 2026, the Company recognized impairment losses of approximately $5.5 million, consisting of $4.1 million related to its Brazilian gaming license, and $1.4 million related to the Magicbet777 domain and associated player database.
In light of these regulatory developments and the resulting operational restrictions, the Company does not expect to resume its gaming operations in Brazil during the remainder of 2026. The Company currently anticipates maintaining a limited local presence, including an office and minimal operating expenditures, primarily to support certain administrative and regional activities, including activities related to Portugal, while monitoring ongoing legal proceedings and judicial decisions that may affect its ability to resume operations in Brazil.
The timing and feasibility of any potential resumption of gaming operations in Brazil remain uncertain and will depend on future regulatory developments, the outcomes of relevant legal proceedings and management's assessment of the commercial viability of such operations. There can be no assurance that the Company will be able to resume its operations in Brazil or recover any additional investments or expenditures previously incurred.
The continued suspension of operations, together with the costs associated with maintaining a limited local presence, could result in additional operating losses, employee-related costs, contractual obligations, regulatory compliance expenses or other financial losses. The Company may also be required to further reduce or permanently discontinue its Brazilian operations depending on the outcome of ongoing legal proceedings and regulatory developments.
The ultimate impact of these developments remains uncertain. Any further adverse regulatory changes, unfavorable judicial decisions, prolonged suspension of operations or additional financial losses could materially adversely affect the Company's business, financial condition, cash flows and results of operations.
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Changes in Australian gambling laws and regulations could materially and adversely affect our use of Australian trade promotion lottery as part of our business.
Our Australian subsidiary, Classics for a Cause ("CFAC"), operates trade promotion lotteries as part of its business that is subject to Australian federal, state and territory gambling laws and regulations. Changes in the regulatory framework governing online gambling and trade promotion lotteries could materially and adversely affect CFAC's business model, operations, financial performance and ability to continue operating.
On August 26, 2026, the Australian Government enacted the Interactive Gambling Amendment (Gambling Reform) Act 2026 (Cth), which amends the Interactive Gambling Act 2001 (Cth) (“Act”) and introduces additional restrictions on certain online gambling activities, including trade promotion gambling services. The relevant amendments are scheduled to take effect on January 1, 2027.
Under the amended legislation, trade promotion gambling services must satisfy more restrictive requirements to qualify for an exclusion from the prohibitions applicable to interactive gambling services. These requirements generally include that the sole or primary purpose of the promotion must be to promote trade, that the promotion must be incidental to the supply of goods or services, that participation must not require payment other than for goods or services at fair market value, and that participation must not be offered on an ongoing or recurring basis as part of a system of continuous or repeated draws. Certain statutory exceptions or ministerial determinations may apply.
These legislative changes may significantly affect CFAC's existing business model, particularly arrangements involving membership or subscription fees and recurring prize draws. If CFAC's trade promotion activities do not qualify for an applicable exclusion or other lawful authorization under the amended regulatory framework, certain aspects of its operations could be classified as prohibited interactive gambling services.
As a result, CFAC may be required to substantially modify its business model, restructure its operations, suspend certain activities, or discontinue some or all of its business operations. There can be no assurance that CFAC will be able to implement the necessary changes within the required timeframe or that any alternative business model would be commercially viable.
Any suspension, restructuring or discontinuation of CFAC's operations could result in a significant reduction or elimination of revenue generated by the business, increased compliance and restructuring costs, employee termination expenses, contractual obligations, asset impairment charges and other financial losses. In addition, any failure to comply with applicable gambling laws and regulations could expose CFAC and the Company to regulatory investigations, enforcement actions, substantial monetary penalties and reputational damage.
The Company continues to assess the potential impact of these legislative changes on CFAC's operations and available compliance alternatives. However, uncertainty remains regarding the interpretation and application of the amended legislation to CFAC's specific business activities, the availability of applicable exemptions or authorizations, and the commercial feasibility of any necessary operational changes. At this stage, the Australian regulator responsible for enforcement of the Act, the Australian Communications and Media Authority, is not currently proposing to issue guidance on the relevant amendments, which continues to impact certainty in relation to the interpretation of the amendments.
If CFAC is unable to continue operating under the amended regulatory framework, or if compliance requires substantial changes to its existing business model, such developments could materially and adversely affect the Company's business, financial condition, results of operations and cash flows.
Our UK prize competition business may be subject to significant historical and future value-added tax liabilities, which could materially adversely affect our business, financial condition, results of operations and cash flows.
Our subsidiary, RKings Competitions Limited ("RKings"), operates prize draw competitions in the United Kingdom, offering participants the opportunity to win vehicles, cash and other prizes through paid entries, with an alternative free postal entry route. Historically, RKings has not been registered for UK value-added tax ("VAT") and has not accounted for VAT on paid competition entries, consistent with the historical treatment adopted by certain operators in the UK prize competition industry.
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In February 2026, the UK government indicated, in response to a Parliamentary Question, that paid entries to prize competitions offering a free entry route should generally be subject to VAT at the standard rate of 20%. Since August 2026, His Majesty's Revenue and Customs ("HMRC") has reportedly commenced contacting operators within the prize competition sector regarding their VAT treatment. As of the date of this report, RKings has not received a formal notice or assessment from HMRC in connection with this matter.
The applicability of VAT to prize draw competitions remains subject to significant legal and regulatory uncertainty. In October 2026, the UK First-tier Tribunal heard an appeal involving another prize competition operator, Omaze, concerning whether prize draws offering a free entry route qualify for the VAT exemption applicable to lotteries. The proceedings focused primarily on the interpretation of the term "lottery" under UK VAT legislation and whether the availability of a free entry route prevents such competitions from qualifying for the exemption. A decision is expected in 2027, although the timing remains uncertain and any decision may be subject to further appeal.
The Company has engaged external tax advisers to assess the potential VAT implications for RKings. Significant uncertainties remain regarding whether paid competition entries qualify for VAT exemption, the appropriate taxable amount if VAT is determined to apply, and the jurisdiction in which such transactions may be subject to VAT. In particular, a substantial proportion of RKings' customers are located in the Republic of Ireland, and the Company is evaluating whether certain transactions may be treated as electronically supplied services for VAT purposes. Depending on the outcome of this assessment, certain transactions may fall outside the scope of UK VAT but could potentially give rise to VAT obligations in Ireland.
In addition, uncertainty remains regarding the basis upon which any VAT liability would be calculated, including whether VAT would apply to gross competition entry revenues or to a net amount after deducting the cost of prizes. The potential financial exposure could vary significantly depending on the ultimate interpretation and application of the relevant tax legislation.
Separately, RKings has historically received services from suppliers located outside the United Kingdom, including digital advertising, technology and other services. Such transactions may give rise to VAT registration and reverse-charge obligations, irrespective of the ultimate VAT treatment of competition entry revenues. The extent to which any related input VAT may be recoverable remains subject to further assessment.
If HMRC determines that VAT is payable on some or all of RKings' historical competition revenues, or that additional VAT obligations arise in respect of services received from overseas suppliers, the Company could incur substantial historical tax liabilities, together with applicable interest and penalties. Such liabilities could extend to multiple prior reporting periods and may be material to the Company's financial position. Additionally, if VAT is payable on RKings’ competition revenues, or additional VAT obligations arise in respect of services received from overseas suppliers, RKings results of operations may be significantly negatively affected.
The Company continues to evaluate these matters with its professional advisers, including the potential scope of historical VAT obligations, the applicable assessment periods, the appropriate taxable base, and the availability of input VAT recovery. Due to the significant uncertainties surrounding these matters, the Company is currently unable to reasonably estimate the amount or range of potential financial exposure.
The timing and ultimate outcome of these matters remain uncertain. Any adverse determination, including the imposition of retrospective VAT liabilities or additional VAT obligations on future operations, could materially adversely affect the Company's business, financial condition, results of operations and cash flows.
We have in the past, and may in the future, impair goodwill and intangible assets, including in-process research and development.
We review long-lived assets and certain identifiable assets (including intangible assets) for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered. An impairment exists when the carrying value of the intangible asset (including goodwill) is not recoverable and exceeds its estimated fair value. Goodwill represents the difference between the purchase price and the fair value of assets and liabilities acquired in a business combination. We review goodwill yearly, or more frequently whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered, for impairment by initially considering qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill, as a basis for determining whether it is necessary to perform a quantitative analysis. If it is determined that it is more likely than not that the fair value of reporting unit is less than its carrying amount, a quantitative analysis is performed to identify goodwill impairment.
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During the three months ended September 30, 2026, the Company identified impairment indicators related to its Brazilian gaming operations due to adverse regulatory developments and continued operating losses. Following the issuance of Brazilian Provisional Measure No. 1,394/2026 on September 25, 2026, which, prohibits fixed-odds sports betting and online casino-style betting throughout Brazil, including offerings by foreign operators to persons in Brazil, management performed an impairment assessment in accordance with ASC 360, considering projected future cash flows, estimated fair values, and the expected future economic benefits of the underlying intangible assets. Based on this assessment, the Company concluded that certain intangible assets were impaired and recognized an impairment loss of approximately $5.5 million during the three months ended September 30, 2026, consisting of $4.1 million related to its Brazilian gaming license and $1.4 million related to the Magicbet777 domain and associated player database, due to the regulatory restrictions imposed on online gaming operations in Brazil, which significantly reduced the expected future cash flows and economic benefits associated with these assets.
The $4.1 million impairment of the Brazilian gaming license included approximately $2.0 million of the remaining net book value of the license and approximately $2.1 million of license costs previously reclassified to investments in the local statutory books in connection with a silent partnership (Sociedade em Conta de Participação, or “SCP”) arrangement with a third-party operator. As the Company retained legal ownership of the gaming license, the previously reclassified amount was determined to remain part of the capitalized gaming license costs under U.S. GAAP and was accordingly reclassified from investments to intangible assets for consolidated financial reporting purposes.
Additionally, the Company recognized an impairment loss of approximately $92,000 related to trademarks acquired in connection with the acquisition of Media Games Malta, following the cessation of its operations.
The impairment losses were recognized in the consolidated statements of operations and comprehensive loss. As a result, the carrying amounts of the Brazilian gaming license, the Magicbet777 domain and associated player database, and the Media Games Malta trademarks were reduced to zero as of September 30, 2026.
Intangible assets that have finite useful lives are amortized over their useful lives. The Company incurred amortization expenses of $1,356,786 and $2,575,834 during the three months ended September 30, 2026, and 2025, respectively, and $3,913,460 and $7,193,854 during the nine months ended September 30, 2026 and 2025, respectively.
Goodwill is tested for impairment at the reporting unit level. In accordance with ASC Topic 350 Intangibles - Goodwill and Other (“ASC 350”), our business is classified into two reporting units: Golden Matrix and MeridianBet Group. We review and evaluate our goodwill for potential impairment at a minimum annually, or more frequently if circumstances indicate that impairment is possible.
During the three months ended September 30, 2026, the Company identified indicators that the fair value of its Golden Matrix reporting unit may be below its carrying amount, including continued operating losses and a revised forecast. The Company performed an interim quantitative impairment test as of September 30, 2026, estimating fair value using a weighted combination of a discounted cash flow method and a market capitalization method. The carrying amount exceeded the estimated fair value, and the Company recognized a goodwill impairment charge of $5.9 million. Following the charge, goodwill allocated to the Golden Matrix reporting unit was $2.0 million.
An impairment recognized in one period may not be reversed in a subsequent period, even if the value of the impaired asset increases in the future. We have in the past and could in the future incur additional impairments of intangible assets, including goodwill, which may have a material effect on our results of operations, balance sheet and financial statements, which may cause the value of our common stock to decline in value.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Recent Sales of Unregistered Securities
There have been no sales of unregistered securities during the quarter ended September 30, 2026, and from the period from October 1, 2026 to the filing date of this Report, which have not previously been disclosed in an Annual Report on Form 10-K, a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K, except as follows:
Recent sales of unregistered securities during the quarter ended September 30, 2026.
On August 25, 2026, the Company issued an aggregate of 12,054 shares of restricted common stock to Dejan Petković in satisfaction of the first four installments of the equity compensation obligation under the Sponsorship Agreement dated December 15, 2025, as amended on July 10, 2026.
Recent sales of unregistered securities subsequent to our fiscal quarter ended September 30, 2026.
On October 6, 2026, the Company issued 3,014 restricted shares of its common stock to Dejan Petković pursuant to the Sponsorship Agreement, as amended on July 10, 2026, in satisfaction of the equity compensation obligation for the September 2026 installment. The related share-based compensation obligation had been accrued as of September 30, 2026.
* * * * *
We claim an exemption from registration for the issuance of the shares of common stock described above pursuant to Section 4(a)(2), Rule 506(b) and/or Regulation S of the Securities Act since the shares of common stock were issued to an “accredited investor”, a non-U.S. person (as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to an offshore transaction, and no directed selling efforts were made in the United States by the Company, a distributor, any of their respective affiliates, or any person acting on behalf of any of the foregoing or a person who had access to similar information which would be available in a registration statement filed pursuant to the Securities Act. The securities are subject to transfer restrictions, and the securities contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold absent registration or pursuant to an exemption therefrom. The securities were not registered under the Securities Act and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws.
Issuer Repurchases of Equity Securities
The following table sets forth share repurchase activity for the respective periods:
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| May Yet Be |
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| Purchased |
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| Total Number |
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| Average |
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| Announced |
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| Under the |
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| of Shares |
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| Price Paid Per |
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| Plans or |
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Period |
| Purchased |
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| Share |
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| Programs(1) |
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| Programs(1) |
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July 1 – July 31, 2026 |
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| - |
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| - |
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| - |
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| $ | 2,877,222 |
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August 1 – August 31, 2026 |
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| - |
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| - |
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| - |
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| $ | 2,877,222 |
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September 1 – September 30, 2026 |
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| - |
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| - |
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| - |
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| $ | 2,877,222 |
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Total |
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| - |
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| - |
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| - |
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(1) On December 16, 2025, the Board of Directors of the Company approved a share repurchase program for the purchase of up to $3.0 million of the currently outstanding shares of the Company’s common stock. The repurchase program will expire on the earliest of December 15, 2026, the date on which $3.0 million of the Company’s common stock has been repurchased, and the date the program is discontinued by the Company. Under the stock repurchase program, shares may be repurchased from time to time in the open market or through negotiated transactions at prevailing market rates, or by other means in accordance with federal securities laws. Repurchases will be made at management’s discretion at prices management considers to be attractive and in the best interests of both the Company and its stockholders, subject to the availability of stock, general market conditions, the trading price of the stock, alternative uses for capital, and the Company’s financial performance. Open market purchases are expected to be conducted in accordance with the limitations set forth in Rule 10b-18 of the Exchange Act and other applicable laws and regulations. Repurchases may also be made under a Rule 10b5-1 plan, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws.
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Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
(a) Form 8-K Information. The information and disclosures which are set forth above under “Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds”-“Recent sales of unregistered securities”, are incorporated by reference into this “Item 5. Other Information”, Section (a), in their entirety, and shall serve as disclosure of such information pursuant to Item 3.02 of Form 8-K.
The Company is voluntarily reporting the following information in this Part II, Item 5 of this Quarterly Report on Form 10-Q in lieu of reporting such information under Item 8.01 of a Current Report on Form 8-K. The information relates to an amendment entered into after the end of the fiscal quarter covered by this report and before the filing of this report:
On October 13, 2026, with effect from September 1, 2026, the Company and Igor Salindrija entered into Addendum No. 3 to the Igor Salindrija loan agreement. Under the amended terms, the parties acknowledged that the outstanding principal balance as of September 1, 2026 was EUR 550,000, and agreed to extend the repayment period through March 1, 2027 pursuant to a revised repayment schedule. Interest continues to accrue on the outstanding principal at an annual rate of 7%. Except as modified by Addendum No. 3, all other terms and conditions of the loan agreement, as previously amended by Addendum No. 1 and Addendum No. 2, remain unchanged.
(c) Rule 10b5-1 Trading Plans.
Our directors and executive officers may from time to time enter into plans or other arrangements for the purchase or sale of our shares that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or may represent a non-Rule 10b5-1 trading arrangement under the Exchange Act. During the quarter ended September 30, 2026, none of the Company’s directors or officers (as defined in Rule 16a-1(f)) adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement”.
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Item 6. Exhibits
Incorporated by Reference | |||||||||||||||||
Exhibit Number | Description of Exhibit | Filed/ Furnished Herewith | Form | Exhibit | Filing Date/Period End Date | File Number | |||||||||||
2.1 |
| Tenth Amendment to Amended and Restated Sale and Purchase Agreement of Share Capital entered into and effective September 28, 2026, by and between Meridian Holdings Inc., formerly Golden Matrix Group, Inc., as purchaser and the shareholders of: Meridian Tech Društvo Sa Ograničenom Odgovornošću Beograd, a private limited company formed and registered in and under the laws of the Republic of Serbia, Društvo Sa Ograničenom Odgovornošću “Meridianbet” Društvo Za Proizvodnju, Promet Roba I Usluga, Export Import Podgorica, a private limited company formed and registered in and under the laws of Montenegro, Meridian Gaming Holdings Ltd., a company formed and registered in the Republic of Malta, and Meridian Gaming (Cy) Ltd, a company formed and registered in the Republic of Cyprus, as sellers |
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| 8-K |
| 2.1 |
| 10/2/2026 |
| 001-41326 | |||||
3.1 |
| Articles of Incorporation Since Formation and through April 2020 |
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| 10-KT/A | 3.1 | 10/28/2020 | 000-54840 | |||||||||
3.2 |
| Amended and Restated Certificate of Designation of Golden Matrix Group, Inc. Establishing the Designation, Preferences, Limitations and Relative Rights of its Series B Voting Preferred Stock as filed with the Secretary of State of Nevada on March 11, 2022 |
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| 8-K | 10.1 | 3/14/2022 | 000-54840 | |||||||||
3.3 |
| Certificate of Correction (correcting Certificate of Change filed with the Secretary of State of Nevada on April 27, 2020) filed with the Secretary of State of Nevada on October 26, 2020 |
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| 8-K | 3.2 | 10/28/2020 | 000-54840 | |||||||||
3.4 |
| Certificate of Amendment to Articles of Incorporation, as filed with the Secretary of State of Nevada on December 16, 2021 |
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| 8-K | 3.1 | 12/16/2021 | 000-54840 | |||||||||
3.5 |
| Certificate of Amendment to Articles of Incorporation of Golden Matrix Group, Inc., as filed with the Secretary of State of Nevada on April 4, 2024 |
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| 8-K | 3.1 | 4/9/2024 | 001-41326 | |||||||||
3.6 |
| Certificate of Designation of Golden Matrix Group, Inc. Establishing the Designation, Preferences, Limitations and Relative Rights of Its Series C Preferred Stock, as filed with the Secretary of State of Nevada on April 4, 2024 |
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| 8-K | 3.3 | 4/9/2024 | 001-41326 | |||||||||
3.7 |
| Certificate of Change, affecting a 1-for-12 Reverse Stock Split of the Outstanding Common Stock and Authorized Common Stock, filed with the Secretary of State of Nevada on February 26, 2026 |
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| 8-K |
| 3.1 |
| 3/3/2026 |
| 001-41326 | |||||
3.8 |
| Articles of Amendment affecting Name Change to “Meridian Holdings Inc.”, filed with the Secretary of State of Nevada on February 26, 2026 |
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| 8-K |
| 3.2 |
| 3/3/2026 |
| 001-41326 | |||||
3.9 |
| Bylaws of the Company |
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| S-1 | 3.2 | 10/7/2008 | 333-153881 | |||||||||
3.10 |
| Amendment to the Bylaws of Golden Matrix Group, Inc. dated April 5, 2024 |
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| 8-K | 3.2 | 4/9/2024 | 001-41326 | |||||||||
3.11 |
| Amendments to the Bylaws of Golden Matrix Group, Inc. dated January 29, 2025 |
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| 8-K | 3.2 | 1/30/2025 | 001-41326 | |||||||||
3.12 |
| Amendments to the Bylaws of Golden Matrix Group, Inc. dated December 2, 2025 |
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| 8-K |
| 3.1 |
| 12/8/2025 |
| 001-41326 | |||||
10.1 |
| Separation Agreement dated July 29, 2026, by and between Meridian Holdings Inc. and Rich Christensen |
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| 8-K |
| 10.1 |
| 7/29/2026 |
| 001-41326 | |||||
10.2 |
| Second Amendment to Promissory Notes dated September 28, 2026, by and between Meridian Holdings Inc., formerly Golden Matrix Group, Inc. and each of Aleksandar Milovanović; Zoran Milošević; and Snežana Božović |
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| 8-K |
| 10.1 |
| 10/2/2026 |
| 001-41326 | |||||
10.3 |
| First Amendment to Employment Agreement dated September 29, 2026, by and between Meridian Tech Društvo Sa Ograničenom Odgovornošću Beograd, and Zoran Milošević, and acknowledged and approved by Meridian Holdings Inc. |
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| 8-K |
| 10.3 |
| 10/2/2026 |
| 001-41326 | |||||
10.4 |
| Offer Letter Dated July 2, 2022, between Zhe ‘Scott’ Yan and Global Technology Group Pty Ltd, as amended on June 1, 2025 |
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| 8-K |
| 10.4 |
| 10/2/2026 |
| 001-41326 | |||||
10.5 |
| First Amendment to Promissory Notes dated April 27, 2026, and effective April 9, 2026 |
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| 10-Q |
| 10.4 |
| 4/28/2026 |
| 001-41326 | |||||
10.6 |
| Addendum No. 1 to Igor Salindrija Loan Agreement dated January 5, 2026 |
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| 10-Q |
| 10.2 |
| 7/29/2026 |
| 001-41326 | |||||
10.7 |
| Addendum No. 2 to Igor Salindrija Loan Agreement dated April 2, 2026 |
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| 10-Q | 10.3 | 7/29/2026 | 001-41326 | |||||||||
10.8* |
| Addendum No. 3 to Igor Salindrija Loan Agreement dated October 13, 2026 |
| x |
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31.1 |
| Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act* |
| x | |||||||||||||
31.2 |
| Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act* |
| x | |||||||||||||
32.1 |
| Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act** |
| x | |||||||||||||
32.2 |
| Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act** |
| x | |||||||||||||
101.INS* |
| Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
| x | |||||||||||||
101.SCH* |
| Inline XBRL Taxonomy Extension Schema Document |
| x | |||||||||||||
101.CAL* |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| x | |||||||||||||
101.DEF* |
| Inline XBRL Taxonomy Extension Definition Linkbase Document |
| x | |||||||||||||
101.LAB* |
| Inline XBRL Taxonomy Extension Label Linkbase Document |
| x | |||||||||||||
101.PRE* |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| x | |||||||||||||
104* |
| Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set |
| x | |||||||||||||
* Filed herewith.
** Furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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Dated: November 10, 2026 | /s/ Zoran Milošević |
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Zoran Milošević |
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Its: Chief Executive Officer (Principal Executive Officer) |
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Dated: November 10, 2026 | /s/ Zhe ‘Scott’ Yan |
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Zhe ‘Scott’ Yan |
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Its: Chief Accounting Officer (Principal Accounting Officer and Principal Financial Officer) |
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