# EDGAR Filing Document

**Accession Number:** 0001621672
**File Stem:** 0001437749-25-035238
**Filing Date:** 2025-11
**Character Count:** 413023
**Document Hash:** ab01fc35de240f366e8d50776c5d1369
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-25-035238.hdr.sgml**: 20251114

**ACCESSION NUMBER**: 0001437749-25-035238

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 60

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251114

**DATE AS OF CHANGE**: 20251114

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Super League Enterprise, Inc.
- **CENTRAL INDEX KEY:** 0001621672
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 471990734
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38819
- **FILM NUMBER:** 251488148

**BUSINESS ADDRESS:**
- **STREET 1:** 2450 COLORADO AVE
- **STREET 2:** STE 100E
- **CITY:** SANTA MONICA
- **STATE:** CA
- **ZIP:** 90404
- **BUSINESS PHONE:** 213-421-1920

**MAIL ADDRESS:**
- **STREET 1:** 2450 COLORADO AVE
- **STREET 2:** STE 100E
- **CITY:** SANTA MONICA
- **STATE:** CA
- **ZIP:** 90404

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Super League Gaming, Inc.
- **DATE OF NAME CHANGE:** 20150924

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Nth Games, Inc.
- **DATE OF NAME CHANGE:** 20141007

?xml version='1.0' encoding='ASCII'? slgg20250930_10q.htm

[<u>**Table of Contents**</u>](#toc)

------

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended **September 30, 2025**

OR

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934

From the transition period from to

Commission File Number **001-38819**

---

| |
|:---|
| **SUPER LEAGUE ENTERPRISE, INC.** |
| (Exact name of small business issuer as specified in its charter) |

---

---

| | |
|:---|:---|
| **Delaware** | **47-1990734** |
| (State or other jurisdiction of incorporation or<br> organization) | (IRS Employer Identification No.) |

---

**2450 Colorado Ave., Suite 100E**

**Santa Monica, California 90404**

(Address of principal executive offices)

**Company: (213) 421-1920; Investor Relations: 203-741-8811**

(Issuer's telephone number)

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. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically on its corporate web site, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Sec.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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 | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| | | Emerging growth company | ☐ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which** <br> **registered** |
| Common Stock, par value $0.001 per share | SLE | NASDAQ Capital Market |

---

As of November 10, 2025, there were 10,075,954 shares of the registrant's common stock, $0.001 par value, issued and outstanding.

------

[**Table of Contents**](#toc)

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| | | Page |
| [<u>PART I. FINANCIAL INFORMATION</u>](#part1) | [<u>PART I. FINANCIAL INFORMATION</u>](#part1) |  |
| [<u>Item 1.</u>](#part1) | [<u>Condensed Financial Statements</u> <u>(Unaudited)</u>](#part1) | [1](#part1) |
| [<u>Item 2.</u>](#item2mda) | [<u>Management</u><u>'</u><u>s Discussion and Analysis of Financial Condition and Results of Operations</u>](#item2mda) | [47](#item2mda) |
| [<u>Item 3.</u>](#item3qandq) | [<u>Quantitative and Qualitative Disclosures About Market Risk</u>](#item3qandq) | [70](#item3qandq) |
| [<u>Item 4.</u>](#item4conandpro) | [<u>Controls and Procedures</u>](#item4conandpro) | [70](#item4conandpro) |
| [<u>PART II. OTHER INFORMATION</u>](#part2) | [<u>PART II. OTHER INFORMATION</u>](#part2) |  |
| [<u>Item 1.</u>](#item1legal) | [<u>Legal Proceedings</u>](#item1legal) | [70](#item1legal) |
| [<u>Item 1A.</u>](#item1a) | [<u>Risk Factors</u>](#item1a) | [70](#item1a) |
| [<u>Item 2.</u>](#item2unreg) | [<u>Unregistered Sales of Equity Securities and Use of Proceeds</u>](#item2unreg) | [71](#item2unreg) |
| [<u>Item 3.</u>](#item3defaults) | [<u>Defaults Upon Senior Securities</u>](#item3defaults) | [71](#item3defaults) |
| [<u>Item 4.</u>](#item4msd) | [<u>Mine Safety Disclosures</u>](#item4msd) | [71](#item4msd) |
| [<u>Item 5.</u>](#item5otherinfo) | [<u>Other Information</u>](#item5otherinfo) | [71](#item5otherinfo) |
| [<u>Item 6.</u>](#item6exhibits) | [<u>Exhibits</u>](#item6exhibits) | [72](#item6exhibits) |
| [SIGNATURES](#sig) | [SIGNATURES](#sig) |  |

---

------

[**Table of Contents**](#toc)

**PART I**

**FINANCIAL INFORMATION**

---

| | |
|:---|:---|
| **ITEM 1.** | **CONDENSED FINANCIAL STATEMENTS**  |

---

**SUPER LEAGUE ENTERPRISE, INC.**

**CONDENSED BALANCE SHEETS**

(In U.S. dollars, rounded to the nearest thousands, except share and per share data)

---

| | | |
|:---|:---|:---|
|  | **September 30,** | **December 31,** |
|  | **2025** | **2024** |
|  | (Unaudited) |  |
| **ASSETS** |  |  |
| Current Assets |  |  |
| Cash and cash equivalents | $1061000 | $1310000 |
| Accounts receivable, net | 1918000 | 3766000 |
| Prepaid expense and other current assets | 1487000 | 677000 |
| Total current assets | 4466000 | 5753000 |
| Property and equipment, net | 11000 | 24000 |
| Intangible assets, net | 2361000 | 4070000 |
| Goodwill | 1864000 | 1864000 |
| Total assets | $8702000 | $11711000 |
| **LIABILITIES AND STOCKHOLDERS**' **(DEFICIT) EQUITY** |  |  |
| Current Liabilities |  |  |
| Accounts payable and accrued expense | $5454000 | $5282000 |
| Accrued contingent consideration | 39000 | 138000 |
| Promissory note - contingent consideration |  | 1735000 |
| Contract liabilities | 813000 | 50000 |
| Secured loan – SLR Facility |  | 24000 |
| Promissory notes payable and accrued interest | 3304000 | 1707000 |
| Promissory notes payable and accrued interest – related party |  | 1509000 |
| Total current liabilities | 9610000 | 10445000 |
| Deferred taxes | 161000 | 161000 |
| Warrant liability | 936000 | 935000 |
| Total liabilities | 10707000 | 11541000 |
| Commitments and Contingencies (Note 7) |  |  |
| **Stockholders**' **(Deficit) Equity** |  |  |
| Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; 1,882,907 and 17,499 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively | 4000 |  |
| Common stock, par value $0.001 per share; 400,000,000 shares authorized; 1,549,104 and 405,610 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively<sup>(1)</sup> | 78000 | 94000 |
| Additional paid-in capital | 271518000 | 270111000 |
| Accumulated deficit | (273605000) | (270035000) |
| Total stockholders' (deficit) equity | (2005000) | 170000 |
| Total liabilities and stockholders' (deficit) equity | $8702000 | $11711000 |

---

------

<sup>(1)</sup> Refer to Note 1 for information regarding Reverse Stock Split effective June 23, 2025.

See accompanying notes to condensed financial statements.

------

[**Table of Contents**](#toc)

**SUPER LEAGUE ENTERPRISE, INC.**

**CONDENSED STATEMENTS OF OPERATIONS**

(Rounded to the nearest thousands, except share and per share data)

(Unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months** | **Three Months** | **Nine Months** | **Nine Months** |
|  | **Ended September 30,** | **Ended September 30,** | **Ended September 30,** | **Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **REVENUE** | $2423000 | $4431000 | $8142000 | $12756000 |
| **COST OF REVENUE** | 1343000 | 2706000 | 4557000 | 7653000 |
| **GROSS PROFIT** | 1080000 | 1725000 | 3585000 | 5103000 |
| **OPERATING EXPENSE** |  |  |  |  |
| Selling, marketing and advertising | 1699000 | 2397000 | 6198000 | 7306000 |
| Engineering, technology and development | 667000 | 914000 | 2290000 | 3405000 |
| General and administrative | 1765000 | 1935000 | 4938000 | 6558000 |
| Contingent consideration |  | (68000) | (14000) | (15000) |
| **Total operating expense** | 4131000 | 5178000 | 13412000 | 17254000 |
| **NET OPERATING LOSS** | (3051000) | (3453000) | (9827000) | (12151000) |
| **OTHER INCOME (EXPENSE)** |  |  |  |  |
| Gain on sale of intangible assets |  |  | 343000 | 144000 |
| Change in fair value of warrant liability | 1073000 | 198000 | 1934000 | 1104000 |
| Loss on extinguishment of liability | (161000) | (336000) | (161000) | (336000) |
| Interest (expense) income, including change in fair value of debt accounted for at fair value | (1010000) | (45000) | (2231000) | (78000) |
| Debt issue costs | (415000) |  | (554000) |  |
| Other (expense) income, net | 2000 | 4000 | (79000) | (30000) |
| **Total other income (expense)** | (511000) | (179000) | (748000) | 804000 |
| **Loss before income taxes** | (3562000) | (3632000) | (10575000) | (11347000) |
| Provision (benefit) for income taxes |  |  |  |  |
| **NET LOSS** | $(3562000) | $(3632000) | $(10575000) | $(11347000) |
| **Net income (loss) per share attributable to common stockholders <sup>(1)</sup>** |  |  |  |  |
| Basic net income (loss) per common share | $3.25 | $(21.47) | $(4.96) | $(80.10) |
| Weighted-average number of common shares outstanding, basic | 1090129 | 248007 | 719639 | 182738 |
| Diluted net loss per common share | $(2.65) | $(21.47) | $(4.96) | $(80.10) |
| Weighted-average number of common shares outstanding, diluted | 1561806 | 248007 | 719639 | 182738 |

---

------

<sup>(1)</sup> Refer to Note 1 for information regarding Reverse Stock Split effective June 23, 2025.

See accompanying notes to condensed financial statements.

------

[**Table of Contents**](#toc)

**SUPER LEAGUE ENTERPRISE, INC.**

**CONDENSED STATEMENTS OF STOCKHOLDERS**' **(DEFICIT) EQUITY**

(Rounded to the nearest thousands, except share and per share data)

(Unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months** | **Three Months** | **Nine Months** | **Nine Months** |
|  | **Ended September 30,** | **Ended September 30,** | **Ended September 30,** | **Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **Preferred stock (Shares):** |  |  |  |  |
| **Balance, beginning of period** | 16426 | 22858 | 17499 | 23656 |
| Issuance of Series AAA Junior preferred stock at $1,000 per share |  |  |  | 1210 |
| Issuance of Series AAAA Junior preferred stock at $1.00 per share – RP Note Exchange | 1500000 |  | 1500000 |  |
| Issuance of Series AAAA Junior preferred stock at $1.00 per share – Super Biz Note Exchange | 1894964 |  | 1894964 |  |
| Issuance of Series AAA-2 Junior preferred stock at $1,000 per share |  | 551 |  | 551 |
| Issuance of Series AAA-3 Junior preferred stock at $1,000 per share |  | 697 |  | 697 |
| Issuance of Series AAA-4 Junior preferred stock at $1,000 per share |  | 399 |  | 399 |
| Conversion of Series A preferred stock to common stock |  | (96) | (780) | (571) |
| Conversion of Series AA preferred stock to common stock |  | (1573) | (60) | (1936) |
| Conversion of Series AAA preferred stock to common stock |  | (2244) | (150) | (3414) |
| Conversion of Series AAA Junior preferred stock to common stock |  |  | (83) |  |
| Conversion of Series AAAA Junior preferred stock to common stock | (1528483) |  | (1528483) |  |
| Conversion of Series AA, AAA and AAA Junior Preferred Stock into Series B Preferred Stock | (15987) |  | (15987) |  |
| Issuance of Series B Preferred Stock in exchange for Series AA, AAA and AAA Junior Preferred Stock | 15987 |  | 15987 |  |
| **Balance, end of period** | 1882907 | 20592 | 1882907 | 20592 |
| **Preferred stock (Amount, at Par Value):** |  |  |  |  |
| **Balance, beginning of period** | $- | $- | $- | $- |
| Issuance of Series AAAA Junior preferred stock at $1.00 per share – RP Note Exchange | 2000 |  | 2000 |  |
| Issuance of Series AAAA Junior preferred stock at $1.00 per share – Super Biz Note Exchange | 2000 |  | 2000 |  |
| Issuance of Series AAA Junior preferred stock at $1,000 per share |  |  |  |  |
| Conversion of Series A preferred stock to common stock |  |  |  |  |
| Conversion of Series AA preferred stock to common stock |  |  |  |  |
| Conversion of Series AAA preferred stock to common stock |  |  |  |  |
| Conversion of Series AAA Junior preferred stock to common stock |  |  |  |  |
| **Balance, end of period** | $4000 | $- | $4000 | $- |
| **Common stock (Shares):** |  |  |  |  |
| **Balance, beginning of period** | 884699 | 181077 | 405610 | 119353 |
| Issuances of common stock, net of issuance costs |  |  | 397547 |  |
| Common stock issued in connection with Hudson ELOC |  |  | 17926 |  |
| Commitment Shares – Hudson ELOC |  |  | 7500 |  |
| Issuance of common stock - Agile II Exchange | 217108 |  | 217108 |  |
| Partial conversion of 1800 Diagonal Note I | 53000 |  | 53000 |  |
| Common stock issued for Melon Acquisition |  |  | 895 | 1803 |
| Common stock issued for Super Biz Acquisition / Super Biz Note |  |  | 6563 | 767 |
| Preferred stock dividends paid – common stock |  | 48141 | 7945 | 63819 |
| Conversion of Series A preferred stock |  | 316 | 1759 | 1456 |
| Conversion of Series AA preferred stock |  | 20088 | 794 | 24899 |
| Conversion of Series AAA preferred stock |  | 32819 | 2241 | 50267 |
| Conversion of Series AAA Junior preferred stock |  |  | 1660 |  |
| Conversion of Series AAAA Junior preferred stock | 311300 |  | 311300 |  |
| Stock-based compensation | 82997 | 10417 | 117256 | 11119 |
| Issuance of common stock in settlement of legal matter |  |  |  | 19375 |
| Other |  |  |  |  |
| **Balance, end of period** | 1549104 | 292858 | 1549104 | 292858 |
| **Common stock (Amount)<sup>(1)</sup>:** |  |  |  |  |
| **Balance, beginning of period** | $78000 | $85000 | $94000 | $81000 |
| Issuances of common stock, net of issuance costs |  |  | 16000 |  |
| Reverse stock split |  |  | (34000) |  |
| Common stock issued in connection with Hudson ELOC |  |  | 1000 |  |
| Conversion of Series A, AA and AAA preferred stock |  | 2000 |  | 4000 |
| Preferred stock dividends paid – common stock |  | 2000 |  | 3000 |
| Common stock issued for Melon Acquisition |  |  |  |  |
| Common stock issued for Super Biz Acquisition |  |  |  |  |
| Stock-based compensation |  |  | 1000 |  |
| Issuance of common stock in settlement of legal matter |  |  |  | 1000 |
| **Balance, end of period** | $78000 | $89000 | $78000 | $89000 |
| **Additional paid-in-capital:** |  |  |  |  |
| **Balance, beginning of period** | $272954000 | $263296000 | $270111000 | $258923000 |
| Issuances of common stock, net of issuance costs |  |  | 1545000 |  |
| Reverse stock split |  |  | 34000 |  |
| Commitment fees – YP ELOC Prefunded warrants | 600000 |  | 600000 |  |
| Common stock issued in connection with Hudson ELOC |  |  | 231000 |  |
| Commitment Shares – Hudson ELOC |  |  | 138000 |  |
| Issuance of common stock - Agile II Exchange | 1440000 |  | 1440000 |  |
| Partial conversion of 1800 Diagonal Note I | 248000 |  | 248000 |  |
| Issuance of Series AAA Junior preferred stock at $1,000 per share, net of cash and noncash issuance costs |  |  |  | 751000 |
| Issuance of Series AAAA Junior preferred stock at $1.00 per share – RP Note Exchange | 1498000 |  | 1498000 |  |
| Issuance of Series AAAA Junior preferred stock at $1.00 per share – Super Biz Note Exchange | 1895000 |  | 1895000 |  |
| Issuance of Series AAA-2 Junior preferred stock at $1,000 per share |  | 453000 |  | 453000 |
| Issuance of Series AAA-3 Junior preferred stock at $1,000 per share |  | 529000 |  | 529000 |
| Issuance of Series AAA-4 Junior preferred stock at $1,000 per share |  | 102000 |  | 102000 |
| Common stock purchase warrants issued – Series AAA-3 and Series AAA-4 Junior preferred stock |  | (134000) |  | (134000) |
| Conversion of Series AA, AAA, AAA Junior Preferred Stock to Series B Preferred Stock – issuance costs | (24000) |  | (24000) |  |
| Series AAA Junior preferred stock noncash issuance costs – incremental fair value in connection with modifications to certain existing AIRs |  |  |  | 294000 |
| Preferred stock dividends paid – common stock |  | 2421000 | 101000 | 3287000 |
| Deemed dividend on exchange of Series AA, AAA and AAA Junior Preferred Stock for Series B Preferred Stock | (7685000) |  | (7685000) |  |
| Common stock purchase warrants issued to placement agent |  | (346000) |  | (346000) |
| Preferred stock conversions |  | (2000) |  | (2000) |
| Deemed dividend on Series AA, AAA and AAA Junior preferred stock – down round | 308000 |  | 308000 |  |
| Common stock issued for Melon Acquisition |  |  | 8000 | 90000 |
| Common stock issued for Super Biz Acquisition |  |  |  | 38000 |
| Stock-based compensation | 284000 | 356000 | 839000 | 986000 |
| Prepaid consultant costs and other |  |  | 231000 |  |
| Issuance of common stock and incremental fair value in connection with modifications to certain existing AIRs in settlement of legal matter |  | 70000 |  | 1553000 |
| Other |  | 336000 |  | 557000 |
| **Balance, end of period** | $271518000 | $267081000 | $271518000 | $267081000 |
| **Accumulated Deficit:** |  |  |  |  |
| **Balance, beginning of period** | $(277149000) | $(258325000) | $(270035000) | $(249014000) |
| Preferred stock dividends paid or accrued– common stock | (271000) | (1694000) | (372000) | (3290000) |
| Deemed dividend on exchange of Series AA, AAA and AAA Junior Preferred Stock for Series B Preferred Stock | 7685000 |  | 7685000 |  |
| Deemed dividend on Series AA, AAA and AAA Junior preferred stock – down round | (308000) |  | (308000) |  |
| Net Loss | (3562000) | (3632000) | (10575000) | (11347000) |
| **Balance, end of period** | $(273605000) | $(263651000) | $(273605000) | $(263651000) |
| **Total stockholders**' **(deficit) equity** | $(2005000) | $3519000 | $(2005000) | $3519000 |

---

------

<sup>(1)</sup> Refer to Note 1 for information regarding Reverse Stock Split effective June 23, 2025.

See accompanying notes to condensed financial statements.

------

[**Table of Contents**](#toc)

**SUPER LEAGUE ENTERPRISE, INC.**

**CONDENSED STATEMENTS OF CASH FLOWS**

(Rounded to the nearest thousands)

(Unaudited)

---

| | | |
|:---|:---|:---|
|  | **Nine Months**<br> **Ended September 30,** | **Nine Months**<br> **Ended September 30,** |
|  | **2025** | **2024** |
| **CASH FLOWS FROM OPERATING ACTIVITIES** |  |  |
| Net loss | $(10575000) | $(11347000) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| Depreciation and amortization | 1607000 | 1953000 |
| Stock-based compensation | 1372000 | 986000 |
| Change in fair value of warrant liability | (1934000) | (1104000) |
| Change in fair value of contingent consideration |  | (158000) |
| Change in fair value of debt | 924000 |  |
| Gain on sale of Minehut Assets |  | (144000) |
| Debt issuance costs | 554000 |  |
| Fair value of noncash legal settlement and other noncash charges |  | 794000 |
| Loss on extinguishment of liability | 161000 | 336000 |
| Changes in operating assets and liabilities: |  |  |
| Accounts receivable | 1040000 | 3772000 |
| Prepaid expense and other current assets | (319000) | 263000 |
| Accounts payable and accrued expense | (398000) | (3309000) |
| Accrued contingent consideration |  | (17000) |
| Contract liabilities | 763000 | (185000) |
| Accrued interest on note payable |  |  |
| **Net cash used in operating activities** | (6805000) | (8160000) |
| **CASH FLOWS FROM INVESTING ACTIVITIES** |  |  |
| Proceeds from sale of Mineville Assets | 350000 |  |
| Proceeds from sale of Minehut Assets | 808000 |  |
| Purchase of property and equipment |  | (23000) |
| Capitalization of software development costs | (200000) | (434000) |
| Other purchases of intangible assets | (35000) |  |
| **Net cash provided by (used in) investing activities** | 923000 | (457000) |
| **CASH FLOWS FROM FINANCING ACTIVITIES** |  |  |
| Proceeds from issuance of preferred stock, net of issuance costs |  | 2129000 |
| Proceeds from issuance of common stock, net of issuance costs | 1945000 |  |
| Proceeds from notes payable, net of debt issuance costs | 7607000 |  |
| Payments on notes payable | (3818000) |  |
| Advances from accounts receivable facility | 429000 | 1033000 |
| Payments on accounts receivable facility | (453000) | (1833000) |
| Contingent consideration payments – Melon Acquisition | (77000) | (32000) |
| **Net cash provided by financing activities** | 5633000 | 1297000 |
| **NET DECREASE IN CASH** | (249000) | (7320000) |
| **Cash and Cash Equivalents** – beginning of period | 1310000 | 7609000 |
| **Cash and Cash Equivalents** – end of period | $1061000 | $289000 |
| Cash paid for interest | $1274000 | $93000 |
| SUPPLEMENTAL NONCASH, INVESTING AND FINANCING ACTIVITIES |  |  |
| Issuance of equity securities in exchange for debt | $4920000 | $- |
| Commitment shares issued in connection with YP ELOC | 600000 |  |
| Commitment shares issued in connection with Hudson ELOC | 159000 |  |
| Issuance of Super biz Note in connection with extinguishment of accrued contingent consideration liability |  | 1765000 |
| Series AAA Junior preferred stock noncash issuance costs – incremental fair value in connection with modifications to certain AIRs |  | 294000 |
| Common stock issued in connection with Super Biz Note | 336000 |  |
| Issuance of common stock in connection with the payment of Super Biz Contingent Consideration |  | 38000 |
| Common stock issued in connection with Melon Contingent Consideration | 8000 | 90000 |
| Issuance of common stock in connection with legal settlement |  | 1270000 |

---

See accompanying notes to condensed financial statements.

------

[**Table of Contents**](#toc)

**SUPER LEAGUE ENTERPRISE, INC.**

**NOTES TO CONDENSED FINANCIAL STATEMENTS**

**(Unaudited)**

**1.** **DESCRIPTION OF BUSINESS**

Super League Enterprise, Inc. (Nasdaq: SLE) ("Super League," or the "Company") is redefining how brands connect with consumers through the power of playable media. Through solutions within mobile games and the world's largest immersive gaming platforms, Super League provides global brands with ads, content, and experiences that are not only seen – they are played, felt, and remembered. Boasting an award-winning development studio, a vast network of native creators, and proprietary engagement technology, Super League is a one-of-a-kind partner for brands looking to stand out in culture, spark loyalty, and drive meaningful impact. In a world where attention is earned, Super League makes brands relevant - by making them playable.

We generate revenue from (i) innovative advertising including immersive game world and experience publishing and in-game media products, (ii) direct to consumer offers, including in-game items, e-commerce, and digital collectibles, and (iii) content and technology through the production and distribution of our own, advertiser and third-party content. We operate in one reportable segment to reflect the way management and our chief operating decision maker review and assess the performance of the business

Super League was incorporated on October 1, 2014, as Nth Games, Inc. under the laws of the State of Delaware and changed its name to Super League Gaming, Inc. on June 15, 2015, and to Super League Enterprise, Inc. on September 11, 2023.

All references to "Note," followed by a number reference refer to the applicable corresponding numbered footnotes to these condensed financial statements. References to the "SEC" refer to the United States Securities and Exchange Commission.

*Reverse Common Stock Split*

On June 17, 2025, the Company filed a Certificate of Amendment (the "June 2025 Amendment") to its Second Amended and Restated Certificate of Incorporation, as amended (the "Charter"), which became effective as of June 23, 2025, to effect a reverse stock split of the Company's issued and outstanding shares of common stock at a ratio of 1-for-40 (the "Reverse Split"). The Reverse Split was approved by the Company's Board of Directors (the "Board") on June 2, 2025, and approved by the stockholders of the Company on June 9, 2025. Refer to Note 6 below for additional information regarding the Reverse Split.

All references to common stock, warrants to purchase common stock, options to purchase common stock, restricted stock, preferred stock conversion shares, common stock underlying additional investment rights ("AIRs"), share data, per share data and related information contained in the financial statements have been retroactively adjusted to reflect the effect of the Reverse Split for all periods presented.

*NASDAQ Listing Rule 5550(a)(2)*

On July 8, 2025, the Company received a written notice from The Nasdaq Stock Market ("Nasdaq") informing us that the Company has regained compliance with the minimum bid price requirement under NASDAQ Listing Rule 5550(a)(2) (the "Rule") for continued listing on the Nasdaq Capital Market.

Previously, on January 2, 2025, the Company received a letter (the "Bid Price Letter") from the Listing Qualifications Staff of Nasdaq indicating that, based upon the closing bid price of the Company's common stock, for 30 consecutive business days, the Company was not then currently in compliance with the requirement to maintain a minimum bid price of $1.00 per share for continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2).

*NASDAQ Listing Rule 5620(a)*

On June 11, 2025, the Company received a written notice from Nasdaq informing us that the Company has regained compliance with the annual meeting requirement under NASDAQ Listing Rule 5620(a) (the "Annual Meeting Rule") for continued listing on the Nasdaq Capital Market

Previously, on January 3, 2025, the Company received a letter (the "Annual Meeting Letter") from Nasdaq indicating that the Company no longer complied with the Annual Meeting Rule since it did not hold an annual meeting of stockholders within 12 months of the end of the Company's fiscal year ended December 31, 2023.

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*Nasdaq Listing Rule 5550(b)(1)*

On October 28, 2025, the Company received a written notice from Nasdaq informing the Company that it regained compliance with Nasdaq Listing Rule 5550(b), and that the Company is in compliance with all applicable continued listing requirements. Accordingly, the hearing before a Nasdaq Hearing Panel (the "Panel") scheduled to take place on November 11, 2025, as described below, was cancelled.

Previously, on April 7, 2025, the Company received a letter (the "Stockholder Deficiency Letter") from Nasdaq, notifying the Company that it is not in compliance with Nasdaq Listing Rule 5550(b)(1), which requires the Company to maintain a minimum of $2,500,000 in stockholders' equity for continued listing on The Nasdaq Capital Market (the "Stockholders' Equity Requirement"). The Stockholder Deficiency Letter also indicated that the Company does not meet the alternative compliance standards of market value of listed securities or net income from continuing operations. The Company's failure to comply with the Stockholders' Equity Requirement was based on the Company's filing of its Annual Report on Form 10-K for the year ended December 31, 2024, reporting the stockholders' equity of $170,000. The Company prepared and submitted a plan of compliance (which was due within 45 calendar days from receipt of the formal notice) to Nasdaq.

On October 8, 2025, the Company received a delisting determination letter (the "Delisting Determination Letter") in connection with the Stockholders' Equity Requirement. The Delisting Determination Letter stated that unless the Company requested a hearing before the Panel to appeal Nasdaq's delisting determination by October 15, 2025, trading of the common stock would have been suspended at the opening of business on October 17, 2025, and the Company's common stock would have been delisted from Nasdaq. As of October 8, 2025, the Company requested a hearing before the Panel, which was scheduled to take place on November 11, 2025, at which the Company planned to request a suspension of delisting pending its return to compliance. Pursuant to Nasdaq Listing Rule 5815(a)(1)(B), the hearing requested stayed the suspension of trading and delisting of the common stock pending the conclusion of the hearing process. As described above, On October 28, 2025, the Company received a written notice from Nasdaq informing Super League that it had regained compliance with the Stockholders' Equity Requirement, and that the Company is in compliance with all applicable continued listing requirements.

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

***Basis of Presentation***

The accompanying condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, certain information and footnotes required by U.S. GAAP in annual financial statements have been omitted or condensed in accordance with quarterly reporting requirements of the SEC. These interim condensed financial statements should be read in conjunction with our audited financial statements for the year ended December 31, 2024 included in our Annual Report on Form 10-K for the year ended December 31, 2024, as amended, filed with the SEC on March 31, 2025.

The December 31, 2024 condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The condensed financial statements of Super League include all adjustments of a normal recurring nature which, in the opinion of management, are necessary for a fair statement of Super League's financial position as of September 30, 2025, and results of its operations and its cash flows for the interim periods presented. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the entire fiscal year, or any future period.

***Principles of Consolidation***

The condensed financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

***Reclassifications***

Certain reclassifications to operating expense line have been made to prior year amounts for consistency and comparability with the current year's condensed financial statement presentation. These reclassifications had no effect on the reported total revenue, operating expense, total assets, total liabilities, total stockholders' (deficit) equity, or net loss for the prior periods presented.

***Use of Estimates***

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from these estimates. The Company believes that, of the significant accounting policies described herein, the accounting policies associated with revenue recognition, impairment of intangibles, stock-based compensation expense, accounting for business combinations and related contingent consideration, derecognition of assets, accounting for debt, including estimates and assumptions used to calculate the fair value of debt instruments, accounting for debt modifications and extinguishments, accounting for derivatives, including estimates and assumptions used to calculate the fair value of derivative instruments, accounting for convertible preferred stock, including modifications and exchanges of equity and equity-linked instruments, accounting for warrant liabilities and accounting for income taxes and valuation allowances against net deferred tax assets, require its most difficult, subjective, or complex judgments.

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***Liquidity and Capital Resources***

As of September 30, 2025, the Company had cash and cash equivalents, working capital and an accumulated deficit as reflected on the accompanying condensed balance sheets provided herein. For the nine months ended September 30, 2025 and 2024, the Company incurred net losses, and cash outflows from operating activities as reflected in the accompanying condensed statements of operations and cash flows, respectively. In recent prior periodic reporting, and as of September 30, 2025 (prior to the mitigating factors described below), the Company's historical operating losses and the Company's prior reliance on external financing raised substantial doubt about the Company's ability to continue as a going concern.

Improved Liquidity Due to Subsequent Events

 *Equity Financing*

Subsequent to the balance sheet date and before the issuance of these financial statements, the Company completed equity financings totaling $20.0 million in gross proceeds ($18.5 million in proceeds net of offering costs). The proceeds provide significant additional working capital and liquidity to fund operations and meet the Company's obligations as they arise. The Company intends to use the proceeds from the Offering for repayment of existing indebtedness totaling $1.5 million, implementation of a new corporate strategy, general corporate purposes and working capital. Refer to Note 8 for additional information regarding equity financings subsequent to September 30, 2025.

 *Additional Conversions of Debt to Equity*

During the three months ended September 30, 2025, the company exchanged $4.7 million of outstanding debt for equity as described at Notes 4 and 5. In October and November 2025, holders of an aggregate of approximately $4.0 million of the Company's outstanding promissory notes as of September 30, 2025, exchanged or converted such notes into either common stock or preferred stock of the Company pursuant to (i) executed exchange agreements, or (ii) the existing conversion terms set forth in certain notes. As a result, the Company eliminated approximately $4.0 million of principal and accrued interest obligations that would otherwise have required cash settlement subsequent to September 30, 2025. The conversions materially reduced the Company's leverage profile and future cash commitments. Refer to Note 8 for additional information regarding the exchange or conversion of debt to equity subsequent to September 30, 2025.

 *Operating Cost Reductions and Updated Forecasts*

Since approximately May 2024, the Company implemented a number of operating expense reduction initiatives designed to decrease future operating cash outflows. These actions included workforce optimization, vendor contract renegotiations, reduced discretionary spending, and restructuring of non-core activities. Excluding noncash charges, these operating expense reductions resulted in a decrease in operating expense of 29% and 24% for the three and nine month periods ended September 30, 2025, compared to the three and nine month periods ended September 30, 2024, respectively.

 *Considerations as of the Date of Issuance of Financial Statements*

In connection with preparing the Company's financial statements as of and for the three and nine months ended September 30, 2025, management evaluated whether conditions and events raise substantial doubt about the Company's ability to continue as a going concern within one year after the date the financial statements are issued, in accordance with ASC 205-40, Presentation of Financial Statements—Going Concern ("ASC 205-40").

While in general, the primary transactions described above were consummated pursuant to the Board's approval of definitive documentation, originally negotiated and the principal terms agreed upon in September 2025, the Company's ability to execute and consummate the transactions required the approval of the Company's stockholders (the "Stockholder Approval"). The Company received the approval of the holders of the requisite number of votes to approve such transactions at the Company's 2025 Annual Meeting of Stockholders, held on October 20, 2025.

The occurrence of each of (i) the requirement that the Company receive the Stockholder Approval, and (ii) the Company's financial position at September 30, 2025, initially raised substantial doubt about the Company's ability to continue as a going concern within one year after the date the financial statements were scheduled to be issued. However, the factors contributing to the initial doubt of the Company's ability to continue as a going concern has been addressed and alleviated due to: (a) the Company receiving the required Stockholder Approval; and (b) management's execution to date and ability to continue to execute the Company's financial plans and consummate the transactions described above, including, without limitation (i) the October 2025 financing resulting in $20.0 million in gross proceeds, (ii) the conversion of outstanding debt to equity, and (iii) the Company's expense reduction and cost optimization initiatives.

Based on: (i) cash on hand as of the issuance date of these financial statements; (ii) net proceeds from the equity financings completed subsequent to September 30, 2025; (iii) elimination of future cash obligations resulting from the conversion of debt into equity; and (iv) realized reductions in operating expense, management believes that the Company will have sufficient liquidity to meet its obligations as they become due for at least the twelve-month period following the issuance date of these financial statements as contemplated by ASC 205-40. Accordingly, management has concluded that substantial doubt about the Company's ability to continue as a going concern has been alleviated.

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***Revenue Recognition***

Revenue is recognized when the Company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services and when the customer obtains control of the goods or services. In this regard, revenue is recognized when: (i) the parties to the contract have approved the contract (in writing, orally, or in accordance with other customary business practices) and are committed to perform their respective obligations; (ii) the entity can identify each party's rights regarding the goods or services to be transferred; (iii) the entity can identify the payment terms for the goods or services to be transferred; (iv) the contract has commercial substance (that is, the risk, timing, or amount of the entity's future cash flows is expected to change as a result of the contract); and (v) it is probable that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.

Transaction prices are based on the amount of consideration to which we expect to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties, if any. We consider the explicit terms of the revenue contract, which are typically written and executed by the parties, our customary business practices, the nature, timing, and the amount of consideration promised by a customer in connection with determining the transaction price for our revenue arrangements. Refunds and sales returns historically have not been material.

The Company generates revenue from (i) innovative advertising including immersive game world and experience publishing and in-game media products, (ii) content and technology through the production and distribution of our own, advertiser and third-party content, and (iii) direct to consumer offers, including in-game items, e-commerce and digital collectibles.

The Company reports revenue on a gross or net basis based on management's assessment of whether the Company acts as a principal or agent in the transaction and is evaluated on a transaction-by-transaction basis. To the extent the Company acts as the principal, revenue is reported on a gross basis net of any sales tax from customers, when applicable. The determination of whether the Company acts as a principal or an agent in a transaction is based on an evaluation of whether the Company controls the goods or services prior to transfer to the customer. Where applicable, the Company has determined that it acts as the principal in all of its media and advertising, publishing and content studio and direct to consumer revenue streams, except in situations where we utilize a reseller partner with respect to media and advertising sales arrangements.

In the event a customer pays us consideration, or we have a right to an amount of consideration that is unconditional, prior to our transfer of a good or service to the customer, we reflect the contract as a contract liability when the payment is made or the payment is due, whichever is earlier. In the event we perform by transferring goods or services to a customer before the customer pays consideration or before payment is due, we reflect the contract as a contract asset, excluding any amounts reflected as a receivable.

Depending on the complexity of the underlying revenue arrangement and related terms and conditions, significant judgments, assumptions and estimates may be required to determine each party's rights regarding the goods or services to be transferred, each party's performance obligations, whether performance obligations are satisfied at a point in time or over time, estimates of completion methodologies, the timing of satisfaction of performance obligations, whether we are a principal or agent in the arrangement and the appropriate period or periods in which, or during which, the completion of the earnings process and transfer of control occurs. Depending on the magnitude of specific revenue arrangements, if different judgments, assumptions and estimates are made regarding revenue arrangements in any specific period, our periodic financial results may be materially affected.

**<u>Media and Advertising</u>**

Media and advertising revenue primarily consists of direct and reseller sales of our on-platform media (including off-platform media) and analytics products, and influencer marketing campaign sales to third-party brands and agencies (hereinafter, "Brands").

*On Platform Media*

On platform media revenue is generated from third party Brands advertising in-game on Roblox or other digital platforms, and prior to the Minehut Sale, on our Minehut Minecraft platform (Refer to Note 3, "Sale of Mineville" and "Sale of Minehut" below for information concerning the sale of the related digital properties in May 2025 and February 2024, respectively). Media assets include static billboards, video billboards, portals, 3D characters, Pop Ups and other media products. We work with Brands to determine the specific campaign media to deploy, target ad units and target demographics. We customize the media advertising campaign and media products with applicable branding, images and design and place the media on the various digital platforms. Media is delivered via our Super Biz Roblox platform, the Roblox Immersive Ads platform, other platforms, and prior to the Minehut Sale, on our owned and operated Minehut platform. Media placement can be based on a cost per thousand, other cost per measure, or a flat fee. Media and advertising arrangements typically include contract terms for time periods ranging from one week to two or three months in length.

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For on-platform media campaigns, we typically insert media products on-platform (in-game) to deliver to the Brand a predetermined number of impressions identified in the underlying contract. The benefit accrues to the Brand at the time that we deliver the impression on the platform, and the media product is viewed or interacted with by the on-platform user. The performance obligation for on-platform media campaigns is each impression that is guaranteed or required to be delivered per the underlying contract. Each impression is considered a good or service that is distinct under the revenue standard, and the performance obligation under our on-platform media contracts is the delivery of a series of impressions. Each impression required to be delivered in the series that we promise to transfer to the Brand meets the criteria to be a performance obligation satisfied over time, due to the fact that (1) our performance does not create an asset with an alternative use to the Company, and (2) we have an enforceable right to payment for performance completed to date per the terms of the contract. Further, the same method is used to measure our progress toward complete satisfaction of the performance obligation to transfer each distinct impression, as in the transfer of the series of impressions to the customer, which is based on actual delivery of impressions. As such, we account for the specified series of impressions as a single performance obligation.

The delivery of the impression on platform represents the change in control of the good or service, and therefore, the Company satisfies its performance obligations and recognizes revenue based on the delivery of impressions under the contract.

*Influencer Marketing*

Influencer marketing revenue is generated in connection with the development, management and execution of influencer marketing campaigns on behalf of Brands, primarily on YouTube, Instagram and TikTok. Influencer marketing campaigns are collaborations between Super League, popular social-media influencers, and Brands, to promote a Brands' products or services. Influencers are paid a flat rate per post to feature a Brand's product or service on their respective social media outlets.

For influencer marketing campaigns that include multiple influencers, the customer can benefit from the influencer posts either on its own or together with other resources that are readily available to the customer. Our influencer marketing campaigns for Brands (1) incorporate a significant service of integrating the goods or services with other goods or services promised in the contract (typically additional influencer posts) into a bundle of goods or services that represent the combined output that the customer has contracted for, and (2) the goods or services are interdependent in that each of the goods or services is affected by one or more of the other goods or services in the contract which combined, create an influencer marketing campaign to satisfy the Brand's specific campaign objectives. The interdependency of the performance obligations is supported by an understanding of what a customer expects to receive as a final product with respect to an influencer marketing campaign, which is an integrated influencer marketing advertising campaign that the influencer posts create when they are combined into an overall integrated campaign.

We recognize revenues for influencer marketing campaigns based on input methods which recognize revenue on the basis of the entity's efforts or inputs to the satisfaction of a performance obligation relative to the total expected inputs to the satisfaction of that performance obligation. As such, revenues are recognized over the term of the campaign, as the influencer videos are posted, based on costs incurred to date relative to total costs for the influencer marketing campaign.

**<u>Publishing and Content Studio</u>**

Publishing and content studio revenue consists of revenue generated from immersive game development and custom game experiences within our owned and affiliate game worlds, and revenue generated in connection with our production, curation and distribution of entertainment content for our own network of digital channels and media and entertainment partner channels.

*Publishing*

Custom builds are highly customized branded game experiences created and built by Super League for customers on existing digital platforms such as Roblox, Fortnite, Decentraland and others. Custom builds often include the creation of highly customized and branded gaming experiences and other campaign specific media or products to create an overall customized immersive world campaign.

Custom integrations are highly customized advertising campaigns that are integrated into and run on existing affiliate Roblox gaming experiences. Custom integrations will often include the creation of highly customized and branded game integration elements to be integrated into the existing Roblox gaming experience to the customers specifications and other campaign-specific media or products. Prior to the Minehut Sale, we also created custom integrations on the digital property "Minehut" for Brands. Refer to Note 3, "Sale of Mineville" and "Sale of Minehut" below for information concerning the sale of the related digital properties in May 2025 and February 2024, respectively.

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Our custom builds and custom integration (hereinafter, "Custom Programs") campaign revenue arrangements typically include multiple promises and performance obligations, including requirements to design, create and launch a platform game, customize and enhance an existing game, deploy media products, and related performance measurement. Custom Programs offer a strategically integrated advertising campaign with multiple integrated components, and we provide a significant service of integrating the goods or services with other goods or services promised in the contract into a bundle of goods or services that represent the combined output or outputs that the customer has contracted for. As such, Custom Program revenue arrangements are combined into a single performance unit, as our performance does not create an asset with an alternative use to the entity and we typically have an enforceable right to payment for performance to date during the term of the arrangement.

We recognize revenues for Custom Programs based on input methods, that recognize revenue based upon estimates of progress toward complete satisfaction of the contract performance obligations, utilizing primarily costs or direct labor hours incurred to date to estimate progress towards completion.

*Content Production*

Content production revenue is generated in connection with our production, curation and distribution of entertainment content for our own network of digital channels and media and entertainment partner channels. We distribute three primary types of content for syndication and licensing, including: (1) our own original programming content, (2) user generated content ("UGC"), including online gameplay and gameplay highlights, and (3) the creation of content for third parties utilizing our remote production and broadcast technology.

Content production arrangements typically involve promises to provide a distinct set of videos, creative, content creation and/or other live or remote production services. These services can be one-off in nature (relatively short services periods of one day to one week) or can be specified as monthly services over a multi-month period.

One-off and monthly content production services are distinct in that the customer can benefit from the service either on its own or together with other resources that are readily available to the customer. Further, promises to provide one-off or monthly content production services are typically separately identifiable as the nature of the promises, within the context of the contract, is to transfer each of those goods or services individually. Each month's content production services are separate and not integrated with a prior month's or subsequent month's services and do not represent a combined output; each month's content production services do not modify any other prior period content production services, and the monthly services are not interdependent or highly interrelated.

As a result, each one-off or monthly promise to provide content production services is a distinct good or service that we promise to transfer and are therefore performance obligations. In general, content production contracts do not meet the criteria for recognition of revenues over time as the customer typically does not simultaneously receive and consume the benefits provided by our performance as we perform, our performance does not typically create or enhance an asset that the customer controls, and while our performance does not create an asset with an alternative use, we typically have a right to payment upon completion of each distinct performance obligation.

A performance obligation is satisfied at a point in time if none of the criteria for satisfying a performance obligation over time are met. For content production arrangements, we have a right to payment and the customer has control of the good or service at the time of completion and delivery of the one-off or monthly content production services in accordance with the terms of the underlying contract. As such, revenue is recognized at the time of completion of the one-off or monthly content production services.

**<u>Direct to Consumer</u>**

Direct to consumer revenue primarily consists of monthly digital subscription fees, and sales of in-game digital goods. Subscription revenue is recognized in the period the services are rendered. Payments are typically due from customers at the point of sale.

Refer to Note 3, "Sale of Mineville" and "Sale of Minehut" below for information concerning the sale of the related digital properties in May 2025 and February 2024, respectively.

*InPvP Platform Generated Sales Transactions*

InPvP revenues were generated from single transactions for various distinct digital goods sold to users in-game. Microsoft processed sales transactions and remitted the applicable revenue share to us pursuant to the terms of the Microsoft agreement.

Revenue for digital goods sold on the platform is recognized when Microsoft (our partner) collects the revenue and facilitates the transaction, including delivery of digital goods, on the platform. Revenue for such arrangements included all revenue generated, make goods, and refunds of all transactions managed via the platform by Microsoft. Payments were made to the Company monthly based on the sales revenue generated on the platform.

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Revenue was comprised of the following for the three and nine months ended September 30:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months**<br> **Ended September 30,** | **Three Months**<br> **Ended September 30,** | **Nine Months**<br> **Ended September 30,** | **Nine Months**<br> **Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Media and advertising | $1025000 | $1538000 | $3773000 | $4637000 |
| Publishing and content studio | 1398000 | 2646000 | 4056000 | 7388000 |
| Direct to consumer<sup>(1)</sup> |  | 247000 | 313000 | 731000 |
|  | $2423000 | $4431000 | $8142000 | $12756000 |
| **Revenue Recognition:** |  |  |  |  |
| Single point in time | 43% | 52% | 42% | 43% |
| Over time | 57% | 48% | 58% | 57% |
| Total | 100% | 100% | 100% | 100% |

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<sup>(1)</sup> Refer to Note 3, "Sale of Mineville" and "Sale of Minehut" below for information concerning the sale of the related digital properties in May 2025 and February 2024, respectively.

Contract assets (included in "Prepaid expense and other current assets") totaled $598,000 at September 30, 2025 and $372,000 at December 31, 2024. Contract liabilities totaled $813,000 at September 30, 2025 and $50,000 at December 31, 2024.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months**<br> **Ended September 30,** | **Three Months**<br> **Ended September 30,** | **Nine Months**<br> **Ended September 30,** | **Nine Months**<br> **Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Revenue recognized related to contract liabilities as of the beginning of the respective period | $40000 | $- | $50000 | $234000 |

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In accordance with FASB ASC Topic 606-10-50-13, the Company is required to include disclosure on its remaining performance obligations as of the end of the current reporting period. Due to the nature of the Company's contracts with customers, these reporting requirements are not applicable pursuant to FASB ASC Topic 606-10-50-14, as the performance obligations are part of contracts that have original durations of one year or less.

*Seasonality*. Our revenue fluctuates quarterly and is generally higher in the second half of our fiscal year, with the fourth quarter typically representing our highest revenue quarter each year. Advertising spending is traditionally seasonally strong in the second half of each year, reflecting the impact of seasonal back to school, game release and holiday season advertising spending by brands and advertisers. We believe that this seasonality in advertising spending affects our quarterly results, which generally reflect relatively higher advertising revenue in the second half of each year, compared to the first half of the year.

***Cost of Revenues***

Cost of revenues includes direct costs incurred in connection with the satisfaction of performance obligations under our revenue arrangements, including internal and third-party engineering, creative, content, broadcast and other personnel, talent and influencers, internal and third-party game developers, third-party ad-platform, content capture and production services, direct marketing, cloud services, software, prizing, and revenue sharing fees.

***Advertising***

Advertising costs include the cost of ad production, social media, print media, marketing, promotions, and merchandising. The Company expenses advertising costs as incurred. Advertising costs are included in selling, marketing and advertising expense in the condensed statements of operations. Advertising expense for the three and nine months ended September 30, 2025 were $46,000 and $68,000, respectively. Advertising expense for the three and nine months ended September 30, 2024 were $0 and $56,000, respectively.

***Engineering, Technology and Development Costs***

Components of our platform are available on a "free to use," "always on basis," and are utilized and offered as an audience acquisition tool, as a means of growing our audience, engagement, viewership, players and community. Engineering, technology and development related operating expense includes the costs described below, incurred in connection with our audience acquisition and viewership expansion activities. Engineering, technology and development related operating expense includes (i) allocated internal engineering personnel expense, including salaries, noncash stock compensation, taxes and benefits, (ii) third-party contract software development and engineering expense, (iii) internal use software cost amortization expense, and (iv) technology platform related cloud services, broadband and other platform expense, incurred in connection with our audience acquisition and viewership expansion activities, including tools and product offering development, testing, minor upgrades and features, free to use services, corporate information technology and general platform maintenance and support.

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***Accounts Receivable***

Accounts receivable are recorded at the invoice amount, less allowances for credit losses, if any, and do not bear interest. At each balance sheet date, the Company provides an allowance for potential credit losses based on its evaluation of the collectability and the customers' creditworthiness. The Company regularly reviews the allowance by considering factors such as the age of the receivable balances, historical experience, credit quality, current economic conditions, and reasonable forecasts of future economic conditions that may affect a customer's ability to pay. Accounts receivable are written off when they are determined to be uncollectible. As of September 30, 2025 and December 31, 2024, no allowance for expected credit losses was deemed necessary.

***Fair Value Measurements***

Fair value is defined as the exchange price that would be received from selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company measures financial assets and liabilities at fair value at each reporting period using a fair value hierarchy which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument's classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:

*Level 1.* Quoted prices in active markets for identical assets or liabilities.

*Level 2*. Quoted prices for similar assets and liabilities in active markets or inputs other than quoted prices which are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments.

*Level 3.* Unobservable inputs which are supported by little or no market activity and which are significant to the fair value of the assets or liabilities.

Certain liabilities are required, or elected, to be recorded at fair value on a recurring basis in accordance with applicable guidance. As described in the notes below, certain promissory notes, contingent consideration, warrant liabilities and contingent interest derivatives outstanding during the periods presented are recorded at fair value. Transfers to/from Levels 1, 2, and 3 are recognized at the beginning of the reporting period. There were no transfers to/from Levels 1, 2, and 3 during the periods presented.

Certain long-lived assets may be periodically required to be measured at fair value on a nonrecurring basis, including long-lived assets that are impaired. The fair value for other assets and liabilities such as cash, restricted cash, accounts receivable, other receivables, prepaid expense and other current assets, accounts payable and accrued expense, and liabilities to customers have been determined to approximate carrying amounts due to the short maturities of these instruments.

***Derivative Financial Instruments***

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the condensed statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to a liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities are classified in the condensed balance sheets as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.

Equity-linked instruments that are deemed to be freestanding instruments issued in conjunction with convertible debt or preferred stock are accounted for separately. For equity linked instruments classified as equity, the proceeds are allocated based on the relative fair values of the preferred stock and the equity-linked instrument following the guidance in FASB ASC Topic 470, "Debt," ("ASC 470").

***Intangible Assets***

Intangible assets primarily consist of (i) internal-use software development costs, (ii) domain name, copyright and patent registration costs, (iii) commercial licenses, (iv) developed technology acquired, (v) partner, customer, creator and influencer related intangible assets acquired and (vi) other intangible assets, which are recorded at cost (or in accordance with the acquisition method or cost accumulation methods described above) and amortized using the straight-line method over the estimated useful lives of the assets, ranging from 3 to 10 years.

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Software development costs incurred to develop internal-use software during the application development stage are capitalized and amortized on a straight-line basis over the software's estimated useful life, which is generally three years. Software development costs incurred during the preliminary stages of development are charged to expense as incurred. Maintenance and training costs are charged to expense as incurred. Upgrades or enhancements to existing internal-use software that result in additional functionality are capitalized and amortized on a straight-line basis over the applicable estimated useful life.

*Transfer or Sale of Intangible Assets*

Upon the sale of an intangible asset, or group of intangible assets (hereinafter, "nonfinancial assets"), the Company initially evaluates whether the Company has a controlling financial interest in the legal entity that holds the nonfinancial assets by applying the guidance on consolidation. Any nonfinancial assets transferred that are held in a legal entity in which the Company does not have (or ceases to have) a controlling financial interest is further evaluated to determine whether the underlying transaction contract meets all of the criteria for accounting for contract under the revenue standard. Once a contract meets all of the criteria, the Company identifies each distinct nonfinancial asset promised to a counterparty and derecognizes each distinct nonfinancial asset when the Company transfers control of the nonfinancial asset to the counterparty. The Company evaluates the point in time at which a counterparty obtains control of the nonfinancial assets, including whether or not the counterparty can direct the use of, and obtain substantially all of the benefits from, each distinct nonfinancial asset.

If the consideration promised in a contract is variable or includes a variable amount, the Company estimates the amount of consideration to which the Company will be entitled in exchange for transferring the promised assets to a counterparty. Purchase consideration is variable if the amount the Company will receive is contingent on future events occurring or not occurring, even though the amount itself is fixed. The Company determines the total transaction price, including an estimate of any variable consideration, at contract inception and reassesses this estimate at each reporting date. The Company estimates the transaction price utilizing the expected value method. The expected value is the sum of probability-weighted amounts in a range of possible consideration amounts.

The accounting for an arrangement with a put option depends on the amount the Company must pay to the counterparty in the event the counterparty exercises the put option, and whether the counterparty has a significant economic incentive to exercise its right. The accounting for put options requires the Company to assess at contract inception, whether the counterparty has a significant economic incentive to exercise its right, including how the repurchase price compares to the expected market value of the nonfinancial assets at the date of repurchase and the amount of time until the right expires. A customer has a significant economic incentive to exercise a put option when the repurchase price is expected to significantly exceed the market value of the good at the time of repurchase. The Company accounts for a put option as a sale of an asset or group of assets with a right of return, if the repurchase price is less than the original sales price and the customer does not have a significant economic incentive to exercise its right.

***Impairment of Long-Lived Assets***

The Company assesses the recoverability of long-lived assets whenever events or changes in circumstances indicate that their carrying value may not be recoverable. Factors we consider important, which could trigger an impairment review, include the following: significant underperformance relative to expected historical or projected future operating results; significant changes in the manner of our use of the acquired assets or the strategy for our overall business; significant negative industry or economic trends; significant adverse changes in legal factors or in the business climate, including adverse regulatory actions or assessments; and significant decline in our stock price for a sustained period. In the event the sum of the expected undiscounted future cash flows resulting from the use of the asset is less than the carrying amount of the asset, an impairment loss equal to the excess of the asset's carrying value over its fair value is recorded.

Other assets of a reporting unit that are held and used may be required to be tested for impairment when certain events trigger interim goodwill impairment tests. In such situations, other assets, or asset groups, are tested for impairment under their respective standards and the other assets' or asset groups' carrying amounts are adjusted for impairment before testing goodwill for impairment as described below. There can be no assurance, however, that market conditions or demand for the Company's products or services will not change, which could result in long-lived asset impairment charges in the future.

***Goodwill***

Goodwill represents the excess of the purchase price of the acquired business over the acquisition date fair value of the net assets acquired. Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis (December 31) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. We consider our market capitalization and the carrying value of our assets and liabilities, including goodwill, when performing our goodwill impairment tests. We operate in one reporting segment.

If a potential impairment exists, a calculation is performed to determine the fair value of existing goodwill. This calculation can be based on quoted market prices and / or valuation models, which consider the estimated future undiscounted cash flows resulting from the reporting unit, and a discount rate commensurate with the risks involved. Third-party appraised values may also be used in determining whether impairment potentially exists. In assessing goodwill impairment, significant judgment is required in connection with estimates of market values, estimates of the amount and timing of future cash flows, and estimates of other factors that are used to determine the fair value of our reporting unit. If these estimates or related projections change in future periods, future goodwill impairment tests may result in charges to earnings.

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When conducting the Company's annual or interim goodwill impairment assessment, we have the option to initially perform a qualitative evaluation of whether it is more likely than not that goodwill is impaired. The Company is also permitted to bypass the qualitative assessment and proceed directly to the quantitative test. In evaluating whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount, we consider the guidance set forth in FASB ASC Topic 350 "Intangibles – Goodwill and Other", which requires an entity to assess relevant events and circumstances, including macroeconomic conditions, industry and market considerations, cost factors, financial performance and other relevant events or circumstances.

***Stock-Based Compensation***

Compensation expense for stock-based awards is measured at the grant date, based on the estimated fair value of the award, and is recognized as an expense, typically on a straight-line basis over the employee's requisite service period (generally the vesting period of the equity award) which is generally two to four years. Compensation expense for awards with performance conditions that affect vesting is recorded only for those awards expected to vest or when the performance criteria are met. The fair value of restricted stock and restricted stock unit awards is determined by the product of the number of shares or units granted and the grant date market price of the underlying common stock. The fair value of stock option and common stock purchase warrant awards is estimated on the date of grant utilizing the Black-Scholes-Merton option pricing model. The Company utilizes the simplified method for estimating the expected term for options granted to employees due to the lack of available or sufficient historical exercise data for the Company for the applicable options terms. The Company accounts for forfeitures of awards as they occur. Estimates of expected volatility of the underlying common stock for the expected term of the stock option used in the Black-Scholes-Merton option pricing model are determined by reference to historical volatilities of the Company's common stock and historical volatilities of similar companies.

Grants of equity-based awards (including warrants) to non-employees in exchange for consulting or other services are accounted for using the grant date fair value of the equity instruments issued.

A condition affecting the exercisability or other pertinent factors used in determining the fair value of an award that is based on an entity achieving a specified share price constitutes a market condition pursuant to FASB ASC Topic 718, "Stock based Compensation," ("ASC 718"). A market condition is reflected in the grant-date fair value of an award, and therefore, a Monte Carlo simulation model is utilized to determine the estimated fair value of the equity-based award. Compensation cost is recognized for awards with a market condition, provided the requisite service period is satisfied, regardless of whether the market condition is ever satisfied.

Cancellation of an existing equity-classified award along with a concurrent grant of a replacement award is accounted for as a modification under ASC 718. Total compensation cost to be recognized in connection with a modification and concurrent grant of a replacement award is equal to the original grant date fair value plus any incremental fair value, calculated as the excess of the fair value of the replacement award over the fair value of the original awards on the cancellation date. Any incremental compensation cost related to vested awards is recognized immediately on the modification date. Any incremental compensation cost related to unvested awards is recognized prospectively over the remaining service period, in addition to the remaining unrecognized grant date fair value.

Total noncash stock-based compensation expense for the periods presented was included in the following financial statement line items:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months** | **Three Months** | **Nine Months** | **Nine Months** |
|  | **Ended September 30,** | **Ended September 30,** | **Ended September 30,** | **Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Selling, marketing and advertising | $53000 | $124000 | $304000 | $378000 |
| Engineering, technology and development | 2000 | 6000 | 15000 | 23000 |
| General and administrative | 558000 | 226000 | 1053000 | 585000 |
| Total noncash stock compensation expense | $613000 | $356000 | $1372000 | $986000 |

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*Approval of the 2025 Omnibus Equity Incentive Plan*

On June 9, 2025, the stockholders of the Company approved the 2025 Omnibus Stock Incentive Plan (the "2025 Plan") which (i) reserves thereunder 75,000 shares for issuance in the form of restricted stock units ("RSUs") and stock option grants ("Option Grants"), among other derivative securities, and (ii) provides for the integration of one hundred percent (100%) of the reserved shares available under the Company's existing 2014 Stock Option and Incentive Plan (the "2014 Plan") including (a) all shares of common stock reserved and unaffiliated with any issued and outstanding restricted stock units and stock option grants under the 2014 Plan totaling 3,708 shares, (b) all shares of common stock relating to unvested restricted stock units under the 2014 Plan totaling 3,204 shares, and (c) all shares of common stock relating to issued and outstanding stock option grants totaling 8,433. In connection with the adoption of the 2025 Plan, the Board also approved the cancellation of all issued and outstanding stock options under the 2014 Plan (2014 Plan Canceled Awards").

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Concurrent with the cancellation of the 2014 Plan Canceled Awards the Board approved the issuance of 70,900 equity awards under the 2025 Plan, comprised of 40,104 stock options and 30,796 RSUs to employees with the following general terms: 1) exercise price of $5.08 per share for stock options, 2) shares of common stock associated with all RSUs valued at $5.08 per share, the closing price of the Company's common stock on the grant date, and 3) RSU and Option grants to vest at the rate of 1/24th per month in arrears ("2025 Exchanged Awards").

Unrecognized compensation expense related to the awards cancelled under the 2014 Plan totaled $408,000 which is being recognized prospectively over the remaining modified service period of 2 years. Total incremental compensation cost related to the 2025 Exchanged Awards totaled $307,000, $165,000 of which related to vested awards as of the modification date and was recognized as expense immediately in the statement of operations for the nine months ended September 30, 2025, and $141,000 related to unvested awards which is being recognized prospectively over the remaining modified service period of 2 years.

On October 20, 2025, stockholders approved an amendment to the Company's 2025 Omnibus Equity Incentive Plan to increase the number of shares of Common Stock available for issuance under the 2025 Plan by 6,967,863 shares of common stock.

***Financing Costs***

Specific incremental costs directly attributable to a proposed or actual offering of securities are deferred and charged against the gross proceeds of the equity financing. In the event that the proposed or actual equity financing is not completed, or is deemed not likely to be completed, such costs are expensed in the period that such determination is made. Deferred equity financing costs, if any, are included in other current assets in the accompanying condensed balance sheets. Deferred financing costs, included in prepaid expense and other current assets, at September 30, 2025 and December 31, 2024, totaled $832,000 and $64,000, respectively.

Specific incremental costs directly attributable to a proposed or actual debt offering are reported in the condensed balance sheets as a direct deduction from the face amount of the debt instrument. In the event that the proposed or actual debt financing is not completed, or is deemed not likely to be completed, such costs are expensed in the period that such determination is made. In the event that the Company elects to use the fair value option to account for debt instruments, all costs directly attributable to the debt offering are expensed as incurred in the condensed statements of operations. For the three and nine months ended September 30, 2025, debt financing costs expensed as incurred in connection with debt financings totaled $415,000 and $554,000, respectively. For the three and nine months ended September 30, 2024, debt financing costs expensed as incurred in connection with debt financings totaled $0 and $0, respectively.

***Debt***

*Fair Value Option* ("*FVO*"*) Election*

The Company accounted for certain promissory notes and convertible notes issued, as described at Note 5, under the fair value option election pursuant to ASC 825, "Financial Instruments," ("ASC 825") as discussed below. The promissory notes accounted for under the FVO election are each debt host financial instruments containing embedded features which would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements under ASC 815. Notwithstanding, ASC 825 provides for the "fair value option" election, to the extent not otherwise prohibited by ASC 825, to be afforded to financial instruments, wherein bifurcation of an embedded derivative is not necessary, and the financial instrument is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. The estimated fair value adjustments, subsequent to the issuance date, as required by ASC 825, are recognized as a component of other comprehensive income ("OCI") with respect to the portion of the fair value adjustment attributed to a change in the instrument-specific credit risk, with the remaining amount of the fair value adjustment recognized as other income (expense) in the accompanying condensed statements of operations. With respect to the promissory notes described at Note 5, as provided for by ASC 825, the estimated fair value adjustments are presented in a respective single line item within other income (expense) in the accompanying condensed statements of operations, since the change in fair value of the convertible notes payable was not attributable to instrument specific credit risk. The estimated fair value adjustment is included in interest expense in the accompanying condensed statements of operations.

The fair value of the promissory notes described at Note 5 was estimated based on a calculation of the present value of the related cash flows (i.e. payments of principal and interest based on contractual agreement terms) using a discount rate that reflected market rates and related credit risk (Level 3 inputs). The FVO was elected for the promissory notes described at Note 5 due to the short-term nature of the promissory notes and to provide relevant and timely information regarding the current market value of the debt, which is marked to market at each balance sheet date reflecting the effects of market fluctuations and other factors.

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Significant judgements and estimates may be required in connection with the determination of whether or not to elect the FVO for specific assets and/or liabilities. In addition, significant judgements and estimates may be required in connection with the determination of appropriate discount rates utilized in connection with present value related valuation techniques. Discount rate assumptions typically reflect the estimated yield to maturity of the debt instrument, incorporating the estimated market-implied rate of return an investor would receive if they held the debt until maturity, and taking into account all future cash flows and the current market price; adjusted for credit risk and market conditions. In addition, judgements and estimates are required in connection with the determination of the portion of subsequent fair value adjustments relate to instrument-specific credit risk, which are reflected in OCI, and the portion of subsequent fair value adjustments that relate to changes in interests rates or other variables, which are reflected in the condensed statements of operations. Variations in any of these judgements and estimates could have a material impact on our financial results.

The Company may issue convertible debt instruments that include detachable common stock purchase warrants. The Company evaluates the terms of each instrument to determine the appropriate accounting treatment under ASC 825-10, "Fair Value Option," ASC 480, "Distinguishing Liabilities from Equity," and ASC 815-40, "Contracts in Entity's Own Equity" ("ASC 815-40"). The Company has elected the FVO for certain convertible debt instruments, as described at Note 5. Under the FVO, the entire debt instrument, including any embedded conversion feature, is initially recognized and subsequently measured at fair value, with changes in fair value recognized in earnings within Other income (expense) each reporting period. The fair value election eliminates the need to separately account for the embedded conversion feature under ASC 815-40.

Detachable warrants issued in connection with convertible debt are evaluated separately from the debt instrument. If the warrants meet the criteria for equity classification under ASC 815-40 (including the fixed-for-fixed equity scope exception and no cash-settlement provisions), the warrants are recorded in additional paid-in capital and are not subsequently remeasured. If the warrants do not meet the criteria for equity classification, they are accounted for as derivative liabilities at fair value with changes in fair value recognized in earnings.

At issuance, proceeds are allocated between the fair-value-option debt instrument and any separately issued equity-classified warrants based on their relative fair values. Transaction costs related to fair-value-option debt instruments are expensed as incurred. For equity-classified warrants, issuance costs are recorded as a reduction to additional paid-in capital. Changes in the fair value of convertible debt for which the FVO has been elected may reflect changes in the Company's credit risk, market interest rates, and the value of the conversion feature.

*Debt Modifications and Extinguishments*

Modifications to debt obligations are initially analyzed to determine whether the modification qualifies as a troubled debt restructuring ("TDR"). A modification is a troubled debt restructuring if both (1) the borrower is experiencing financial difficulty, and (2) the lender grants the borrower a concession. In determining if a company is experiencing financial difficulties for a TDR, as contemplated by the applicable standard, several factors are considered including whether the company is currently in payment default on any debt, if there is a high probability of future default without modification, bankruptcy considerations, or if there is substantial doubt about the company's ability to continue as a going concern. A lender is granting a concession when the effective borrowing rate on the restructured debt is less than the effective borrowing rate on the original debt. The recognition and measurement of the impact of a TDR on the financial statements depends on whether the future undiscounted cash flows specified by the new terms are greater (gain is recorded in the condensed statements of operations for the difference) or less (no gain is recorded in the condensed statements of operations for the difference) than the carrying value of the debt.

For an exchange of debt instruments or a modification of a debt instrument by a debtor and a creditor in a nontroubled debt situation, the Company initially evaluates whether the modified debt terms are "substantially different" from the original debt. An exchange of debt instruments or a modification of a debt instrument by a debtor and a creditor is deemed to have been accomplished with debt instruments that are substantially different if the present value of the cash flows under the terms of the new debt instrument is at least 10 percent different from the present value of the remaining cash flows under the terms of the original instrument. If the terms of a debt instrument are changed or modified and the cash flow effect on a present value basis is less than 10 percent, the debt instruments are not considered to be substantially different.

If the modification is not deemed to be substantially different, the modification is accounted for as an adjustment to the carrying amount of the debt, with a recalculated effective interest rate. If the modification is deemed to be substantially different, then the modification is accounted for as an extinguishment of the original debt and issuance of new debt, requiring the recognition of a gain or loss on the extinguishment in the condensed statements of operations.

In an early extinguishment of debt for which the fair value option has been elected, the net carrying amount of the extinguished debt is determined to be equal to its fair value at the reacquisition date. As such, there is no difference between the carrying amount of the debt and its reacquisition price for which to recognize a gain or loss. Upon extinguishment the Company includes in net income only the cumulative amount of the gain or loss previously recorded in other comprehensive income for the extinguished debt that resulted from changes in instrument-specific credit risk, if any.

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*Debt Exchanges for Equity* — *Fair Value Option*

The Company may settle or exchange debt instruments by issuing equity securities (i.e. common stock or preferred stock). Upon settlement or exchange of FVO-elected debt for the Company's equity securities, the carrying amount of the debt immediately prior to settlement represents its fair value at the settlement date. Any difference between the fair value of the equity instruments issued and the carrying amount of the debt extinguished is recognized as a gain or loss in earnings within Other income (expense) at the time of the exchange. Equity instruments issued in settlement of debt are recorded in stockholders' equity at their fair value on the settlement date. Any incremental direct costs associated with issuing equity securities are accounted for as a reduction to additional paid-in capital.

***Transfers of Financial Assets***

The Company accounts for transfers of financial assets as sales when it has surrendered control over the related assets. Whether control has been relinquished requires, among other things, an evaluation of relevant legal considerations and an assessment of the nature and extent of the Company's continuing involvement with the assets transferred. Gains and losses stemming from transfers reported as sales, if any, are included in the statements of income. Assets obtained and liabilities incurred in connection with transfers reported as sales are initially recognized in the balance sheets at fair value.

Transfers of financial assets that do not qualify for sale accounting are reported as collateralized borrowings. Accordingly, the related assets remain on the Company's balance sheet and continue to be reported and accounted for as if the transfer had not occurred. Cash proceeds from these transfers are reported as liabilities, with attributable interest expense recognized over the life of the related transactions. Commitment fees charged irrespective of drawdown activity are recognized as expense on a straight-line basis over the commitment period and included in other income (expense) in the condensed statements of operations. Refer to Note 3 for additional information.

***Reportable Segments***

The Company utilizes the management approach to identify the Company's operating segments, based on information reported internally to the Chief Operating Decision Maker ("CODM") to make resource allocation and performance assessment decisions. The Company's CODM is the Company's Chief Executive Officer.

An operating segment of a public entity has all the following characteristics: (1) it engages in business activities from which it may earn revenue and incur expense; (2) its operating results are regularly reviewed by the public entity's CODM to make decisions about resources to be allocated to the segment and assess its performance: and (3) its discrete financial information is available. Based on the applicable criteria under the standard, the components of the Company's operations are its: (1) media and advertising component, including its publishing and content studio component; and (2) the Company's direct-to-consumer component. A reportable segment is an identified operating segment that also exceeds the quantitative thresholds described in the applicable standard.

Based on the applicable criteria under the standard, including quantitative thresholds, the Company determined it has one operating segment and one reportable segment, operated primarily in domestic markets for the periods presented, as the CODM regularly reviews and manages the Company's operations, business activities and financial performance and allocates resources as a single operating and reportable segment at the entity level.

Super League's single reportable segment derives revenues from customers as summarized at Note 2, "*Revenue Recognition.*" The accounting policies of the Company's single reporting segment are described in the summary of significant accounting policies herein.

The chief operating decision maker assesses performance, establishes management compensation and decides how to allocate resources for the single reporting segment, primarily by monitoring actual results versus the annual plan, based on total revenues, net operating income (loss) and net income (loss) as reported in the condensed statements of operations. The CODM does not evaluate segment performance using entity level balance sheet information.

The significant expenses reviewed by the CODM are cost of revenue; selling, marketing and advertising expense; engineering, technology and development expense; and general and administrative expense, as presented in the condensed statements of operations, including noncash amortization and noncash stock compensation expense included in the expense categories. Selling, marketing and advertising expense, engineering, technology and development expense, and general and administrative expense include noncash amortization expense and noncash stock compensation expense, which is disclosed in Note 2 and Note 3, respectively. Other segment items consist of contingent consideration, loss on intangible asset disposal, impairment of intangible assets, interest expense, changes in the fair value of derivative instruments and other income (expense) items, as presented in the condensed statements of operations.

***Concentration of Credit Risks***

Financial instruments that potentially subject the Company to concentrations of credit risk are cash equivalents and accounts receivable. Cash and cash equivalents are also invested in deposits with certain financial institutions and may, at times, exceed federally insured limits. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company's financial condition, results of operations, and cash flows.

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***Risks and Uncertainties***

*Concentrations*. The Company had certain customers whose revenue individually represented 10% or more of the Company's total revenue, or whose accounts receivable balances individually represented 10% or more of the Company's total accounts receivable, and vendors whose accounts payable balances individually represented 10% or more of the Company's total accounts payable, as follows:

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| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months**<br> **Ended September 30,** | **Three Months**<br> **Ended September 30,** | **Three Months**<br> **Ended September 30,** | **Three Months**<br> **Ended September 30,** | **Three Months**<br> **Ended September 30,** | **Three Months**<br> **Ended September 30,** | **Nine Months**<br> **Ended September 30,** | **Nine Months**<br> **Ended September 30,** | **Nine Months**<br> **Ended September 30,** | **Nine Months**<br> **Ended September 30,** | **Nine Months**<br> **Ended September 30,** | **Nine Months**<br> **Ended September 30,** |
|  | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** |
| Number of customers > 10% of revenue / percent of revenue | Three | / | 37% | Two | / | 25% | Two | / | 28% | Two | / | 23% |

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Revenue concentrations were comprised of the following revenue categories:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months** | **Three Months** | **Nine Months** | **Nine Months** |
|  | **Ended September 30,** | **Ended September 30,** | **Ended September 30,** | **Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Media and advertising | 13% | -% | 14% | 11% |
| Publishing and content studio | 24% | 25% | 14% | 12% |
|  | 37% | 25% | 28% | 23% |

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|:---|:---|:---|:---|:---|:---|:---|
|  | **September 30,**<br> **2025** | **September 30,**<br> **2025** | **September 30,**<br> **2025** | **December 31,**<br> **2024** | **December 31,**<br> **2024** | **December 31,**<br> **2024** |
| Number of customers > 10% of accounts receivable / percent of accounts receivable | Four | / | 59% | Three | / | 45% |
| Number of vendors > 10% of accounts payable / percent of accounts payable | One | / | 10% | Two | / | 21% |

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***Net Earnings (Loss) Per Share***

Basic net earnings (loss) per share is computed by dividing the income or loss by the weighted-average number of outstanding shares of common stock for the applicable period. Diluted earnings per share is computed by dividing the income or loss by the weighted-average number of outstanding shares of common stock for the applicable period, including the dilutive effect of common stock equivalents. Potentially dilutive common stock equivalents primarily consist of common stock potentially issuable in connection with the conversion of outstanding preferred stock, convertible notes payable, employee stock options, warrants issued to employees and non-employees in exchange for services and warrants issued in connection with financings.

A reconciliation of net loss to net income (loss) attributable to common stockholders is as follows for the three and nine months ended September 30:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months** | **Three Months** | **Nine Months** | **Nine Months** |
|  | **Ended September 30,** | **Ended September 30,** | **Ended September 30,** | **Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Net loss | $(3562000) | $(3632000) | $(10575000) | $(11347000) |
| Deemed dividend on Series AA Preferred Stock – down round feature | (308000) |  | (308000) |  |
| Deemed dividend on exchange of Series AA, AAA and AAA Junior Preferred Stock for Series B Preferred Stock | 7685000 |  | 7685000 |  |
| Preferred stock dividends paid or accrued– common stock | (271000) | (1694000) | (372000) | (3290000) |
| Net income (loss) attributable to common stockholders - basic | $3544000 | $(5326000) | $(3570000) | $(14637000) |
| Add back: |  |  |  |  |
| Deemed dividend on exchange of Series AA, AAA and AAA Junior Preferred Stock for Series B Preferred Stock | (7685000) |  |  |  |
| Net loss attributable to common stockholders - diluted | $(4141000) | $(5326000) | $(3570000) | $(14637000) |

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The following table sets forth the computation of basic and diluted EPS for the three and nine months ended September 30:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months** | **Three Months** | **Nine Months** | **Nine Months** |
|  | **Ended September 30,** | **Ended September 30,** | **Ended September 30,** | **Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **Basic Earnings (Loss) Per Common Share:** |  |  |  |  |
| Net income (loss) from continuing operations attributable to common stockholders | $3544000 | $(5326000) | $(3570000) | $(14637000) |
| Weighted-average number of common shares—basic | 1090129 | 248007 | 719639 | 182738 |
| **Basic earnings (loss) per common share** | $3.25 | $(21.47) | $(4.96) | $(80.10) |
| **Diluted Earnings Per Common Share:** |  |  |  |  |
| Net loss from continuing operations attributable to common stockholders | $(4141000) | $(5326000) | $(3570000) | $(14637000) |
| Weighted-average number of common shares—basic | 1090129 | 248007 | 719639 | 182738 |
| Effect of dilutive securities: |  |  |  |  |
| Deemed dividend on exchange of Series AA, AAA and AAA Junior Preferred Stock for Series B Preferred Stock | 471677 |  |  |  |
| Weighted-average number of common shares—diluted | 1561806 | 248007 | 719639 | 182738 |
| **Diluted earnings (loss) per common share** | $(2.65) | $(21.47) | $(4.96) | $(80.10) |
| **Anti-dilutive shares excluded from diluted earnings per share calculation:** |  |  |  |  |
| Preferred Stock | 2209000 | 304000 | 2681000 | 304000 |
| Options, warrants, restricted stock units | 1143000 | 54000 | 1143000 | 54000 |
| Convertible notes | 138000 |  | 138000 |  |
| AIRs | 486000 | 210000 | 486000 | 210000 |

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Refer to Note 8 for a description of transactions that occurred subsequent to September 30, 2025, but before these financial statements were issued or are available to be issued, that would have changed materially the number of common shares or potential common shares outstanding at the end of the current period, if the transaction had occurred before the end of the current period.

***Preferred Stock***

Changes to the terms of the Company's preferred stock or exchanges of shares of the Company's preferred stock for another, are assessed to determine whether the changes or exchange should be accounted for as either a modification or an extinguishment. This assessment can be done either qualitatively or quantitatively based upon the significance of the change. When preferred stock is modified in a manner that cannot be reliably assessed qualitatively, the Company performs a quantitative test to determine whether the modification or exchange should be accounted for as a modification or an extinguishment.

The Company applies the cash flow model used to assess debt modifications in ASC 470-50, "Debt – Modifications and Extinguishments", to determine whether a modification or exchange of preferred stock should be accounted for as a modification or extinguishment. Under that model, the present value of the contractual cash flows is compared before and after a modification or exchange. If the present value of the contractual cash flows is ten percent or more, the modification or exchange is accounted for as an extinguishment; if the present value of the contractual cash flows differs by less than ten percent, the modification or exchange is accounted for as a modification.

If the assessment results in an extinguishment, then the difference between the fair value of the new or modified preferred stock and the carrying value of the original preferred stock is recognized as a reduction of, or increase to, retained earnings, as a deemed dividend. The difference is also recognized as an adjustment to earnings available to common shareholders for purposes of calculating earnings per share. If the assessment results in a modification, the Company measures any transfer of value between preferred shareholders and common shareholders as the difference between the fair value of the preferred stock before and after the modification or exchange, measured on the modification or exchange date. Transfers of value are recorded as a reduction of, or increase to, retained earnings as a deemed dividend. In addition, transfers of value are recognized as an adjustment to earnings available to common shareholders for purposes of calculating earnings per share.

***Preferred Stock Dividends***

Dividends on preferred stock paid in another class of stock are recorded at the fair value of the shares issued as a charge to retained earnings. Dividends declared on preferred stock that are payable in the Company's common shares are deducted from earnings available to common shareholders when computing earnings per share. Dividends on preferred stock that are due, but unpaid, are reflected in accrued liabilities in the condensed balance sheet until paid.

Certain of the Company's outstanding preferred stock contain a conversion price down round feature subject to a contractual floor pursuant to the underlying rights in the applicable certificate of designation. Upon the occurrence of a triggering event that results in a reduction of the conversion price for an equity-classified convertible preferred stock, the Company measures the value of the effect of the feature as the difference between the fair value of the financial instrument without the down round feature, with a conversion price corresponding to the currently stated conversion price of the issued instrument, and the fair value of the financial instrument without the down round feature with a conversion price corresponding to the reduced conversion price upon the down round feature being triggered. The value of the effect of a down round feature that is triggered is recognized as a charge to retained earnings and a reduction to income available to common stockholders in the computation of earnings per share. Refer to the condensed statements of stockholders' (deficit) equity for total charges to accumulated deficit as a result of the triggering of down round features related to outstanding preferred stock for the periods presented.

***Income Taxes***

Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's condensed financial statements or income tax returns. A valuation allowance is established to reduce deferred tax assets if all, or some portion, of such assets will more than likely not be realized, or if it is determined that there is uncertainty regarding future realization of such assets.

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Under U.S. GAAP, a tax position is a position in a previously filed tax return, or a position expected to be taken in a future tax filing that is reflected in measuring current or deferred income tax assets and liabilities. Tax positions are recognized only when it is more likely than not, based on technical merits, that the position will be sustained upon examination. Tax positions that meet the more likely than not thresholds are measured using a probability weighted approach as the largest amount of tax benefit being realized upon settlement. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments, and which may not accurately forecast actual outcomes. Management believes the Company has no uncertain tax positions for the periods presented.

On July 4, 2025, H.R.1 – 119th Congress (2025-2026)("H.R.1") was signed into law. H.R.1 introduces changes to United States tax policy, trade regulations, and federal spending priorities. Key provisions include the extension and modification of tax provisions from the 2017 Tax Cuts and Jobs Act, modification of certain energy-related tax credits and incentives, and timing of deductions related to certain domestic expenses. The enactment of H.R.1 did not have a material impact on the Company's statements of operations, financial position or cash flows for the periods presented herein.

**Contingencies**

Certain conditions may exist as of the date the condensed financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company's management, in consultation with its legal counsel as appropriate, assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company, in consultation with legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company's condensed financial statements. If the assessment indicates a potentially material loss contingency is not probable, but is reasonably possible, or is probable, but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

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***Recent Accounting Guidance***

*Recently Adopted Accounting Pronouncements.*

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp; **ASU** | &nbsp;&nbsp;&nbsp; **Description** | &nbsp;&nbsp;&nbsp; **Date Adopted** |
| &nbsp;&nbsp;&nbsp; Income Taxes (Topic 740): Improvements to Income Tax Disclosures<br>(ASU 2023-09) | This ASU requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The amendment in the ASU is intended to enhance the transparency and decision usefulness of income tax disclosures.<br>The adoption of this standard did not have a material impact on the Company's condensed financial statements and related disclosures. | &nbsp;&nbsp;&nbsp; January 1, 2025 |

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*Recently Issued Accounting Pronouncements.*

Accounting standards updates ("ASU") applicable to the Company that were recently issued are summarized below.

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp; **ASU** | &nbsp;&nbsp;&nbsp; **Description** | &nbsp;&nbsp;&nbsp; **Effective Date** |
| &nbsp;&nbsp;&nbsp; Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments<br>(ASU 2024-04) | &nbsp;&nbsp;&nbsp; This ASU clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. Under the amendments, to account for a settlement of a convertible debt instrument as an induced conversion, (1) an inducement offer is required to preserve the form and amount of consideration issuable upon conversion in accordance with the terms of the existing debt instrument, (2) the assessment of the form and amount of consideration in the inducement offer should be performed as of the date the inducement offer is accepted by the holder, and (3) issuers that have exchanged or modified a convertible debt instrument within the preceding 12 months should use the terms that existed 12 months before the inducement offer was accepted when determining whether induced conversion accounting should be applied.<br>Early adoption is permitted. The Company is currently evaluating the impact this standard will have on its condensed financial statements and related disclosures. | &nbsp;&nbsp;&nbsp; Fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. |
| &nbsp;&nbsp;&nbsp; Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses<br>(ASU 2024-03)<br>| &nbsp;&nbsp;&nbsp; This ASU requires that an entity disaggregate relevant expense captions presented on the face of the income statement into natural expense categories within the footnotes of the financial statements. In addition, a separate disclosure of selling expense is required to be presented. The ASU is intended to allow stakeholders to better understand the components of an entity's expenses.<br>Early adoption is permitted. The Company is currently evaluating the impact this standard will have on its condensed financial statements and related disclosures. | &nbsp;&nbsp;&nbsp; Fiscal years beginning after December 15, 2026<br>|
| Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets." <br>(ASU 2025-05) | This standard allows entities to apply a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers. <br>Early adoption is permitted, and the standard is to be applied prospectively. The Company is currently evaluating the impact of the adoption of this standard. | &nbsp;&nbsp;&nbsp;Fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. |
| &nbsp;&nbsp;&nbsp; Intangibles - Goodwill and Other – Internal - Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. <br>(ASU 2025-06)  | This standard updates the recognition model for internal-use software by eliminating the project stage framework and requiring capitalization once projects are approved and completion is probable, and also clarifies related disclosure requirements. <br>Early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard. | &nbsp;&nbsp;&nbsp;Fiscal years beginning after December 15, 2027, including interim periods within those years. |

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**3.** **INTANGIBLE ASSETS**

Intangible assets consisted of the following:

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| | | | |
|:---|:---|:---|:---|
|  | **September 30,**<br> **2025** | **December 31,**<br> **2024** | **Weighted** <br> **Average**<br> **Amortization**<br> **Period (Years)** |
| Partner and customer relationships | $7316000 | $7645000 | 6.5 |
| Capitalized software development costs | 4974000 | 4774000 | 3.0 |
| Capitalized third-party game property costs | 500000 | 500000 | 5.0 |
| Developed technology | 3920000 | 3931000 | 5.0 |
| Influencers/content creators | 2559000 | 2559000 | 4.5 |
| Trade name | 209000 | 209000 | 5.0 |
| Domain | 68000 | 68000 | 10.0 |
| Copyrights and other | 770000 | 745000 | 5.5 |
|  | 20316000 | 20431000 | 5.0 |
| Less: accumulated amortization | (17955000) | (16361000) |  |
| Intangible assets, net | $2361000 | $4070000 |  |

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Amortization expense included in operating expense for the three and nine months ended September 30, 2025 totaled $513,000 and $1,594,000, respectively. Amortization expense included in operating expense for the three and nine months ended September 30, 2024 totaled $610,000 and $1,896,000, respectively.

The Company expects to record amortization of intangible assets for the year ending December 31, 2025 and future fiscal years as follows:

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| | |
|:---|:---|
| **For the years ending December 31,** |  |
| 2025 remaining | $502000 |
| 2026 | 1208000 |
| 2027 | 452000 |
| 2028 | 185000 |
| 2029 | 14000 |
| Thereafter |  |
|  | $2361000 |

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*Sale of Mineville*

On May 19, 2025, the Company entered into a Membership Interest Purchase and Sale Agreement (the "Mineville Purchase Agreement") with Mineville, LLC, a Delaware limited liability company ("Purchaser"), pursuant to which the Company agreed to sell, and Purchaser agreed to purchase, 100% of the membership interests (the "Interests") of InPvP, LLC ("InPvP"). Prior to the consummation of the transactions (the "Mineville Closing") contemplated by the Mineville Purchase Agreement (the "Mineville Sale"), InPVP was a wholly owned subsidiary of the Company that operated our Mineville digital property. The closing of the Mineville Sale occurred simultaneously with the execution of the Mineville Purchase Agreement. The Purchaser paid cash consideration totaling $350,000 at the Mineville Closing to acquire the Interests.

The parties also agreed upon separate terms for an ongoing commercial relationship whereby the Company was granted the rights to ad sales and brand integration to all of Purchaser's Microsoft servers for a term of two years. The Company will have exclusive Sales Rights for the first year of the Sales Term, and during the second year the Sales Rights will be non-exclusive. During the Sales Term, the revenue generated from the Sales Rights will be allocated among the Company and Purchaser as follows: (i) the Company will retain 60% of the net revenue until gross sales revenue exceeds $1.0 million; (ii) after gross sales revenue exceed $1.0 million, the Company will retain 50% of the net revenue through the remainder of the Sales Term; and (iii) if gross sales revenue exceeds $1.5 million during the Sales Term, the Sales Term shall renew automatically for one additional year on the same terms as the second year of the Sales Term.

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The net carrying value of Mineville assets sold totaled $350,000 as of May 19, 2025, which historically were included in intangible assets, net in the condensed balance sheets, resulting in no gain or loss in connection with the Mineville Sale.

*Sale of Minehut*

On February 29, 2024, the Company sold its Minehut related assets ("Minehut Assets") to GamerSafer, Inc. ("GamerSafer"), in a transaction approved by the Board. Pursuant to the Asset Purchase Agreement entered into by and between GamerSafer and the Company on February 26, 2024 (the "GS Agreement"), the Company received $1.0 million of purchase consideration ("Minehut Purchase Consideration") for the Minehut Assets, which amount was paid by GamerSafer in revenue and royalty sharing over a multiple-year period, as described in the GS Agreement (the "Minehut Sale"). Other than with respect to the GS Agreement, there is no relationship between the Company or its affiliates with GamerSafer or its affiliates. The transaction allows Super League to streamline its position in partnering with major brands to build, market, and operate 3D experiences across multiple immersive platforms, including open gaming powerhouses like Minecraft, and aligns with the Company's cost improvement initiatives. Super League and GamerSafer maintain a commercial relationship which ensures that Minehut can remain an ongoing destination available to Super League's partners. The carrying value of Minehut related assets totaled $475,000 as of February 26, 2024, comprised of total carrying costs of $1,671,000, net of accumulated amortization of $1,196,000, and historically were included in intangible assets, net in the condensed balance sheets.

The Company recorded a receivable for the total estimated Minehut Purchase Consideration totaling $619,000 and recognized an initial gain on sale of the Minehut Assets totaling $144,000, which is included in other income in the condensed statements of operations for the nine months ended September 30, 2024. The Minehut Purchase Consideration in the GS Agreement was variable pursuant to the guidance set forth in FASB ASC Topic 606, "Revenue from Contracts with Customers" ("ASC 606"). Under ASC 606, purchase consideration is variable if the amount the Company will receive is contingent on future events occurring or not occurring, even though the amount itself is fixed. As such, the Company estimated the amount of consideration to which the Company will be entitled, in exchange for transferring the Minehut Assets to GamerSafer, utilizing the expected value method which is the sum of probability-weighted amounts in a range of possible consideration outcomes over the applicable contractual payment period, resulting in an estimated receivable of $619,000. Amounts collected in excess of the estimated purchase consideration recorded at contract inception, up to the $1.0 million stated contractual amount of purchase consideration, are recognized as additional gains on the sale of Minehut Assets when realized. Additional gains on the sale of the Minehut Assets subsequent to the initial accounting for the transaction for the three and nine months ended September 30, 2025, totaled $0 and $343,000, respectively. Additional gains on the sale of the Minehut Assets subsequent to the initial accounting for the transaction for the three and nine months ended September 30, 2024, totaled $0 and $0, respectively. From the date of sale of the Minehut Assets through September 30, 2025, the Company calculated royalties due from GamerSafer, applied against the Minehut Purchase Consideration receivable pursuant to the GS Agreement, totaling $1,000,000.

**4.** **ACQUISITIONS**

*Acquisition of Melon, Inc.* – *Contingent Consideration*

On May 4, 2023 ("Melon Acquisition Date"), Super League entered into an Asset Purchase Agreement (the "Melon Purchase Agreement") with Melon, Inc., a Delaware corporation ("Melon"), pursuant to which the Company acquired substantially all of the assets of Melon (the "Melon Assets") (the "Melon Acquisition").

Contingent consideration related to the Melon Acquisition is recorded as a liability in the accompanying condensed balance sheets in accordance with ASC 480, which requires freestanding financial instruments where the Company must or could settle the obligation by issuing a variable number of its shares, and the obligation's monetary value is based solely or predominantly on variations in something other than the fair value of the Company's shares, to be recorded as a liability at fair value and re-valued at each reporting date, with changes in the fair value reported in the condensed statements of operations. The fair value of the Melon Contingent Consideration on the respective valuation dates through to the end of fiscal year 2024 final earn out period was determined utilizing a Monte Carlo simulation model and measured using Level 3 inputs, as described at Note 2. Assumptions utilized in connection with utilization of the Monte Carlo simulation model for the periods presented included risk-free interest rates ranging from 4.04 % to 5.35%, volatility rates ranging from 70% to 85%, and discount rate of 30%.

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The change in fair value, which is included in contingent consideration expense in the condensed statements of operations for the applicable periods presented was comprised of the following:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months** | **Three Months** | **Nine Months** | **Nine Months** |
|  | **Ended September 30,** | **Ended September 30,** | **Ended September 30,** | **Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Beginning balance | $116000 | $336000 | $138000 | $538000 |
| Contingent Consideration – Initial accrual – May 2023 |  |  |  |  |
| Change in fair value<sup>(3)</sup> |  | (68000) | (14000) | (148000) |
| Contingent consideration payments <sup>(2)</sup> | (77000) |  | (85000) | (122000) |
| Accrued contingent consideration<sup>(1)</sup> | $39000 | $268000 | $39000 | $268000 |

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<sup>(1)</sup> As of September 30, 2025, the accrual for the final Melon Second Earn Out Period was comprised of the cash portion of the earn out payment. As of September 30, 2024, the accrual for the Second Earn Out Period included 2,105 shares of common stock valued at $24.80 per share, the closing price of our common stock as of September 30, 2024.

<sup>(2)</sup> In April 2025, the Company paid Melon Accrued Contingent Consideration related to the Melon Second Earn Out Period, comprised of 894 shares of our common stock valued at $8,000. In May 2024, the Company paid Melon Accrued Contingent consideration related to the Melon First Earn Out Period, comprised of $32,000 of cash payments and payment of 1,803 shares of our common stock valued at $90,000.

<sup>(3)</sup> Reflected in the condensed statement of operations for the applicable period.

*Acquisition of Super Biz* – *Contingent Consideration*

On October 4, 2021 ("Super Biz Closing Date"), the Company entered into an Asset Purchase Agreement (the "Super Biz Purchase Agreement") with Super Biz Co. and the founders of Super Biz (the "Founders"), pursuant to which the Company acquired (i) substantially all of the assets of Super Biz (the "Super Biz Assets"), and (ii) the personal goodwill of the Founders regarding Super Biz's business, (the "Super Biz Acquisition").

Pursuant to the terms and subject to the conditions of the Super Biz Purchase Agreement, up to an aggregate amount $11.5 million would be payable to Super Biz and the Founders in connection with the achievement of certain revenue milestones for the period from the Super Biz Closing Date until December 31, 2022 ("Initial Earn Out Period") and for the fiscal year ending December 31, 2023 (the "Super Biz Contingent Consideration") ("Super Biz Earn Out Periods"). The Super Biz Contingent Consideration was payable in the form of both cash and shares of the Company's common stock, in equal amounts, as more specifically set forth in the Super Biz Purchase Agreement.

The Super Biz Contingent Consideration was accounted for as post-combination services and expensed in the period that payment of any amounts of contingent consideration is determined to be probable and reasonably estimable. Contingent consideration is recorded as a liability in the accompanying condensed balance sheets in accordance with ASC 480, which requires freestanding financial instruments where the company must or could settle the obligation by issuing a variable number of its shares, and the obligation's monetary value is based solely or predominantly on variations in something other than the fair value of the company's shares, to be recorded as a liability at fair value and re-valued at each reporting date, with changes in the fair value reported in the condensed statements of operations (December 31, 2024 condensed balance sheet only).

As described below, in August 2024 the accrued Super Biz Contingent Consideration, comprised solely of the cash portion of the continent consideration for the final earn out period, was converted into an unsecured promissory note. The net change in fair market value related to accrued Super Biz Contingent Consideration for the three and nine months ended September 30, 2024 totaled $0 and $9,000, respectively. Accrued contingent consideration expense related to accrued Super Biz Consideration for the three and nine months ended September 30, 2024 totaled $0 and $142,000, respectively. Payments related to accrued Super Biz Consideration for the three and nine months ended September 30, 2024 totaled $0 and $38,000 (758 shares of Common Stock), respectively.

*Issuance of Promissory Note.* In August 2024, the Company issued an unsecured promissory note to the Founders in connection with the accrued contingent consideration outstanding related to the final earn out period, with a principal amount totaling approximately $1.8 million (the "Super Biz Note").

Interest accrued on the outstanding principal at the rate of 8.5% per annum, and accrued until the earlier of (i) repayment of the Super Biz Note in full, or (ii) the Maturity Date; provided, however, during the existence of an event of default, as defined in the Super Biz Note, interest shall accrue on all outstanding principal at the contractual default rate, as defined in the Super Biz Note. Super Biz Note related interest expense for the three and nine months ended September 30, 2025 totaled $36,000 and $128,000, respectively.

*Restricted Common Stock Issuance.* In addition, in connection with the August 2024 issuance of the Super Biz Note, the Company issued 6,563 shares of the Company's common stock to the Founders in January 2025.

The issuance of the Super Biz Note in exchange for the related accrued contingent consideration balance was accounted for as an extinguishment of the original liability due to the fact that the present value of the cash flows under the terms of Super Biz Note was determined to be at least 10 percent different from the present value of the remaining cash flows under the terms of the original obligation. As a result, a loss on extinguishment totaling $336,000 was recorded in the condensed statements of operations for the three and nine months ended September 31, 2024, primarily comprised of the fair value of the 6,563 shares of restricted stock (based on closing price of our common stock on the date of issuance of the Super Biz Note) issued, as described above.

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On June 13, 2025, the Company entered into: (a) Amendment No. 1 to Super Biz Note (the "Drozdov Amendment"), originally issued on August 1, 2024, to Sam Drozdov ("Drozdov")(the "Drozdov Note"); (b) Amendment No. 1 to Super Biz Note (the "Khakshoor Amendment"), originally issued on August 1, 2024, to Ben Khakshoor ("Khakshoor") (the "Khakshoor Note"); and (c) Amendment No. 1 to Super Biz Note (the "Firepit Amendment", and collectively with the Drozdov Amendment and the Khakshoor Amendment, the "Super Biz Note Amendments"), originally issued on August 1, 2024, to Firepit Partners Co. (f/k/a Bloxbiz Co.) ("Firepit", and collectively with Drozdov and Khakshoor, the "Super Biz Lenders") (the "Firepit Note", and collectively with the Drozdov Note and the Khakshoor Note, the "Super Biz Amended Notes").

Pursuant to the Super Biz Note Amendments: (a) the maturity date for each of the Super Biz Amended Notes was extended to August 1, 2025 (the "Amended Maturity Date"); and (b) beginning on June 1, 2025, through the Amended Maturity Date, the interest rate on each of the Super Biz Amended Notes was increased to 20%. As consideration for entering into the Super Biz Note Amendments, the Company agreed to pay: (x) two payments of $18,750 to each of Drozdov and Khakshoor; and (y) two payments of $12,500 to Firepit (collectively, the "Consideration Payments"). The first Consideration Payment was paid on June 15, 2025.

The June 13, 2025 modification of the Super Biz Note was accounted for as a modification as the lender did not grant any concessions and the debt terms were not determined to be "substantially different" from the original debt, as described at Note 2.

On July 8, 2025, the Company entered into exchange agreements with: (i) Khakshoor, pursuant to which the Company and Khakshoor agreed that in exchange for the surrender and forgiveness of that certain promissory note issued to Khakshoor, dated August 1, 2024, and amended on June 13, 2025, with the principal and interest thereon being equal to $711,361, Khakshoor will be issued 711,361 shares of the Company's Series AAAA Jr. Convertible Preferred Stock (the "Khakshoor Agreement"); (ii) Drozdov, pursuant to which the Company and Drozdov agreed that in exchange for the surrender and forgiveness of that certain promissory note issued to Drozdov, dated August 1, 2024, and amended on June 13, 2025, with the principal and interest thereon being equal to $711,361, Drozdov would be granted 711,361 shares of the Company's Series AAAA Jr. Convertible Preferred Stock (the "Drozdov Agreement"); and (iii) Firepit, pursuant to which the Company and Firepit agreed that in exchange for the surrender and forgiveness of that certain promissory note issued to Firepit, dated August 1, 2024, and amended on June 13, 2025, with the principal and interest thereon being equal to $474,242, Firepit would be granted 474,242 shares of the Company's Series AAAA Jr. Convertible Preferred Stock (the "Firepit Agreement", and collectively with the Khakshoor Agreement and Drozdov Agreement, the "SB Exchange Agreements").

The July 8, 2025 exchange of the Super Biz Amended Notes for shares of the Company's Series AAAA Junior Preferred Stock was accounted for as an extinguishment of the related promissory notes, resulting in a loss on extinguishment of liability of $161,000, included in the condensed statement of operations for the three and nine months ended September 30, 2025.

**5.** **DEBT** 

*Promissory Notes Accounted for at Fair Value*

*Agile I* 

On November 8, 2024 (the "Agile I Effective Date"), the Company entered into a loan agreement with Agile Capital Funding, LLC, as collateral agent ("Agile")(" the Agile I Loan Agreement"), pursuant to which the Company issued to Agile a Confessed Judgment Secured Promissory Note for an aggregate value of $1.85 million (the "Agile I Note"). Pursuant to the Agile I Loan Agreement: (i) the Agile I Note matures 28 weeks from the Agile I Effective Date; (ii) carries an aggregate total interest payment of approximately $0.78 million (the "Applicable Rate"), and (iii) immediately upon the occurrence and during the continuance of an Event of Default (as defined in the Agile I Loan Agreement), interest shall accrue at a fixed per annum rate equal to the Applicable Rate plus five percent, or 42%. The Company is required to repay all the obligations due under the Agile I Loan Agreement and the Agile I Note in 28 equal payments of $93,821 with the first payment being made to Agile on November 14, 2024, and every seven days thereafter until the Maturity Date. The proceeds received from the Agile I Note were used to fund general working capital needs.

Pursuant to the Agile I Loan Agreement, upon the occurrence of certain events, including (a) a change in the Company's business other than the business engaged in by the Company on the Agile I Effective Date, (b) cause or permit, voluntarily or involuntarily, any Key Person to cease being actively engaged in the management of the Company without prior notice to Agile, (c) a change in control of the Company or otherwise approve the liquidation or dissolution of the Company or its Subsidiary (collectively, a "Change in Business, Management, or Ownership"), or (d) the Term Loan is accelerated upon the occurrence of an Event of Default, the Company shall be required to immediately pay to Agile an amount equal to the sum of: (i) all outstanding principal of the Agile I Note plus accrued and unpaid interest thereon through the prepayment date, (ii) a fee equal to the aggregate and actual amount of interest (at the contract rate of interest) that would be paid through the Maturity Date (the "Prepayment Fee"), plus (iii) all other obligations that are due and payable, including, without limitation, interest at the Default Rate with respect to any past due amounts. The Company is allowed to make a full or partial prepayment of any or all of the obligations arising under the Agile I Loan Agreement and the Agile I Note, provided the Company shall be obligated to pay a contractual prepayment fee.

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The Agile I Loan Agreement imposed various restrictions on the activities of the Company, including, subject to certain exceptions set forth in the Agile I Loan Agreement (including, without limitation, the pending transactions with Infinite Reality, Inc.), a prohibition on: (i) creating, incurring, assuming, or being liable for any indebtedness, or allow the Subsidiary to do so (expressly excluding up to $3,000,000 of unsecured loans through one or more third parties); (ii) any Change in Business, Management, or Ownership; (iii) fundamental changes to the Company or its subsidiaries (including certain consolidations, mergers and sales/transfers of assets outside the ordinary course of business, and limitations on the ability of the Company and its Subsidiary to grant liens upon their property or assets); (iv) pay any dividends (other than dividends payable solely in capital stock) or make any distribution or payment in respect of or redeem, retire or purchase any capital stock; (v) enter into certain transactions with the Company's affiliates; (vi) make or permit any payment on any debt that is subordinate to the obligations under the Agile I Loan Agreement and the Agile I Note (expressly excluding up to $3,000,000 of unsecured loans through one or more third parties); and (vi) other than in the ordinary course of business, entering into any material agreement, or terminating or materially amending a material agreement.

As security for the full and prompt payment and performance of any obligations arising under the Agile I Loan Agreement and the Agile I Note, the Company and its Subsidiary granted to Agile a continuing first priority security interest in all the assets of the Company and its Subsidiary; provided, however, the filing of a financing statement and/or the taking of any action required to perfect Agile's security interest in the collateral may only occur upon an event of default. The Agile I Loan Agreement also provides for standard Events of Default, customary provisions, including representations, warranties and covenants, indemnification, waiver of jury trial, arbitration, and the exercise of remedies upon a breach or default.

In connection with entering into the Agile I Loan Agreement, the Company was required to pay an administrative fee of $92,500 to the Collateral Agent, which was paid at the closing out of proceeds of the issuance of the Agile I Note and expensed in "other expense" in the condensed statements of operations.

On February 10, 2025, in connection with entering into the Agile II Loan Agreement as described below, the Company paid the remaining balance of the Agile I Note, including interest for the remaining term, totaling $1.5 million.

*Agile II*

On February 10, 2025 (the "Agile II Effective Date"), the Company entered into a Business Loan and Security Agreement (the "Agile II Loan Agreement"), with Agile Capital Funding, LLC as collateral agent ("Collateral Agent"), and Agile Lending, LLC (collectively "Agile"), pursuant to which the Company issued to Agile a Confessed Judgment Secured Promissory Note for an aggregate value of $2.5 million (the "Agile II Note"). Pursuant to the Agile II Loan Agreement: (i) the Agile II Note matures 32 weeks from the Agile II Effective Date; (ii) carries an aggregate total interest payment of approximately $1.05 million, and (iii) immediately upon the occurrence and during the continuance of an Event of Default (as defined in the Agile II Loan Agreement), interest shall accrue at a fixed per annum rate equal to the applicable rate plus five percent, or 42%. The Company is required to repay all the obligations due under the Agile II Loan Agreement and the Agile II Note in 32 equal payments of $110,937, with the first payment being made to Agile on February 17, 2025, and every seven days thereafter until the maturity date. The proceeds received from the Agile II Note will be used to fund general working capital needs.

Pursuant to the Agile II Loan Agreement, upon the occurrence of certain events, including (a) a change in the Company's business other than the business engaged in by the Company on the Aigle II Effective Date, (b) cause or permit, voluntarily or involuntarily, any Key Person to cease being actively engagement in the management of the Company without prior notice to Agile, (c) a change in control of the Company (expressly excluding pending transactions) or otherwise approve the liquidation or dissolution of the Company (collectively, a "Change in Business, Management, or Ownership"), or (d) the RP Note is accelerated upon the occurrence of an Event of Default, the Company shall be required to immediately pay to Agile an amount equal to the sum of: (i) all outstanding principal of the Agile II Note plus accrued and unpaid interest thereon through the prepayment date, (ii) a fee equal to the aggregate and actual amount of interest (at the contract rate of interest) that would be paid through the maturity date (the "Prepayment Fee"), plus (iii) all other obligations that are due and payable, including, without limitation, interest at the Default Rate with respect to any past due amounts. The Company is allowed to make a full or partial prepayment (and receive a discount thereon if repaid in full within sixty days of note issuance) of any or all of the obligations arising under the Agile II Loan Agreement and the Agile II Note, provided the Company shall be obligated to pay the Prepayment Fee.

The Agile II Loan Agreement imposes various restrictions on the activities of the Company consistent with the Agile I Loan Agreement described above under the heading "*Agile I.*" 

As security for the full and prompt payment and performance of any obligations arising under the Agile II Loan Agreement and the Agile II Note, the Company granted to Agile a continuing first priority security interest in all the assets of the Company; provided, however, the filing of a financing statement and/or the taking of any action required to perfect Agile's security interest in the collateral may only occur upon an event of default. The Agile II Loan Agreement also provides for standard Events of Default, customary provisions, including representations, warranties and covenants, indemnification, waiver of jury trial, arbitration, and the exercise of remedies upon a breach or default.

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In connection with entering into the Agile II Loan Agreement, the Company was required to pay an administrative fee of $125,000 to the Collateral Agent, which was paid at the closing out of proceeds of the issuance of the Agile II Note and expensed in "other expense" in the condensed statements of operations. $1.5 million of the Agile II Note was used to repay the remaining balance of principal and interest under the Agile I Note, with net proceeds to the Company of approximately $875,000.

On July 10, 2025, the Company entered into an exchange agreement (the "Agile Exchange Agreement") with Agile, pursuant to which the Company and Agile agreed that in exchange for the surrender and forgiveness of the Agile II Note, dated February 7, 2025, with the remaining amount of principal and interest thereunder being $1,331,250, Agile received (a) 44,128 shares of common stock (the "Agile Exchange Shares"), (b) pre-funded warrants to purchase 173,023 shares of common stock (the "Agile Pre-Funded Warrants", and collectively with the Agile Exchange Shares, the "Agile Exchange Securities"), with the Agile Exchange Securities valued at a price of $5.67, such amount above the Nasdaq Minimum Price, and (c) four equal cash payments of $25,000 to Agile, totaling $100,000, beginning on July 10, 2025, and every seven days thereafter.

The July 10, 2025 exchange of the balance of the Agile II Note for shares of the Company's Common Stock was accounted for as an extinguishment of the Agile II Note, resulting in the derecognition of the related liability and the recording of the fair value of the equity securities exchanged on the date of settlement. The Agile II Note was accounted for under the FVO, and therefore, the carrying amount of the Agile II Note immediately prior to settlement represented its fair value at the settlement date. As a result, no gain or loss was recognized in connection with the exchange. The $100,000 of cash payments were included as a component of the change in fair value of the Agile II Note for the three and nine months ended September 30, 2025, which is included in other income (expense) in the condensed statements of operations.

*1800 Diagonal Lending I*

On March 26, 2025 (the "Diagonal Effective Date"), the Company and 1800 Diagonal Lending, LLC, a Virginia limited liability company, or registered assignees ("Diagonal") entered into a Securities Purchase Agreement (the "Diagonal Agreement"), pursuant to which the Company issued a Convertible Promissory Note (the "Diagonal Note") in the principal amount of $300,000 (the "Diagonal Principal"), for which the Diagonal Note, among other things, (a) matures on December 30, 2025 (unless otherwise accelerated upon an Event of Default (as defined below)) (the "Diagonal Maturity Date"), (b) accrues interest at a rate of 10% per annum on the unpaid principal balance from the date the Diagonal Note was issued (the "Diagonal Issuance Date") until the principal and interest becomes due and payable, whether on the Maturity Date or upon acceleration by prepayment or otherwise, (c) begins to accrue interest on the Diagonal Issuance Date but shall not be payable until the Diagonal Note becomes payable, and (d) interest will accrue at a rate of 22% per annum for any amount of principal or interest which is not paid as required under the Diagonal Note, or during an Event of Default.

Pursuant to the Diagonal Note, Diagonal has the right, from time to time, and at any time, during the period beginning on the date which is 180 days from the Diagonal Effective Date and ending on the earlier of (a) the Diagonal Maturity Date, or (b) the date of payment of the Default Amount, each in respect of the remaining outstanding amount of the Diagonal Note into fully paid and non-assessable shares of common stock at a price equal to 75% multiplied by the Market Price (as defined below) (the "Conversion Price"). For purposes of the Diagonal Note: (x) the "Market Price" means the lowest Trading Price for the Company's common stock during the 10 trading ending on the latest complete trading day prior to the Diagonal Conversion Date; (y) the "Trading Price" means the closing price (or bid, if applicable) of the Company's common stock as listed (or quoted, as applicable) on the principal securities exchange or trading market where it is listed or traded; and (z) the "Diagonal Conversion Date" means the date specified in the applicable notice of conversion, delivered to the Company by Diagonal in accordance with the Diagonal Note.

Pursuant to the Diagonal Note, the following events, among other things, constitute an Event of Default: (i) failure to pay principal and interest when due; (ii) the Company fails to issue shares of common stock upon exercise of Diagonal's conversion rights under the Diagonal Note; (iii) the Company's breach of any material covenant or other material term or condition in the Diagonal note or the Diagonal Agreement, and such breach continues for a period of 20 business days after written notice from Diagonal; (iv) any breach of the representations and warranties set forth in both the Diagonal Agreement and the Diagonal Note; (v) the Company institutes any assignment for the benefit of creditors, or applies for or consents to the appointment of a receiver or trustee for it or for a substantial part of its property or business; (vi) the Company institutes, or any proceeding is instated against the Company, relating to any bankruptcy, insolvency, reorganization, or liquidation proceedings; (vii) the Company fails to maintain the listing of its common stock on Nasdaq or on the Over The Counter boards or an equivalent exchange; (viii) the Company failing to comply with the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or ceases to be subject to the reporting requirements of the Exchange Act; (ix) the Company institutes any dissolution, liquidation, or winding up of the Company or any substantial portion of its business; (x) the restatement of any financial statements filed by the Company with the Securities and Exchange Commission, if the result of such restatement would have constituted a material adverse effect on the rights of Diagonal; (xi) the Company proposes to replace its transfer agent and fails to provide a fully executed irrevocable transfer agent instructions signed by the successor transfer agent; and (xii) a breach or default by the Company of any covenant or other term or condition contained in any other agreement by the Company, after the passage of all applicable notice and cure or grace periods (each individually an "Event of Default", and collectively, "Events of Default").

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Upon the occurrence and during the continuation of any Event of Default, the Diagonal Note shall become immediately due and payable, and the Company shall pay to Diagonal an amount equal to the Default Amount (as defined below), multiplied by two. For other Events of Default, the Diagonal Note shall become immediately due and payable in an amount equal to 150% times the sum of (a) the then outstanding principal amount of the Diagonal Note, plus (b) accrued and unpaid interest on the unpaid principal amount of the Diagonal Note to the date of payment, plus (c) Default Interest, if any, on the amounts referred to in clauses (a) and/or (b), plus (d) any amounts owed to Diagonal pursuant to the Diagonal Note (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (b), (c) and (d) shall collectively be known as the "Default Amount") and all other amounts payable under the Diagonal Note shall immediately become due and payable, together with all costs, including, without limitation, legal fees and expenses, of collection, and Diagonal shall be entitled to exercise all other rights and remedies available at law or in equity.

The Diagonal Note further contains provisions that: (a) limit Diagonal's beneficial ownership upon conversion of the Diagonal Note to a maximum of 4.99% of the Company's issued and outstanding common stock; (b) prohibit the Company from entering selling, leasing or otherwise disposing of any significant portion of its assets outside the ordinary course of business; and (c) adjust the Conversion Price (and number of shares deliverable upon conversion) upon (i) the event of merger, consolidation, or similar transactions, and (ii) the Company declaring or making any distribution of assets to holders of its common stock as a dividend, stock repurchase, return of capital, or otherwise. The Diagonal Agreement also provides for customary provisions, including, without limitation, representations, warranties, covenants, conditions to closing, indemnification, waiver of jury trial, and exercise of remedies upon a breach of the Diagonal Agreement.

The Diagonal Note was issued with an Original Issue Discount of 4.75% (the "OID"), with net proceeds to the Company of approximately $279,000 after deducting the OID, reimbursement of Diagonal's expenses in an amount equal to $7,000 (expensed in the statements of operations for the nine months ended September 30, 2025), and other estimated offering expenses. The Company used the net proceeds from the offering for working capital and general corporate purposes.

During the three and nine months ended September 30, 2025, Diagonal converted an aggregate principal amount under the Diagonal Note of $247,000 into shares of the Company's Common Stock at an average price of $2.33 per share, resulting in the issuance of 106,000 shares of Common Stock to Diagonal.

*1800 Diagonal Lending II*

On May 12, 2025 (the "Diagonal II Effective Date"), the Company and Diagonal entered into a Securities Purchase Agreement (the "Diagonal II Agreement"), pursuant to which the Company issued a Convertible Promissory Note (the "Diagonal II Note") in the principal amount of $145,200 (the "Diagonal II Principal"), for which the Diagonal II Note, among other things, (a) matures on February 15, 2026 (unless otherwise accelerated upon an Event of Default (as defined below)) (the "Diagonal II Maturity Date"), (b) accrues interest at a rate of 10% per annum on the unpaid principal balance from the date the Diagonal II Note was issued (the "Diagonal II Issuance Date") until the principal and interest becomes due and payable, whether on the Maturity Date or upon acceleration by prepayment or otherwise, (c) interest begins to accrue on the Diagonal II Issuance Date but shall not be payable until the Diagonal II Note becomes payable, and (d) interest will accrue at a rate of 22% per annum for any amount of principal or interest which is not paid as required under the Diagonal II Note, or during an Event of Default.

Pursuant to the Diagonal II Note, Diagonal has the right, from time to time, and at any time, during the period beginning on the date which is 180 days from the Diagonal II Effective Date and ending on the earlier of (a) the Diagonal II Maturity Date, or (b) the date of payment of the Default Amount, each in respect of the remaining outstanding amount of the Diagonal II Note into fully paid and non-assessable shares of common stock at a price equal to 75% multiplied by the Market Price (as defined below) (the "Conversion Price"). For purposes of the Diagonal II Note: (x) the "Market Price" means the lowest Trading Price for the Company's common stock during the 10 trading ending on the latest complete trading day prior to the Diagonal II Conversion Date; (y) the "Trading Price" means the closing price (or bid, if applicable) of the Company's common stock as listed (or quoted, as applicable) on the principal securities exchange or trading market where it is listed or traded; and (z) the "Diagonal II Conversion Date" means the date specified in the applicable notice of conversion, delivered to the Company by Diagonal in accordance with the Diagonal II Note.

Pursuant to the Diagonal II Note, the following events, among other things, constitute an Event of Default: (i) failure to pay principal and interest when due; (ii) the Company fails to issue shares of common stock upon exercise of Diagonal's conversion rights under the Diagonal II Note; (iii) the Company's breach of any material covenant or other material term or condition in the Diagonal II Note or the Diagonal II Agreement, and such breach continues for a period of 20 business days after written notice from Diagonal; (iv) any breach of the representations and warranties set forth in both the Diagonal II Agreement and the Diagonal II Note; (v) the Company institutes any assignment for the benefit of creditors, or applies for or consents to the appointment of a receiver or trustee for it or for a substantial part of its property or business; (vi) the Company institutes, or any proceeding is instated against the Company, relating to any bankruptcy, insolvency, reorganization, or liquidation proceedings; (vii) the Company fails to maintain the listing of its common stock on Nasdaq or on the Over The Counter boards or an equivalent exchange; (viii) the Company failing to comply with the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or ceases to be subject to the reporting requirements of the Exchange Act; (ix) the Company institutes any dissolution, liquidation, or winding up of the Company or any substantial portion of its business; (x) the restatement of any financial statements filed by the Company with the Securities and Exchange Commission, if the result of such restatement would have constituted a material adverse effect on the rights of Diagonal; (xi) the Company proposes to replace its transfer agent and fails to provide a fully executed irrevocable transfer agent instructions signed by the successor transfer agent; and (xii) a breach or default by the Company of any covenant or other term or condition contained in any other agreement by the Company, after the passage of all applicable notice and cure or grace periods (each individually an "Event of Default", and collectively, "Events of Default").

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Upon the occurrence and during the continuation of any Event of Default that is enumerated in Section 3.2 of the Diagonal II Note, the Diagonal II Note shall become immediately due and payable, and the Company shall pay to Diagonal an amount equal to the Default Amount (as defined below), multiplied by two. For other Events of Default not enumerated in Section 3.2 of the Diagonal II Note, the Diagonal II Note shall become immediately due and payable in an amount equal to 150% times the sum of (a) the then outstanding principal amount of the Diagonal II Note, plus (b) accrued and unpaid interest on the unpaid principal amount of the Diagonal II Note to the date of payment, plus (c) Default Interest, if any, on the amounts referred to in clauses (a) and/or (b), plus (d) any amounts owed to Diagonal pursuant to Sections 1.3 and 1.4(g) of the Diagonal II Note (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (b), (c) and (d) shall collectively be known as the "Default Amount") and all other amounts payable under the Diagonal II Note shall immediately become due and payable, together with all costs, including, without limitation, legal fees and expenses, of collection, and Diagonal shall be entitled to exercise all other rights and remedies available at law or in equity.

Pursuant to the Diagonal II Note, Diagonal is prohibited from converting any portion of the Note that, if such conversion was effectuated, would cause the Company to issue to the Lender shares of the Company's common stock in excess of 19.99% of the issued and outstanding shares of common stock immediately prior to the issuance of the Note.

The Diagonal II Note was issued with an Original Issue Discount of 9.09% (the "OID"), with net proceeds to the Company of $125,000 after deducting the OID, reimbursement of Diagonal's expenses in an amount equal to $7,000 (expensed in the statements of operations for the nine months ended September 30, 2025), and other estimated offering expenses. The Company used the net proceeds from the offering for working capital and general corporate purposes.

*Belleau Note Purchase Agreement*

On March 28, 2025 (the "Belleau Effective Date"), we entered into a Note Purchase Agreement (the "Belleau Purchase Agreement") with Belleau Wood Capital, LP, or its assignees, ("Belleau"). Pursuant to the Belleau Purchase Agreement, the Company will issue to Belleau a total of three Unsecured Promissory Notes (each, a "Belleau Note" and collectively, the "Belleau Notes") with an aggregate principal amount of $1,500,000 (the "Belleau Principal"). The consummation of the sale of the initial Belleau Note was consummated on the Belleau Effective Date, with gross proceeds to the Company of $300,000. The consummation of the sale of the two remaining Belleau Notes are scheduled to occur in the amounts and on the dates as follows: (a) $600,000 on April 14, 2025; and (b) $600,000 on April 28, 2025. As of September 30, 2025, $1.1 million of the Notes were funded, with an additional $150,000 funded subsequent to June 2025. Each of the Belleau Notes: (x) matures on the date that is 12 months from the date of the issuance of each respective Belleau Note (collectively, the "Belleau Maturity Date"); (y) may be prepaid in part or in full at any time by the Company without penalty; and (z) accrues interest at a rate of 20% simple interest per annum (the "Belleau Interest Rate", and the dollar value of the accrued interest, the "Belleau Interest").

The Belleau Interest that accrues on each respective Belleau Note is payable on each respective Belleau Maturity Date in the form of restricted shares of the Company's common stock equal to 20% of the Belleau Principal, calculated at a price per share of $14.00. In the event of a prepayment of any Belleau Note by the Company, the Belleau Interest will be payable in full at the time of such prepayment.

The Belleau Note also provides for: (i) standard events of default, including (a) any default in the payment of the Belleau Principal or Belleau Interest on their respective due dates, (b) the occurrence of a Bankruptcy Event (as defined in the Belleau Note), or (c) the Company commits any material breach or default of any material provision of the Belleau Note, if not cured within 20 days following the written notice from Belleau specifying in reasonable detail such breach or default (sections (a) through (c), the "Belleau Events of Default"); and (ii) customary provisions, including representations, warranties and covenants, indemnification, waiver of jury trial, arbitration, and the exercise of remedies upon a breach or default. Upon the occurrence of an Event of Default, the Belleau Note will bear interest at the default interest rate of 20% per annum, payable in cash, and upon Belleau's written notice to the Company, all payments of Belleau Principal and Belleau Interest will become immediately due and payable.

On August 11, 2025, the Company and Belleau entered into an Amended & Restated Unsecured Promissory Note, pursuant to which the Belleau Principal was reduced to $1,250,000. The Company used the proceeds from the sale of the Belleau Notes for working capital and general corporate purposes. During the three months ended September 30, 2025, the Company repaid $250,000 of principal on the Belleau Note. Refer to Note 8 for additional information.

In September 2025, the Company prepaid $250,000 of principal on the Belleau Note.

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*Related Party Promissory Note*

On November 19, 2024 (the "RP Effective Date"), we entered into a Note Purchase Agreement (the "RP Purchase Agreement") with a non-employee member of the Board (the "Purchaser"). Pursuant to the RP Purchase Agreement, the Company issued to the Purchaser an Unsecured Promissory Note (the "RP Note") in the amount of $1,500,000 (the "RP Principal"), for which the RP Note (i) matures on the date that is 12 months from the RP Effective Date (the "RP Maturity Date"), (ii) may be pre-paid at any time by the Company without penalty, and (iii) accrues interest on the RP Principal at a rate of 40% simple interest per annum (the "RP Interest"). The RP Interest is payable on the RP Maturity Date. In the event of a prepayment of the RP Note by the Company, the RP Interest will be pro-rated for the period the RP Note is outstanding. The Company intends on using the proceeds for working capital and general corporate purposes.

The RP Note also provides for: (i) standard events of default, including (a) any default in the payment of the RP Principal or RP Interest on their respective due dates, (b) the occurrence of a Bankruptcy Event (as defined in the Note), or (c) the Company commits any material breach or default of any material provision of the Note, if not cured within 20 days following the written notice from the Purchaser specifying in reasonable detail such breach or default (sections (a) through (c), the "Events of Default"); and (ii) customary provisions, including representations, warranties and covenants, indemnification, waiver of jury trial, arbitration, and the exercise of remedies upon a breach or default. Upon the occurrence of an Event of Default, the RP Note will bear interest at the default interest rate of 45% per annum, and upon Purchaser's written notice to the Company, all payments of RP Principal and RP Interest will become immediately due and payable.

On June 13, 2025, the Company entered into an amendment to the RP Note (the "RP Amendment"). Pursuant to the Amendment: (a) the maturity date of the RP Note was extended to November 19, 2026; (b) beginning on November 19, 2025, interest will no longer accrue on the remaining Principal outstanding; and (c) the Company agreed to make monthly payments of $175,000, with such payments to start on November 19, 2025, and continue thereafter for twelve months, at which time the RP Note will be paid in full.

On July 7, 2025, the Company entered into an exchange agreement with the Michael Keller Trust (the "Trust") ("RP Exchange Agreement"), pursuant to which the Company and the Trust agreed that in exchange for the surrender and forgiveness of RP Note, with the principal and interest thereon being equal to $1,878,082, the Trust would be granted (a) 1,500,000 shares of Series AAAA Jr. Convertible Preferred Stock, and (b) cash payments totaling $378,000, such payments to be made in equal monthly installments of approximately $63,000, commencing on October 15, 2025, and concluding on March 15, 2026 (the "Trust Agreement").

The July 7, 2025 exchange of the balance of the RP Note for shares of the Company's Series AAAA Junior Preferred Stock was accounted for as an extinguishment of the RP Note, resulting in the derecognition of the related liability and the recording of the fair value of the Series AAAA Jr. Preferred Stock exchanged on the date of settlement. The RP Note was accounted for under the FVO, and therefore, the carrying amount of the RP Note immediately prior to settlement represented its fair value at the settlement date. As a result, no gain or loss was recognized in connection with the exchange. The $378,000 of accrued cash payments were included as a component of the change in fair value of the RP Note for the three and nine months ended September 30, 2025, which is included in other income (expense) in the condensed statements of operations.

*Yield Point Convertible Note*

On July 10, 2025, the Company and Yield Point NY, LLC (the "Yield Point"), entered into a Securities Purchase Agreement, pursuant to which the Company agreed to sell up to (i) an aggregate principal amount of $4,494,382 in 8% Senior Secured Convertible Notes, maturing eighteen (18) months after the issue date, with original issue discount of 11%, convertible into shares of the Company's common stock at a conversion price of $6.815 per share, and if not converted then amortized over the final twelve (12) months concluding on the maturity date ("YP Notes"), and (ii) common stock purchase warrants to purchase 659,968 shares of common stock at an exercise price of $5.361 per share (the "YP Warrants") (the "Offering") (the YP Purchase Agreement"). The Company received $4,000,000 in gross proceeds from the Offering.

The Purchase Agreement contains customary covenants on the Company's part that are typical for transactions of this type, as well as the following additional covenants: (i) for as long as the YP Notes remain outstanding, the Company agreed not to effect or enter into an Equity Line of Credit or agreement to effect any issuance by the Company or any of its subsidiaries involving a variable rate transaction; (ii) the Company agreed to offer to Yield Point, for so long as any amount in excess of $1,500,000 remains outstanding on the Note, the opportunity to participate in an amount equal to 25% in any subsequent securities offerings by the Company; (iii) the Company agreed to hold a stockholder meeting within 90 days of the date of the Agreement at which the Company will solicit the stockholders' affirmative vote for approval of the anti-dilution provisions described in the transaction documents in accordance with the applicable law and rules and regulations of the Nasdaq. The YP Purchase Agreement obligates the Company to indemnify Yield Point and various related parties for certain losses including those resulting from (i) any misrepresentation or breach of any representation or warranty made by the Company, (ii) any breach of any obligation of the Company, and (iii) certain claims by third parties.

The YP Notes are senior secured obligations of the Company and are secured by certain personal property of the Company, pursuant to a security agreement. Unless earlier converted, the YP Notes will mature in January 2027. The YP Notes bear interest at a rate of 8% per annum, subject to increase in the event of default to the lesser of 18% per annum or the maximum rate permitted under applicable law. The YP Notes, including interest accrued thereon, are convertible at any time until a convertible note is no longer outstanding, in whole or in part, at the option of the holders into shares of common stock at a conversion price of $6.815 per share, subject to adjustment as set forth therein. The YP Notes have a beneficial ownership limitation such that none of Yield Point have the right to convert any portion of their YP Notes if Yield Point (together with its affiliates or any other persons acting together as a group with Yield Point) would beneficially own in excess of 4.99% of the number of shares of common stock outstanding immediately after giving effect to the issuance of common stock issuable upon conversion of such YP Notes, or, upon 61 days' prior written notice to the Company, 9.99% of the number of shares of common stock outstanding immediately after giving effect to the issuance of common stock issuable upon conversion of such YP Notes. Commencing on the six-month anniversary of the date of the issuance of the Note, and on the same date every month thereafter, the Company shall make 12 equal amortization payments, with each payment being equal to one-twelfth of the initial principal amount, plus all accrued but unpaid interest.

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The YP Notes also contain certain negative covenants, including prohibitions on the incurrence of indebtedness, liens, amendments to the Company's organizational documents, dividends, redemption, related party transactions and entry into any equity line of credit agreement or variable rate transactions. The YP Notes also contain standard and customary events of default including, but not limited to, failure to make payments when due, failure to observe or perform covenants or agreements contained in the YP Notes, existence of a default or event of default under any of the Transaction Documents (as defined in the YP Notes), the bankruptcy or insolvency of the Company or any of its subsidiaries and unsatisfied judgments against the Company.

The YP Warrants entitle the holders to purchase 659,968 shares of common stock, respectively. The YP Warrants are exercisable immediately and have a term of four years. The YP Warrants each have an exercise price of $5.361 per share, subject to adjustment as set forth therein.

The terms of each of the YP Notes and the YP Warrants provide for anti-dilution protection for issuances of common stock at a price per share less than the price equal to the conversion price or exercise price, as applicable, subject to approval by the Company's stockholders.

In connection with the YP Purchase Agreement, the Company and Yield Point entered into the PIPE Registration Rights Agreement, pursuant to which the Company has agreed to register the Underlying Shares on the Registration Statement, to be filed with the SEC within 30 days after the date of the issuance of the YP Notes and YP Warrants and to cause the Registration Statement to be declared effective under the Securities Act no later than 90 days after the date of the Purchase Agreement. If certain of the Company's obligations under the Registration Rights Agreement are not met, the Company is required to pay partial liquidated damages to Yield Point.

The Company also entered into a Security Agreement (the "YP Security Agreement") with Yield Point and such holders of the YP Notes as may be issued in the future (together with Yield Point, the "Secured Parties"). Pursuant to the YP Security Agreement, the Secured Parties were granted a security interest in certain of the Company's personal property to secure the payment and performance of all of the Company's obligations under the YP Notes, YP Warrants, Purchase Agreement, Registration Rights Agreement and Security Agreement.

On September 30, 2025, the Company and Yield Point, entered into Amendment No. 1 to the YP Note (the "YP Note Amendment"), originally issued on July 10, 2025, pursuant to that certain YP Purchase Agreement, dated therewith. Pursuant to the YP Note Amendment: (i) the "Conversion Price" was amended to $5.95, subject to adjustment as set forth in the Note; and (ii) the "Floor Price" was amended to $1.19. All other terms and conditions of the Note remain in full force and effect.

The initial fair value of the YP Warrants, totaling $1,935,000, was classified as a liability in the condensed balance sheets, and is remeasured at fair value at each balance date. The fair value of the YP Warrants was $865,000 at September 30, 2025, resulting in a $1,070,000 credit in the condensed statements of operations for the three and nine months ended September 30, 2025, reflecting the change in fair value of the YP Warrant liability for the period from issuance to September 30, 2025. The fair value of the YP Warrants was estimated using the Black-Scholes-Merton option pricing model and the following weighted-average assumptions: expected volatility of 40%; risk free interest rate range of 3.66% - 3.88%; and expected life range of 3.83-4.0 years. The fair value of the conversion feature embedded in the YP Note was estimated using the Black-Scholes-Merton option pricing model and the following weighted-average assumptions: expected volatility of 40%; risk free interest rate range of 3.66% - 3.97%; and expected life range of 1.30-1.53 years.

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The Agile I Note, Agile II Note, Diagonal I Note, Diagonal II Note, Belleau Note, RP Note and the YP Note are accounted for at fair value as described in Note 2, and measured using Level 3 inputs.

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| | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **YP Note** | **YP Note** | **Agile I Note** | **Agile I Note** | **Agile II Note** | **Agile II Note** | **Belleau Note** | **Belleau Note** | **Diagonal I** | **Diagonal I** | **Diagonal II** | **Diagonal II** | **RP Note** | **RP Note** |
|  |  |  |  |  |  |  |  |  | **Note** | **Note** | **Note** | **Note** |  |  |
| Gross Proceeds | $| 4494000 | $| 1850000 | $| 2500000 | $| 1250000 | $| 300000 | $| 145000 | $| 1500000 |
| Proceeds net of original issue discount |  | 4000000 |  |  |  |  |  |  |  | 286000 |  | 132000 |  |  |
| Fair Value at issuance date |  | 2065000 |  | 2132000 |  | 3205000 |  | 1019000 |  | 247000 |  | 123000 |  | 1343000 |
| Fair Value allocated to YP Warrant liability |  | 1935000 |  |  |  |  |  |  |  |  |  |  |  |  |
| Difference between proceeds and fair value at issuance<sup>(2)</sup> |  | N/A |  | 282000 |  | 705000 |  | (231000) |  | (39000) |  | (9000) |  | (157000) |
| Note balance – December 31, 2024 |  |  |  | 1454000 |  |  |  |  |  |  |  |  |  | 1500000 |
| Fair value – December 31, 2024 |  |  |  | 1679000 |  |  |  |  |  |  |  |  |  | 1438000 |
| Note balance – September 30, 2025 |  | 4494000 |  |  |  |  |  | 1000000 |  | 53000 |  | 145000 |  |  |
| Fair value – September 30, 2025 |  | 2041000 |  |  |  |  |  | 1074000 |  | 64000 |  | 125000 |  |  |
| Interest paid during the three months ended September 30, 2025 |  |  |  |  |  | 426000 |  |  |  |  |  |  |  |  |
| Interest paid during the nine months ended September 30, 2025 |  |  |  | 563000 |  | 656000 |  |  |  |  |  |  |  |  |
| Change in fair value - three months ended September 30, 2025<sup>(2)</sup> |  | 24000 |  |  |  |  |  | 312000 |  | 40000 |  | 11000 |  |  |
| Change in fair value - nine months ended September 30, 2025<sup>(2)</sup> |  | 24000 |  | (178000) |  | 67000 |  | 305000 |  | 64000 |  | 3000 |  | 35000 |
| Debt issue costs <sup>(1)</sup> |  | 415000 |  | 180000 |  | 125000 |  |  |  | 7000 |  | 7000 |  |  |
| Interest Rate / Discount rate | 8%/NA | 8%/NA | 42%/42% | 42%/42% | 42%/42% | 42%/42% | 20%/42% | 20%/42% | 10%/42% | 10%/42% | 10%/42% | 10%/42% | 40%/42% | 40%/42% |

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<sup>(1)</sup> Debt issue costs incurred in connection with the YP Note included legal fees and advisor fees. Debt issue costs incurred in connection with the Agile Loan included administrative fee of $92,500 to the collateral agent and advisor fees. Debt issuance costs are reflected in "other expense" in the condensed statements of operations.

<sup>(2)</sup> Reflected in interest expense in the condensed statements of operations.

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*Accounts Receivable Financing Facility*

Super League Enterprise, Inc. and certain of its subsidiaries (collectively with the Company, the "Borrowers"), entered into a Financing and Security Agreement (the "SLR Agreement") with SLR Digital Finance, LLC ("Lender"), effective December 17, 2023 (the "Facility Effective Date"). Pursuant to the SLR Agreement, Lender may, from time to time and in its sole discretion, make certain cash advances to the Company (each an "Advance", and collectively, "Advances"), against the face amounts of certain uncollected accounts receivable of the Borrowers on an account-by-account basis (each, a "Financed Account", and collectively, the "Accounts"), at a rate of 85% multiplied by the face value of such Account (the "Advance Rate"), less any reserved funds and any other amounts due to Lender from Borrowers, up to a maximum aggregate Advance amount of $4,000,000 (the "Maximum Amount")(collectively, the "AR Facility"). Upon receipt of any Advance, Borrowers will have assigned all of its rights in such receivables and all proceeds thereof. The proceeds received from the Facility will be used to fund general working capital needs. On June 10, 2025, the AR Facility was terminated.

In connection with the AR Facility, the Company agreed to, among other things, (i) pay a finance fee equal to 2% of the Maximum Amount, payable in 24 equal monthly installments on the last day of each month of the Term until paid in full, (ii) pay a servicing fee equal to 0.30% multiplied by the actual average daily amount of Advances outstanding at the time of determination (the "Outstanding Amount") for the applicable month, on the last day of each calendar month during the Term (or so long as any obligations arising under the SLR Agreement are outstanding); (iii) be charged a monthly financing fee (the "Financing Fee"), due upon receipt of full payment of a Financed Account by Lender, equal to 1/12 of (a) the prime rate plus 2% (the "Facility Rate"), multiplied by (b) the amount of the Outstanding Amount; and (iv) utilize the facility such that the monthly average aggregate Advances outstanding is at $400,000 (the "Minimum Utilization"). In the event that Borrower's monthly utilization is less than the applicable Minimum Utilization for any month, the Financing Fee for such month shall be calculated as if the applicable Minimum Utilization has been satisfied.

Transfers of financial assets that do not qualify for sale accounting are reported as collateralized borrowings. Financing and servicing fees calculated with reference to amounts advanced under the AR Facility are included in interest expense. The commitment fee, based on the maximum facility amount and payable irrespective of drawdowns, is expensed on a straight-line basis over the term of the AR Facility and included in other income (expense) in the condensed statements of operations.

Total amounts advanced and repaid under the AR Facility for the applicable periods presented are reflected in financing activities in the condensed statements of cash flows. Interest expense for the three and nine months ended September 30, 2025 totaled $0 and $45,000, respectively. Interest expense for the three and nine months ended September 30, 2024 totaled $19,000 and $52,000, respectively. Commitment fee expense for the three and nine months ended September 30, 2025 totaled $0 and $73,000, respectively. Commitment fee expense for the three and nine months ended September 30, 2024 totaled $10,000 and $30,000, respectively.

**6.** **STOCKHOLDERS' (DEFICIT) EQUITY AND EQUITY-LINKED INSTRUMENTS**

***Common Stock***

*General*

*Filing of Third Amended and Restated Certificate of Designation*

On October 20, 2025, the Company filed the Third Amended and Restated Certificate of Incorporation of Super League Enterprise, Inc. (the "Amended Certificate"). The Amended Certificate amends the Company's Second Amended and Restated Certificate of Incorporation, as amended (the "Prior Charter") to: (i) increase the number of authorized shares of Common Stock from 400,000,000 to 750,000,000; and (ii) to allow the vote of the holders of our preferred stock to amend their respective preferred stock certificates of designations, without requiring the approval of the holders of all voting securities of the Company. The Amended Charter was also restated to include all amendments to the Prior Charter made pursuant to Certificates of Amendment after the filing of the Prior Charter.

On May 30, 2023, the Company filed an amendment to its Charter, increasing the number of authorized shares of common stock from 100,000,000 to 400,000,000. The Company's Board approved the amendment on March 17, 2023, and the Company obtained the approval of the amendment by written consent of its stockholders holding greater than 50% of the voting securities of the Company on April 5, 2023.

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*Reverse Stock Split*

On June 17, 2025, the Company filed the June 2025 Amendment to its Second Amended and Restated Charter, which became effective as of June 23, 2025, effecting the 2025 Reverse Stock Split. The 2025 Reverse Split was approved by the Company's Board on June 2, 2025. The Company's shares began trading on a 2025 Reverse Split-adjusted basis on the Nasdaq Capital Market on June 23, 2025.

As a result of the 2025 Reverse Split, every 40 shares of the Company's issued and outstanding common stock was automatically combined and converted into one issued and outstanding share of common stock. No fractional shares of common stock were issued as a result of the 2025 Reverse Split. Instead, in lieu of any fractional shares to which a stockholder of record would otherwise be entitled as a result of the 2025 Reverse Split, the Company paid cash (without interest) equal to the value of such fractional share. The 2025 Reverse Split did not modify the rights or preferences of the common stock.

All references to common stock, warrants to purchase common stock, options to purchase common stock, restricted stock, preferred stock conversion shares, common stock underlying additional investment rights, share data, per share data and related information contained in the financial statements have been retroactively adjusted to reflect the effect of the 2025 Reverse Split for all periods presented. The Reverse Split resulted in a decrease in Comon Stock, par value, of $34,000, as reflected on the condensed balance sheet as of September 30, 2025, compared to December 31, 2025.

***Preferred Stock***

*General*

The Company's initial certificate of incorporation authorized 5,000,000 shares of preferred stock, par value $0.001 per share. In October 2016, the Company's Board and a majority of the holders of the Company's common stock approved an amendment and restatement of the certificate of incorporation which, in part, eliminated the authorized preferred stock. In August 2018, the Board approved a second amendment and restatement of the Company's amended and restated certificate of incorporation (the "Second Amended and Restated Charter") to, in part, increase the Company's authorized capital to a total of 110.0 million shares, including 10.0 million shares of newly created preferred stock, par value $0.001 per share, authorize the Board to fix the designation and number of each series of preferred stock, and to determine or change the designation, relative rights, preferences, and limitations of any series of preferred stock. The Second Amended and Restated Charter was approved by a majority of the Company's stockholders in September 2018, and was filed with the State of Delaware in November 2018.

*Filing of Certificate of Designation of Preferences, Rights and Limitations of Convertible Preferred Stock* – *Nine Months Ended September, 30, 2025*

*Series AAAA Junior*. On July 11, 2025, the Company filed the Certificate of Designation of Preferences, Rights and Limitations ("COD") of the Series AAAA Jr. Preferred Stock (the "AAAA Jr. Certificate"), designating 3,775,047 shares of Series AAAA Jr. Convertible Preferred Stock (the "AAAA Jr. Preferred Stock") in connection with the entry into the SB Exchange Agreements.

Each share of AAAA Jr. Preferred Stock is convertible at the option of the holder, subject to certain beneficial ownership limitations and primary market limitations as set forth in each AAAA Jr. Certificate, into such number of shares of the Common Stock, equal to the number of AAAA Jr. Preferred Stock to be converted, multiplied by the stated value of $1.00 (the "*Stated Value*"), divided by the conversion price in effect at the time of the conversion (the initial conversion price is equal to the Nasdaq Minimum Price, plus $0.01, subject to adjustment in the event of stock splits, stock dividends, and similar transactions). Holders of the AAAA Jr. Preferred Stock will be entitled to receive dividends, subject to the beneficial ownership and primary market limitations, payable in the form of that number of shares of Common Stock equal to 60% of the shares of Common Stock underlying the AAAA Jr. Preferred Stock upon issuance, provided that the holder holds at least 1% of the AAAA Jr. Preferred Stock on January 1, 2026. In addition, subject to the beneficial ownership and primary market limitations, holders of AAAA Jr. Preferred Stock will be entitled to receive dividends equal, on an as-if-converted to shares of Common Stock basis, and in the same form as dividends actually paid on shares of the Common Stock when, as, and if such dividends are paid on shares of the Common Stock. Notwithstanding the foregoing, to the extent that a holder's right to participate in any dividend in shares of Common Stock to which such holder is entitled would result in such holder exceeding the beneficial ownership and primary market limitations, then such holder shall not be entitled to participate in any such dividend to such extent and the portion of such shares that would cause such holder to exceed the beneficial ownership and primary market limitations shall be held in abeyance for the benefit of such holder until such time, if ever, as such holder's beneficial ownership thereof would not result in such holder exceeding the beneficial ownership and primary market limitations.

*Series B.* On September 12, 2025, the Company filed the COD of the Series B Convertible Preferred Stock (the "*Series B COD*"), designating 16,426 shares of Series B Preferred Stock in connection with the entry into the 2025 Exchange Agreements, as described below.

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Each share of Series B Preferred Stock is convertible (i) at the sole discretion of the Company at any time, (ii) mandatorily on February 11, 2026, and/or (iii) at the option of the holder, each conversion method being subject to certain beneficial ownership limitations and primary market limitations as set forth in the Series B COD, into such number of shares of the Common Stock, equal to the number of Preferred Stock to be converted, multiplied by the stated value of $1.00 (the "Stated Value"), divided by the conversion price in effect at the time of the conversion (the initial conversion price equal to $7.00, subject to adjustment in the event of stock splits, stock dividends, and similar transactions). Holders of Series B Preferred will be entitled to receive dividends, subject to the beneficial ownership and primary market limitations, on an as-if-converted to shares of Common Stock basis, to and in the same form as dividends actually paid on shares of the Common Stock when, as, and if such dividends are paid on shares of the Common Stock. Notwithstanding the foregoing, to the extent that a holder's right to participate in any dividend in shares of Common Stock to which such holder is entitled would result in such holder exceeding the beneficial ownership and primary market limitations, then such holder shall not be entitled to participate in any such dividend to such extent and the portion of such shares that would cause such holder to exceed the beneficial ownership and primary market limitations shall be held in abeyance for the benefit of such holder until such time, if ever, as such holder's beneficial ownership thereof would not result in such holder exceeding the beneficial ownership and primary market limitations.

The Series B Preferred Stock shall, with respect to distributions of assets and rights upon the occurrence of any voluntary or involuntary liquidation, dissolution or winding-up of the Company rank senior to the Common Stock, the Series AA Preferred, the Series AAA Preferred, and Series AAA Jr. Preferred, but junior to any future series of Preferred Stock issued by the Company.

*Prior Filings of Certificate of Designation of Preferences, Rights and Limitations of Convertible Preferred Stock* – *General*

*Certificates of Designation.* In connection with each of the Preferred Stock Offerings, the Company filed Certificates of Designation of Preferences, Rights and Limitations of each series with the State of Delaware. Use of net proceeds included working capital, general corporate purposes, and certain indebtedness (Series A Preferred only), including sales and marketing activities and product development.

*Conversion Feature.* Each share of preferred stock is convertible into such number of shares of the Company's common stock equal to the number of preferred shares to be converted, multiplied by the Stated Value, divided by the conversion price in effect at the time of the conversion, subject to adjustment in the event of stock splits, stock dividends, certain fundamental transactions and future issuances of equity securities, as described herein. In addition, on the one-year anniversary of the respective filing date, the Company may, in its discretion, convert (y) 50% of the outstanding shares of Preferred into the Company's common stock if the VWAP of such common stock over the previous 10 days as reported on the NASDAQ Capital Market equals at least 250% of the conversion price, or (z) 100% of the outstanding shares of Series AAA Preferred into the Company's common stock if the VWAP equals at least 300% of the conversion price. The conversion price is equal to the "Minimum Price," as defined in NASDAQ Rule 5635(d)(1), on the Preferred Stock Offering closing date. In addition, Series A Preferred Stock outstanding will automatically convert into shares of common stock at the Conversion Price upon the earlier of (a) the 24-month anniversary of the effective date or (b) the consent to conversion by holders of at least 51% of the outstanding shares of Series A Preferred.

*Voting Rights.* Each individual series of preferred stock shall vote together with the common stock on an as-converted basis, and not as a separate class, subject to the primary market limitations, except that holders of each individual series of preferred stock shall vote as a separate class with respect to (a) amending, altering, or repealing any provision of the respective series' COD in a manner that adversely affects the powers, preferences or rights of the series, (b) increasing the number of authorized shares of the series, (c) authorizing or issuing an additional class or series of capital stock that ranks senior to or pari passu with the existing series with respect to the distribution of assets on liquidation, or (d) entering into any agreement with respect to the foregoing. In addition, no holder of a series of preferred stock shall be entitled to vote on any matter presented to the Company's stockholders relating to approving the conversion of such holder's series of preferred stock into an amount in excess of the primary market limitations.

*Dividends.* Holders of preferred stock, excluding holders of the Series AAA, AAA-2, AAA-3 and AAA-4 Junior preferred stock (collectively, "Series AAA Junior Preferred Stock"), were or will be entitled to receive dividends, subject to the beneficial ownership and primary market limitations, payable in the form of that number of shares of common stock equal to 20% of the shares of common stock underlying the preferred stock then held by such holder on the 12 and 24 month anniversaries of the respective filing date. Holders of the Series AAA Junior Preferred Stock were entitled to receive dividends, subject to the beneficial ownership and primary market limitations, payable in the form of that number of shares of common stock equal to 20% of the shares of common stock underlying the Series AAA Junior Preferred Stock then held by such holder on the 30-day, 60-day, and 90-day anniversaries of the filing Date.

In addition, subject to the beneficial ownership and primary market limitations, holders of preferred stock will be entitled to receive dividends equal, on an as-if-converted to shares of common stock basis, and in the same form as dividends actually paid on shares of the common stock when, as, and if such dividends are paid on shares of the common stock. Notwithstanding the foregoing, to the extent that a holder's right to participate in any dividend in shares of common stock to which such holder is entitled would result in such holder exceeding the beneficial ownership and primary market limitations, then such holder shall not be entitled to participate in any such dividend to such extent and the portion of such shares that would cause such holder to exceed the beneficial ownership and primary market limitations shall be held in abeyance for the benefit of such holder until such time, if ever, as such holder's beneficial ownership thereof would not result in such holder exceeding the beneficial ownership and primary market limitations.

*Liquidation Preferences.* Upon any dissolution, liquidation or winding up, whether voluntary or involuntary, holders of preferred stock (together with any Parity Securities (as defined in the respective Certificates of Designations) will be entitled to first receive distributions out of the Company's assets in an amount per share equal to the preferred stock Stated Value plus all accrued and unpaid dividends, whether capital or surplus before any distributions shall be made on any shares of common stock (after the payment to any senior security, if any).

*Registration Rights.* The Company and Yield Point in the Preferred Stock Offerings (including the Exchange) also executed separate registration rights agreements, pursuant to which the Company filed or will file the applicable registration statements on Form S-3.

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The following additional terms vary across the applicable series of Convertible Preferred Stock as follows:

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| | | | |
|:---|:---|:---|:---|
| **Term** | **Series AAA and AAA Junior Preferred** | **Series AA Preferred** | **Series A Preferred** |
| Voting Rights – Certain Indebtedness | Holders shall vote as a separate class with respect to authorizing, creating, incurring, assuming, guaranteeing or suffering to exist any indebtedness for borrowed money of any kind outside of certain loans not to exceed $5,000,000 and accounts payable in the ordinary course of business, or entering into any agreement with respect to the foregoing. | Holders shall vote as a separate class with respect to authorizing, creating, incurring, assuming, guaranteeing or suffering to exist any indebtedness for borrowed money of any kind outside of accounts payable in the ordinary course of business, or entering into any agreement with respect to the foregoing. | Holders shall vote as a separate class with respect to authorizing, creating, incurring, assuming, guaranteeing or suffering to exist any indebtedness for borrowed money of any kind in excess of $5 million, or entering into any agreement with respect to the foregoing. |
| Additional Investment Rights ("AIRs") | Subject to the approval by a majority of the voting securities of the Company (the "Stockholder Approval"), which was obtained on June 9, 2025, pursuant to the Subscription Agreements, Series AAA and AAA Junior Preferred Stock holders shall have the right to purchase shares of a newly designated series of preferred stock of the Company containing comparable terms (except for adjustments to the Conversion Price based on future equity issuances) as the applicable series of preferred stock (the "Series AAA Additional Investment Right") from the date the SEC declares the related registration statement to be filed with the SEC pursuant to the applicable Registration Rights Agreement (as defined below) effective, to the date that is 18 months thereafter, for an additional dollar amount equal to the applicable initial investment amount at $1,000 per share (the "Original Issue Price"), with a conversion price equal to the original conversion price of the applicable series of preferred stock. No further additional investment rights shall be granted to investors that exercise the Series AAA Additional Investment Rights. | Pursuant to the Subscription Agreements, purchasers that (a) previously held shares of the Company's Series A Preferred Stock, par value $0.001 per share, or (b) purchased at least $3.5 million in shares of Series AA Preferred Stock (subject to the acceptance of such lesser amounts in the Company's sole discretion), shall have the right to purchase shares of a newly designated series of preferred stock of the Company containing comparable terms as the Series AA Preferred Stock (the "Series AA Additional Investment Right") from the date of each respective closing through the date that is 18 months thereafter as follows: (i) such investor may purchase an additional dollar amount equal to its initial investment amount at $1,000 per share (the "AA Original Issue Price"), with a conversion price equal to the conversion price in effect on the date of original purchase; and (ii) such investor may purchase an additional dollar amount equal to its initial investment amount at the AA Original Issue Price, with a conversion price equal to 125% of the respective conversion price in effect on the date of original purchase. | **Not applicable** |
| Down Round Feature | Subject to the effectiveness of the Stockholder Approval, which was obtained on June 9, 2025, for twenty-four (24) months after the Filing Date, and subject to certain carveouts as described in the Series AAA Certificates of Designation, if the Company conducts an offering at a price per share less than the then effective conversion price (the "Future Offering Price") consisting of common stock, convertible or derivative instruments, then in such event the conversion price of the Series AAA Preferred Stock shall be adjusted to the Future Offering Price, but not less than the Conversion Price Floor (as defined in the Series AAA Certificate of Designations). | For as long as Series AA Preferred Stock remains outstanding and subject to certain carveouts as described in the Series AA Certificates of Designations, (i) if the Company conducts an offering at a price per share less than the then current conversion price (the "Future Offering Price") consisting of common stock, convertible or derivative instruments, and undertaken in an arms-length third party transaction, then in such event the conversion price of the Series AA Preferred Stock shall be adjusted to the greater of: (a) the Future Offering Price and (b) the Conversion Price Floor (" Series AA Down Round Feature"); and (ii) if as of the 24-month anniversary date of April 19, 2023, the VWAP for the five trading days immediately prior to such 24-month anniversary date is below the then current conversion price, the holder will receive a corresponding adjustment to the then conversion price, such adjustment not to exceed the Conversion Price Floor. | **Not applicable** |

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<u>Convertible Preferred Stock</u>

On the dates set forth in the table below, we entered into subscription agreements with accredited investors in connection with the sale of newly designated Series of Convertible Preferred Stock, each series having a $0.001 par value and a $1,000 purchase price ("Stated Value"), hereinafter collectively referred to as "Convertible Preferred Stock, and the individual offerings of preferred stock referred to by the combination of "Series" and the specific letter designation of each series (i.e. "Series A Preferred Stock Offering" refers to the Series A preferred stock offering, and "Series A Preferred Stock" refers to Series A convertible preferred stock), and each series of Convertible Preferred Stock issued, collectively referred to as "Preferred Stock Offerings," as follows (rounded to the nearest thousands, except preferred share and conversion price data):

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| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Proceeds** | **Proceeds** | **Proceeds** | **Conversion Shares – Common** <br> **Stock** | **Conversion Shares – Common** <br> **Stock** | **Conversion Shares – Common** <br> **Stock** | **Other** |
| **Series**<br> **Designation** | **Closing**<br> **Date** | **Conversion**<br> **Prices<sup>(2)(3)(4)(7)</sup>** | **Shares**<br> **Purchased/**<br>**Exchange<sup>(6)</sup>** | **Conversions**<br> **/Exchanges** | **Outstanding-**<br> **September 30, 2025** | **Gross**<br> **Proceeds** | **Fees** | **Net**<br> **Proceeds** | **Original** | **Conversions**<br> **/Exchanges<sup>(5)</sup>** | **September 30, 2025** | **Placement**<br> **Agent**<br> **Warrants<sup>(1)</sup>** |
| A | November 22,<br> 2022 | $496.4 | 5359 | (5359) |  | $5359000 | $697000 | $4662000 | 11000 | (11000) |  | 2000 |
| A-2 | November 28,<br> 2022 | $531.6 | 1297 | (1297) |  | 1297000 | 169000 | 1128000 | 2000 | (2000) |  |  |
| A-3 | November 30,<br> 2022 | $536.4 | 1733 | (1733) |  | 1733000 | 225000 | 1508000 | 3000 | (3000) |  |  |
| A-4 | December 22,<br> 2022 | $304 | 1934 | (1934) |  | 1934000 | 251000 | 1683000 | 6000 | (6000) |  | 1000 |
| A-5 | January 31,<br> 2023 | $443.6 | 2299 | (2299) |  | 2299000 | 299000 | 2000000 | 5000 | (5000) |  | 1000 |
| AA | April 19,<br> 2023 | $377.20/$75.60 | 7680 | (7527) | 153 | 7680000 | 966000 | 6714000 | 102000 | (100000) | 2000 | 3000 |
| AA-2 | April 20,<br> 2023 | $417.20/$83.60 | 1500 | (1500) |  | 1500000 | 130000 | 1370000 | 18000 | (18000) |  |  |
| AA-3 | April 28,<br> 2023 | $380.00/$76.00 | 1025 | (1025) |  | 1025000 | 133000 | 892000 | 13000 | (13000) |  |  |
| AA-4 | May 5,<br> 2023 | $371.20/$74.40 | 1026 | (1026) |  | 1026000 | 133000 | 893000 | 14000 | (14000) |  |  |
| AA-5 | May 26,<br> 2023 | $424.00/$84.80 | 550 | (550) |  | 550000 | 72000 | 478000 | 6000 | (6000) |  |  |
| AAA | November 30,<br> 2023 | $66.80/$20.08 | 9388 | (9273) | 115 | 5377000 | 645000 | 4732000 | 467000 | (462000) | 5000 | 19000 |
| AAA-2 | December 22,<br> 2023 | $68.40/$20.52 | 5334 | (5178) | 156 | 2978000 | 357000 | 2621000 | 81000 | (73000) | 8000 | 11000 |
| AAA-Junior | June 26,<br> 2024 | $50.00/$15.00 | 1210 | (1205) | 5 | 1210000 | 145000 | 1065000 | 81000 | (80000) | 1000 | 4000 |
| AAA-Junior-2 | July 10,<br> 2024 | $50.00/$15.00 | 551 | (541) | 10 | 551000 | 66000 | 485000 | 37000 | (36000) | 1000 | 2000 |
| AAA-Junior-3 | September 20,<br> 2024 | $50.00/$15.00 | 697 | (697) |  | 697000 | 84000 | 613000 | 46000 | (46000) |  | 2000 |
| AAA-Junior-4 | September 30,<br> 2024 | $50.00/$15.00 | 399 | (399) |  | 399000 | 48000 | 351000 | 27000 | (27000) |  | 1000 |
| AAAA-Junior<sup>(8)</sup> | July 14,<br> 2025 | $4.91 | 3394964 | (1528483) | 1866481 |  |  |  | 691000 | (311000) | 380000 |  |
| B<sup>(9)</sup> | September 29,<br> 2025 | $7 | 15987 |  | 15987 |  |  |  | 2284000 |  | 2284000 |  |
|  |  |  | **3452933** | **(1570026)** | **1882907** | $**35615000** | $**4420000** | $**31195000** | **3894000** | **(1213000)** | **2681000** | **46000** |

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<sup>(1)</sup> Pursuant to the terms of the Placement Agent Agreements, we agreed to issue to the Placement Agent, following the final closing under the individual Preferred Stock Offerings (effective as of the respective individual series closing dates), five-year warrants to purchase 14.5% of the shares of common stock issuable upon conversion of the respective series of Convertible Preferred Stock sold in the respective Preferred Stock Offering, at an exercise price equal to the applicable Preferred Stock Offering conversion price. See below for placement agent warrants exchanged in connection with the Exchange.

<sup>(2)</sup> The Conversion price for Series AA Preferred Stock outstanding as of August 23, 2023, totaling 10,706 shares of Series AA Preferred Stock, was adjusted to $104.00 as a result of the Series AA Down Round Feature described below.

<sup>(3)</sup> The Conversion prices for the Series AA Preferred Stock outstanding as of November 30, 2023, totaling 7,322 shares of Series AA Preferred Stock, were adjusted to the conversion prices shown in the table above, as a result of the Series AA Down Round Feature described below.

<sup>(4)</sup> The triggering of the Down Round Feature for the Series AA Preferred Stock, occurring in August 2023, resulted in a deemed dividend totaling $6,446,000, which was charged to retained earnings in the September 30, 2023 condensed balance sheet.

<sup>(5)</sup> As adjusted to reflect reduction in conversion prices as a result of the Series AA Down Round Feature, described below.

<sup>(6)</sup> Series AAA and Series AAA-2 totals include 4,011 and 2,356 preferred shares, respectively, issued in connection with the Series Exchange Agreements described below.

<sup>(7)</sup> In July 2025, the conversion prices for the AAA Preferred and the AAA Junior Preferred were adjusted pursuant to the applicable Down Round Feature. The conversion prices for AAA, AAA-2, AAA Junior, AAA Junior-2, AAA Junior-3 and AAA Junior-4 Preferred stock outstanding were adjusted to the conversion prices shown in the table above on the applicable date that the Down Round Feature was triggered ("July 2025 Down Round"). The July 2025 Down Round, resulted in a deemed dividend totaling $308,000, which was charged to accumulated deficit in the September 30, 2025 condensed balance sheet.

<sup>(8)</sup> Series AAAA Junior Preferred Stock was issued in exchange for certain debt outstanding, as described at Note 5.

<sup>(9)</sup> Series B Preferred Stock was issued in exchange for certain preferred stock outstanding, as described below.

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*Placement Agent Fees.* The Company sold and/or exchanged the shares of preferred stock pursuant to placement agency agreements (the "Placement Agency Agreements") with Aegis Capital Corporation, a registered broker dealer, which acted as the Company's exclusive placement agent (the "Placement Agent") for each series of the Preferred Stock Offerings and the Exchange (as described below). Pursuant to the terms of the Placement Agency Agreements, in connection with the Preferred Stock Offerings and the Exchange, the Company paid the Placement Agent an aggregate cash fee and non-accountable expense allowance as described in the table above by series, and have or will issue to the Placement Agent or its designees warrants (the "Placement Agent Warrants") to purchase common stock at the amounts and conversion prices disclosed in the table above. With respect to shares of Series AAA Preferred Stock issued in connection with the Exchange, the Placement Agent exchanged previously issued placement agent warrants to purchase 2,210 shares of common stock of the Company that were issued in connection with the Series A and Series AA Preferred Stock offerings, at exercise prices ranging from $304.00 to $536.40 per share, for new placement agent warrants to purchase a total of 8,686 shares of common stock at an exercise price of $66.96 per share and 4,994 shares of common stock at an exercise price of $68.40 per share.

The Placement Agent shall also earn fees and be issued additional Placement Agent Warrants with respect to any securities issued pursuant to the Additional Investment Rights described herein. No further additional investment rights shall be granted to investors that exercise the Additional Investment Rights.

*Exchange of Series A and AA for Series AAA Preferred Stock*

In connection with the closing of the Series AAA Preferred rounds, in November and December 2023, the Company entered into certain Series A Exchange Agreements (the "Series A Agreements") and Series AA Exchange Agreements (the "Series AA Agreements", and collectively with the Series A Agreements, the "Series Exchange Agreements"), with certain holders (the "Holders") of the Company's Series A Preferred Stock, and Series AA Preferred Stock, pursuant to which the Holders exchanged an aggregate of 6,367 shares of Series A Preferred and/or Series AA Preferred, for an aggregate of 6,367 shares of Series AAA Preferred (the "Exchange"). The Exchange closed concurrently with the closing of the Series AAA Preferred Stock Offerings.

*Exchange of Series AA, AAA and AAA Junior Preferred Stock for Series B Preferred Stock*

On September 12, 2025, the Company entered into an Amended & Restated Exchange Agreement, Consent and Waiver (the "2025 Exchange Agreements") with certain holders (the "2025 Exchange Preferred Stockholders") of the Company's Series AA, AAA and AAA Junior Preferred Stock, par value $0.001 per share ("2025 Exchanged Preferred Stock"), pursuant to which the Company and the 2025 Exchange Preferred Stockholders agreed that in exchange for the shares of 2025 Exchanged Preferred Stock held by the 2025 Exchange Preferred Stockholders, the 2025 Exchange Preferred Stockholders were granted shares of the Company's newly issued Series B Preferred Stock, par value $0.001 per share ("2025 Exchange"). Up to an aggregate of 16,426 shares of Series B Preferred will be issued pursuant to the 2025 Exchange Agreements.

In connection with the issuance of the Series B Preferred Stock, the 2025 Exchange Preferred Stockholders, among other things: (i) agreed to terminate their additional investment rights granted to them in their respective subscription agreements; (ii) waived any issuances by the Company of securities below the respective prior conversion price floors prior to the Exchange; (iii) waived any incurrence of indebtedness by the Company prior to the Exchange; (iv) agreed, for a period of six months following the date of the Exchange Agreements, to attend any annual or special meeting of the Company's stockholders and vote their shares in accordance with management's recommendation; and (v) provided a general release of the Company from any obligations that may exist under the terms of the Preferred Stock.

The 2025 Exchange was accounted for as an extinguishment of the 2025 Exchanged Preferred Stock, and therefore the difference between the fair value of the new / modified preferred stock and the carrying value of the original preferred stock, totaling 7,685,000, was recognized as an decrease to accumulated deficit and a decrease in additional-paid-in capital in the condensed balance sheet, as a deemed dividend.

*Common Stock Purchase Warrants*

*Series AAA Junior-3 and Series AAA Junior-4 Warrants.* The Series AAA Junior-3 and Series AAA Junior-4 subscription agreements entered into in September 2024, included the sale of an aggregate of 1,096 units (the "Units"), each Unit consisting of (i) one share of newly designated Series AAA-3 Junior Convertible Preferred Stock or Series AAA-4 Junior Convertible Preferred Stock, as reflected in the table above, and (ii) a warrant to purchase 25 shares of the Company's common stock (the "September 2024 Series AAA Junior Investor Warrants"), at a purchase price of $1,000 per Unit, for aggregate gross proceeds to the Company of approximately $1,096,000.

The Investor Warrants are exercisable at $40.00 per share at the option of the holder, subject to adjustment, are exercisable immediately upon issuance and expire three years from the respective issue dates of the Units, subject to certain beneficial ownership limitations. The Investor Warrants contain customary adjustments in the event of stock splits, stock dividends and other corporate events, and contain price-based anti-dilution protections. Any price-based anti-dilution adjustments were conditioned on, and subject to, stockholder approval, which was received on June 9, 2025.

The September 2024 Series AAA Junior Investor Warrant agreements also contain a provision that states that, upon exercise of the warrant by an investor, if for any reason the company fails to deliver the shares by the settlement date, the investor can require the company to make a cash payment ("Buy-In Provision"). The cash payment would be based on the amount (if any) that the investor lost by having to purchase shares in the open market because of the company's failure to deliver the shares.

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As a result of the Buy-In Provision, the ability to deliver shares upon exercise of the Investor Warrants in every circumstance is generally not within the control of the Company as contemplated by the accounting standards, and thus, a partial cash settlement may be required outside of the Company's control. As such, the September 2024 Series AAA Junior Investor Warrants do not meet the requirements for equity classification, and therefore, the fair value of the September 2024 Series AAA Junior Investor Warrants are recorded as a liability on the condensed balance sheets and re-valued at each reporting date, with changes in the fair value reported in the condensed statements of operations. Refer to the table below.

*Placement Agent Warrants.* The Placement Agent Warrants issued in connection with the Series A Preferred Stock, Series AA Preferred Stock and Series AAA Preferred Stock (including the Exchange), described above, include provisions that are triggered in the event of the occurrence of a Fundamental Transaction, as defined in the underlying warrant agreement, which contemplates the potential for certain transactions that result in a third-party acquiring more than 50% of the outstanding shares of common stock of the Company for cash or other assets. Given the existence of multiple classes of voting stock for the Company, as described above, the Fundamental Transaction provisions in the warrant agreements could result in a 50% or more change in ownership of outstanding common stock, without a 50% change in voting interests. As such, the Placement Agent Warrants are not eligible for the scope exception under ASC 815, and therefore, the fair value of the Placement Agent Warrants are recorded as a liability on the condensed balance sheets and re-valued at each reporting date, with changes in the fair value reported in the condensed statements of operations. Refer to the table below.

The fair value and change in the fair value of the warrant liabilities related to the September 2024 Series AAA Junior Investor Warrants and the Placement Agent Warrants, measured using Level 3 inputs, and the related income statement impact was comprised of the following for the applicable periods presented:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months** | **Three Months** | **Nine Months** | **Nine Months** |
|  | **Ended September 30,** | **Ended September 30,** | **Ended September 30,** | **Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| *Series AAA Junior-3 and Series AAA Junior-4 Warrants:* | | | | |
| Beginning balance | $20000 | $- | $348000 | $- |
| Initial fair value of warrant liability – grant date<sup>(1)</sup> |  | 346000 |  | 346000 |
| Change in fair value | (3000) | 14000 | (331000) | 14000 |
| Subtotal - Fair value of warrant liability - Series AAA Junior -3 and Series AAA Junior – 4 Warrants | 17000 | 360000 | 17000 | 360000 |
| *Placement Agent Warrants:* | | | | |
| Beginning balance | 54000 | 665000 | 587000 | 665000 |
| Initial fair value of warrant liability – grant date<sup>(1)</sup> |  | 134000 |  | 134000 |
| Change in fair value |  | (212000) | (533000) | (212000) |
| Subtotal - Fair value of warrant liability – Placement Agent Warrants | $54000 | $587000 | $54000 | $587000 |
| Total fair value of warrant liability<sup>(2)</sup> | $71000 | $947000 | $71000 | $947000 |

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<sup>(1)</sup> Estimated fair value on the respective dates of issuance.

<sup>(2)</sup> Refer to Note 5 for information regarding the YP Warrant issued in connection with the YP Note.

The fair value of the warrants described above was estimated using the Black-Scholes-Merton option pricing model and the following weighted-average assumptions for the applicable dates:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **September 30,**<br> **2025** | **December 31,**<br> **2024** | **December 31,**<br> **2024** | **September 30,**<br> **2024** | **September 30,**<br> **2024** |
| Expected Volatility | 107% – 114% | 101% | 101% | 98% | 98% |
| Risk–free interest rate | 3.60% – 3.68% | 4.27% | 4.38% | 4.21% | 4.21% |
| Expected life of options (in years) | 1.96 – 3.98 | 2.71 | 4.74 | 3.89 | 4.47 |

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*Preferred Stock Dividends*

The Company paid or accrued common stock dividends on outstanding preferred stock for the periods presented, as follows:

*Three and Nine Months Ended September 30, 2025:*

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| | | | |
|:---|:---|:---|:---|
| **Series Designation** | **Date** | **Dividend** <br> **Shares** | **Fair Value**<br> **Shares** <br> **Issued <sup>(1)</sup>** |
| Series A-5 | February 4, 2025 | 54 | $1000 |
| Series AA | April 28, 2025 | 6359 | 89000 |
| Series AA-3 | May 1, 2025 | 66 | 1000 |
| Series AA-4 | May 21, 2025 | 1348 | 9000 |
| Series AA-5 | May 30, 2025 | 118 | 1000 |
| Series AAA / AAA-2 | September 30, 2025 (Accrued) | 88883 | 271000 |
|  |  | 96828 | $372000 |

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*Three and Nine Months Ended September 30, 2024:*

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| | | | |
|:---|:---|:---|:---|
| **Series** <br> **Designation** | **Date** | **Dividend** <br> **Shares** | **Fair Value** <br> **Shares**<br> **Issued <sup>(1)</sup>** |
| Series A-5 | January 31, 2024 | 55 | $4000 |
| Series AA | April 19, 2024 | 11907 | 661000 |
|  | July 23, 2024 | 3972 | 216000 |
| Series AA-3 | April 29, 2024 | 1029 | 60000 |
|  | July 23, 2024 | 964 | 52000 |
| Series AA-4 | May 6, 2024 | 1388 | 77000 |
|  | July 23, 2024 | 41 | 2000 |
| Series AA-5 | May 30, 2024 | 1298 | 65000 |
|  | July 23, 2024 | 1180 | 64000 |
| Series AAA | July 23, 2024 | 10801 | 587000 |
| Series AAA-2 | July 23, 2024 | 12258 | 666000 |
| Series AAA-Junior | July 26, 2024 | 4840 | 273000 |
|  | August 26, 2024 | 4840 | 240000 |
|  | September 24, 2024 | 4840 | 126000 |
| Series AAA-Junior - 2 | August 9, 2024 | 2204 | 97000 |
|  | September 9, 2024 | 2204 | 100000 |
|  |  | 63821 | $3290000 |

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<sup>(1)</sup> Fair valued based on the closing price of the Company's common stock on the respective common stock dividend payment or accrual date.

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*Dividend Acceleration*

In connection with the 2025 Exchange Agreements, remaining Series AAA and AAA-2 Preferred Stock dividends totaling 88,883 shares of common stock, originally payable in November and December 2025, were accelerated as of the date of the exchange. The fair value of the accelerated dividends totaled $271,000, based on the closing price of the Company's common stock on September 30, 2025, which is reflected as a charge to accumulated deficit and accrued liabilities as of September 30, 2025.

In June 2024, certain existing holders of Series A, AA and AAA Preferred Stock executed Series AAA Junior Preferred Stock Offering related dividend acceleration agreements ("June 2024 Dividend Acceleration Agreements") pursuant to which, in exchange for participation in the Series AAA Junior Preferred Stock Offering at or above a predefined threshold, all applicable remaining common stock dividends related to their existing Series A, AA and / or AAA Preferred Stock holdings were accelerated. A total of 23,076 shares of common stock dividends were paid in July 2024 pursuant to the June 2024 Dividend Acceleration Agreements, with a fair value of $729,000, based on the closing price of the Company's common stock on June 30, 2024, which is reflected as a charge to accumulated deficit and accrued liabilities as of June 30, 2024.

*Modifications to Series AA Additional Investment Rights*

In June 2024, certain holders of Series AA Preferred Stock with outstanding Additional Investment Rights arising from the Series AA Preferred Stock Offering ("Series AA AIRs"), in exchange for certain Series AAA Junior Preferred Stock Offering related approvals, received (i) a six (6) month extension of the exercise period of such Series AA AIRs; and (ii) an adjustment to the conversion prices for such Series AA AIRs, to the existing conversion price floors for each respective subseries of Series AA Preferred Stock, as described in the table above. In addition, a three-month extension to the term of the Additional Investment Rights issued to holders of Series AAA Preferred Stock ("Series AAA AIRs")(the issuance of such Series AAA AIRs being subject to approval of stockholders), such that the Series AAA AIRs shall expire 21-months from the final closing of Series AAA Preferred Stock Offering.

The Company utilized an option pricing model, employing the back solve method for purposes of determining the implied common stock value of the Company for input into a Black Scholes option pricing model to determine the fair value of the AIRs immediately before and after the modifications described above, using Level 3 inputs. Weighted average assumptions utilized in the Black Scholes option pricing model included a $34.40 implied common stock price, conversion prices ranging from $75.44 to $530.00 (based on the applicable original and modified preferred stock conversion prices), risk free interest rates ranging from 5.13% to 5.36%, terms ranging from 0.42 years to 0.92 years and volatility assumptions ranging from 79% to 91%.

In connection with the modification to the Series AA AIRs described above, Series AA AIRs with initial underlying common shares totaling 16,074, were modified as described above, resulting in an incremental increase in fair value totaling $294,000 which was charged to additional paid-in capital as a Series AAA Junior Preferred Stock Offering financing costs in June 2024. As a result of the reduction of the Series AA AIRs conversion price, total common shares underlying the modified Series AA AIRs increased to 80,381 shares.

<u>Common Stock Issuances</u>

*Equity Financings*

On May 30, 2025, the Company entered into a securities purchase agreement (the "May III Purchase Agreement") with certain investors, which provided for the sale and issuance by the Company in a registered direct offering (the "May III Offering") of an aggregate of (i) 79,750 shares of the Company's common stock, at a purchase price of $4.80 per share (the "May III Shares"), and (ii) pre-funded warrants to purchase up to 59,833 shares of common stock at a purchase price of $4.79 per pre-funded warrant (the "May III Pre-Funded Warrants" and, together with the May III Shares, the "May III Securities"), which represents the per share price for the May III Shares less the exercise price of $0.00001 per share. The May III Offering closed on June 2, 2025. The aggregate gross proceeds to the Company from the May III Offering were approximately $670,000, before deducting placement agent commissions and other estimated offering expenses. The Company utilized the net proceeds of the May III Offering for working capital and general corporate purposes, as well as to repay a portion of the Company's indebtedness.

On May 30, 2025, the Company also entered into a placement agent agreement (the "May III Placement Agent Agreement") with Aegis Capital Corp. (the "Placement Agent"). Pursuant to the terms of the May III Placement Agent Agreement, the Placement Agent agreed to use its reasonable best efforts to arrange for the sale of the securities in the May III Offering. The Company agreed to pay the Placement Agent a cash fee equal to 8% of the aggregate gross proceeds from the sale of the May III Securities. The Company also agreed to reimburse the Placement Agent for certain expenses.

On May 29, 2025, the Company entered into an underwriting agreement (the "May II Underwriting Agreement") with Aegis Capital Corp., (the "Underwriter"), relating to the Company's public offering (the "May II Offering") of 104,167 shares (the "May II Shares") of its common stock. Pursuant to the May II Underwriting Agreement, the Company also granted the Underwriter a 45-day option ("May II Option") to purchase an additional 10,417 shares of common stock (the "May II Option Securities", and together with the Shares, the "May II Securities"). On May 30, 2025, the Company issued the May II Shares and closed the May II Offering at a public price of $4.80 per share, for net proceeds to the Company of approximately $380,000 after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. The Company utilized the net proceeds of the May II Offering for working capital and general corporate purposes, as well as to repay a portion of the Company's indebtedness. On May 29, 2025, the Underwriter delivered notice to the Company that it elected to exercise the May II Option with respect to an aggregate of 10,417 May II Option Securities. The closing of the sale of the May II Option Shares occurred on May 30, 2025.

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On May 9, 2025, the Company entered into an underwriting agreement (the "May I Underwriting Agreement") with the Underwriter, relating to the Company's public offering (the "May I Offering") of 127,941 shares (the "May I Shares") of its common stock, par value $0.001 per share. Pursuant to the May I Underwriting Agreement, the Company also granted the Underwriters a 45-day option ("May I Option") to purchase an additional 19,191 shares of common stock (the "May I Option Securities", and together with the Shares, the "May I Securities"). On May 12, 2025, the Company issued the firm May I Securities and closed the May I Offering at a public price of $6.80 per share, for net proceeds to the Company of approximately $700,400 after deducting underwriting discounts, commissions and estimated offering expenses payable by the Company. On May 14, 2025, the Underwriter partially exercised its May I Option and purchased an additional 15,441 shares of common stock at a price of $6.80 per share, before deducting underwriting discounts. The issuance by the Company of the May I Option Securities resulted in total gross proceeds of approximately $104,999, before deducting underwriting discounts, commissions, and other offering expenses payable by the Company. The Company utilized the net proceeds of the May I Offering for working capital and general corporate purposes, as well as to repay a portion of the Company's indebtedness.

*Yield Point Equity Line of Credit*

On July 10, 2025 (the "YP Execution Date"), the Company, entered into an equity purchase agreement (the "YP Equity Purchase Agreement," or "YP ELOC") with Yield Point. Under the YP Equity Purchase Agreement, the Company has the right, but not the obligation, to direct Yield Point to purchase up to $20,000,000 (the "Maximum Commitment Amount") in shares of common stock of the Company upon satisfaction of certain terms and conditions contained in the YP Equity Purchase Agreement, including, without limitation, an effective registration statement filed with SEC registering the resale of the shares of Put Stock (defined below) and the shares of Commitment Stock (defined below) and additional shares to be sold to Yield Point from time to time under the YP Equity Purchase Agreement. The term of the YP Equity Purchase Agreement began on the YP Execution Date and ends on the earlier of (i) the date on which Yield Point shall have purchased shares of common stock issued, or that the Company shall be entitled to issue, per any applicable Put Notice in accordance with the terms and conditions of the YP Equity Purchase Agreement (the "Put Stock") equal to the Maximum Commitment Amount (as defined in the YP Equity Purchase Agreement), (ii) the date that is thirty-six (36) months from the date the registration statement is declared effective, (iii) written notice of termination by the Company to Yield Point (which shall not occur at any time that Yield Point holds any of the shares of Put Stock, or within 30 days of the sale to Yield Point of Put Stock), or (iv) written notice of termination by Yield Point to the Company (the "Commitment Period").

During the Commitment Period, the Company may direct Yield Point to purchase shares of Put Stock by delivering a notice (a "Put Notice") to Yield Point. The Company shall, in its sole discretion, select the number of shares of Put Stock requested by the Company in each Put Notice. However, such amount may not exceed the Maximum Put Amount (as defined in the YP Equity Purchase Agreement). The purchase price to be paid by Yield Point for the shares of Put Stock will be ninety-two percent (92%) of the lowest VWAP for a trading day on the Principal Market during the Valuation Period (as defined in the YP Equity Purchase Agreement).

In consideration for Yield Point's execution and delivery of, and performance under the YP Equity Purchase Agreement, on the Execution Date, the Company issued pre-funded warrants to purchase common stock (the "YP Pre-Funded Warrant") to Yield Point in a form acceptable to Yield Point in its sole discretion and having an exercise price per share of $0.001 (the "Commitment Stock") having a value of $600,000 based on closing price of the common stock on July 9, 2025. All of the shares of Commitment Stock were fully earned as of the Execution Date, and the issuance of the shares of Commitment Stock is not contingent upon any other event or condition, including, without limitation, the effectiveness of the Initial Registration Statement (defined below) or the Company's submission of a Put Notice to Yield Point and irrespective of any termination of the YP Equity Purchase Agreement.

Under the YP Equity Purchase Agreement, the Company was obligated to file with the SEC, on or before August 10, 2025, a registration statement on Form S-1 (the "Initial Registration Statement") covering only the resale of the shares of Put Stock and Commitment Stock and to use its best efforts to have the Initial Registration declared effective no later than October 10, 2025. The Company filed the Initial Registration Statement on July 17, 2025, which was declared effective on September 30, 2025.

The YP Equity Purchase Agreement contains customary representations, warranties, agreements, and conditions to completing future sale transactions, indemnification rights and obligations of the parties.

*Hudson Equity Line of Credit*

On February 14, 2025, the Company entered into an equity purchase agreement (the "Hudson Equity Purchase Agreement") with Hudson Global Ventures, LLC, a Nevada limited liability company ("Hudson"). Pursuant to the Hudson Equity Purchase Agreement, the Company had the right, but not the obligation, to sell to Hudson, and Hudson is obligated to purchase, up to $2.9 million of newly issued shares (the "Hudson Total Commitment") of the Company's common stock, from time to time during the term of the Hudson Equity Purchase Agreement, subject to certain limitations and conditions (the "Hudson Offering" or "Hudson ELOC"). As consideration for Hudson's commitment to purchase shares of common stock under the Hudson Purchase Agreement, the Company issued to Hudson 7,500 shares of common stock, valued at $159,000, following the execution of the Hudson Equity Purchase Agreement (the "Hudson Commitment Shares").

From and after the initial satisfaction of the conditions to our right to commence sales to Hudson under the Hudson Equity Purchase Agreement (such event, the "Hudson Commencement," and the date of initial satisfaction of all such conditions, the "Hudson Commencement Date"), the Company was able to direct Hudson to purchase shares of common stock at a purchase price per share equal to the lesser of (i) 92% of the closing price of the Company's common stock, as listed on Nasdaq, on the trading day immediately preceding the respective Put Date (the "Hudson Initial Purchase Price"), or (ii) 92% of the lowest closing price of the Company's common stock, as listed on Nasdaq, on any trading day during the period beginning on the Put Date (as defined in the Hudson Purchase Agreement) and continuing through the date that is three trading days immediately following the Clearing Date (as defined in the Hudson Purchase Agreement) associated with the applicable Hudson Put Notice (such three trading day period is the "Hudson Valuation Period", and the price is the "Hudson Market Price"), on such date on which the Hudson Purchase Price is calculated in accordance with the terms of the Hudson Equity Purchase Agreement. The Company controlled the timing and amount of any such sales of common stock to Hudson.

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During the three and nine months ended September 30, 2025 the Company sold zero and 17,925 shares of common stock, respectively, under the Hudson ELOC at an average per share price of $13.60, raising net proceeds totaling $231,000. The Hudson Equity Purchase Agreement was terminated effective May 8, 2025. The Company utilized the net proceeds from the Hudson Offering for working capital and general corporate purposes, including sales and marketing activities, product development and capital expenditures.

**7.** **COMMITMENTS AND CONTINGENCIES** 

*Settlement of Pending or Threatened Claims*

In May 2024, the Company settled a dispute concerning the interpretation of certain financial terms contained within the Series AA and Series AA-2 Preferred Stock certificates of designation filed in connection with the Series AA and Series AA-2 Preferred Stock Offerings ("Pioneer Settlement"). Pioneer Capital Anstalt ("Pioneer") filed a complaint in the United States District Court for the Southern District of New York seeking monetary damages and specific performance concerning the interpretation and calculation of certain financial terms applicable to Pioneer's additional investment rights agreements acquired in connection with Pioneer's participation in the Series AA and Series AA-2 Preferred Stock Offerings ("Pioneer AA AIRs")("Pioneer Action"). In order to avoid further expense, costs, and time to litigate the action, the Parties resolved the dispute, resulting in the modification of the conversion price and conversion floor price applicable to the Pioneer AA AIRs from prices ranging from $377.20 to $521.60, down to prices ranging from $75.44 to $104.32, and the extension of the exercise term for the Pioneer AA AIRs for a period of six (6) months. The modifications to the Pioneer AIRs resulted in an incremental increase in fair value totaling $213,000 which was included as a noncash legal settlement charge in general and administrative expense in the statement of operations for the three and nine months ended September 30, 2024. As a result of the reduction of the Pioneer AA AIRs conversion price, total common shares underlying the modified Pioneer AA AIRs increased from 9,315 to 46,576 shares.

In addition, the Company issued to Pioneer 6,875 shares of restricted common stock valued at $346,000 on the date of issuance, which was included as a noncash legal settlement charge in general and administrative expense in the statement of operations for the three and nine months ended September 30, 2024. In connection with the Pioneer Settlement, Pioneer filed a notice of dismissal regarding the Action.

The Company utilized an option pricing model, employing the back solve method for purposes of determining the implied common stock value of the Company for input into a Black Scholes option pricing model to determine the fair value of the Pioneer AA AIRs immediately before and after the modifications described above, using Level 3 inputs. Weighted average assumptions utilized in the Black Scholes option pricing model included a $34.40 implied common stock price, conversion prices ranging from $75.44 to $521.60 (based on the applicable original and modified preferred stock conversion prices), risk free interest rates ranging from 5.13% to 5.36%, terms ranging from .52 years to 1.02 years and volatility assumptions ranging from 80% to 93%.

During the fourth quarter of 2023, the certain note holders related to a convertible note original issued in May 2022 (the "Note Holders") made certain claims arising from an interpretation of certain rights that the Note Holders had pursuant to the terms of underlying securities purchase agreement ("2022 SPA"). On March 12, 2024, the Company and the Note Holders (the "Parties") executed a Mutual General Release and Settlement Agreement (the "2022 Note Holder Settlement Agreement") settling all claims between the Parties with respect to the 2022 SPA. In consideration for the 2022 Note Holder Settlement Agreement, the Company agreed to issue the Parties an aggregate amount of 12,500 shares of common stock (the "Settlement Payment"). The Company accrued the fair value of the Settlement Payment as of December 31, 2023 (based on the closing price of the Company's common stock on December 31, 2023) resulting in a settlement expense of $760,000 which was included in general and administrative expense in the condensed statement of operations for the year ended December 31, 2023. The Company issued the 12,500 shares of common stock on March 19, 2024, which were valued at $74.00 per share (the closing price of the Company's common stock on March 19, 2024), or $924,000, resulting in additional noncash settlement expense of $164,000, which was included in the general and administrative expense in the condensed statement of operations for the nine months ended September 30, 2024.

**8.** **SUBSEQUENT EVENTS**

The Company evaluated subsequent events for their potential impact on the condensed financial statements and disclosures through the date the condensed financial statements were issued and determined that, except as set forth below, no subsequent events occurred that were reasonably expected to impact the condensed financial statements presented herein.

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<u>Nasdaq Listing Rule 5550(b)(1)</u>

On October 28, 2025, the Company received a written notice from Nasdaq informing Super League that it has regained compliance with Nasdaq Listing Rule 5550(b), which requires the Company to maintain a minimum of $2,500,000 in stockholders' equity for continued listing on The Nasdaq Capital Market, and that the Company is in compliance with all applicable continued listing requirements. Accordingly, due to the fact that as of the noticed date the Company is in compliance with all applicable continued listing requirements, the hearing before the Hearings Panel originally scheduled to take place on November 11, 2025 was cancelled. Refer to Note 1 for additional information.

<u>October 2025 PIPE Transaction</u>

*Entry into Securities Purchase Agreements*

On October 22, 2025, October 24, 2025 and October 27, 2025, the Company entered into Securities Purchase Agreements (the "PIPE Purchase Agreement") with certain accredited investors (the "Purchasers"), relating to the Company's offering (the "PIPE Offering") of an aggregate of (a) 3,985,000 shares (the "PIPE Shares") of the Company's Common Stock, at a price per Share equal to $1.00 and (b) Pre-Funded Warrants to purchase 16,015,000 shares of Common Stock (the "PIPE Pre-Funded Warrants") at a price per PIPE Pre-Funded Warrant equal to same price as that for PIPE Shares minus $0.00001, and the remaining exercise price of each PIPE Pre-Funded Warrant will equal $0.00001 per share, for gross proceeds to the Company of approximately $20,000,000, before deducting offering costs and expenses. For each one Share or PIPE Pre-Funded Warrant purchased in the Offering, each Purchaser also received Common Stock Purchase Warrants ("PIPE Warrants"), to purchase one share of Common Stock ("PIPE Warrant Shares"), with an exercise price of $1.00. The PIPE Shares, PIPE Pre-Funded Warrants and PIPE Warrants sold in the Offering are sometimes hereafter referred to as, the "PIPE Securities." The PIPE Offering, which was comprised of three separate closings, had a final close date of October 27, 2025. The Company intends to use the proceeds from the Offering for repayment of existing indebtedness totaling $1.5 million, implementation of a new corporate strategy, general corporate purposes and working capital. In connection with the consummation of the PIPE Offering, the Company issued additional PIPE Warrants to purchase 9.2 million shares of common stock to certain designees of the Lead Investor (as defined in the PIPE Placement Agreement), as approved by the Company's stockholders at the Company's 2025 Annual Meeting of Stockholders.

Under the PIPE Pre-Funded Warrants, a holder will not be entitled to exercise any portion of any Pre-Funded Warrant that, upon giving effect to such exercise, would cause: (i) the aggregate number of shares of Common Stock beneficially owned by such holder (together with its affiliates) to exceed 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise; or (ii) the combined voting power of the Company's securities beneficially owned by such holder (together with its affiliates) to exceed 4.99% of the combined voting power of all of the Company's securities outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the PIPE Pre-Funded Warrant, which percentage may be changed at the holder's election to a higher or lower percentage not in excess of 9.99% upon 61 days' notice to the Company. In addition, in certain circumstances, upon a fundamental transaction, a holder of PIPE Pre-Funded Warrants will be entitled to receive, upon exercise of the PIPE Pre-Funded Warrants, the kind and amount of securities, cash or other property that such holder would have received had they exercised the PIPE Pre-Funded Warrants immediately prior to the fundamental transaction.

The Company and the Purchasers also executed a registration rights agreement (the "PIPE RRA"), pursuant to which the Company agreed to file a registration statement covering the resale of the PIPE Shares, the shares of Common Stock underlying the Pre-Funded Warrants (the "PFW Shares"), and the PIPE Warrant Shares within thirty (30) days following the date of the issuance of the PIPE Securities, and to cause the PIPE RRA to be declared effective under the Securities Act of 1933, as amended (the "Securities Act"), no later than 90 days after the date on which the Purchase Agreements were entered.

*Issuance of the PIPE Warrants*

The PIPE Warrants entitle the holders to purchase that number of shares of Common Stock equal to the number of shares of Common Stock (or PIPE Pre-Funded Warrants) purchased in the Offering. The PIPE Warrants are exercisable immediately upon issuance, expire five years from the date of issuance, and have an initial exercise price of $1.00 (the "Initial Exercise Price"), subject to adjustment in the event of any Warrant Dilutive Issuance (as defined below), or any stock splits, stock dividends, recapitalizations, and similar events (the Initial Exercise Price as adjusted from time to time pursuant to the terms of the PIPE Warrant is referred to as, the "Exercise Price").

The anti-dilution adjustments to the Exercise Price set forth that if the Company sells any shares of Common Stock or any securities of the Company that would entitle the holder thereof to acquire at any time Common Stock, for effective consideration per share (the "New Issuance Price") less than a price equal to the Exercise Price in effect immediately prior to such sale (the foregoing a "Warrant Dilutive Issuance"), then simultaneously with the consummation (or, if earlier, the announcement) of such Warrant Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the higher of (i) the New Issuance Price or (ii) the Warrant Floor Price (as defined below), provided, however, that no Exempt Issuance (as defined in the Warrants) shall be considered a Warrant Dilutive Issuance. The "Warrant Floor Price" means $0.57, such amount representing 20% of the Nasdaq Minimum Price of $2.85 on the date the Purchase Agreements were executed (the "PIPE Purchase Date") (which price shall be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction).

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The Warrants also contain a call feature, whereby, after the Company has registered the PIPE Warrant Shares on an effective registration statement filed with the SEC, the Company has the option, but not the obligation, and in the Company's sole and absolute discretion, to purchase the PIPE Warrant from the Holder at a price of $0.001 per share of Common Stock underlying the PIPE Warrant (the "Call Option"), in the event the closing price of the Company's Common Stock, as listed on the Nasdaq Capital Market, is at or above $3.00 per share for 20 consecutive trading days (the "Call Trigger"). The Company's right to exercise the Call Option will begin on the day immediately following the Call Trigger until the day that is thirty (30) calendar days thereafter, by way of delivery of a notice to exercise the Call Option to the holders of the PIPE Warrants.

*Placement Agency Agreement*

On October 22, 2025, the Company and Aegis Capital Corp. ("Aegis"), entered into a Placement Agency Agreement (the "PIPE Placement Agreement"), pursuant to which Aegis acted as our exclusive placement agent in connection with the PIPE Offering. Pursuant to the PIPE Placement Agreement, the placement commission will be (I) (a) 2.0% for investments made by the Lead Investor (as defined in the PIPE Placement Agreement), and (b) 9.0% for all PIPE Securities placed by Aegis, excluding Lead Investor; (II) if investments placed by Aegis equal $5 million or more, the Company will pay Aegis an additional fee of $125,000; (III) Aegis will also receive a fee of 9.0% of the proceeds from the cash exercise of any warrants purchased by investors, excluding the Lead Investor, in each case payable on exercise; and (IV) as additional compensation for Aegis's services, the Company shall issue to Aegis or its designees at the consummation of the PIPE Offering, warrants (the "PIPE Placement Agent Warrants") to purchase that number of shares of Common Stock equal to 5.0% of the aggregate number of PIPE Shares and PIPE Pre-Funded Warrants sold in the Placement other than to the Lead Investor. The Placement Agent Warrants will be exercisable at any time beginning and from time to time, in whole or in part, during the five (5) years commencing on the commencement of sales in the Placement, at a price per share equal to 100.0% of the offering price per share of the PIPE Securities sold in the PIPE Offering and such Placement Agent Warrants shall be exercisable on a cash basis or cashless basis.

<u>Belleau Wood Exchange Agreement</u>

Effective October 22, 2025, the Company and Belleau Wood Capital, LP ("Belleau") entered into an exchange agreement (the "Belleau Exchange Agreement"), pursuant to which the Company and Belleau agreed (a) to convert the remaining principal amount of $1.0 million due under the Belleau Note into 1.0 million shares of Common Stock, valued at $1.00 per share, simultaneous with the close of the PIPE Offering (the "Note Exchange Consideration"), and (b) issue Belleau a common stock purchase warrant to purchase the sum of 125,000 shares of Common Stock, in form similar to the PIPE Warrants (the "Belleau Warrants"), except the warrants will be exercisable for a period of two (2) years.

<u>Yield Point Exchange Agreement</u>

Effective October 22, 2025, the Company and Yield Point NY, LLC ("Yield Point") entered into an exchange agreement (the "YP Exchange Agreement"), pursuant to which the Company and Yield Point would, on a date no earlier than ten (10) business days after the effectiveness of the YP Exchange Agreement, exchange up to 100% of unconverted and unpaid principal and interest under the YP Note, for: (i) that number of shares of the Company's Series C Preferred Stock; (ii) common stock purchase warrants to purchase 2,000,000 shares of Common Stock, on terms substantially similar to the PIPE Warrants, including the warrant exercise price adjustments pursuant to a Warrant Dilutive Issuance, at an initial exercise price of $1.00 per share such exercise price to be subject to adjustment (the "YP Exchange Warrant"); and (iii) the cancellation of any remaining portion of the YP Warrant to purchase 659,968 shares of Common Stock, issued in connection with the sale of the YP Note.

<u>Issuance of Common Stock Purchase Warrants</u>

On October 20, 2025, the Company issued certain common stock purchase warrants to purchase an aggregate of 2,333,057 shares of Common Stock (the "Series B Warrants") to the holders of shares of the Company's Series B Preferred Stock (the "Series B Holders"). Each Series B Warrant has a proposed exercise price per share equal to $1.00 (the "Series B Exercise Price"). The Series B Warrants will be available for exercise only upon the first trading day following the one year anniversary of the Company's issuance of the Series B Warrants, unless prior written approval is received from the Company during such one-year period, as may be required by the applicable rules and regulations of the Nasdaq Capital Market (the "Warrant Stockholder Approval" and the first trading day following the one year anniversary of the Company's receipt of Warrant Stockholder Approval being, the "Initial Exercise Date").

Each Series B Warrant offered will become exercisable beginning on the Initial Exercise Date at the Series B Exercise Price, and will expire on the date that is one year from the Initial Exercise Date, subject to the right to exercise during such one-year period with the prior written approval of the Company; provided that holders of the Series B Warrants will have the right to exercise their Series B Warrants during the time beginning on date the Company receives the Warrant Stockholder Approval and the Initial Exercise Date in the event of a Change of Control or other Fundamental Change (each as defined in the Series B Warrant).

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<u>Filing of Third Amended and Restated Certificate of Designation</u>

On October 20, 2025, the Company filed the Third Amended and Restated Certificate of Incorporation of Super League Enterprise, Inc. (the "Amended Certificate"). The Amended Certificate amends the Company's Second Amended and Restated Certificate of Incorporation, as amended (the "Prior Charter") to: (i) increase the number of authorized shares of Common Stock from 400,000,000 to 750,000,000; and (ii) to allow the vote of the holders of our preferred stock to amend their respective preferred stock certificates of designations, without requiring the approval of the holders of all voting securities of the Company. The Amended Charter was also restated to include all amendments to the Prior Charter made pursuant to Certificates of Amendment after the filing of the Prior Charter.

<u>Filing of Certificate of Designation of Preferences, Rights and Limitations of Series C Preferred</u>

The Amended Certificate authorizes the issuance of up to 10,000,000 shares of preferred stock, and further authorizes the Board of the Company to fix and determine the designation, preferences, conversion rights, or other rights, including voting rights, qualifications, limitations, or restrictions of the Preferred Stock.

On October 22, 2025, the Company filed the Certificate of Designation of Preferences, Rights and Limitations of the Series C Senior Convertible Preferred Stock (the "Series C Certificate"), designating 4,700 shares of Series C Senior Convertible Preferred Stock, par value $0.001 per share ("Series C Preferred"), in connection with the YP Exchange Agreement (as defined above). Pursuant to the Series C Certificate, the Series C Preferred Stock, among other terms: (i) ranks, with respect to dividend rights and rights upon liquidation, dissolution or winding up of the Company, senior to all classes of Common Stock and each other class or series of equity security of the Company which is not expressly senior or on parity with the Series C Preferred Stock ; (ii) the Series C Preferred Stock shall remain outstanding until the Series C Preferred Stock is converted into Common Stock either optionally by the holder or automatically pursuant to its terms described below, and will automatically be converted into Common Stock on the eighteen-month anniversary of effectiveness of the registration statement relating to the shares of Common Stock issuable upon conversion of the Series C Preferred Stock ; (iii) the shares of Series C Preferred Stock when converted, subject to certain beneficial ownership limitations, into shares of the Company's Common Stock, will have a conversion price of $1.00; and (iv) subject to certain limitations summarized below and as more specifically set forth in the Series C Certificate, the holders of Series C Preferred Stock are entitled to vote on all matters submitted to the stockholders for a vote together with the holders of the Common Stock as a single class, on an as-converted basis, with a number of votes per share equal to (a) the stated value of $1,000.00, divided by (b) the conversion price of $1.00 (as adjusted for any stock dividends, splits, combinations or other similar events on the Common Stock); and (v) the Conversion Price.

Furthermore, the Series C Certificate includes a beneficial ownership limitation such that a holder thereof does not have the right to convert any portion of the Series C Preferred if such holder (together with its affiliates or any other persons acting together as a group with such holder) would beneficially own in excess of 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of Common Stock issuable upon conversion of such Series C Preferred, or, upon 61 days' prior written notice to the Company, 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of Common Stock issuable upon conversion of such shares of Series C Preferred.

*Other*

*2025 Omnibus Equity Incentive Plan.* On October 20, 2025, stockholders approved an amendment to the Company's 2025 Omnibus Equity Incentive Plan to increase the number of shares of Common Stock available for issuance under the 2025 Plan by 6,967,863 shares of common stock.

*Shareholder Approval.* Certain of the transactions summarized above required stockholder approval, all approvals of which were obtained on October 20, 2025.

*Board of Directors.* Effective November 13, 2025, Jeff Gehl resigned as a Class II member of the Board of Directors of the Company. Mr. Gehl's resignation was not due to any disagreements with respect to the Company's operations, policies or practices. Mark Jung, a Class III member of the Board of Directors of the Company, was appointed as interim Chairman of the Audit Committee on November 13, 2025 in connection with Mr. Gehl's resignation.

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| **ITEM 2.**  | **MANAGEMENT**'**S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS** |

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*References in this Quarterly Report on Form 10-Q to* "*Super League Enterprise, Inc.*" "*Company,*" "*we,*" "*us,*" "*our,*" *or similar references mean Super League Enterprise, Inc. References to the* "*SEC*" *refer to the U.S. Securities and Exchange Commission. All references to* "*Note,*" *followed by a number reference herein, refer to the applicable corresponding numbered footnotes to the condensed financial statements contained elsewhere herein.*

**Forward-Looking Statements**

*You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our condensed financial statements and the related notes included elsewhere in this interim report. Our condensed financial statements have been prepared in accordance with Accounting Principles Generally Accepted in the United States (*"*U.S. GAAP*"*). The following discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the* "*Securities Act*"*) and Section 21E of the Securities Exchange Act of 1934, as amended (the* "*Exchange Act*"*), including, without limitation, statements regarding our expectations, beliefs, intentions or future strategies that are signified by the words* "*expect,*" "*anticipate,*" "*intend,*" "*believe,*" *or similar language. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Our business and financial performance are subject to substantial risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements. In evaluating our business, you should carefully consider the information set forth under the heading* "*Risk Factors*" *included Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, as well as in Item II, Part 1A of this Quarterly Report on Form 10-Q (this* "*Report*"*). Readers are cautioned not to place undue reliance on these forward-looking statements.*

**Overview**

Super League Enterprise, Inc. is redefining how brands connect with consumers through the power of playable media. Through solutions within mobile games and the world's largest immersive gaming platforms, Super League provides global brands with ads, content, and experiences that are not only seen – they are played, felt, and remembered. Boasting an award-winning development studio, a vast network of native creators, and proprietary engagement technology, Super League is a one-of-a-kind partner for brands looking to stand out in culture, spark loyalty, and drive meaningful impact. In a world where attention is earned, Super League makes brands relevant - by making them playable.

We generate revenue from (i) innovative advertising including immersive game world and experience publishing and in-game media products, (ii) direct to consumer offers, including in-game items, e-commerce, and digital collectibles, and (iii) content and technology through the production and distribution of our own, advertiser and third-party content. We operate in one reportable segment to reflect the way management and our chief operating decision maker review and assess the performance of the business.

**Executive Summary**

During the nine months ended September 30, 2025, we continued our mission of transforming how brands engage with consumers through the power of playable media, delivering ads, content, and immersive experiences that are seen and played, and therefore remembered, across mobile games and the world's largest immersive gaming platforms. We continued to execute with respect to our revenue diversification strategy, including our Tik-Tok creator partnership with Meta-Stadiums, our focus on significantly lowering our operating cost structure, our focus on turnkey low-friction product solutions, and continued to forge new partnerships that expand our brand partner and client base.

In addition, during the second and third quarters of 2025, we made significant progress on various corporate restructuring activities that commenced in April 2025 and completed in October 2025. In April 2025, the Company significantly reduced its costs structure through a 35% workforce reduction and restructuring of management compensation ("Second Quarter 2025 Headcount Reductions"). The measures, effective primarily as of April 14, 2025 and May 1st, 2025, respectively, reduced fiscal year operating costs by approximately $2.7 million through December 31, 2025.

During the three months ended September 30, 2025, as a component of certain corporate restructuring activities, we exchanged approximately $5.0 million of existing debt for equity (common and preferred stock), extinguishing the related higher interest debt and reducing our future debt service obligations with respect to the extinguished debt, as described at Note 5.

We also issued a $4.5 million Convertible Note as described below, with an annual interest rate of 8%, and amortization that was scheduled to commence in January 2026, in the event not converted prior to January 1, 2026. Refer to "Financing Activities below, and Note 5 and Note 8, for additional information regarding the YP Note and related subsequent events impacting the YP Note.

In addition, during the three months ended September 30, 2025, we converted in the aggregate, 15,987 shares of Series AA, AAA and AAA Junior outstanding Preferred Stock into Series B Preferred Stock, as described at Note 6. The Series B Preferred stock was mandatorily converted into common stock in October 2025, as a component of the PIPE Offering described below.

*Three Months Ended September 30, 2025 as compared to the Three Months Ended September 30, 2024*

Revenue for the three months ended September 30, 2025 totaled $2.4 million, a decrease of $2.0 million or 45%, compared to $4.4 million for the comparable prior year quarter. The decrease in revenue for the three months ended September 30, 2025 reflected the impact of macro headwinds, largely due to tariff uncertainty, continued market education and adoption of immersive platforms as a marketing channel, and a reduction in direct to consumer revenues related to the sale of our Mineville digital property in May 2025.

Cost of revenue for the three months ended September 30, 2025 decreased $1.4 million, or 50% to $1.3 million, compared to $2.7 million in the comparable prior year quarter, driven primarily by the 45% decrease in quarterly revenues for the same periods.

As a percentage of revenue, gross profit for the three months ended September 30, 2025 was 45%, compared to 39% for the prior year comparable quarter.

In April 2025, the Company significantly reduced its costs structure through a 35% workforce reduction and restructuring of management compensation. The measures, effective primarily as of April 14, 2025 and May 1st, 2025, respectively, reduced fiscal year operating costs by approximately $2.7 million through December 31, 2025.

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Total operating expense for the three months ended September 30, 2025 decreased $1.0 million, or 20% to $4.1 million, compared to $5.2 million in the comparable prior year quarter. Excluding noncash stock compensation expense, intangible asset amortization expense, and other noncash charges (collectively, "noncash charges and credits"), totaling $1.1 million and $968,000 for the three month ended September 30, 2025 and 2024, respectively, operating expense for the three months ended September 30, 2025 and 2024 was $3.0 million and $4.2 million, respectively, reflecting a $1.2 million, or 29% decrease compared to the prior year quarter, reflecting the impact of our ongoing focus on cost reductions and operating efficiencies. Net loss for the three months ended September 30, 2025, which includes the impact of noncash charges and credits was $3.6 million, compared to a net loss of $3.6 million in the comparable prior year quarter.

The calculation of net loss per share for the three months ended September 30, 2025 and 2024 included a noncash preferred stock dividend and deemed dividend related direct net credit to accumulated deficit totaling $7.1 million and $(1.7 million), respectively, as described at Note 2. Net income (loss) per share for the three months ended September 30, 2025 and 2024 was $3.25 and $(21.47), respectively. Excluding the impact of the noncash common stock dividend and deemed dividend related direct net debits (credits) to accumulated deficit, net loss per share for the three months ended September 30, 2025 and 2024 was $(3.27) and $(14.64), respectively.

 *Nine Months Ended September 30, 2025 as compared to the Nine Months Ended September 30, 2024*

Revenue for the nine months ended September 30, 2025 totaled $8.1 million, a decrease of $4.6 million or 36%, compared to $12.8 million for the comparable prior year period. The decrease in revenue for the nine months ended September 30, 2025 reflected a mix of industry softness in ad sales, stemming from macro environmental factors and uncertainties, including uncertainties around the impact of shifting tariff policies, consumer spending softness, continued market education and adoption of immersive platforms as a marketing channel, the shift of certain revenues and program start delays to future periods by advertisers, and a reduction in direct to consumer revenues due to the sale of our Minehut digital property in the first quarter of 2024, and the sale of our Mineville digital property in May 2025.

Cost of revenue for the nine months ended September 30, 2025 decreased $3.1 million, or 40% to $4.6 million, compared to $7.7 million in the comparable prior year period, driven primarily by the 36% decrease in quarterly revenues for the same periods.

As a percentage of revenue, gross profit for the nine months ended September 30, 2025 was 44%, compared to 40% for the prior year comparable period.

Total operating expense for the nine months ended September 30, 2025 decreased $3.8 million, or 22% to $13.4 million, compared to $17.3 million in the comparable prior year period. Excluding noncash charges and credits, totaling $3.0 million and $3.6 million for the nine months ended September 30, 2025 and 2024, respectively, operating expense for the nine months ended September 30, 2025 and 2024 was $10.4 million and $13.7 million, respectively, reflecting a $3.3 million, or 24% decrease compared to the prior year period, reflecting the impact of our ongoing focus on cost reductions and operating efficiencies. Net loss for the nine months ended September 30, 2025, which includes the impact of noncash charges and credits was $10.6 million or $(4.96) per share, compared to a net loss of $11.3 million, or $(80.10) per share, in the comparable prior year period.

The calculation of net loss per share for the nine months ended September 30, 2025 and 2024 included a noncash preferred stock dividend and deemed dividend related direct net credit to accumulated deficit totaling $7.0 million and $(3.3 million), respectively, as described at Note 2. Net income (loss) per share for the nine months ended September 30, 2025 and 2024 was $(4.96) and $(80.10), respectively. Excluding the impact of the noncash common stock dividend and deemed dividend related direct net credits to accumulated deficit, net loss per share for the nine months ended September 30, 2025 and 2024 was $(14.69) and $(62.09), respectively.

*Reverse Stock Split*

On June 17, 2025, the Company filed a Certificate of Amendment (the "June 2025 Amendment") to its Second Amended and Restated Certificate of Incorporation, as amended (the "Charter"), which became effective as of June 23, 2025, effecting the 2025 Reverse Stock Split. The 2025 Reverse Split was approved by the Company's Board of Directors (the "Board") on June 2, 2025. The Company's shares began trading on a 2025 Reverse Split-adjusted basis on the Nasdaq Capital Market on June 23, 2025.

As a result of the 2025 Reverse Split, every 40 shares of the Company's issued and outstanding common stock was automatically combined and converted into one issued and outstanding share of common stock. No fractional shares of common stock were issued as a result of the 2025 Reverse Split. Instead, in lieu of any fractional shares to which a stockholder of record would otherwise be entitled as a result of the 2025 Reverse Split, the Company paid cash (without interest) equal to the value of such fractional share. The 2025 Reverse Split did not modify the rights or preferences of the common stock.

All references to common stock, warrants to purchase common stock, options to purchase common stock, restricted stock, preferred stock conversion shares, common stock underlying additional investment rights, share data, per share data and related information contained in the financial statements have been retroactively adjusted to reflect the effect of the 2025 Reverse Split for all periods presented

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*Recent Developments*

<u>October 2025 PIPE and Related Transactions</u>

*Entry into Securities Purchase Agreements*

On October 22, 2025, October 24, 2025 and October 27, 2025, the Company entered into Securities Purchase Agreements (the "PIPE Purchase Agreement") with certain accredited investors (the "Purchasers"), relating to the Company's offering (the "PIPE Offering") of an aggregate of (a) 3,985,000 shares (the "PIPE Shares") of the Company's Common Stock, at a price per Share equal to $1.00 and (b) Pre-Funded Warrants to purchase 16,015,000 shares of Common Stock (the "PIPE Pre-Funded Warrants") at a price per PIPE Pre-Funded Warrant equal to same price as that for PIPE Shares minus $0.00001, and the remaining exercise price of each PIPE Pre-Funded Warrant will equal $0.00001 per share, for gross proceeds to the Company of approximately $20,000,000, before deducting offering costs and expenses. For each one Share or PIPE Pre-Funded Warrant purchased in the Offering, each Purchaser also received Common Stock Purchase Warrants ("PIPE Warrants"), to purchase one share of Common Stock ("PIPE Warrant Shares"), with an exercise price of $1.00. The PIPE Shares, PIPE Pre-Funded Warrants and PIPE Warrants sold in the Offering are sometimes hereafter referred to as, the "PIPE Securities." The PIPE Offering, which was comprised of three separate closings, had a final close date of October 27, 2025. The Company intends to use the proceeds from the Offering for repayment of existing indebtedness, implementation of a new corporate strategy, general corporate purposes and working capital. In connection with the consummation of the PIPE Offering, the Company issued additional PIPE Warrants to purchase 9.2 million shares of common stock to certain designees of the Lead Investor (as defined in the PIPE Placement Agreement), as approved by the Company's stockholders at the Company's 2025 Annual Meeting of Stockholders.

The Company and the Purchasers also executed a registration rights agreement (the "PIPE RRA"), pursuant to which the Company agreed to file a registration statement covering the resale of the PIPE Shares, the shares of Common Stock underlying the Pre-Funded Warrants (the "PFW Shares"), and the PIPE Warrant Shares within thirty (30) days following the date of the issuance of the PIPE Securities, and to cause the PIPE RRA to be declared effective under the Securities Act of 1933, as amended (the "Securities Act"), no later than 90 days after the date on which the Purchase Agreements were entered.

*Issuance of the PIPE Warrants*

The PIPE Warrants entitle the holders to purchase that number of shares of Common Stock equal to the number of shares of Common Stock (or PIPE Pre-Funded Warrants) purchased in the Offering. The PIPE Warrants are exercisable immediately upon issuance, expire five years from the date of issuance, and have an initial exercise price of $1.00 (the "Initial Exercise Price"), subject to adjustment in the event of any Warrant Dilutive Issuance (as defined below), or any stock splits, stock dividends, recapitalizations, and similar events (the Initial Exercise Price as adjusted from time to time pursuant to the terms of the PIPE Warrant is referred to as, the "Exercise Price").

The Warrants also contain a call feature, whereby, after the Company has registered the PIPE Warrant Shares on an effective registration statement filed with the SEC, the Company has the option, but not the obligation, and in the Company's sole and absolute discretion, to purchase the PIPE Warrant from the Holder at a price of $0.001 per share of Common Stock underlying the PIPE Warrant (the "Call Option"), in the event the closing price of the Company's Common Stock, as listed on the Nasdaq Capital Market, is at or above $3.00 per share for 20 consecutive trading days (the "Call Trigger"). The Company's right to exercise the Call Option will begin on the day immediately following the Call Trigger until the day that is 30 calendar days thereafter, by way of delivery of a notice to exercise the Call Option to the holders of the PIPE Warrants.

*Placement Agency Agreement*

On October 22, 2025, the Company and Aegis Capital Corp. ("Aegis"), entered into a Placement Agency Agreement (the "PIPE Placement Agreement"), pursuant to which Aegis acted as our exclusive placement agent in connection with the PIPE Offering. Pursuant to the PIPE Placement Agreement, the placement commission will be (I) (a) 2.0% for investments made by the Lead Investor (as defined in the PIPE Placement Agreement), and (b) 9.0% for all PIPE Securities placed by Aegis, excluding Lead Investor; (II) if investments placed by Aegis equal $5 million or more, the Company will pay Aegis an additional fee of $125,000; (III) Aegis will also receive a fee of 9.0% of the proceeds from the cash exercise of any warrants purchased by investors, excluding the Lead Investor, in each case payable on exercise; and (IV) as additional compensation for Aegis's services, the Company shall issue to Aegis or its designees at the consummation of the PIPE Offering, warrants (the "PIPE Placement Agent Warrants") to purchase that number of shares of Common Stock equal to 5.0% of the aggregate number of PIPE Shares and PIPE Pre-Funded Warrants sold in the Placement other than to the Lead Investor. The Placement Agent Warrants will be exercisable at any time beginning and from time to time, in whole or in part, during the five years commencing on the commencement of sales in the Placement, at a price per share equal to 100.0% of the offering price per share of the PIPE Securities sold in the PIPE Offering and such Placement Agent Warrants shall be exercisable on a cash basis or cashless basis.

*Belleau Wood Exchange Agreement*

Effective October 22, 2025, the Company and Belleau Wood Capital, LP ("Belleau") entered into an exchange agreement (the "*Belleau Exchange Agreement*"), pursuant to which the Company and Belleau agreed (a) to convert the remaining principal amount of $1.0 million due under the Belleau Note into 1.0 million shares of common stock, valued at $1.00 per share, simultaneous with the close of the PIPE Offering (the "*Note Exchange Consideration*"), and (b) issue Belleau a common stock purchase warrant to purchase the sum of 125,000 shares of Common Stock, in form similar to the PIPE Warrants (the "*Belleau Warrants*"), except the warrants will be exercisable for a period of two (2) years.

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*Yield Point Exchange Agreement*

Effective October 22, 2025, the Company and Yield Point NY, LLC ("Yield Point") entered into an exchange agreement (the "YP Exchange Agreement"), pursuant to which the Company and Yield Point would, on a date no earlier than ten (10) business days after the effectiveness of the YP Exchange Agreement, exchange up to 100% of unconverted and unpaid principal and interest under the YP Note, for: (i) that number of shares of the Company's Series C Preferred Stock; (ii) common stock purchase warrants to purchase 2,000,000 shares of Common Stock, on terms substantially similar to the PIPE Warrants, at an initial exercise price of $1.00 per share subject to adjustment as set forth therein (the "YP Exchange Warrant"); and (iii) the cancellation of all remaining common stock purchase warrants previously issued to Yield Point in connection with the sale to Yield Point of that certain Convertible Promissory Note, dated July 10, 2025.

*Issuance of Common Stock Purchase Warrants*

On October 20, 2025, the Company issued certain common stock purchase warrants to purchase an aggregate of 2,333,057 shares of Common Stock (the "Series B Warrants") to the holders of shares of the Company's Series B Preferred Stock (the "Series B Holders"). Each Series B Warrant has a proposed exercise price per share equal to $1.00 (the "Series B Exercise Price"). The Series B Warrants will be available for exercise only upon the first trading day following the one year anniversary of the Company's issuance of the Series B Warrants, unless prior written approval is received from the Company during such one-year period, as may be required by the applicable rules and regulations of the Nasdaq Capital Market (the "Warrant Stockholder Approval" and the first trading day following the one year anniversary of the Company's receipt of Warrant Stockholder Approval being, the "Initial Exercise Date").

Each Series B Warrant offered will become exercisable beginning on the Initial Exercise Date at the Series B Exercise Price, and will expire on the date that is one year from the Initial Exercise Date, subject to the right to exercise during such one-year period with the prior written approval of the Company; provided that holders of the Series B Warrants will have the right to exercise their Series B Warrants during the time beginning on date the Company receives the Warrant Stockholder Approval and the Initial Exercise Date in the event of a Change of Control or other Fundamental Change (each as defined in the Series B Warrant).

*Filing of Third Amended and Restated Certificate of Designation*

On October 20, 2025, the Company filed the Third Amended and Restated Certificate of Incorporation of Super League Enterprise, Inc. (the "*Amended Certificate*"). The Amended Certificate amends the Company's Second Amended and Restated Certificate of Incorporation, as amended (the "*Prior Charter*") to: (i) increase the number of authorized shares of Common Stock from 400,000,000 to 750,000,000; and (ii) to allow the vote of the holders of our preferred stock to amend their respective preferred stock certificates of designations, without requiring the approval of the holders of all voting securities of the Company. The Amended Charter was also restated to include all amendments to the Prior Charter made pursuant to Certificates of Amendment after the filing of the Prior Charter.

*Filing of Certificate of Designation of Preferences, Rights and Limitations of Series C Preferred*

On October 22, 2025, the Company filed the Certificate of Designation of Preferences, Rights and Limitations of the Series C Senior Convertible Preferred Stock (the "Series C Certificate"), designating 4,700 shares of Series C Senior Convertible Preferred Stock, par value $0.001 per share ("Series C Preferred"), in connection with the YP Exchange Agreement, as described at Note 8.

*Amendment to 2025 Omnibus Equity Incentive Plan*

On October 20, 2025, stockholders approved an amendment to the Company's 2025 Omnibus Equity Incentive Plan to increase the number of shares of Common Stock available for issuance under the 2025 Plan by 6,967,863 shares of common stock.

*Acquisition of Supersocial*

In May 2025, we acquired Supersocial, an award-winning production studio and creative agency that has been a pioneer on the Roblox platform since its founding in 2020. The acquisition expanded our roster of partnerships and reinforces the Company's mission to connect brands with passionate consumer audiences through the power of play. Supersocial's past clients and partners include Gucci, e.l.f. Cosmetics, NARS Cosmetics, Warner Bros., Walmart, Supermodel Heidi Klum, Universal Music Group, Bandai Namco, Jon Favreau's Fairview Portals, Innov8 Creative Academy, and Legendary Entertainment. Through the acquisition, we acquired multiple live branded games and experiences on Roblox. Super League also will offer all Supersocial partners a broad set of additional opportunities to reach targeted audiences through turnkey playable advertising and playable content - opening up additional ways for brands to connect with focused consumers exactly how they want to be engaged while playing.

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*Sale of Mineville*

On May 19, 2025, the Company entered into a Membership Interest Purchase and Sale Agreement (the "Mineville Purchase Agreement") with Mineville, LLC a Delaware limited liability company ("Purchaser"), pursuant to which the Company agreed to sell, and Purchaser agreed to purchase, 100% of the membership interests (the "Interests") of InPvP, LLC ("InPvP"). Prior to the Mineville Sale, InPVP was a wholly owned subsidiary of the Company that owned and operated the Company's Mineville digital offering. The closing of the Mineville Sale occurred simultaneously with the execution of the Mineville Purchase Agreement. The Purchaser paid cash consideration totaling $350,000 at the Mineville Closing to acquire the Interests.

The parties also agreed upon separate terms for an ongoing commercial relationship whereby the Company was granted the rights to ad sales and brand integration (the "Sales Rights") to all of Purchaser's Microsoft servers for a term of two years (the "Sales Term"). The Company will have exclusive Sales Rights for the first year of the Sales Term, and during the second year the Sales Rights will be non-exclusive. During the Sales Term, the revenue generated from the Sales Rights will be allocated among the Company and Purchaser as follows: (i) the Company will retain 60% of the net revenue until gross sales revenue exceeds $1.0 million; (ii) after gross sales revenue exceed $1.0 million, the Company will retain 50% of the net revenue through the remainder of the Sales Term; and (iii) if gross sales revenue exceeds $1.5 million during the Sales Term, the Sales Term shall renew automatically for one additional year on the same terms as the second year of the Sales Term.

*Expanded Commercial Partnership with Meta-Stadiums Corp.*

In July 2025, we expanded our strategic commercial partnership with Meta-Stadiums Corp., a pioneer in mobile-first, gamified virtual entertainment and operator of AI-powered, next-generation creator networks. This expanded collaboration supports Super League's revenue diversification strategy and accelerates its monetization roadmap by unlocking new revenue opportunities within the TikTok creator ecosystem across content, commerce, and campaign activations.

*Expanded Relationship with AdArcade*

In May 2025, we expanded our partnership with AdArcade, creators of Native Playables®, a patented mobile ad format that delivers three times higher engagement than other mobile playable ads. This exclusive relationship enables Super League to offer consumer brands and media agencies a unique, scalable, full-funnel playable solution with access to 220 million monthly US gamers.

Native Playables are interactive ads that match the gameplay a consumer is already enjoying and are available in more than 25 popular mobile game formats. Native matching leads to higher ad performance across key metrics, with return on ad spend ("ROAS") as high as 13x compared to standard playable ads. A brand's video creative can also run in sync with the playable unit, ensuring consumers both watch and interact with a brand's tested and approved messaging, logos, and iconography.

Expansion into mobile games is a key pillar of our revenue diversification. We believe that this partnership strengthens Super League's ability to deliver full-funnel value - from awareness to targetable, measurable conversion - through scalable, brand-safe media. Native Playables reach audiences who play the world's most downloaded casual and hyper-casual mobile games, further broadening Super League's solutions for brands and agencies to engage the tens of millions of Millennials and Gen X who play, alongside the Gen Z and Gen Alpha consumers who also play Roblox, Minecraft, and Fortnite.

*Exclusive Partnership with ES3*

In October 2025, we announced an exclusive sales partnership with ES3, a leading technology and media solutions company specializing in interactive content experiences for connected TV (CTV) and traditional Pay TV environments. We will serve as the exclusive third-party sales partner for INGAGE, a gamified content module that is activated through ads on CTV devices and platforms, designed to transform how brands and advertisers connect with streaming audiences. ES3's INGAGE interactive experiential ad platform has produced notable programs with Warner Bros. Discovery's "Superman", Game of Thrones, HBO, MGM+ and more. This partnership combines ES3's advanced CTV media capabilities with Super League's track record of delivering successful advertising programs that drive results through gameplay. Together, the companies will scale access to interactive, measurable ad experiences that merge entertainment, engagement, and commerce.

*Equity Financings*

On May 30, 2025, the Company entered into a securities purchase agreement (the "May III Purchase Agreement") with certain investors, which provides for the sale and issuance by the Company in a registered direct offering (the "May III Offering") of an aggregate of (i) 79,750 shares of the Company's common stock, at a purchase price of $4.80 per share (the "May III Shares"), and (ii) pre-funded warrants to purchase up to 59,833 shares of common stock at a purchase price of $4.79 per pre-funded warrant (the "May III Pre-Funded Warrants" and, together with the May III Shares, the "May III Securities"), which represents the per share price for the May III Shares less the exercise price of $0.00001 per share. The May III Offering closed on June 2, 2025. The aggregate gross proceeds to the Company from the May III Offering were approximately $670,000, before deducting placement agent commissions and other estimated offering expenses. The Company utilized the net proceeds of the May III Offering for working capital and general corporate purposes, as well as to repay a portion of the Company's indebtedness.

On May 30, 2025, the Company also entered into a placement agent agreement (the "May III Placement Agent Agreement") with Aegis Capital Corp. (the "Placement Agent"). Pursuant to the terms of the May III Placement Agent Agreement, the Placement Agent agreed to use its reasonable best efforts to arrange for the sale of the securities in the May III Offering. The Company agreed to pay the Placement Agent a cash fee equal to 8% of the aggregate gross proceeds from the sale of the May III Securities. The Company also agreed to reimburse the Placement Agent for certain expenses.

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On May 29, 2025, the Company entered into an underwriting agreement (the "May II Underwriting Agreement") with Aegis Capital Corp., (the "Underwriter"), relating to the Company's public offering (the "May II Offering") of 104,167 shares (the "May II Shares") of its common stock. Pursuant to the May II Underwriting Agreement, the Company also granted the Underwriter a 45-day option ("May II Option") to purchase an additional 10,417 shares of common stock (the "May II Option Securities", and together with the Shares, the "May II Securities"). On May 30, 2025, the Company issued the May II Shares and closed the May II Offering at a public price of $4.80 per share, for net proceeds to the Company of approximately $380,000 after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. The Company utilized the net proceeds of the May II Offering for working capital and general corporate purposes, as well as to repay a portion of the Company's indebtedness. On May 29, 2025, the Underwriter delivered notice to the Company that it elected to exercise the May II Option with respect to an aggregate of 10,417 May II Option Securities. The closing of the sale of the May II Option Shares occurred on May 30, 2025.

On May 9, 2025, the Company entered into an underwriting agreement (the "May I Underwriting Agreement") with the Underwriter, relating to the Company's public offering (the "May I Offering") of 127,941 shares (the "May I Shares") of its common stock, par value $0.001 per share. Pursuant to the May I Underwriting Agreement, the Company also granted the Underwriters a 45-day option ("May I Option") to purchase an additional 19,191 shares of common stock (the "May I Option Securities", and together with the Shares, the "May I Securities"). On May 12, 2025, the Company issued the firm May I Securities and closed the May I Offering at a public price of $6.80 per share, for net proceeds to the Company of approximately $700,400 after deducting underwriting discounts, commissions and estimated offering expenses payable by the Company. On May 14, 2025, the Underwriter partially exercised its May I Option and purchased an additional 15,441 shares of common stock at a price of $6.80 per share, before deducting underwriting discounts. The issuance by the Company of the May I Option Securities resulted in total gross proceeds of approximately $104,999, before deducting underwriting discounts, commissions, and other offering expenses payable by the Company. The Company utilized the net proceeds of the May I Offering for working capital and general corporate purposes, as well as to repay a portion of the Company's indebtedness.

*NASDAQ Listing Rule 5550(a)(2)*

On July 8, 2025, we received a written notice from The Nasdaq Stock Market ("Nasdaq") informing us that the Company has regained compliance with the minimum bid price requirement under NASDAQ Listing Rule 5550(a)(2) (the "Rule") for continued listing on the Nasdaq Capital Market.

Previously, on January 2, 2025, we received a letter (the "Bid Price Letter") from Nasdaq indicating that, based upon the closing bid price of the Company's common stock, for 30 consecutive business days, the Company was not then currently in compliance with the requirement to maintain a minimum bid price of $1.00 per share for continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2).

*NASDAQ Listing Rule 5620(a)*

On June 11, 2025, we received a written notice from Nasdaq informing us that the Company has regained compliance with the annual meeting requirement under NASDAQ Listing Rule 5620(a) (the "Annual Meeting Rule") for continued listing on the Nasdaq Capital Market

Previously, on January 3, 2025, the Company received a letter (the "Annual Meeting Letter") from Nasdaq indicating that the Company no longer complied with the Annual Meeting Rule since it did not hold an annual meeting of stockholders within twelve months of the end of the Company's fiscal year ended December 31, 2023.

*Nasdaq Listing Rule 5550(b)(1)*

On October 28, 2025, the Company received a written notice from Nasdaq informing Super League that it has regained compliance with Nasdaq Listing Rule 5550(b), and that the Company is in compliance with all applicable continued listing requirements. Accordingly, the hearing before the Hearings Panel scheduled to take place on November 11, 2025, as described below, was cancelled.

Previously, on April 7, 2025, the Company received a letter (the "Stockholder Deficiency Letter") from Nasdaq, notifying the Company that it is not in compliance with Nasdaq Listing Rule 5550(b)(1), which requires the Company to maintain a minimum of $2,500,000 in stockholders' equity for continued listing on The Nasdaq Capital Market (the "Stockholders' Equity Requirement"). The Stockholder Deficiency Letter also indicated that the Company does not meet the alternative compliance standards of market value of listed securities or net income from continuing operations. The Company's failure to comply with the Stockholders' Equity Requirement was based on the Company's filing of its Annual Report on Form 10-K for the year ended December 31, 2024, reporting the stockholders' equity of $170,000. The Company prepared and submitted a plan of compliance (which was due within 45 calendar days from receipt of the formal notice) to Nasdaq.

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Previously, on October 8, 2025, the Company received a delisting determination letter (the "*Delisting Determination Letter*") in connection with the Stockholders' Equity Requirement. The Delisting Determination Letter stated that unless the Company requested a hearing before a Nasdaq Hearing Panel ("*Panel*") to appeal Nasdaq's delisting determination by October 15, 2025, trading of the common stock would have been suspended at the opening of business on October 17, 2025, and the Company's common stock would have been delisted from Nasdaq. As of October 8, 2025, the Company requested a hearing before the Panel, which was scheduled to take place on November 11, 2025, at which the Company planned to request a suspension of delisting pending its return to compliance. Pursuant to Nasdaq Listing Rule 5815(a)(1)(B), the hearing requested stayed the suspension of trading and delisting of the common stock pending the conclusion of the hearing process. As described above, On October 28, 2025, the Company received a written notice from Nasdaq informing Super League that it has regained compliance with Nasdaq Listing Rule 5550(b), and that the Company is in compliance with all applicable continued listing requirements.

*Seasonality*

Our revenue fluctuates quarterly and is generally higher in the second half of our fiscal year, with the fourth quarter typically representing our highest revenue quarter each year. Advertising spending is traditionally seasonally strong in the second half of each year, reflecting the impact of seasonal back to school, game release and holiday season advertising spending by brands and advertisers. We believe that this seasonality in advertising spending affects our quarterly results, which generally reflect relatively higher advertising revenue in the second half of each year, compared to the first half of the year.

**Summary Results of Operations**

The following table sets forth a summary of our results of operations for the three and nine months ended September 30, 2025 and 2024 (dollars in thousands):

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|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months** | **Three Months** |  | **Nine Months** | **Nine Months** |  |
|  | **Ended September 30,** | **Ended September 30,**<br>**Change** | **Change** | **Ended September 30,** | **Ended September 30,**<br>**Change** | **Change** |
|  | **2025** | **2024** | **%** | **2025** | **2024** | **%** |
| **REVENUE** | $2423 | $4431) | (45)% | $8142 | $12756) | (36)% |
| **COST OF REVENUE** | 1343 | 2706) | (50)% | 4557 | 7653) | (40)% |
| **GROSS PROFIT** | 1080 | 1725) | (37)% | 3585 | 5103) | (30)% |
| **OPERATING EXPENSE** |  |  |  |  |  |  |
| Selling, marketing and advertising | 1699 | 2397) | (29)% | 6198 | 7306) | (15)% |
| Engineering, technology and development | 667 | 914) | (27)% | 2290 | 3405) | (33)% |
| General and administrative | 1765 | 1935) | (9)% | 4938 | 6558) | (25)% |
| Contingent consideration |  | (68) | (100)% | (14) | (15) | (7)% |
| **Total operating expense** | 4131 | 5178) | (20)% | 13412 | 17254) | (22)% |
| **NET LOSS FROM OPERATIONS** | (3051) | (3453) | (12)% | (9827) | (12151) | (19)% |
| **OTHER INCOME (EXPENSE), NET** | (511) | (179) | 185% | (748) | 804) | (193)% |
| **Loss before income taxes** | (3562) | (3632) | (2)% | (10575) | (11347) | (7)% |
| Provision (benefit) for income taxes |  |  | -% |  |  |  |
| **NET LOSS** | $(3562) | $(3632) | (2)% | $(10575) | $(11347) | (7)% |

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**Comparison of the Results of Operations for the Three and Nine Months Ended September 30, 2025 and 2024**

***Revenue (dollars in thousands)***

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|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months**<br> **Ended September 30,** | **Three Months**<br> **Ended September 30,**<br>**Change** | **Change** | **Nine Months** <br> **Ended September 30,** | **Nine Months** <br> **Ended September 30,**<br>**Change** | **Change** |
|  | **2025** | **2024**  | **%**  | **2025**  | **2024**  | **%**  |
| Media and advertising | $1025 | $1538) | (33)% | $3773 | $4637) | (19)% |
| Publishing and content studio | 1398 | 2646) | (47)% | 4056 | 7388) | (45)% |
| Direct to consumer |  | 247) | (100)% | 313 | 731) | (57)% |
|  | $2423 | $4431) | (45)% | $8142 | $12756) | (36)% |

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|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months**<br> **Ended September 30,** | **Three Months**<br> **Ended September 30,** | **Three Months**<br> **Ended September 30,** | **Three Months**<br> **Ended September 30,** | **Three Months**<br> **Ended September 30,** | **Three Months**<br> **Ended September 30,** | **Nine Months**<br> **Ended September 30,** | **Nine Months**<br> **Ended September 30,** | **Nine Months**<br> **Ended September 30,** | **Nine Months**<br> **Ended September 30,** | **Nine Months**<br> **Ended September 30,** | **Nine Months**<br> **Ended September 30,** |
|  | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** |
| Number of customers > 10% of revenue / percent of revenue | Three | / | 37% | Two | / | 25% | Two | / | 28% | Two | / | 23% |
| By revenue category: |  |  |  |  |  |  |  |  |  |  |  |  |
| Media and advertising | One | / | 13% |  | / | -% | One | / | 14% | One | / | 11% |
| Publishing and content studio | Two | / | 24% | Two | / | 25% | One | / | 14% | One | / | 12% |

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*Three Months Ended September 30, 2025, Compared to the Three Months Ended September 30, 2024:*

● Total revenue decreased $2.0 million, or 45% to $2.4 million, compared to $4.4 million in the comparable prior year quarter. The decrease in revenue for the three months ended September 30, 2025 reflected the impact of macro headwinds, largely due to tariff uncertainty, continued market education and adoption of immersive platforms as a marketing channel, a strategic decrease in lower margin influencer marketing revenues and a reduction in direct to consumer revenues related to the sale of our Mineville digital property in May 2025.

● Media and advertising revenue decreased $513,000, or 33%, to $1.0 million, compared to $1.5 million in the comparable prior year quarter. The change reflected a $433,000 strategic decrease in lower margin influencer marketing revenues and a $228,000 decrease in on-platform related media sales revenue, partially offset by a $138,000 increase in higher average margin off-platform related media sales revenue. Off-platform sales revenues as a percentage of total revenue for the three months ended September 30, 2025 and 2024 were 16% and 5%, respectively, reflecting the impact of our strategic focus on diversifying our revenue streams and related opportunities.

● Publishing and content studio revenue decreased $1.2 million or 47%, to $1.4 million, compared to $2.6 million in the comparable prior year quarter, driven primarily by a net $1.3 million decrease in custom game development and immersive experience related revenues. Revenues for the three months ended September 30, 2025 included revenues from immersive experiences for Lions Gate Ancillary LLC. (World Crossing), Second Dinner Studios, Inc. (Nuverse Marvel Snap), Heidi Klum Company, L'OREAL USA, Inc. and Logitech. Revenues for the three months ended September 30, 2024 included $334,000 of revenues for the International Olympic Committee and related Visa Shoppes custom game development experiences, as well as immersive experiences for Google, Inc., Dreamworks – Wild Robot, Hi-Chew, Maybeline, Bandi Namco, Funnico Inc, AVID Center and Westpac.

● Direct to consumer revenue decreased $247,000, due to the impact of the sale of our Mineville digital property in May 2025, which prior to the sale, generated direct to consumer Minecraft related digital goods revenues for the Company.

*Nine Months Ended September 30, 2025, Compared to the Nine Months Ended September 30, 2024:*

● Total revenue decreased $4.6 million, or 36% to $8.1 million, compared to $12.8 million in the comparable prior year period. The decrease in revenue for the nine months ended September 30, 2025 reflected a mix of industry softness in ad sales, stemming from macro environmental factors and uncertainties, including uncertainties around the impact of shifting tariff policies, consumer spending softness, continued market education and adoption of immersive platforms as a marketing channel, the shift of certain revenues and program start delays to future periods by advertisers, a strategic decrease in lower margin influencer marketing revenues and a reduction in direct to consumer revenues due to the sale of our Minehut digital property in the first quarter of 2024 and the sale of our Mineville digital property in May 2025.

● Media and advertising revenue decreased $864,000, or 19%, to $3.8 million, compared to $4.6 million in the comparable prior year period. The change reflected a $1.1 million strategic decrease in lower margin influencer marketing revenues, partially offset by a $574,000 increase in off-platform related media sales revenue. Revenues for the nine months ended September 30, 2024 included $1.3 million of influencer marketing revenues from our Ubisoft/Xdefiant program. Off-platform sales revenues as a percentage of total revenue for the nine months ended September 30, 2025 and 2024 were 15% and 5%, respectively, reflecting the impact of our strategic focus on diversifying our revenue streams and related opportunities.

● Publishing and content studio revenue decreased $3.3 million, or 45%, to $4.1 million, compared to $7.4 million in the comparable prior year period, driven primarily by a net $3.4 million decrease in custom game development and immersive experience related revenues. Revenues for the nine months ended September 30, 2025 included revenues from immersive experiences for Lions Gate Ancillary LLC. (World Crossing), Second Dinner, Inc./Funnico Inc. (Nuverse Marvel Snap), CMG Strategy Co., LLC (Chipotle / Halsey experience), United States Golf Association, Hi-Chew, Panda Express, Heidi Klum Company and Logitech. Revenues for the nine months ended September 30, 2024 included $2.1 million of revenues for the International Olympic Committee and related Visa Shoppes custom game development experiences.

● Direct to consumer revenue decreased $418,000, or 57%, to $313,000, compared to $731,000 in the comparable prior year period, primarily reflecting the impact of the sale of our Minehut digital property in the first quarter of 2024 and the sale of our Mineville digital property in May 2025, which prior to the sale, generated direct to consumer Minecraft related digital goods revenues for the Company.

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***Cost of Revenue***

Cost of revenue includes direct costs incurred in connection with the satisfaction of performance obligations under our revenue arrangements including internal and third-party engineering, creative, content, broadcast and other personnel, talent and influencers, internal and third-party game developers, third-party ad-platform, content capture and production services, direct marketing, cloud services, software, prizing, and revenue sharing fees. Cost of revenue fluctuates period to period based on the specific programs and revenue streams contributing to revenue each period and the related cost profile of our physical and digital experiences, media and advertising campaigns and publishing and content studio sales activities occurring each period.

*Three Months Ended September 30, 2025, Compared to the Three Months Ended September 30, 2024:*

● Cost of revenue decreased $1.4 million, or 50%, relatively consistent with the 45% decrease in related revenues for the quarterly periods presented. The greater than proportional change in cost of revenue was primarily due to the impact of the strategic 87% decrease in influencer marketing revenues in the current period, which generally have a higher average direct cost profile and lower margins.

*Nine Months Ended September 30, 2025, Compared to the Nine Months Ended September 30, 2024:*

● Cost of revenue decreased $3.1 million, or 40%, relatively consistent with the 36% decrease in related revenues for the year to date periods presented. The greater than proportional change in cost of revenue was primarily due to the impact of the strategic 52% decrease in influencer marketing revenues in the current period, which generally have a higher average direct cost profile and lower margins.

***Operating Expense***

Refer to the table summarizing our results of operations for the three and nine months ended September 30, 2025 and 2024 above.

*Noncash stock-based compensation*. Noncash stock-based compensation expense for the periods presented was included in the following operating expense line items (dollars in thousands):

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|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months**<br> **Ended September 30,** | **Three Months**<br> **Ended September 30,**<br>**Change** | **Change** | **Nine Months** <br> **Ended September 30,** | **Nine Months** <br> **Ended September 30,**<br>**Change** | **Change** |
|  | **2025** | **2024** | **%** | **2025**  | **2024**  | **%** |
| Selling, marketing and advertising | $53 | $124) | (57)% | $304 | $378) | (20)% |
| Engineering, technology and development | 2 | 6) | (67)% | 15 | 23) | (35)% |
| General and administrative | 558 | 226 | 147% | 1053 | 585 | 80% |
| Total noncash stock compensation expense | $613 | $356 | 72% | $1372 | $986 | 39% |

---

Concurrent with the cancellation of the awards outstanding under the 2014 Plan, as described and defined in Note 2, the Board approved the issuance of 70,900 equity awards under the 2025 Plan, comprised of 40,104 stock options and 30,796 RSUs to employees with the following general terms: 1) exercise price of $5.08 per share for stock options, 2) shares of common stock associated with all RSUs valued at $5.08 per share, the closing price of the Company's common stock on the grant date, and 3) RSU and Option grants to vest at the rate of 1/24th per month in arrears ("2025 Exchanged Awards").

Unrecognized compensation expense related to the awards cancelled under the 2014 Plan totaled $408,000 which is being recognized prospectively over the remaining modified service period of 2 years. Total incremental compensation cost related to the 2025 Exchanged Awards totaled $307,000, $165,000 of which related to vested awards as of the modification date and was recognized as expense immediately in the statement of operations for the nine months ended September 30, 2025, and $141,000 related to unvested awards which is being recognized prospectively over the remaining modified service period of 2 years.

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*Amortization of intangible assets.* Amortization expense for the periods presented was included in the following operating expense line items (dollars in thousands):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months**<br> **Ended September 30,** | **Three Months**<br> **Ended September 30,**<br>**Change** | **Change** | **Nine Months** <br> **Ended September 30,** | **Nine Months** <br> **Ended September 30,**<br>**Change** | **Change** |
|  | **2025** | **2024** | **%** | **2025**  | **2024**  | **%** |
| Selling, marketing and advertising | $157 | $199) | (21)% | $508 | $596) | (15)% |
| Engineering, technology and development | 231 | 229 | 1% | 699 | 736) | (5)% |
| General and administrative | 125 | 182) | (31)% | 386 | 564) | (32)% |
| Total amortization expense | $513 | $610) | (16)% | $1593 | $1896) | (16)% |

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Amortization expense for the three and nine months ended September 30, 2025 decreased due primarily to a $70,000 and $209,000, respectively, reduction reflecting the completion of amortization (amortization period ended in the fourth quarter of 2024) of intangible assets acquired in connection with the acquisition of Super Biz in October 2021, and a $146,000 (year to date period only) reduction in amortization expense related to the sale of our Minehut assets in the first quarter of 2024, as described below.

***Selling, Marketing and Advertising***

*Three Months Ended September 30, 2025, Compared to the Three Months Ended September 30, 2024:*

Selling, marketing and advertising expense decreased $698,000, or 29%. The change was primarily due to a $914,000, or 39% reduction in selling, marketing and advertising personnel costs in connection with the Second Quarter 2025 Headcount Reductions and ongoing cost optimization activities. The decrease was partially offset by a $153,000, or 44% reduction in selling, marketing and advertising personnel costs allocated to cost of revenue, consistent with the decrease in revenues for the periods presented.

*Nine Months Ended September 30, 2025, Compared to the Nine Months Ended September 30, 2024:*

Selling, marketing and advertising expense decreased $1.1 million, or 15%. The change was primarily due to a $1.8 million, or 25% reduction in selling, marketing and advertising personnel costs in connection with the Second Quarter 2025 Headcount Reductions and ongoing cost optimization activities. The decrease was partially offset by a $522,000, or 44% reduction in selling, marketing and advertising personnel costs allocated to cost of revenue, consistent with the decrease in revenues for the periods presented, and credits reflected during the nine months ended September 30, 2024 related to influencer marketing expense related estimates recorded in prior periods.

***Engineering, Technology and Development***

Components of our platform are available on a "free to use," "always on basis," and are utilized and offered as an audience acquisition tool, as a means of growing our audience, engagement, viewership, players and community. Engineering, technology and development related operating expense include the costs described below, incurred in connection with our audience acquisition and viewership expansion activities. Engineering, technology and development related operating expense includes (i) allocated internal engineering personnel expense, including salaries, noncash stock compensation, taxes and benefits, (ii) third-party contract software development and engineering expense, (iii) internal use software cost amortization expense, and (iv) technology platform related cloud services, broadband and other platform expense, incurred in connection with our audience acquisition and viewership expansion activities, including tools and product offering development, testing, minor upgrades and features, free to use services, corporate information technology and general platform maintenance and support. Capitalized internal use software development costs are amortized on a straight-line basis over the software's estimated useful life.

*Three Months Ended September 30, 2025, Compared to the Three Months Ended September 30, 2024:*

● Engineering, technology and development expense decreased $247,000, or 27%, driven primarily by a $436,000, or 57% reduction in product and engineering personnel costs, and a decrease in cloud services and platform infrastructure costs totaling $59,000, or 36%, in connection with the Second Quarter 2025 Headcount Reductions and ongoing cost optimization activities. The decrease was partially offset by a decrease in engineering personnel costs allocated to cost of revenue totaling $263,000, consistent with the decrease in revenues for the periods presented.

*Nine Months Ended September 30, 2025, Compared to the Nine Months Ended September 30, 2024:*

● Engineering, technology and development expense decreased $1.1 million, or 33%, driven primarily by a reduction in product and engineering personnel expense totaling $1.2 million, or 46%, reflecting the impact of Second Quarter 2025 Headcount Reductions and a decrease in cloud services and other technology platform costs totaling $314,000, or 46%, relating to additional cost reduction activities, including the sale of our Minehut and Mineville digital assets, as described herein. The decrease was partially offset by a $490,000, or 68% decrease in engineering personnel costs allocated to cost of revenue, consistent with the decrease in revenues for the periods presented, and a reduction in capitalized internal use software costs.

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***General and Administrative***

General and administrative expense for the periods presented was comprised of the following (dollars in thousands):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months<br> Ended September 30,** | **Three Months<br> Ended September 30,**<br>**Change** | **Change** | **Nine Months<br> Ended September 30,** | **Nine Months<br> Ended September 30,**<br>**Change** | **Change** |
|  | **2025** | **2024** | **%** | **2025**  | **2024**  | **%** |
| Personnel costs | $361 | $378) | (4)% | $1230 | $1331) | (8)% |
| Office and facilities | 12 | 49) | (76)% | 66 | 147) | (55)% |
| Professional fees | 128 | 228) | (44)% | 568 | 799) | (29)% |
| Stock-based compensation | 558 | 227 | 146% | 1053 | 585 | 80% |
| Depreciation and amortization | 128 | 205) | (38)% | 398 | 621) | (36)% |
| Other | 578 | 848) | (32)% | 1623 | 3075) | (47)% |
| Total general and administrative expense | $1765 | $1935) | (9)% | $4938 | $6558) | (25)% |

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*Three Months Ended September 30, 2025, Compared to the Three Months Ended September 30, 2024:*

A summary of the main drivers of the change in general and administrative expense for the periods presented is as follows:

● Personnel and facilities costs decreased due to a reduction in various corporate, general and administrative costs in connection with the Second Quarter 2025 Headcount Reductions and ongoing cost reduction and optimization activities.

● Noncash Stock Compensation expense increased primarily due to a $271,000 increase in noncash stock compensation expense incurred in connection with the utilization of third-party investor relations and other consultants during the quarterly periods presented.

● Amortization expense decreased due primarily to the completion of amortization, in the fourth quarter of 2024, of developer relationship related intangible assets acquired in connection with the acquisition of Super Biz in October 2021, prior to January 1, 2025.

● The decrease in other expense was primarily due to a reduction in information technology, insurance and other corporate costs in connection with ongoing cost reduction and optimization activities. In addition, other expense for the three months ended September 30, 2024 included a charge to earnings related to the write off of accounts receivable totaling $200,000, and a noncash incremental fair value charge totaling $70,000, related to Pioneer AA AIRs, which were modified to include a reduction in conversion price and an extension of the exercise term in May 2024, as described at Note 7.

*Nine Months Ended September 30, 2025, Compared to the Nine Months Ended September 30, 2024:*

A summary of the main drivers of the change in general and administrative expense for the periods presented is as follows:

● Personnel and facilities costs decreased due to a reduction in various corporate, general and administrative costs in connection with the Second Quarter 2025 Headcount Reductions and ongoing cost reduction and optimization activities.

● Noncash Stock Compensation expense increased primarily due to a $49,000 of incremental expense recognized immediately in the statement of operations related to the vested portion of the 2025 Exchanged Awards as described at Note 2. In addition, the increase reflects a $582,000 increase in noncash stock compensation expense incurred in connection with the utilization of third-party investor relations and other consultants, partially offset by a net reduction related to headcount reductions and the ending of amortization periods for equity awards granted in prior periods.

● Amortization expense decreased due primarily to the completion of amortization, in the fourth quarter of 2024, of developer relationship related intangible assets acquired in connection with the acquisition of Super Biz in October 2021, prior to January 1, 2025.

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● The decrease in other expense was primarily due to a reduction in information technology, insurance and other corporate costs in connection with ongoing cost reduction activities. In addition, other expense for the nine months ended September 30, 2024 included a noncash legal settlement expense incurred in connection with the Pioneer Settlement, described above, comprised of $346,000 of noncash expense in connection with the issuance of 6,875 shares of common stock to Pioneer, and a noncash incremental fair value charge totaling $283,000, related to Pioneer AA AIRs, which were modified to include a reduction in conversion price and an extension of the exercise term in May 2024, as described above. Other expense for the nine months ended September 30, 2024 also included a $164,000 noncash legal settlement charge related to the adjustment of the estimated fair value (i.e. mark-to-market), as of the issuance date, for common stock issued pursuant to the 2022 Note Holder Settlement Agreement, as described at Note 7.

***Other Income (Expense), Net***

*Sale of Mineville*

On May 19, 2025, the Company entered into the Mineville Purchase Agreement with Mineville, LLC a Delaware limited liability company, pursuant to which the Company agreed to sell, and Purchaser agreed to purchase 100% of the Interests of InPvP for cash consideration totaling $350,000, as described earlier in this Report. The net carrying value of Mineville assets sold totaled $350,000 as of May 19, 2025, which historically were included in intangible assets, net in the condensed balance sheets, resulting in no gain or loss in connection with the Mineville Sale.

*Gain on Sale of Minehut Assets* 

On February 29, 2024, the Company sold its Minehut Assets to GamerSafer in a transaction approved by the Board. Pursuant to the GS Agreement entered into by and between Super League and GamerSafer, the Company received $1.0 million of purchase consideration for the Minehut Assets, which amount was paid by GamerSafer in revenue and royalty sharing over a multiple-year period, as described in the GS Agreement. The transaction allows Super League to streamline its position in partnering with major brands to build, market, and operate 3D experiences across multiple immersive platforms, including open gaming powerhouses like Minecraft, and aligns with the Company's cost improvement initiatives. Super League and GamerSafer will maintain a commercial relationship which ensures that Minehut can remain an ongoing destination available to Super League's partners. The carrying value of Minehut related assets totaled $475,000 as of February 26, 2024, comprised of total carrying costs of $1,671,000, net of accumulated amortization of $1,196,000, and historically were included in intangible assets, net in the condensed balance sheets.

The Company recorded a receivable for the total estimated Minehut Purchase Consideration totaling $619,000 and recognized an initial gain on sale of the Minehut Assets totaling $144,000, which is included in other income in the condensed statements of operations for the three and nine months ended September 30, 2024. The Minehut Purchase Consideration in the GS Agreement was variable pursuant to the guidance set forth in ASC 606. Under ASC 606, purchase consideration is variable if the amount the Company will receive is contingent on future events occurring or not occurring, even though the amount itself is fixed. As such, the Company estimated the amount of consideration to which the Company will be entitled, in exchange for transferring the Minehut Assets to GamerSafer, utilizing the expected value method which is the sum of probability-weighted amounts in a range of possible consideration outcomes over the applicable contractual payment period, resulting in an estimated receivable of $619,000. Amounts collected in excess of the estimated purchase consideration recorded at contract inception, up to the $1.0 million stated contractual amount of purchase consideration, are recognized as additional gains on the sale of Minehut Assets when realized. Additional gains on the sale of the Minehut Assets subsequent to the initial accounting for the transaction for the three and nine months ended September 30, 2025, totaled $0 and $343, 0000, respectively. Additional gains on the sale of the Minehut Assets subsequent to the initial accounting for the transaction for the three and nine months ended September 30, 2024, totaled $0 and $0, respectively. From the date of sale of the Minehut Assets through September 30, 2025, the Company calculated royalties due from GamerSafer, applied against the Minehut Purchase Consideration receivable pursuant to the GS Agreement, totaling $1,000,000.

*Change in Fair Value of Warrant Liabilities*

*YP Warrants*

The initial fair value of the YP Warrants, totaling $1,935,000, was classified as a liability in the condensed balance sheets, and is remeasured at fair value at each balance date. The fair value of the YP Warrants was $865,000 at September 30, 2025, resulting in a $1,070,000 credit in the condensed statements of operations for the three and nine months ended September 30, 2025, reflecting the change in fair value of the YP Warrant liability for the period from issuance to September 30, 2025.

*Series AAA Junior -3 and Series AAA Junior* – *4 Warrants*

The Series AAA Junior-3 and Series AAA Junior-4 subscription agreements entered into in September 2024, included the sale of an aggregate of 1,096 units (the "Units"), each Unit consisting of (i) one share of newly designated Series AAA-3 Junior Convertible Preferred Stock or Series AAA-4 Junior Convertible Preferred Stock, as reflected in the table above, and (ii) a warrant to purchase 25 shares of the Company's common stock (the "September 2024 Series AAA Junior Investor Warrants"), at a purchase price of $1,000 per Unit, for aggregate gross proceeds to the Company of approximately $1,096,000.

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The September 2024 Series AAA Junior Investor Warrant agreements also contain a provision that states that, upon exercise of the warrant by an investor, if for any reason the company fails to deliver the shares by the settlement date, the investor can require the company to make a cash payment ("Buy-In Provision").

As a result of the Buy-In Provision, the ability to deliver shares upon exercise of the Investor Warrants in every circumstance is generally not within the control of the Company as contemplated by the accounting standards, and thus, a partial cash settlement may be required outside of the Company's control. As such, the September 2024 Series AAA Junior Investor Warrants do not meet the requirements for equity classification, and therefore, the fair value of the September 2024 Series AAA Junior Investor Warrants are recorded as a liability on the condensed balance sheet and re-valued at each reporting date, with changes in the fair value reported in the condensed statements of operations. Refer to the table below.

*Placement Agent Warrants*

The Placement Agent Warrants issued in connection with the Series A Preferred Stock, Series AA Preferred Stock and Series AAA Preferred Stock (including the Exchange), described earlier in this Report, include provisions that are triggered in the event of the occurrence of a Fundamental Transaction, as defined in the underlying warrant agreement, which contemplates the potential for certain transactions that result in a third-party acquiring more than 50% of the outstanding shares of common stock of the Company for cash or other assets. Given the existence of multiple classes of voting stock for the Company, as described above, the Fundamental Transaction provisions in the warrant agreements could result in a 50% or more change in ownership of outstanding common stock, without a 50% change in voting interests. As such, the Placement Agent Warrants are not eligible for the scope exception under ASC 815, and therefore, the fair value of the Placement Agent Warrants are recorded as a liability on the condensed balance sheet and re-valued at each reporting date, with changes in the fair value reported in the condensed statements of operations.

The fair value and change in the fair value of the warrant liabilities related to the September 2024 Series AAA Junior Investor Warrants and the Placement Agent Warrants, measured using Level 3 inputs, and the related income statement impact was comprised of the following for the applicable periods presented:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months** | **Three Months** | **Nine Months** | **Nine Months** |
|  | **Ended September 30,** | **Ended September 30,** | **Ended September 30,** | **Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| *Series AAA Junior-3 and Series AAA Junior-4 Warrants:* | | | | |
| Beginning balance | $20000 | $- | $348000 | $- |
| Initial fair value of warrant liability – grant date<sup>(1)</sup> |  | 346000 |  | 346000 |
| Change in fair value | (3000) | 14000 | (331000) | 14000 |
| Subtotal - Fair value of warrant liability - Series AAA Junior -3 and Series AAA Junior – 4 Warrants | 17000 | 360000 | 17000 | 360000 |
| *Placement Agent Warrants:* | | | | |
| Beginning balance | 54000 | 665000 | 587000 | 665000 |
| Initial fair value of warrant liability – grant date<sup>(1)</sup> |  | 134000 |  | 134000 |
| Change in fair value |  | (212000) | (533000) | (212000) |
| Subtotal - Fair value of warrant liability – Placement Agent Warrants | $54000 | $587000 | $54000 | $587000 |
| Total fair value of warrant liability | $71000 | $947000 | $71000 | $947000 |

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<sup>(1)</sup> Estimated fair value on the respective dates of issuance.

*Interest expense, including change in fair value of promissory notes carried at fair value*

Interest expense, including change in fair value of promissory notes carried at fair value, primarily reflects the change in fair value of debt accounted for under the fair value option ("FVO") as described at Note 2. Interest expense, including change in fair value of promissory notes carried at fair value for the periods presented was comprised of the following:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months** | **Three Months** | **Nine Months** | **Nine Months** |
|  | **Ended September 30,** | **Ended September 30,** | **Ended September 30,** | **Ended September 30,** |
| **Description:** | **2025** | **2024** | **2025** | **2024** |
| Super Biz Note | $(36000) | $(25000) | $(51000) | $(25000) |
| Agile I Note |  |  | (358000) |  |
| Agile II Note | (256000) |  | (1258000) |  |
| RP Note | (404000) |  | (439000) |  |
| Belleau Note | (287000) |  | (75000) |  |
| 1800 Diagonal Notes | (51000) |  | (26000) |  |
| YP Note | 24000 |  | 24000 |  |
| SLR Facility |  | (20000) | (45000) | (53000) |
| Other |  |  | (3000) |  |
| Total Interest (expense) income, including change in fair value of promissory notes carried at fair value | $(1010000) | $(45000) | $(2231000) | $(78000) |

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*Loss on Extinguishment of Liability*

On July 8, 2025, the Company entered into the SB Exchange Agreements as described at Note 5, pursuant to which the Company and Khakshoor, Drozdov and Firepit (collectively, the "SB Note Holders") agreed that in exchange for the surrender and forgiveness of the Super Biz Notes, with an aggregate principal and interest balance of $1.9 million, the SB Note Holders were issued 1,896,964 shares of the Company's Series AAAA Jr. Convertible Preferred Stock. The July 8, 2025 exchange of the Super Biz Notes for shares of the Company's Series AAAA Junior Preferred Stock was accounted for as an extinguishment of the related promissory note, resulting in a loss on extinguishment of liability of $161,000, included in the condensed statements of operations for the three and nine months ended September 30, 2025.

In August 2024, the Company issued an unsecured promissory note to the Founders in connection with the remaining Super Biz Second Earn Out Period accrued contingent consideration outstanding, with a principle amount totaling approximately $1.8 million, whereby the Company is obligated to pay the outstanding contingent consideration on the following repayment terms ("Super Biz Note"). Interest accrued on the outstanding principal at the rate of 8.5% per annum.

In addition, in connection with the issuance of the Super Biz Note the Company issue 98,438 shares of the Company's common stock to the Founders, valued at $336,000, based on the closing price of our common stock on the date of issuance of the promissory note.

The issuance of the Super Biz Note in exchange for the related accrued contingent consideration balance was accounted for as an extinguishment of the original liability due to the fact that the present value of the cash flows under the terms of Super Biz Note was determined to be at least 10 percent different from the present value of the remaining cash flows under the terms of the original obligation. As a result, a gain on extinguishment totaling $336,000 was recorded in the statement of operations, and credited to additional paid-in capital (included in "Other" in the statement of stockholder's equity), for the three and nine months ended September 30, 2024, primarily comprised of the fair value of the 98,438 shares of restricted stock (based on closing price of our common stock on the date of issuance of the Super Biz Note) to be issued, as described above.

*Debt Issuance Costs*

Other income (expense), net for the three and nine months ended September 30, 2025 included debt issuance costs paid totaling $415,000 and $554,000, respectively, in connection with the issuance of the YP Note, Agile II Note, Diagonal I Note, and Diagonal II Note, as described at Note 5.

**Liquidity and Capital Resources**

**General**

***Liquidity and Capital Resources***

Cash and cash equivalents totaled $1.1 million and $1.3 million at September 30, 2025 and December 31, 2024, respectively. As of September 30, 2025, the Company had working capital and an accumulated deficit as reflected on the accompanying condensed balance sheets provided herein. For the nine months ended September 30, 2025 and 2024, the Company incurred net losses, and cash outflows from operating activities as reflected in the accompanying condensed statements of operations and cash flows, respectively.

Improved Liquidity Due to Subsequent Events

 *Equity Financing*

In October 2025, subsequent to the balance sheet date and prior to the issuance of these financial statements, the Company completed equity financings totaling $20.0 million in gross proceeds ($18.5 million in proceeds net of offering costs). The proceeds provide significant additional working capital and liquidity to fund operations and meet the Company's obligations as they arise. Refer to Note 8 for additional information regarding equity financings subsequent to September 30, 2025. The Company intends to use the proceeds from the Offering for repayment of existing indebtedness totaling $1.5 million, implementation of a new corporate strategy, general corporate purposes and working capital.

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 *Additional Conversions of Debt to Equity*

During the three months ended September 30, 2025, the company exchanged $4.7 million of outstanding debt for equity, as described at Notes 4 and 5. In October and November 2025, holders of an aggregate of approximately $4.0 million of the Company's outstanding promissory notes as of September 30, 2025, exchanged or converted such notes into either common stock or preferred stock of the Company pursuant to (i) executed exchange agreements, or (ii) the existing conversion terms set forth in certain notes. As a result, the Company eliminated approximately $4.0 million of principal and accrued interest obligations that would otherwise have required cash settlement subsequent to September 30, 2025. The conversions materially reduced the Company's leverage profile and future cash commitments. Refer to Note 8 for additional information regarding the exchange or conversion of debt to equity subsequent to September 30, 2025.

 *Operating Cost Reductions and Updated Forecasts*

Since approximately May 2024, the Company implemented a number of operating expense reduction initiatives designed to decrease future operating cash outflows. These actions included workforce optimization, vendor contract renegotiations, reduced discretionary spending, and restructuring of non-core activities. Excluding noncash charges, these operating expense reductions resulted in a decrease in operating expense of 29% and 24% for the three and nine month periods ended September 30, 2025, compared to the three and nine months ended September 30, 2024, respectively.

The change in cash and cash equivalents for the periods presented reflects the impact of operating, investing and financing cash flow related activities, as described below.

**Cash Flows for the Nine Months Ended September 30, 2025 and 2024**

The following table summarizes the change in cash balances for the periods presented (dollars in thousands):

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| | | |
|:---|:---|:---|
|  | **Nine Months** <br> **Ended September 30,** | **Nine Months** <br> **Ended September 30,** |
|  | **2025** | **2024** |
| Net cash used in operating activities | $(6805) | $(8160) |
| Net cash provided by (used in) investing activities | 923 | (457) |
| Net cash provided by financing activities | 5633 | 1297 |
| Net decrease in cash | (249) | (7320) |
| **Cash and cash equivalents, at beginning of period** | 1310 | 7609 |
| **Cash and cash equivalents, at end of period** | $1061 | $289 |

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*Cash Flows from Operating Activities.*

Net cash used in operating activities during the nine months ended September 30, 2025, primarily reflected our GAAP net loss, net of adjustments to reconcile net GAAP loss to net cash used in operating activities, which included noncash stock compensation charges of $1.4 million, depreciation and amortization charges of $1.6 million, net changes in fair value of certain liabilities of ($1,010,000), noncash loss on extinguishment of liability of $161,000, debt issuance costs of $554,000, and net changes in working capital of $1.1 million. Changes in working capital primarily reflected the impact of the management and settlement of receivables and payables in the ordinary course.

Net cash used in operating activities during the nine months ended September 30, 2024, primarily reflected our GAAP net loss, net of adjustments to reconcile net GAAP loss to net cash used in operating activities, which included noncash stock compensation charges of $986,000, depreciation and amortization charges of $2.0 million, gain on sale of Minehut assets of ($144,000), net changes in fair value of certain liabilities of ($1.3 million), noncash legal settlement charges of $724,000, noncash loss on extinguishment of debt of $336,000 and net changes in working capital of $525,000. Changes in working capital primarily reflected the impact of the management and settlement of receivables and payables in the ordinary course.

*Cash Flows from Investing Activities*

Cash flows from investing activities were comprised of the following for the periods presented (dollars in thousands):

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| | | |
|:---|:---|:---|
|  | **Nine Months**<br> **Ended September 30,** | **Nine Months**<br> **Ended September 30,** |
|  | **2025** | **2024** |
| Proceeds from sale of Mineville Assets | $350 | $- |
| Proceeds from sale of Minehut Assets | 808 |  |
| Purchase of property and equipment |  | (23) |
| Capitalization of software development costs | (200) | (434) |
| Other | (35) |  |
| **Net cash provided by (used in) investing activities** | $923 | $(457) |

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*Sale of Mineville Assets.* On May 19, 2025, the Company entered into the Mineville Purchase Agreement with the Purchaser, pursuant to which the Company agreed to sell, and Purchaser agreed to purchase 100% of the Interests of InPvP. Prior to the Mineville Closing contemplated by the Mineville Sale, InPVP was a wholly owned subsidiary of the Company. The closing of the Mineville Sale occurred simultaneously with the execution of the Mineville Purchase Agreement. The Purchaser paid cash consideration totaling $350,000 at the Mineville Closing to acquire the Interests.

*Sale of Minehut Assets.* On February 29, 2024, the Company sold its Minehut Assets to GamerSafer as described above. Pursuant to the GS Agreement, the Company received $1.0 million of purchase consideration for the Minehut Assets, which amount was paid by GamerSafer in revenue and royalty sharing over a multiple-year period, as described in the GS Agreement. During the three months ended September 30, 2025 we received Minehut Purchase Consideration payments totaling $152,000.

*Capitalized Internal Use Software Costs*. Software development costs incurred to develop internal-use software during the application development stage are capitalized and amortized on a straight-line basis over the software's estimated useful life, which is generally three years. Software development costs incurred during the preliminary stages of development are charged to expense as incurred. Maintenance and training costs are charged to expense as incurred. Upgrades or enhancements to existing internal-use software that result in additional functionality are capitalized and amortized on a straight-line basis over the applicable estimated useful life.

*Cash Flows from Financing Activities*.

Cash flows from financing activities were comprised of the following for the periods presented (dollars in thousands):

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| | | |
|:---|:---|:---|
|  | **Nine Months**<br> **Ended September 30,** | **Nine Months**<br> **Ended September 30,** |
|  | **2025** | **2024** |
| Proceeds from issuance of preferred stock, net of issuance costs | $- | $2129 |
| Proceeds from issuance of common stock, net of issuance costs | 1945 |  |
| Proceeds from notes payable, net of issuance costs | 7607 |  |
| Payments on notes payable | (3818) |  |
| Contingent consideration payments – Melon Acquisition | (77) | (32) |
| Advances from accounts receivable facility | 429 | 1033 |
| Payments on accounts receivable facility | (453) | (1833) |
| **Net cash provided by financing activities** | $5633 | $1297 |

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*Debt Financings*

*Agile I* 

On November 8, 2024 (the "Agile I Effective Date"), the Company entered into a loan agreement with Agile Capital Funding, LLC, as collateral agent ("Agile")(" the Agile I Loan Agreement"), pursuant to which the Company issued to Agile a Confessed Judgment Secured Promissory Note for an aggregate value of $1.85 million (the "Agile I Note"). Pursuant to the Agile I Loan Agreement: (i) the Agile I Note matures 28 weeks from the Agile I Effective Date; (ii) carries an aggregate total interest payment of approximately $0.78 million (the "Applicable Rate"), and (iii) immediately upon the occurrence and during the continuance of an Event of Default (as defined in the Agile I Loan Agreement), interest shall accrue at a fixed per annum rate equal to the Applicable Rate plus five percent, or 42%. The Company is required to repay all the obligations due under the Agile I Loan Agreement and the Agile I Note in 28 equal payments of $93,821 with the first payment being made to Agile on November 14, 2024, and every seven days thereafter until the Maturity Date. The proceeds received from the Agile I Note were used to fund general working capital needs.

In connection with entering into the Agile I Loan Agreement, the Company was required to pay an administrative fee of $92,500 to the Collateral Agent, which was paid at the closing out of proceeds of the issuance of the Agile I Note and expensed in "other expense" in the condensed statements of operations. On February 10, 2025, in connection with entering into the Agile II Loan Agreement as described below, the Company paid the remaining balance of the Agile I Note, including interest for the remaining term, totaling $1.5 million.

*Agile II*

On February 10, 2025 (the "Agile II Effective Date"), the Company entered into a Business Loan and Security Agreement (the "Agile II Loan Agreement"), with Agile Capital Funding, LLC as collateral agent ("Collateral Agent"), and Agile Lending, LLC (collectively "Agile"), pursuant to which the Company issued to Agile a Confessed Judgment Secured Promissory Note for an aggregate value of $2.5 million (the "Agile II Note"). Pursuant to the Agile II Loan Agreement: (i) the Agile II Note matures 32 weeks from the Agile II Effective Date; (ii) carries an aggregate total interest payment of approximately $1.05 million, and (iii) immediately upon the occurrence and during the continuance of an Event of Default (as defined in the Agile II Loan Agreement), interest shall accrue at a fixed per annum rate equal to the applicable rate plus five percent, or 42%. The Company is required to repay all the obligations due under the Agile II Loan Agreement and the Agile II Note in 32 equal payments of $110,937, with the first payment being made to Agile on February 17, 2025, and every seven days thereafter until the maturity date. The proceeds received from the Agile II Note will be used to fund general working capital needs.

In connection with entering into the Agile II Loan Agreement, the Company was required to pay an administrative fee of $125,000 to the Collateral Agent, which was paid at the closing out of proceeds of the issuance of the Agile II Note and expensed in "other expense" in the condensed statements of operations. $1.5 million of the Agile II Note was used to repay the remaining balance of principal and interest under the Agile I Note, with net proceeds to the Company of approximately $875,000.

On July 10, 2025, the Company entered into an exchange agreement (the "Agile Exchange Agreement") with Agile, pursuant to which the Company and Agile agreed that in exchange for the surrender and forgiveness of that certain Secured Promissory Note issued to Agile, dated February 7, 2025, with the remaining amount of principal and interest thereunder being $1,331,250, Agile received (a) 44,128 shares of common stock (the "Agile Exchange Shares"), (b) pre-funded warrants to purchase 173,023 shares of common stock (the "Agile Pre-Funded Warrants", and collectively with the Agile Exchange Shares, the "Agile Exchange Securities"), with the Agile Exchange Securities valued at a price of $5.67, such amount above the Nasdaq Minimum Price, and (c) four equal cash payments of $25,000 to Agile, totaling $100,000, beginning on July 10, 2025, and every seven days thereafter.

The July 10, 2025 exchange of the balance of the Agile II Note for shares of the Company's Common Stock was accounted for as an extinguishment of the Agile II Note, resulting in the derecognition of the related liability and the recording of the fair value of the equity securities exchanged on the date of settlement. The Agile II Note was accounted for under the FVO, and therefore, the carrying amount of the Agile II Note immediately prior to settlement represented its fair value at the settlement date. As a result, no gain or loss was recognized in connection with the exchange. The $100,000 of cash payments were included as a component of the change in fair value of the Agile II Note for the three and nine months ended September 30, 2025, which is included in other income (expense) in the condensed statements of operations.

*1800 Diagonal Lending I*

On March 26, 2025 (the "Diagonal Effective Date"), the Company and 1800 Diagonal Lending, LLC, a Virginia limited liability company, or registered assignees ("Diagonal") entered into a Securities Purchase Agreement (the "Diagonal Agreement"), pursuant to which the Company issued a Convertible Promissory Note (the "Diagonal Note") in the principal amount of $300,000 (the "Diagonal Principal"), for which the Diagonal Note, among other things, (a) matures on December 30, 2025 (unless otherwise accelerated upon an Event of Default (as defined below)) (the "Diagonal Maturity Date"), (b) accrues interest at a rate of 10% per annum on the unpaid principal balance from the date the Diagonal Note was issued (the "Diagonal Issuance Date") until the principal and interest becomes due and payable, whether on the Maturity Date or upon acceleration by prepayment or otherwise, (c) begins to accrue interest on the Diagonal Issuance Date but shall not be payable until the Diagonal Note becomes payable, and (d) interest will accrue at a rate of 22% per annum for any amount of principal or interest which is not paid as required under the Diagonal Note, or during an Event of Default.

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Pursuant to the Diagonal Note, Diagonal has the right, from time to time, and at any time, during the period beginning on the date which is 180 days from the Diagonal Effective Date and ending on the earlier of (a) the Diagonal Maturity Date, or (b) the date of payment of the Default Amount, each in respect of the remaining outstanding amount of the Diagonal Note into fully paid and non-assessable shares of common stock at a price equal to 75% multiplied by the Market Price (as defined below) (the "Conversion Price"). For purposes of the Diagonal Note: (x) the "Market Price" means the lowest Trading Price for the Company's common stock during the 10 trading ending on the latest complete trading day prior to the Diagonal Conversion Date; (y) the "Trading Price" means the closing price (or bid, if applicable) of the Company's common stock as listed (or quoted, as applicable) on the principal securities exchange or trading market where it is listed or traded; and (z) the "Diagonal Conversion Date" means the date specified in the applicable notice of conversion, delivered to the Company by Diagonal in accordance with the Diagonal Note.

The Diagonal Note was issued with an Original Issue Discount of 4.75% (the "OID"), with net proceeds to the Company of approximately $279,000 after deducting the OID, reimbursement of Diagonal's expenses in an amount equal to $7,000 (expensed in the statements of operations for the nine months ended September 30, 2025), and other estimated offering expenses. The Company used the net proceeds from the offering for working capital and general corporate purposes.

During the three and nine months ended September 30, 2025, Diagonal converted an aggregate principal amount under the Diagonal Note of $247,000 into shares of the Company's Common Stock at an average price of $2.33 per share, resulting in the issuance of 106,000 shares of Common Stock to Diagonal.

*1800 Diagonal Lending II*

On May 12, 2025 (the "Diagonal II Effective Date"), the Company and Diagonal entered into a Securities Purchase Agreement (the "Diagonal II Agreement"), pursuant to which the Company issued a Convertible Promissory Note (the "Diagonal II Note") in the principal amount of $145,200 (the "Diagonal II Principal"), for which the Diagonal II Note, among other things, (a) matures on February 15, 2026 (unless otherwise accelerated upon an Event of Default (as defined below)) (the "Diagonal II Maturity Date"), (b) accrues interest at a rate of 10% per annum on the unpaid principal balance from the date the Diagonal II Note was issued (the "Diagonal II Issuance Date") until the principal and interest becomes due and payable, whether on the Maturity Date or upon acceleration by prepayment or otherwise, (c) interest begins to accrue on the Diagonal II Issuance Date but shall not be payable until the Diagonal II Note becomes payable, and (d) interest will accrue at a rate of 22% per annum for any amount of principal or interest which is not paid as required under the Diagonal II Note, or during an Event of Default.

Pursuant to the Diagonal II Note, Diagonal has the right, from time to time, and at any time, during the period beginning on the date which is 180 days from the Diagonal II Effective Date and ending on the earlier of (a) the Diagonal II Maturity Date, or (b) the date of payment of the Default Amount, each in respect of the remaining outstanding amount of the Diagonal II Note into fully paid and non-assessable shares of common stock at a price equal to 75% multiplied by the Market Price (as defined below) (the "Conversion Price"). For purposes of the Diagonal II Note: (x) the "Market Price" means the lowest Trading Price for the Company's common stock during the 10 trading ending on the latest complete trading day prior to the Diagonal II Conversion Date; (y) the "Trading Price" means the closing price (or bid, if applicable) of the Company's common stock as listed (or quoted, as applicable) on the principal securities exchange or trading market where it is listed or traded; and (z) the "Diagonal II Conversion Date" means the date specified in the applicable notice of conversion, delivered to the Company by Diagonal in accordance with the Diagonal II Note.

The Diagonal II Note was issued with an Original Issue Discount of 9.09% (the "OID"), with net proceeds to the Company of $125,000 after deducting the OID, reimbursement of Diagonal's expenses in an amount equal to $7,000 (expensed in the statements of operations for the nine months ended September 30, 2025), and other estimated offering expenses. The Company used the net proceeds from the offering for working capital and general corporate purposes.

*Belleau Note Purchase Agreement*

On March 28, 2025 (the "Belleau Effective Date"), we entered into a Note Purchase Agreement (the "Belleau Purchase Agreement") with Belleau Wood Capital, LP, or its assignees, ("Belleau"). Pursuant to the Belleau Purchase Agreement, the Company will issue to Belleau a total of three Unsecured Promissory Notes (each, a "Belleau Note" and collectively, the "Belleau Notes") with an aggregate principal amount of $1,500,000 (the "Belleau Principal"). The consummation of the sale of the initial Belleau Note was consummated on the Belleau Effective Date, with gross proceeds to the Company of $300,000. The consummation of the sale of the two remaining Belleau Notes are scheduled to occur in the amounts and on the dates as follows: (a) $600,000 on April 14, 2025; and (b) $600,000 on April 28, 2025. As of September 30, 2025, $1.1 million of the Notes were funded, with an additional $150,000 funded subsequent to June 2025. Each of the Belleau Notes: (x) matures on the date that is 12 months from the date of the issuance of each respective Belleau Note (collectively, the "Belleau Maturity Date"); (y) may be prepaid in part or in full at any time by the Company without penalty; and (z) accrues interest at a rate of 20% simple interest per annum (the "Belleau Interest Rate", and the dollar value of the accrued interest, the "Belleau Interest").

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The Belleau Interest that accrues on each respective Belleau Note is payable on each respective Belleau Maturity Date in the form of restricted shares of the Company's common stock equal to 20% of the Belleau Principal, calculated at a price per share of $14.00. In the event of a prepayment of any Belleau Note by the Company, the Belleau Interest will be payable in full at the time of such prepayment.

On August 11, 2025, the Company and Belleau entered into an Amended & Restated Unsecured Promissory Note, pursuant to which the Belleau Principal was reduced to $1,250,000. All other terms and conditions of the Belleau Note remained the same. The Company used the proceeds from the sale of the Belleau Notes for working capital and general corporate purposes.

In September 2025, the Company prepaid $250,000 of principal on the Belleau Note.

Effective October 22, 2025, the Company and Belleau entered into an exchange agreement (the "*Belleau Exchange Agreement*"), pursuant to which the Company and Belleau agreed (a) to convert the remaining principal amount of $1.0 million due under the Belleau Note, dated March 28, 2025, into 1.0 million shares of Common Stock, valued at $1.00 per share, simultaneous with the close of the PIPE Offering (the "*Note Exchange Consideration*"), and (b) issue Belleau a common stock purchase warrant to purchase the sum of 125,000 shares of Common Stock, in form similar to the PIPE Warrants (the "*Belleau Warrants*"), except the warrants will be exercisable for a period of two (2) years.

*Related Party Promissory Note*

On November 19, 2024 (the "RP Effective Date"), we entered into a Note Purchase Agreement (the "RP Purchase Agreement") with a non-employee member of the Board (the "Purchaser"). Pursuant to the RP Purchase Agreement, the Company issued to the Purchaser an Unsecured Promissory Note (the "RP Note") in the amount of $1,500,000 (the "RP Principal"), for which the RP Note (i) matures on the date that is 12 months from the RP Effective Date (the "RP Maturity Date"), (ii) may be pre-paid at any time by the Company without penalty, and (iii) accrues interest on the RP Principal at a rate of 40% simple interest per annum (the "RP Interest"). The RP Interest is payable on the RP Maturity Date. In the event of a prepayment of the RP Note by the Company, the RP Interest will be pro-rated for the period the RP Note is outstanding. The Company intends on using the proceeds for working capital and general corporate purposes.

On June 13, 2025, the Company entered into an amendment to the RP Note (the "RP Amendment"). Pursuant to the Amendment: (a) the maturity date of the RP Note was extended to November 19, 2026; (b) beginning on November 19, 2025, interest will no longer accrue on the remaining Principal outstanding; and (c) the Company agreed to make monthly payments of $175,000, with such payments to start on November 19, 2025, and continue thereafter for twelve months, at which time the RP Note will be paid in full.

On July 7, 2025, the Company entered into an exchange agreement with the Michael Keller Trust (the "Trust") ("RP Exchange Agreement"), pursuant to which the Company and the Trust agreed that in exchange for the surrender and forgiveness of RP Note, with the principal and interest thereon being equal to $1,878,082, the Trust would be granted (a) 1,500,000 shares of Series AAAA Jr. Convertible Preferred Stock, and (b) cash payments totaling $378,002, such payments to be made in equal monthly installments of approximately $63,000, commencing on October 15, 2025, and concluding on March 15, 2026 (the "Trust Agreement").

The July 7, 2025 exchange of the balance of the RP Note for shares of the Company's Series AAAA Junior Preferred Stock was accounted for as an extinguishment of the RP Note, resulting in the derecognition of the related liability and the recording of the fair value of the Series AAAA Jr. Preferred Stock exchanged on the date of settlement. The RP Note was accounted for under the FVO, and therefore, the carrying amount of the RP Note immediately prior to settlement represented its fair value at the settlement date. As a result, no gain or loss was recognized in connection with the exchange. The $378,000 of accrued cash payments were included as a component of the change in fair value of the RP Note for the three and nine months ended September 30, 2025, which is included in other income (expense) in the condensed statements of operations.

*Yield Point Convertible Note*

On July 10, 2025, the Company and Yield Point NY, LLC (the "Yield Point"), entered into a Securities Purchase Agreement, pursuant to which the Company agreed to sell up to (i) an aggregate principal amount of $4,494,382 in 8% Senior Secured Convertible Notes, maturing eighteen (18) months after the issue date, with original issue discount of 11%, convertible into shares of the Company's common stock at a conversion price of $6.815 per share, and if not converted then amortized over the final twelve (12) months concluding on the maturity date ("YP Notes"), and (ii) common stock purchase warrants to purchase 659,968 shares of common stock at an exercise price of $5.361 per share (the "YP Warrants") (the "Offering") (the YP Purchase Agreement"). The Company received $4,000,000 in gross proceeds from the Offering.

The YP Notes are senior secured obligations of the Company and are secured by certain personal property of the Company, pursuant to a security agreement. Unless earlier converted, the YP Notes will mature in January 2027. The YP Notes bear interest at a rate of 8% per annum, subject to increase in the event of default to the lesser of 18% per annum or the maximum rate permitted under applicable law. The YP Notes, including interest accrued thereon, are convertible at any time until a convertible note is no longer outstanding, in whole or in part, at the option of the holders into shares of common stock at a conversion price of $6.815 per share, subject to adjustment as set forth therein. Commencing on the six-month anniversary of the date of the issuance of the Note, and on the same date every month thereafter, the Company shall make 12 equal amortization payments, with each payment being equal to one-twelfth of the initial principal amount, plus all accrued but unpaid interest.

The YP Warrants entitle the holders to purchase 659,968 shares of common stock, respectively. The YP Warrants are exercisable immediately and have a term of four years. The YP Warrants each have an exercise price of $5.361 per share, subject to adjustment as set forth therein.

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The terms of each of the YP Notes and the YP Warrants provide for anti-dilution protection for issuances of common stock at a price per share less than the price equal to the conversion price or exercise price, as applicable, subject to approval by the Company's stockholders.

The Company also entered into a Security Agreement (the "YP Security Agreement") with Yield Point and such holders of the YP Notes as may be issued in the future (together with Yield Point, the "Secured Parties"). Pursuant to the YP Security Agreement, the Secured Parties were granted a security interest in certain of the Company's personal property to secure the payment and performance of all of the Company's obligations under the YP Notes, YP Warrants, Purchase Agreement, Registration Rights Agreement and Security Agreement.

On September 30, 2025, the Company and Yield Point, entered into Amendment No. 1 to the YP Note (the "YP Note Amendment"), originally issued on July 10, 2025, pursuant to that certain YP Purchase Agreement, dated therewith. Pursuant to the YP Note Amendment: (i) the "Conversion Price" was amended to $5.95, subject to adjustment as set forth in the Note; and (ii) the "Floor Price" was amended to $1.19. All other terms and conditions of the Note remain in full force and effect.

The fair value of the YP Warrants, totaling $1,935,000, was classified as a liability in the condensed balance sheets, and is remeasured at fair value at each balance date. The fair value of the YP Warrants was $865,000 at September 30, 2025, resulting in a $1,070,000 credit in the condensed statements of operations for the three and nine months ended September 30, 2025, reflecting the change in fair value of the YP Warrant liability. The fair value of the YP Warrants was estimated using the Black-Scholes-Merton option pricing model and the following weighted-average assumptions: expected volatility of 40%; risk free interest rate range of 3.66% - 3.88%; and expected life range of 3.83-4.0 years. The fair value of the conversion feature embedded in the YP Note was estimated using the Black-Scholes-Merton option pricing model and the following weighted-average assumptions: expected volatility of 40%; risk free interest rate range of 3.66% - 3.97%; and expected life range of 1.30-1.53 years.

The Agile I Note, Agile II Note, Diagonal I Note, Diagonal II Note, Belleau Note, RP Note and the YP Note are accounted for at fair value as described in Note 2, and measured using Level 3 inputs with the following impact on the condensed financial statements for the applicable periods referenced:

*Account Receivable Financing Facility* 

The Company and certain of its subsidiaries (collectively with the Company, the "Borrowers"), entered into a Financing and Security Agreement (the "SLR Agreement") with SLR Digital Finance, LLC ("Lender"), effective December 17, 2023 (the "Facility Effective Date"). Pursuant to the SLR Agreement, Lender may, from time to time and in its sole discretion, make certain cash advances to the Company (each an "Advance", and collectively, "Advances"), against the face amounts of certain uncollected accounts receivable of the Borrowers on an account-by-account basis (each, a "Financed Account", and collectively, the "Accounts"), at a rate of 85% multiplied by the face value of such Account (the "Advance Rate"), less any reserved funds and any other amounts due to Lender from Borrowers, up to a maximum aggregate Advance amount of $4,000,000 (the "Maximum Amount")(collectively, the "AR Facility"). Upon receipt of any Advance, Borrowers will have assigned all of its rights in such receivables and all proceeds thereof. The proceeds received from the Facility were used to fund general working capital needs. On June 10, 2025, the AR Facility was terminated. Refer to Note 5 for additional information.

*Equity Financings*

On May 30, 2025, the Company entered into May III Purchase Agreement with the May III Investors certain investors, which provided for the sale and issuance by the Company in a registered direct offering (the "May III *Offering*") of an aggregate of (i) 79,750 shares of the Company's common stock, at a purchase price of $4.80 per share (the "May III *Shares*"), and (ii) pre-funded warrants to purchase up to 59,833 shares of common stock at a purchase price of $4.79 per pre-funded warrant (the "May III *Pre-Funded Warrants*" and, together with the May III Shares, the "May III Securities"), which represents the per share price for the May III Shares less the exercise price of $0.00001 per share. The May III Offering closed on June 2, 2025. The aggregate gross proceeds to the Company from the May III Offering were approximately $670,000, before deducting placement agent commissions and other estimated offering expenses. The Company utilized the net proceeds of the Offering for working capital and general corporate purposes, as well as to repay a portion of the Company's indebtedness.

On May 30, 2025, the Company also entered into the May III Placement Agent Agreement with Aegis Capital Corp. (the "*Placement Agent*"). Pursuant to the terms of the May III Placement Agent Agreement, the Placement Agent agreed to use its reasonable best efforts to arrange for the sale of the securities in the May III Offering. The Company agreed to pay the Placement Agent a cash fee equal to 8% of the aggregate gross proceeds from the sale of the May III Securities. The Company also agreed to reimburse the Placement Agent for certain expenses.

On May 29, 2025, the Company entered into the May II Underwriting Agreement with Aegis Capital Corp., relating to the May II Offering of 104,167 shares of its common stock. Pursuant to the May II Underwriting Agreement, the Company also granted the Underwriter the May II Option to purchase an additional 10,417 shares of common stock. On May 30, 2025, the Company issued the May II Shares and closed the May II Offering at a public price of $4.80 per share, for net proceeds to the Company of approximately $380,000 after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. The Company utilized the net proceeds of the May II Offering for working capital and general corporate purposes, as well as to repay a portion of the Company's indebtedness. On May 29, 2025, the Underwriter delivered notice to the Company that it elected to exercise the May II Option with respect to an aggregate of 10,417 May II Option Securities. The closing of the sale of the May II Option Shares occurred on May 30, 2025.

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On May 9, 2025, the Company entered into the May I Underwriting Agreement with the Underwriter, relating to the Company's May I Offering of 127,941 shares of its common stock. Pursuant to the May I Underwriting Agreement, the Company also granted the Underwriters a May I Option to purchase an additional 19,191 shares of common stock. On May 12, 2025, the Company issued the firm May I Securities and closed the May I Offering at a public price of $6.80 per share, for net proceeds to the Company of approximately $700,400, after deducting underwriting discounts, commissions and estimated offering expenses payable by the Company. On May 14, 2025, the Underwriter partially exercised its May I Option and purchased an additional 15,441 shares of common stock at a price of $6.80 per share, before deducting underwriting discounts. The issuance by the Company of the May I Option Securities resulted in total gross proceeds of approximately $104,999, before deducting underwriting discounts, commissions, and other offering expenses payable by the Company. The Company utilized the net proceeds of the May I Offering for working capital and general corporate purposes, as well as to repay a portion of the Company's indebtedness.

*Yield Point Equity Line of Credit*

On July 10, 2025 (the "YP Execution Date"), the Company, entered into an equity purchase agreement (the "YP Equity Purchase Agreement," or "YP ELOC") with Yield Point. Under the YP Equity Purchase Agreement, the Company has the right, but not the obligation, to direct Yield Point to purchase up to $20,000,000 (the "Maximum Commitment Amount") in shares of common stock of the Company upon satisfaction of certain terms and conditions contained in the YP Equity Purchase Agreement, including, without limitation, an effective registration statement filed with SEC registering the resale of the shares of Put Stock (defined below) and the shares of Commitment Stock (defined below) and additional shares to be sold to Yield Point from time to time under the YP Equity Purchase Agreement. The term of the YP Equity Purchase Agreement began on the YP Execution Date and ends on the earlier of (i) the date on which Yield Point shall have purchased shares of common stock issued, or that the Company shall be entitled to issue, per any applicable Put Notice in accordance with the terms and conditions of the YP Equity Purchase Agreement (the "Put Stock") equal to the Maximum Commitment Amount (as defined in the YP Equity Purchase Agreement), (ii) the date that is thirty-six (36) months from the date the registration statement is declared effective, (iii) written notice of termination by the Company to Yield Point (which shall not occur at any time that Yield Point holds any of the shares of Put Stock, or within 30 days of the sale to Yield Point of Put Stock), or (iv) written notice of termination by Yield Point to the Company (the "Commitment Period"). There was no activity under the YP ELOC during the three and nine months ended September 30, 2025.

*Hudson ELOC*

On February 14, 2025, the Company entered into an equity purchase agreement (the "Hudson Equity Purchase Agreement") with Hudson Global Ventures, LLC, a Nevada limited liability company ("Hudson"). Pursuant to the Hudson Equity Purchase Agreement, the Company had the right, but not the obligation, to sell to Hudson, and Hudson is obligated to purchase, up to $2.9 million of newly issued shares (the "Hudson Total Commitment") of the Company's common stock, from time to time during the term of the Hudson Equity Purchase Agreement, subject to certain limitations and conditions (the "Hudson Offering" or "Hudson ELOC"). As consideration for Hudson's commitment to purchase shares of common stock under the Hudson Purchase Agreement, the Company issued to Hudson 7,500 shares of common stock, valued at $159,000, following the execution of the Hudson Equity Purchase Agreement (the "Hudson Commitment Shares").

From and after the initial satisfaction of the conditions to our right to commence sales to Hudson under the Hudson Equity Purchase Agreement (such event, the "Hudson Commencement," and the date of initial satisfaction of all such conditions, the "Hudson Commencement Date"), the Company was able to direct Hudson to purchase shares of common stock at a purchase price per share equal to the lesser of (i) 92% of the closing price of the Company's common stock, as listed on Nasdaq, on the trading day immediately preceding the respective Put Date (the "Hudson Initial Purchase Price"), or (ii) 92% of the lowest closing price of the Company's common stock on the Nasdaq Capital Market on any trading day during the period beginning on the Put Date (as defined in the Hudson Purchase Agreement) and continuing through the date that is three trading days immediately following the Clearing Date (as defined in the Hudson Purchase Agreement) associated with the applicable Hudson Put Notice (such three trading day period is the "Hudson Valuation Period", and the price is the "Hudson Market Price"), on such date on which the Hudson Purchase Price is calculated in accordance with the terms of the Hudson Equity Purchase Agreement. The Company controlled the timing and amount of any such sales of common stock to Hudson.

During the three and nine months ended September 30, 2025 the Company sold zero and 17,925 shares of common stock, respectively, under the Hudson ELOC at an average per share price of $13.60, raising net proceeds totaling $231,000. The Hudson Equity Purchase Agreement was terminated effective May 8, 2025. The Company utilized the net proceeds from the Hudson Offering for working capital and general corporate purposes, including sales and marketing activities, product development and capital expenditures.

**Contractual Obligations and Off-Balance Sheet Commitments and Arrangements**

As of September 30, 2025, except as disclosed elsewhere herein, we had no significant commitments for capital expenditures, nor do we have any committed lines of credit, other committed funding or long-term debt, and no guarantees. As of September 30, 2025 we maintain approximately 200 square feet of office space which is leased on an annual basis at a rate of approximately $3,000 per month.

We have not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as stockholders' (deficit) equity or that are not reflected in our condensed financial statements included elsewhere herein. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us.

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**Contingencies**

Certain conditions may exist as of the date the condensed financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company's management, in consultation with its legal counsel as appropriate, assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company, in consultation with legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company's condensed financial statements. If the assessment indicates a potentially material loss contingency is not probable, but is reasonably possible, or is probable, but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

**Recent Accounting Pronouncements**

Refer to Note 2 to the accompanying condensed financial statements contained elsewhere in this Report.

**Critical Accounting Estimates**

Our unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. Preparation of these condensed statements requires management to make judgments and estimates. Some accounting policies have a significant impact on amounts reported in these condensed financial statements. The SEC has defined a company's critical accounting policies as the ones that are most important to the portrayal of a company's financial condition and results of operations, and which require a company to make its most difficult and subjective judgments. A summary of significant accounting policies and a description of accounting policies that are considered critical may be found in the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024, as amended, filed with the SEC on March 31, 2025. In addition, refer to Note 2 to the condensed financial statements included in this Report. The following accounting policies were identified during the current period, based on activities occurring during the current period, as critical and requiring significant judgments and estimates.

*Revenue Recognition*

The Company generates revenue from (i) innovative advertising including immersive game world and experience publishing and in-game media products, (ii) content and technology through the production and distribution of our own, advertiser and third-party content, and (iii) direct to consumer offers, including in-game items, e-commerce, game passes and digital collectibles.

Revenue is recognized when the Company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services and when the customer obtains control of the goods or services. In this regard, revenue is recognized when: (i) the parties to the contract have approved the contract (in writing, orally, or in accordance with other customary business practices) and are committed to perform their respective obligations; (ii) the entity can identify each party's rights regarding the goods or services to be transferred; (iii) the entity can identify the payment terms for the goods or services to be transferred; (iv) the contract has commercial substance (that is, the risk, timing, or amount of the entity's future cash flows is expected to change as a result of the contract); and (v) it is probable that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.

We make estimates and judgments when determining whether we will collect substantially all of the consideration to which we will be entitled in exchange for the goods or services that will be transferred to the customer. We assess the collectability of receivables based on several factors, including past transaction history and the creditworthiness of our customers. If it is determined that collection is not reasonably assured, amounts due are recognized when collectability becomes reasonably assured, assuming all other revenue recognition criteria have been met, which is generally upon receipt of cash for transactions where collectability may have been an issue. Management's estimates regarding collectability impact the actual revenue recognized each period and the timing of the recognition of revenue. Our assumptions and judgments regarding future collectability could differ from actual events and thus materially impact our financial position and results of operations.

Depending on the complexity of the underlying revenue arrangement and related terms and conditions, significant judgments, assumptions and estimates may be required to determine each party's rights regarding the goods or services to be transferred, each party's performance obligations, whether performance obligations are satisfied at a point in time or over time, estimates of completion methodologies, the timing of satisfaction of performance obligations, whether we are a principal or agent in the arrangement and the appropriate period or periods in which, or during which, the completion of the earnings process and transfer of control occurs. Depending on the magnitude of specific revenue arrangements, if different judgments, assumptions and estimates are made regarding revenue arrangements in any specific period, our periodic financial results may be materially affected.

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*Fair Value Option (*"*FVO*"*) Election*

The Company accounted for certain promissory notes issued, as described at Note 5, under the fair value option election pursuant to ASC 825, "Financial Instruments," ("ASC 825") as discussed below. The promissory notes accounted for under the FVO election are each debt host financial instruments containing embedded features which would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements under ASC 815. Notwithstanding, ASC 825 provides for the "fair value option" election, to the extent not otherwise prohibited by ASC 825, to be afforded to financial instruments, wherein bifurcation of an embedded derivative is not necessary, and the financial instrument is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. The estimated fair value adjustments, subsequent to the issuance date, as required by ASC 825, are recognized as a component of other comprehensive income ("OCI") with respect to the portion of the fair value adjustment attributed to a change in the instrument-specific credit risk, with the remaining amount of the fair value adjustment recognized as other income (expense) in the accompanying condensed statements of operations. With respect to the promissory notes described at Note 5, as provided for by ASC 825, the estimated fair value adjustments are presented in a respective single line item within other income (expense) in the accompanying condensed statements of operations, since the change in fair value of the convertible notes payable was not attributable to instrument specific credit risk. The estimated fair value adjustment is included in interest expense in the accompanying condensed statements of operations.

The fair value of the promissory notes described at Note 5 was estimated based on a calculation of the present value of the related cash flows (i.e. payments of principal and interest based on contractual agreement terms) using a discount rate that reflected market rates and related credit risk. The FVO was elected for the promissory notes described at Note 5 due to the short term nature of the promissory notes and to provide relevant and timely information regarding the current market value of the debt, which is marked to market at each balance sheet date reflecting the effects of market fluctuations and other factors.

Significant judgements and estimates may be required in connection with the determination of whether or not to elect the FVO for specific assets and/or liabilities. In addition, significant judgements and estimates may be required in connection with the determination of appropriate discount rates utilized in connection with present value related valuation techniques. Discount rate assumptions typically reflect the estimated yield to maturity of the debt instrument, incorporating the estimated market-implied rate of return an investor would receive if they held the debt until maturity, and taking into account all future cash flows and the current market price; adjusted for credit risk and market conditions. In addition, judgements and estimates are required in connection with the determination of the portion of subsequent fair value adjustments relate to instrument-specific credit risk, which are reflected in OCI, and the portion of subsequent fair value adjustments that relate to changes in interests rates or other variables, which are reflected in the condensed statements of operations. Variations in any of these judgements and estimates could have a material impact on our financial results.

*Determination of Fair Value* – *Warrants*

During the period presented the Company issued certain common stock purchase warrants ("Warrants") as described at Note 5 and 6 to the condensed financial statements. The fair value of warrants are determined using a Black Scholes option price model, measured using Level 3 inputs. The fair value of the warrants described above was estimated using the Black-Scholes-Merton option pricing model and the following weighted-average assumptions for the applicable dates:

Significant judgements and estimates may be required in connection with determining the classification of warrants between liabilities and equity, as well as in connection with the assumptions utilized for the expected volatility, risk free interest rate and term in the Black Scholes calculations used to value warrants outstanding at each balance sheet date, if liability classified. Variations in any of these judgements and estimates could have a material impact on our financial results.

**Relaxed Ongoing Reporting Requirements**

We qualify to report as a "smaller reporting company" (as defined in Rule 12b-2) under the reporting rules set forth under the Exchange Act. For so long as we remain an "smaller reporting company," we may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not "smaller reporting companies," including but not limited to not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, and being permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.

We are subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not "smaller reporting company," and our stockholders could receive less information than they might expect to receive from more mature public companies.

We expect to take advantage of these reporting exemptions until we are no longer a smaller reporting company.

Upon the completion of our initial public offering in February 2019, we elected to report as an "emerging growth company" (as defined in the JOBS Act) under the reporting rules set forth under the Exchange Act, which allowed us to take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not "emerging growth companies," including but not limited to:

● not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;

● taking advantage of extensions of time to comply with certain new or revised financial accounting standards;

● being permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and

● being exempt from the requirement to hold a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We were eligible to remain an "emerging growth company" for five years from the date of our initial public offering, and as such, ceased being an "emerging growth company" as of December 31, 2024. However, as described above we continue to be a "smaller reporting company."

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| | |
|:---|:---|
| **ITEM 3.**  | **QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS** |

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In the ordinary course of our business, we are not currently exposed to market risk of the sort that may arise from changes in interest rates or foreign currency exchange rates, or that may otherwise arise from transactions in derivatives.

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| | |
|:---|:---|
| **ITEM 4.**  | **CONTROLS AND PROCEDURES** |

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**Disclosure Controls and Procedures**

As required by Rule 13a-15(b) under the Exchange Act, our Chief Executive Officer ("CEO") and our Chief Financial Officer ("CFO") conducted an evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on that evaluation, our CEO and our CFO each concluded that our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act, (i) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and (ii) is accumulated and communicated to our management, including our CEO and our CFO, as appropriate to allow timely decisions regarding required disclosure.

**Changes in Internal Control Over Financial Reporting**

There were no changes in our internal control over financial reporting identified in management's evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Report that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**PART II**

**OTHER INFORMATION**

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| | |
|:---|:---|
| **ITEM 1.**  | **LEGAL PROCEEDINGS** |

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None.

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| | |
|:---|:---|
| **ITEM 1A.**  | **RISK FACTORS** |

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*Management is not aware of any material changes to the risk factors discussed in Part 1, Item 1A, of the Annual Report on Form 10-K for the year ended December 31, 2024, as amended. In addition to other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors discussed in Part 1, Item 1A, of the Annual Report on Form 10-K for the year ended December 31, 2024, as amended, and subsequent reports filed pursuant to the Exchange Act which could materially and adversely affect the Company*'*s business, financial condition, results of operations, and stock price. The risks described in the Annual Report on Form 10-K and subsequent reports filed pursuant to the Exchange Act are not the only risks facing the Company. Additional risks and uncertainties not presently known to management, or that management presently believes not to be material, may also result in material and adverse effects on our business, financial condition, and results of operations.*

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| | |
|:---|:---|
| **ITEM 2.** | **UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS** |

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No unregistered securities were issued during the three months ended September 30, 2025 that were not previously reported.

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| | |
|:---|:---|
| **ITEM 3.** | **DEFAULTS UPON SENIOR SECURITIES** |

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None.

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| | |
|:---|:---|
| **ITEM 4.** | **MINE SAFETY DISCLOSURES** |

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Not applicable.

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| | |
|:---|:---|
| **ITEM 5.** | **OTHER INFORMATION** |

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Effective November 13, 2025, Jeff Gehl resigned as a Class II member of the Board of Directors of the Company. Mr. Gehl's resignation was not due to any disagreements with respect to the Company's operations, policies or practices. Mark Jung, a Class III member of the Board of Directors of the Company, was appointed as interim Chairman of the Audit Committee on November 13, 2025 in connection with Mr. Gehl's resignation.

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| | |
|:---|:---|
| **ITEM 6.** | **EXHIBITS** |

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(b) Exhibits

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| | | |
|:---|:---|:---|
| **Exhibit** |  |  |
| **No.** | **Description** | **Incorporation by Reference** |
| 3.1 | [<u>Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation, as amended</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925025983/ex_850439.htm) | Exhibit 3.7 to the Registration Statement, filed August 11, 2025 |
| 3.2 | [<u>Third Amended and Restated Certificate of Incorporation of Super League Enterprise, Inc.</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925031490/ex_874287.htm) | Exhibit 3.1 to the Current Report on Form 8-K filed on October 22, 2025 |
| 3.3 | [<u>Certificate of Designation of Preferences, Rights and Limitations of the Series AAAA Jr.</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925022635/ex_838433.htm) | Exhibit 3.1 to the Current Report on Form 8-K filed on July 14, 2025 |
| 3.4 | [<u>Certificate of Designation of Preferences, Rights and Limitations of the Series B Preferred</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925029401/ex_862749.htm) | Exhibit 3.1 to the Current Report on Form 8-K filed on September 18, 2025 |
| 3.5 | [<u>Certificate of Designation of Preferences, Rights and Limitations of the Series C Convertible Preferred Stock</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925031490/ex_874288.htm) | Exhibit 3.2 to the Current Report on Form 8-K filed on October 22, 2025 |
| 4.1 | [<u>Pre-Funded Warrant, dated July 10, 2025, issued to Agile Capital Funding, LLC</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925022635/ex_838383.htm) | Exhibit 4.1 to the Current Report on Form 8-K filed on July 14, 2025 |
| 4.2 | [<u>Form of Pre-Funded Warrant</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925022635/ex_838384.htm) | Exhibit 4.2 to the Current Report on Form 8-K filed on July 14, 2025 |
| 4.3 | [<u>Convertible Promissory Note, dated July 10, 2025, issued to Yield Point NY, LLC by Super League Enterprise, Inc.</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925022635/ex_838385.htm) | Exhibit 4.3 to the Current Report on Form 8-K filed on July 14, 2025 |
| 4.3 | [<u>Common Stock Purchase Warrant, issued to Yield Point NY, LLC by Super League Enterprise, Inc.</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925022635/ex_838386.htm) | Exhibit 4.4 to the Current Report on Form 8-K filed on July 14, 2025 |
| 4.4 | [<u>Amended and Restated Unsecured Promissory Note issued by Super League Enterprise, Inc. to Belleau Wood Capital, LP, on August 11, 2025</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925027014/ex_853198.htm) | Exhibit 4.2 to the Quarterly Report on Form 10-Q filed on August 14, 2025 |
| 4.5 | [<u>Form of October 2025 Pre-Funded Warrant to Purchase Common Stock</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925031490/ex_874282.htm) | Exhibit 4.1 to the Current Report on Form 8-K filed on October 22, 2025 |
| 4.6 | [<u>Form of October 2025 Common Stock Purchase Warrant</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925031490/ex_874283.htm) | Exhibit 4.2 to the Current Report on Form 8-K filed on October 22, 2025 |
| 4.7 | [<u>Form of Series B Common Stock Purchase Warrant</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925031490/ex_874284.htm) | Exhibit 4.3 to the Current Report on Form 8-K filed on October 22, 2025 |
| 10.1 | [<u>Exchange Agreement, dated July 7, 2025, by and between Super League Enterprise, Inc. and the Michael Keller Trust</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925022594/ex_838153.htm) | Exhibit 10.1 to the Current Report on Form 8-K filed on July 7, 2025 |
| 10.2 | [<u>Exchange Agreement, dated July 8, 2025 by and between Super League Enterprise, Inc., and Benjamin Khakshoor</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925022635/ex_838387.htm) | Exhibit 10.1 to the Current Report on Form 8-K filed on July 14, 2025 |
| 10.3 | [<u>Exchange Agreement, dated July 8, 2025 by and between Super League Enterprise, Inc., and Samuel Drozdov</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925022635/ex_838388.htm) | Exhibit 10.2 to the Current Report on Form 8-K filed on July 14, 2025 |
| 10.4 | [<u>Exchange Agreement, dated July 8, 2025 by and between Super League Enterprise, Inc., and Firepit Partners Co.</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925022635/ex_838389.htm) | Exhibit 10.3 to the Current Report on Form 8-K filed on July 14, 2025 |
| 10.5 | [<u>Exchange Agreement, dated July 10, 2025 by and among Super League Enterprise, Inc., Agile Capital Funding, LLC, and Agile Lending, LLC.</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925022635/ex_838390.htm) | Exhibit 10.4 to the Current Report on Form 8-K filed on July 14, 202525 |
| 10.6 | [<u>Equity Purchase Agreement dated July 10, 2025 by and between the Company and YieldPoint NY, LLC</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925022635/ex_838391.htm) | Exhibit 10.5 to the Current Report on Form 8-K filed on July 14, 2025 |
| 10.7 | [<u>Registration Rights Agreement dated July 10, 2025 by and between the Company and YieldPoint NY, LLC</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925022635/ex_838392.htm) | Exhibit 10.6 to the Current Report on Form 8-K filed on July 14, 2025 |
| 10.8 | [<u>Securities Purchase Agreement dated July 10, 2025, by and between the Company and Yield Point NY, LLC</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925022635/ex_838393.htm) | Exhibit 10.7 to the Current Report on Form 8-K filed on July 14, 2025 |
| 10.9 | [<u>Registration Rights Agreement, dated July 10, 2025, by and between the Company and Yield Point NY, LLC</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925022635/ex_838394.htm) | Exhibit 10.8 to the Current Report on Form 8-K filed on July 14, 2025 |
| 10.8 | [<u>Security Agreement, dated July 10, 2025, by and between the Company and Yield Point NY, LLC</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925022635/ex_838395.htm) | Exhibit 10.9 to the Current Report on Form 8-K filed on July 14, 2025 |
| 10.9 | [<u>Form of Exchange Agreement by and between Super League Enterprise, Inc., and certain Preferred Stockholders</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925029401/ex_862748.htm) | Exhibit 10.1 to the Current Report on Form 8-K filed on September 18, 2025 |

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| | | |
|:---|:---|:---|
| 10.10 | [<u>Amendment No. 1 to Secured Convertible Promissory Note, dated September 30, 2025, by and between Super League Enterprise, Inc., and Yield Point NY, LLC</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925030112/ex_865389.htm) | Exhibit 10.1 to the Current Report on Form 8-K filed on September 30, 2025 |
| 10.11\* | [<u>Amendment No. 1 to the Super League Enterprise, Inc. 2025 Omnibus Equity Incentive Plan</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925030352/slgg20251002_def14a.htm#annexi) | Annex I to the Definitive Proxy Statement on Schedule 14A filed on October 2, 2025 |
| 10.12 | [<u>Form of October 2025 Securities Purchase Agreement</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925031490/ex_874285.htm) | Exhibit 10.1 to the Current Report on Form 8-K filed on October 22, 2025 |
| 10.13 | [<u>Form of October 2025 Registration Rights Agreement</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925031490/ex_874286.htm) | Exhibit 10.2 to the Current Report on Form 8-K filed on October 22, 2025 |
| 10.14 | [<u>Exchange Agreement, dated October 22, 2025, by and between Super League Enterprise, Inc., and Yield Point NY, LLC</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925031490/ex_874289.htm) | Exhibit 10.3 to the Current Report on Form 8-K filed on October 22, 2025 |
| 10.15 | [<u>Exchange Agreement, effective October 22, 2025, by and between Super League Enterprise and Belleau Wood Capital, LP</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925031490/ex_874290.htm) | Exhibit 10.4 to the Current Report on Form 8-K filed on October 22, 2025 |
| 10.16 | [<u>Placement Agency Agreement, dated October 22, 2025, by and between Super League Enterprise and Aegis Capital Corp.</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925031490/ex_874291.htm) | Exhibit 10.5 to the Current Report on Form 8-K filed on October 22, 2025 |
| 10.17 | [<u>Placement Agency Agreement, dated October 22, 2025, by and between Super League Enterprise and Aegis Capital Corp.</u>](http://www.sec.gov/Archives/edgar/data/1621672/000143774925032022/ex_877377.htm) | Exhibit 10.3 to the Current Report on Form 8-K filed on October 28, 2025 |
| 31.1 | [Certification of <u>the Principal</u> <u>Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</u>](ex_881150.htm) |  |
| 31.2 | [Certification of the Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex_881151.htm) |  |
| 32.1 | [Certification of <u>the Principal</u> <u>Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</u>](ex_881152.htm) |  |
| 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. |  |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |  |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |  |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |  |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |  |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |  |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL Document and included in Exhibit 101) |  |

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\* Indicates management contract or compensatory plan

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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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| | |
|:---|:---|
| SUPER LEAGUE ENTERPRISE, INC. | SUPER LEAGUE ENTERPRISE, INC. |
| By | /s/ Matt Edelman |
|  | Matt Edelman<br> *Chief Executive Officer*<br> *(Principal Executive Officer)* |

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| | | |
|:---|:---|:---|
|  | By | /s/ Clayton Haynes |
|  |  | Clayton Haynes<br> *Chief Financial Officer*<br> *(Principal Financial and Accounting Officer)* |
| Date: November 14, 2025 |  |  |

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## Exhibit 31.1

**EXHIBIT 31.1**

**CERTIFICATION PURSUANT TO RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934**

**AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Matt Edelman, Chief Executive Officer of Super League Enterprise, Inc., certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q of Super League Enterprise, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

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| | |
|:---|:---|
|  | */s/ Matt Edelman* |
| Date: November 14, 2025 | Matt Edelman<br> Chief Executive Officer<br> (Principal Executive Officer) |

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## Exhibit 31.2

**EXHIBIT 31.2**

**CERTIFICATION PURSUANT TO RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934**

**AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Clayton Haynes, Chief Financial Officer of Super League Enterprise, Inc., certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q of Super League Enterprise, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

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| | |
|:---|:---|
|  | */s/ Clayton Haynes* |
| Date: November 14, 2025 | Clayton Haynes<br> Chief Financial Officer<br> (Principal Financial and Accounting Officer) |

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## Exhibit 32.1

**EXHIBIT 32.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of Super League Enterprise, Inc. (the "Company") on Form 10-Q for the period ended September 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Ann Hand, Chief Executive Officer of the Company, and Clayton Haynes, Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

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| | |
|:---|:---|
| Date: November 14, 2025 | */s/ Matt Edelman* |
|  | Matt Edelman<br> Chief Executive Officer<br> (Principal Executive Officer) |
|  | /s/ *Clayton Haynes* |
|  | Clayton Haynes<br> Chief Financial Officer<br> (Principal Financial and Accounting Officer) |

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