# EDGAR Filing Document

**Accession Number:** 0001829966
**File Stem:** 0001683168-23-000186
**Filing Date:** 2023-1
**Character Count:** 283174
**Document Hash:** 57acd69de79f08a9e615faafbde345e1
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001683168-23-000186.hdr.sgml**: 20230113

**ACCESSION NUMBER**: 0001683168-23-000186

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 76

**CONFORMED PERIOD OF REPORT**: 20220930

**FILED AS OF DATE**: 20230113

**DATE AS OF CHANGE**: 20230113

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** EBET, Inc.
- **CENTRAL INDEX KEY:** 0001829966
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-AMUSEMENT & RECREATION SERVICES [7900]
- **IRS NUMBER:** 853201309
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 0930

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-40334
- **FILM NUMBER:** 23529108

**BUSINESS ADDRESS:**
- **STREET 1:** 3960 HOWARD HUGHES PARKWAY, SUITE 500
- **CITY:** LAS VEGAS
- **STATE:** NV
- **ZIP:** 89169
- **BUSINESS PHONE:** 888-411-2726

**MAIL ADDRESS:**
- **STREET 1:** 3960 HOWARD HUGHES PARKWAY, SUITE 500
- **CITY:** LAS VEGAS
- **STATE:** NV
- **ZIP:** 89169

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Esports Technologies, Inc.
- **DATE OF NAME CHANGE:** 20210309

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** eSports Technologies, Inc.
- **DATE OF NAME CHANGE:** 20201026

?xml version="1.0" encoding="utf-8"?

[**Table of Contents**](#toc_10k21)

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C., 20549** 

**FORM 10-K**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**☒** **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

**For the fiscal year ended September 30, 2022**

**OR**

**☐** **TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

For the transition period from _________________ to ___________________

**Commission File Number: 001-40334**

**EBET, Inc.**

**(Exact Name of Registrant as Specified in its Charter)**

---

| | |
|:---|:---|
| **Nevada** | **85-3201309** |
| **(State or Other Jurisdiction of**<br> **Incorporation or Organization)** | **(I.R.S. Employer Identification No.)** |

---

**3960 Howard Hughes Parkway, Suite 500, Las Vegas, NV 89169**

**(Address of Principal Executive Offices) (Zip Code)** 

**Registrant's Telephone Number, including Area Code: (888) 411-2726**

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

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock | EBET | The NASDAQ Stock Market LLC |

---

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.&nbsp;&nbsp;&nbsp;&nbsp;Yes **☐**&nbsp;&nbsp;&nbsp;&nbsp;No **☒**

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.&nbsp;&nbsp;&nbsp;&nbsp;Yes **☐&nbsp;&nbsp;&nbsp;&nbsp;**No **☒**

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 periods as the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.&nbsp;&nbsp;&nbsp;&nbsp;Yes **☒**&nbsp;&nbsp;&nbsp;&nbsp;No **☐**

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).&nbsp;&nbsp;&nbsp;&nbsp;Yes **☒**&nbsp;&nbsp;&nbsp;&nbsp;No **☐**

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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. (check one)

---

| | |
|:---|:---|
| 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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. **☐**

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).&nbsp;&nbsp;&nbsp;&nbsp;YES **☐**&nbsp;&nbsp;&nbsp;&nbsp;No **☒**

The aggregate market value of the registrant's voting equity held by non-affiliates of the registrant, computed by reference to the price at which the common stock was last sold as of the last business day of the registrant's most recently completed second fiscal quarter, was $93,821,791. In determining the market value of the voting equity held by non-affiliates, securities of the registrant beneficially owned by directors, officers and 10% or greater shareholders of the registrant have been excluded. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

The number of shares of the registrant's common stock outstanding as of January 10, 2023 was 17,275,323.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of this registrant's definitive proxy statement for its 2022 Annual Meeting of Stockholders to be filed with the SEC no later than 120 days after the end of the registrant's fiscal year are incorporated herein by reference in Part III of this Annual Report on Form 10-K.

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
|  |  | Page |
| [**PART I**](#k22_1) |  |  |
| ITEM 1. | [Business](#k22_2) | 1 |
| ITEM 1A. | [Risk Factors](#k22_23) | 6 |
| ITEM 1B. | [Unresolved Staff Comments](#k22_4) | 19 |
| ITEM 2. | [Properties](#k22_5) | 19 |
| ITEM 3. | [Legal Proceedings](#k22_6) | 20 |
| ITEM 4. | [Mine Safety Disclosures](#k22_7) | 20 |
| [**PART II**](#k22_34) |  |  |
| ITEM 5. | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#k22_24) | 21 |
| ITEM 6. | [Selected Financial Data](#k22_25) | 21 |
| ITEM 7. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#k22_7) | 21 |
| ITEM 7A. | [Quantitative and Qualitative Disclosures About Market Risks](#k22_27) | 28 |
| ITEM 8. | [Financial Statements and Supplementary Data](#k22_28) | 28 |
| ITEM 9. | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#k22_29) | 29 |
| ITEM 9A. | [Controls and Procedures](#k22_30) | 29 |
| ITEM 9B. | [Other Information](#k22_31) | 30 |
| [**PART III**](#k22_35) |  |  |
| ITEM 10. | [Directors, Executive Officers and Corporate Governance](#k22_16) | 31 |
| ITEM 11. | [Executive Compensation](#k22_17) | 31 |
| ITEM 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#k22_18) | 31 |
| ITEM 13. | [Certain Relationships and Related Transactions, and Director Independence](#k22_19) | 31 |
| ITEM 14. | [Principal Accountant Fees and Services](#k22_20) | 31 |
| [**PART IV**](#k22_36) |  |  |
| ITEM 15. | [Exhibits, Financial Statement Schedules](#k22_21) | 32 |
| Exhibit Index |  | 32 |
| ITEM 16. | [10-K Summary](#k22_32) | 34 |
| [Signatures](#k22_33) |  | 35 |

---

i

References in this Form 10-K to "we", "us", "its", "our" or the "Company" are to EBET, Inc., as appropriate to the context.

**Cautionary Statement About Forward-Looking Statements**

We make forward-looking statements under the "Risk Factors," "Business," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and in other sections of this report. In some cases, you can identify these statements by forward-looking words such as "may," "might," "should," "would," "could," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "potential" or "continue," and the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. In particular, you should consider the numerous risks and uncertainties described under "Risk Factors".

While we believe we have identified material risks, these risks and uncertainties are not exhaustive. Other sections of this report may describe additional factors that could adversely impact our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements after the date of this report to conform our prior statements to actual results or revised expectations, and we do not intend to do so.

Forward-looking statements include, but are not limited to, statements about:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· our ability to successfully incorporate the acquired assets from Aspire Global;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· our ability to maintain compliance with our debt
 obligations (or obtain future waivers from such compliance) including but not limited to third party invoices as they become
 due;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· our ability to obtain additional funding to develop additional services and offerings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· compliance with obligations under intellectual property licenses with third parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· market acceptance of our new offerings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· competition from existing online offerings or new offerings that may emerge;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· our ability to establish or maintain collaborations, licensing or other arrangements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· our ability and third parties' abilities to protect intellectual property rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· our ability to adequately support future growth; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· our ability to attract and retain key personnel to manage our business effectively.

We caution you not to place undue reliance on the forward-looking statements, which speak only as of the date of this report in the case of forward-looking statements contained in this report.

You should not rely upon forward-looking statements as predictions of future events. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements. Although we believe that the expectations reflected in the forward looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, you should not rely on any of the forward-looking statements. In addition, with respect to all of our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

ii

**PART I**

**Item 1.** **Business.**

**Overview**

We operate platforms to provide a real money online gambling experience focused on i-gaming including casino, sportsbook and esports events. The Company operates under a Curacao gaming sublicense and under a strategic partnership with Aspire Global plc ("Aspire") allowing EBET to provide online betting services to various countries around the world.

**Acquisition of Aspire Global Plc's ("Aspire") Business to Consumer ("B2C") Business**

In order to accelerate the growth and expand market access for our esports product offerings, on November 29, 2021, we acquired Aspire's B2C Business, for €65,000,000 payable as follows: (i) a cash amount of €50,000,000; (ii) €10,000,000, payable in accordance with the terms of an unsecured subordinated promissory note; and (iii) 186,838 shares of our common stock, which were valued at €5,000,000.

The acquisition of Aspire's B2C business provides the following strategic benefits:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· ownership of Aspire's portfolio of B2C proprietary online casino and sportsbook brands consisting of Karamba, Hopa, Griffon Casino, BetTarget, Dansk777, and GenerationVIP;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· market access for our esports products in key regulated markets including the United Kingdom, Germany, Ireland, Malta, and Denmark, among others, allowing us to cross-sell esports wagering opportunities in the future, to the extent the Company elects to proceed with development of esports products in the future, if ever;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· enhanced strategic partnership with Aspire who provides the online gaming platform and a managed services offering, including customer service, customer on-boarding and payment processing ensuring operational stability and continuity.

Our gaming sub-license from the Curacao Gaming Authority and the licenses made available to us from the acquisition of the Aspire B2C business allows us to accept wagers from residents of more than 160 jurisdictions.

*Focus on i-Gaming Operations*

 

During the quarter ending September 30, 2022, the Company took significant measures to reduce expenses, halt further development of its esports products and platform, and increase the profitability of its business in the short term. These actions include optimizing the efficiency of marketing campaigns, reducing the total number of employees and contractors by approximately 45 positions, terminating software and other immaterial contracts as well as generally reducing the operating costs of the business. While these efforts focus on the goal of attaining profitability of the Company's business, it is likely to reduce overall revenue growth in the short to medium term. These efforts have also resulted in an increased focus on the Company's i-gaming business and the halting of further investment in the Company's esports products and technologies. As a result of the Company's actions as referenced above, it does not expect to launch its esports products in the foreseeable future.

The Company recorded a restructuring charge of approximately $1.0 million that included severance and other costs associated with termination of the employment contracts, consultant contracts and any costs to terminate software licenses and other commitments. Of these costs, $388,000 are included in general and administrative expenses, $521,000 are included in Product and technology expenses, and $130,000 are included in sales and marketing expenses. In connection with the preparation of the financial statements for inclusion in this annual report, the Company completed an impairment review of its property and equipment and intangible assets related to the Company's esports product and technologies and recognized an impairment loss of $3.9 million.

**Market for i-Gaming Gambling**

Online gambling has been legalized by various countries globally owing to employment opportunities and more tax revenue for local and state governments. According to H2 Gambling Capital, the European online gambling market was valued at EUR 35.5 billion for 2021, and is forecasted to be EUR 38.2 billion for 2022, an 8% annual increase. The European online gambling market is also expected to reach EUR 54.3 billion by 2027. According to GrandView Research the global online gambling (i-gaming) market is expected to reach USD $153.6 billion by 2030, potentially registering a compound annual growth rate ("CAGR") of 11.7% from 2022 to 2030. The growing consumer adoption of betting apps and free to play models in online gambling are among major factors expected to drive market growth in the coming years. The development can be ascribed to the legalization of gambling in various European countries, including UK, Italy, Malta, France, Spain, and Germany. Other regions such as the US, Canada and Asia are recording higher CAGR figures.

Increased smartphone and internet penetration and easy access to casino gaming platforms is positively influencing the market statistics. Moreover, the availability of cost-effective betting applications is expected to favor the market growth over the forecast period. Online casino and sportsbook operators emphasize developing information solutions that support and assist gamblers, safeguard the authenticity of gambling activities, and prevent fraudulent activities. Online gambling sites offer a free-play version of their games, creating growth potential for the business.

The COVID-19 pandemic played a crucial role in expediting the online gambling demand as people spent most of their time indoors and opted for online games for their leisure. Additionally, the availability of secure options for digital payment is also stimulating the adoption of online gambling apps. The market growth may be further accelerated by the increased adoption of digital currency, and other digital payment methods, and websites provided by betting and gambling companies.

**Our Products and Services**

We currently operate 7 online wagering brands, via websites and mobile apps, where we accept deposits and funds from our customers and offer our customers the ability to use those funds to wager on slot and table games, live casino games as well as virtual sport computer simulated games and sportsbetting.

---

| | |
|:---|:---|
| ![](image_001.jpg) | ![](image_002.jpg) |
| ![](image_003.jpg) | ![](image_004.jpg) |

---

**Our Technology and Product Development**

In order to create the best real-money wagering experience for our customers, we are developing a new front-end framework for our brands, which will be initially rolled out for Karamba but then to all our brands. This new framework will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Provide our customers with a much improved user experience;

· Increase customer acquisition and conversion rates

· Optimize and increase customer retention metrics.

**Our Intellectual Property and License Agreements**

Although not a primary focus at this time, we intend to continue to develop our own intellectual property in the form of new esports predictive gaming models, predictive consolidated data feeds, bet matching engines, and the platform and software services that allow distribution to both customers and business partners.

In connection with our strategy, we have filed patent applications for various intellectual property, converted some from provisional to utility patent filings as described below, and we may or may not continue to prosecute these applications going forward:

**Live Streaming Wagering Technology -** On June 23, 2021, we filed a patent application for our technology that enhances the betting experience for sports and esports live streaming events that integrates sports and esports wagering across many of the world's most popular live streaming platforms, including Twitch, YouTube, Amazon TV & Gaming, Facebook Gaming, and Hulu among others.

**Artificial Intelligence-Powered Real-Time Odds Modeling & Simulation System –** On August 19, 2021, we filed a patent application for our technology that uses artificial intelligence to generate odds models for use in a betting algorithm for esports tournaments and various stages of a tournament to generate odds instantly for any number of esports match.

**Electronic Sports Betting Exchange System –** On November 2, 2021, we filed a patent application for our technology for a private betting exchange model that is configured to offer operators and high-volume bettors greater liquidity and improved pricing in an esports betting environment where large bet sizes do not impact market prices.

**Esports Wagering Modeling System and Method in Multiplayer Games –** On November 9, 2021, we filed a new patent application for a system that uses a modified statistical distribution for modeling possible outcomes in battle games involving multiple players and teams. The systems and methods described in the Company's patent application detail the use of this statistical tool to represent the exact score distribution of kills in multiplayer online battle events.

We also license software from third parties which we believe will give us competitive advantages and create valuable and new experiences in the future for customers during their wagering experience.

On September 1, 2020, our wholly owned subsidiary, ESEG Limited, entered into three domain purchase agreements pursuant to which it acquired the following domain names: ***Esportsbook.com, Browserbets.com, esportsgames.com, Esportstechnologies.com, Browserbet.com, Fantasyduel.com*** and ***Esportsgamers.com***.

We also own dozens of trademarks both in the United States and internationally and our trademarks and related brands are central to our operations our online wagering brands. Some of our key trademarks including Karamba, Hopa, Bettarget, Gogawi and derivations thereof.

**Competition**

We operate in the global entertainment and gaming industries and there is intense competition among online gaming and entertainment providers. A number of established, well-financed companies producing online gaming products and services compete with our offerings, and other well-capitalized companies may introduce competitive services.

**Human Capital Resources**

As a multinational technology company with approximately 37 employees and contractors located in 12 countries, our business success is driven by our highly skilled workforce. With our global technology and product team, we are focused on delivering new, innovative and exciting products to our growing base of customers.

We recognize that engaging and developing our employees is a key to our success and we rely on attracting and retaining our talent to deliver on our mission. During the year we have implemented a new human resources system to better understand employees' satisfaction through quarterly performance assessments. These assessments ensure we understand how we can better deliver on our investments in technology and meet our customers' needs.

We also offer our employees a competitive compensation package with health and welfare benefits for our employees and family members. In addition, every employee is eligible for equity awards to share in our financial success.

**Government Regulation**

We are subject to various U.S. and foreign laws and regulations that affect our ability to operate our product offerings. These product offerings are generally subject to extensive and evolving regulations that could change based on political and social norms and that could be interpreted in ways that could negatively impact our business.

Our gaming sub-license from the Curacao Gaming Authority and the licenses made available to us from the acquisition of the Aspire B2C business allows us to accept esports and sports wagers from residents of more than 160 jurisdictions. Our focus is to invest and develop our business in Western Europe, Asia and Latin America. We currently do not have the ability to accept wagers from customers based in the United States.

The gaming industry is highly regulated and we must maintain compliance with licenses and pay gaming taxes or a percentage of revenue where required by the jurisdictions in which we operate in order to continue our operations. Our business is subject to compliance with extensive regulation under the laws, rules and regulations of the jurisdictions in which we operate. These laws, rules and regulations generally concern the responsibility, financial stability, integrity and character of the owners, managers and persons with material financial interests in the gaming operations. Violations of laws or regulations in one jurisdiction could result in disciplinary action in that and other jurisdictions.

***Data Protection and Privacy***

Because we handle, collect, store, receive, transmit and otherwise process certain personal information of our users and employees, we are also subject to federal, state and foreign laws related to the privacy and protection of such data.

With our operations in Europe, we face particular privacy, data security and data protection risks in connection with requirements of the General Data Protection Regulation of the European Union (EU) 2016/679 (the "GDPR") and other data protection regulations. Any failure to comply with these rules may result in regulatory fines or penalties including orders that require us to change the way we process data. In the event of a data breach, we are also subject to breach notification laws in the jurisdictions in which we operate, including the GDPR, and the risk of litigation and regulatory enforcement actions.

Any significant change to applicable laws, regulations, interpretations of laws or regulations, or market practices, regarding the use of personal data, or regarding the manner in which we seek to comply with applicable laws and regulations, could require us to make modifications to our products, services, policies, procedures, notices, and business practices, including potentially material changes. Such changes could potentially have an adverse impact on our business.

 **

 ****

 **

 ****

***Curacao License***

The Curacao Ministry of Justice has only granted four online gaming Master Licenses. Our license is a sublicense from one of the four master license holders, Gaming Services Provider N.V. #365/JAZ. The Curacao Ministry of Justice allows an applicant for a sublicense from a Master License holder to operate under the master license holder's license, so long as they meet certain operating and compliance criteria, including, without limitation, providing quarterly and annual submissions and conducting "know your customer" procedures. These criteria must be met at the stage of application as well as on an ongoing basis. As such, so long as we maintain the requisite criteria for holding the sublicense, as a sublicensee we can enjoy the same privileges and rights that the Master License holder has, but without the ability to issue licenses.

This single sublicense covers any kind of game requiring skill or chance, including esports and sports betting. Additionally, it also allows the operator to carry out and offer services related to i-gaming including aggregators, software providers, and platform operators.

The entities that evaluate our ongoing compliance are the Master License holder and the Curacao Gaming Control Board. There is no set standard, to date, to quantify sanctions. These are reviewed on an individual basis. The framework to suspend a sublicense is based on the severity of the infraction, and include, not paying licensing fees, not adhering to policies or resolving customer issues, and not keeping required "know your customer" procedures up to date. Where direct violations of the sublicense agreement pertain to the compliance with the Master License, suspensions would be enforced until the sublicense holder has submitted all needed information or documents as requested by the Master License holder or the Curacao Gaming Board. In addition, any customer complaints that are not resolved could result in a suspension of our sublicense depending on the severity of the issue. Finally, marketing or accepting players from prohibited countries could result in an immediate suspension of our sublicense. In such case, we would need to show that IP geo blocking of the countries has been implemented and measures put in place to ensure we are not accepting customers from said country moving forward.

***Responsible and Safer Gaming***

We view the safety and welfare of our users as critical to our business and have made appropriate investments in our processes and systems. We are committed to industry-leading responsible gaming practices and seek to provide our users with the resources and services they need to play responsibly.

**Corporate Structure**

EBET, Inc. was formed in Nevada in September of 2020 and currently has wholly-owned subsidiaries in Ireland, Malta, Gibraltar, Israel, Belize, Curacao and Cyprus.

**Available Information**

Our Internet address is <u>ebet.gg</u>. On this website, we post the following filings as soon as reasonably practicable after they are electronically filed with or furnished to the U.S. Securities and Exchange Commission ("SEC"): our Annual Reports on Form 10-K; our Quarterly Reports on Form 10-Q; our Current Reports on Form 8-K; our proxy statements related to our annual stockholders' meetings; and any amendments to those reports or statements. All such filings are available on our website free of charge. The charters of our audit, nominating and governance and compensation committees and our Code of Business Conduct and Ethics Policy are also available on our website and in print to any stockholder who requests them. The content on our website is not incorporated by reference into this Form 10-K.

---

| | |
|:---|:---|
| **Item 1A.** | **Risk Factors.** |

---

*An investment in our securities involves a high degree of risk. You should consider carefully all of the material risks described below, together with the other information contained in this Form 10-K. If any of the following events occur, our business, financial condition, results of operations and cash flows may be materially adversely affected.*

**Risks Related to the Company's Business, Operations and Industry**

***Our completed acquisition of the Aspire assets remains subject to integration risks.***

 ****

On November 29, 2021, we completed our acquisition of Aspire's portfolio of B2C proprietary online casino and sportsbook brands, including Karamba, Hopa, Griffon Casino, BetTarget, Dansk777, and GenerationVIP.

Successful integration of Aspire's operations and personnel into our existing business places an additional burden on management and other internal resources. The diversion of management's attention and any difficulties encountered in the transition and integration process could harm our business, financial condition, results of operations and prospects.

Furthermore, the overall integration of the businesses may result in material unanticipated problems, expenses, liabilities, competitive responses, and loss of customers and other relationships. The difficulties of combining the operations of the companies include, among others, difficulties in conforming procedures, other policies, business cultures and compensation structures, assimilating employees, keeping existing customers and obtaining new customers. Our failure to meet the challenges involved in continuing to integrate the operations of these new assets or to otherwise realize any of the anticipated benefits of the acquisition could adversely impair our business and operations.

***We are party to a Credit Agreement which contains restrictive covenants, and if we are unable to comply with these covenants then upon notice of an event of default and/or event of material adverse effect to lender, the lender could declare a default of the Credit Agreement wherein we would be required to immediately repay the amounts due under the Credit Agreement.***

On November 29, 2021, we entered into a Credit Agreement with CP BF Lending, LLC ("Lender") to finance the acquisition of the Aspire assets that we purchased on the same date, via a term loan in the maximum principal amount of $30.0 million with a maturity of 36 months. The Credit Agreement imposes various restrictions and contains customary affirmative and restrictive covenants, including, without limitation, certain reporting obligations and certain limitations on restricted payments; and limitations on liens, encumbrances and indebtedness. In addition, borrowings under the Credit Agreement are secured by a first priority lien on our assets. If we fail to comply with the covenants or payments specified in the Credit Agreement, the Lender could declare an event of default, which would give it the right to declare all borrowings outstanding, together with accrued and unpaid interest and fees, to be immediately due and payable. In addition, since the borrowings under the Credit Agreement are secured by a first priority lien on our assets, upon such an event of default, the Lender may foreclose on our assets. The amount of our outstanding indebtedness could have an adverse effect on our operations and liquidity, including by, among other things: (i) making it more difficult for us to pay or refinance our debts as they become due during adverse economic and industry conditions, because we may not have sufficient cash flows to make our scheduled debt payments; (ii) causing us to use a larger portion of our cash flows to fund interest and principal payments, thereby reducing the availability of cash to fund working capital, capital expenditures and other business activities; (iii) making it more difficult for us to take advantage of significant business opportunities, such as acquisition opportunities or other strategic transactions, and to react to changes in market or industry conditions; and (iv) limiting our ability to borrow additional monies in the future to fund the activities and expenditures described above and for other general corporate purposes as and when needed, which could force us to suspend, delay or curtail business prospects, strategies or operations. To date, the Company has entered into a series of a total of twelve (12) waiver agreements with the Lender providing for the limited waivers of default as to specific financial and other covenants. The waivers were provided under certain terms and conditions and sometimes included fees accrued to the principal balance amount due Lender under the Credit Agreement, and required the Company to repay $3,000,000 in principal on January 10, 2023. These waivers will expire on January 31, 2023. We do not expect to satisfy the financial covenants that are subject to the current waiver prior to January 31, 2023 and are currently in discussions with the Lender on modifying the financial covenants which are the subject of the waiver. There is no assurance that the Company will be successful in making such modifications to the Credit Agreement and as such, no assurance that the Company will not default certain covenants existing in the Credit Agreement.

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***Our recurring losses from operations to raise substantial doubt regarding our ability to continue as a going concern. Our ability to continue as a going concern requires that we obtain sufficient funding to finance our operations in the near term.***

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We have sustained losses from operations since inception, which as of September 30, 2022, accumulated to $62,827,744, including an operating loss of $32,644,277 and $13,449,325 for the years ended September 30, 2022 and 2021, respectively. We do not expect to be profitable in the foreseeable future and have had recurring negative cash flows from operations. These net losses and negative cash flows have had, and will continue to have, an adverse effect on our stockholders' equity and working capital. The continuation of the Company as a going concern is dependent upon our ability to obtain continued financial support from our stockholders, necessary equity or debt financing to continue operations and the attainment of profitable operations. These factors, among others, raised substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern requires that we obtain sufficient funding to finance our operations in the near term. If we are unable to obtain sufficient funding, our business, prospects, financial condition and results of operations will be materially and adversely affected, and we may be unable to continue as a going concern. If we are unable to continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our audited financial statements, and it is likely that investors will lose all or a part of their investment. If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable terms or at all.

Accordingly, our auditor has concluded that substantial doubt exists regarding our ability to continue as a going concern. Our audited financial statements appearing at the end of this Annual Report have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of these uncertainties related to our ability to operate on a going concern basis. In its report on our financial statements for the years ended September 30, 2022 and 2021, our independent registered public accounting firm included an explanatory paragraph stating that our recurring losses from operations and negative cash flows since inception and our need to raise additional funding to finance our operations raise substantial doubt about our ability to continue as a going concern. The perception that we may not be able to continue as a going concern may cause others to choose not to deal with us due to concerns about our ability to meet our contractual obligations.

***The COVID-19 pandemic and the efforts to mitigate its impact may have an adverse effect on our business, liquidity, results of operations, financial condition and price of our securities.***

The pandemic involving the novel strain of coronavirus, or COVID-19, and the measures taken to combat it, may have certain and adverse effects on our business. Public health authorities and governments at local, national and international levels have implemented various measures to respond to this pandemic. Some measures that directly or indirectly impact our business include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· voluntary or mandatory quarantines;

· restrictions on travel; and

· limiting gatherings of people in public places.

While we are primarily an online business, such factors could nonetheless have a negative effect on our business and our ability to effectively and efficiently run our business. During the COVID-19 pandemic, we have undertaken certain measures in an effort to mitigate the spread of COVID-19, including, having our employees work remotely where possible, which may make maintaining our corporate operations, quality controls and internal controls difficult. Moreover, the COVID-19 pandemic and mitigation efforts may also adversely affect our customers' financial condition, which could result in reduced spending and reduced use of our online gaming platform.

As events are rapidly changing, we do not know how long the COVID-19 pandemic and the measures that have been introduced to respond to it will disrupt our operations or the full extent of that disruption. We also cannot predict how long the effects of COVID-19 and the efforts to contain it will continue to impact our business after the pandemic is under control. Governments could take additional restrictive measures to combat the pandemic that could further impact our business or the economy in the geographies in which we operate. It is also possible that the impact of the pandemic and response on our customers and markets will persist for some time after governments ease their restrictions. These measures may impact our business and financial condition as the responses to control COVID-19 continue.

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***We are an early development stage company with a limited operating history and a history of losses.***

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Although our predecessor has been in business since 2016, during our predecessor's existence substantially all of our efforts prior to the acquisition of the Aspire i-gaming assets were focused on developing our technology and intellectual property and operating our first generation website. As a result, we have generated limited revenues and have incurred an accumulated deficit of approximately $62.8 million as of September 30, 2022. There can be no assurance that we will generate meaningful revenues leading to profitability. If we cannot achieve our business objectives including working with our Lender in connection with amending certain financial covenants contained in the Credit Agreement, raising additional capital and reducing our gaming platform services fees, investors in our shares will likely suffer a loss of their entire investment.

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***We have a new business model, which makes it difficult for us to forecast our financial results, creates uncertainty as to how investors will evaluate our prospects, and increases the risk that we will not be successful.***

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We have a new business model and are in the process of developing new offerings, expanding our existing i-gaming offerings and related jurisdictions and developing other revenue sources from the monetization of our business intelligence and otherwise. Accordingly, it will be difficult for us to forecast our future financial results, and it is uncertain how our new business model will affect investors' perceptions and expectations with respect to our business and economic prospects. Additionally, our new business model may not be successful. Consequently, you should not rely upon any past financial results as indicators of our future financial performance.

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***Our current and future online offerings are part of new and evolving industries, presenting significant uncertainty and business risks.***

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The online gaming and interactive entertainment industry is relatively new and continuing to evolve. Whether these industries grow and whether our online business will ultimately succeed, will be affected by, among other things, developments in gaming platforms, legal and regulatory developments (such as the passage of new laws or regulations or the extension of existing laws or regulations to online gaming activities), taxation of gaming activities, data privacy laws and regulation and other factors that we are unable to predict and which are beyond our control. Given the dynamic evolution of these industries, it can be difficult to plan strategically, and it is possible that competitors will be more successful than us at adapting to the changing landscape and pursuing business opportunities. Additionally, as the online gaming industry advances, including with respect to regulation, we may become subject to additional compliance-related costs. Consequently, we are unable to provide assurance that our online and interactive offerings will grow at anticipated rates or be successful in the long term.

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***We have a limited operating history and we expect a number of factors will cause our operating results to fluctuate on an annual basis, which may make it difficult to predict our future performance.***

We are an i-gaming gambling platform with a limited operating history. Consequently, any predictions made about our future success or viability may not be as accurate as they could be if we had a longer operating history. We anticipate that our operating results will significantly fluctuate from quarter to quarter and year to year due to a variety of factors, many of which are beyond our control. In particular, you should consider that we cannot provide assurance that we will be able to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· successfully develop and introduce our updated website;

· maintain our management team;

· raise sufficient funds in the capital markets to effectuate our business plan;

· attract, enter into or maintain contracts with, and
 retain customers and vendors; and/or

· compete effectively in the extremely competitive environment in which we operate.

These factors are our best estimates of possible factors that will affect our future operating results, however, they should not be considered a complete recitation of possible factors that could affect the Company. In addition, we do not know how the economic and societal impact of the ongoing COVID-19 global pandemic may negatively affect our current and future operations and development. Accordingly, the results of any historical quarterly or annual periods should not be relied upon as indications of future operating performance.

***We will require substantial additional funding in the short term, which may not be available to us on acceptable terms, or at all, and, if not so available, may require us to delay, limit, reduce or cease our operations.***

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To date, we have relied primarily on equity financing to carry on our business. We have limited financial resources, no operating cash flow and no assurance that sufficient funding will be available to us to fund our operating expenses and to further develop our business. We expect our current cash on hand will enable us to fund our operating expenses and capital expenditure requirements into but not beyond the next twelvemonths. Unless we achieve profitability, we anticipate that we will need to raise additional capital to fund our operations while we implement and execute our business plan. We currently do not have any contracts or commitments for additional financing. In addition, any additional equity financing may involve substantial dilution to our existing shareholders. There can be no assurance that such additional capital will be available on a timely basis or on terms that will be acceptable to us. Failure to obtain such additional financing could result in delay or indefinite postponement of operations or the further development of our business with the possible loss of such properties or assets. If adequate funds are not available or are not available on acceptable terms, we may not be able to fund our business or the expansion thereof, take advantage of strategic acquisitions or investment opportunities or respond to competitive pressures. Such inability to obtain additional financing when needed could have a material adverse effect on our business, results of operations, cash flow, financial condition and prospects.

***We conduct our operations outside the United States and that exposes us to foreign currency transaction and translation risks. As a result, changes in the valuation of the U.S. dollar in relation to other currencies, primarily the Euro, could have positive or negative effects on our profit and financial position.***

Our global operations are likely to expose us to foreign currency transaction and translation risks. Our functional currency is the U.S. dollar, and as a result, we will be subject to foreign currency fluctuation as all of our revenues, and a significant majority of our operating expenses will not be denominated in the U.S. dollar. We are not licensed in the United States, so we do not have revenues denominated in U.S. dollars. A decrease in the value of non-U.S. dollar currencies, primarily the Euro, against the U.S. dollar could impact our ability to repay our U.S. dollar denominated liabilities, including our term Debt. These risks related to exchange rate fluctuations may increase in future periods as our operations outside of the United States expand.

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***We rely on information technology and other systems and services provided by third parties, primarily by Aspire Global plc, and any failures, errors, defects or disruptions in these systems or services could diminish our brand and reputation, subject us to liability, disrupt our business and adversely affect our operating results and growth prospects. The third-party platforms upon which these systems and software are made available could contain undetected errors.***

Our technology infrastructure is critical to the performance of our offerings and to user satisfaction. As part of the acquisition of Aspires' B2C Business, we entered into an Operator Services Agreement with Aspire for the following four years, which requires Aspire to provide key licensing and operational services in each jurisdiction where Aspire is licensed and operational. However, the systems provided by Aspire, on which we rely, may not be adequately designed with the necessary reliability and redundancy to avoid performance delays or outages that could be harmful to our business. We cannot assure you that the measures we take, in connection with Aspire, to prevent or hinder cyber-attacks and protect our systems, data and user information and to prevent outages, data or information loss, fraud and to prevent or detect security breaches, including a disaster recovery strategy for server and equipment failure and back-office systems and the use of third parties for certain cybersecurity services, will provide absolute security. We have experienced, and we may in the future experience, website disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, human or software errors and capacity constraints. Such disruptions have not had a material impact on us; however, future disruptions from unauthorized access to, fraudulent manipulation of, or tampering with our computer systems and technological infrastructure, or those of third parties, could result in a wide range of negative outcomes, each of which could materially adversely affect our business, financial condition, results of operations and prospects.

Additionally, our products or products provided by Aspire, may contain errors, bugs, flaws or corrupted data, and these defects may only become apparent after their launch. If a particular product offering is unavailable when users attempt to access it or navigation through our offerings is slower than they expect, users may be unable to place their bets or set their line-ups in time and may be less likely to return to our products and services as often, if at all. Furthermore, programming errors, defects and data corruption could disrupt our operations, adversely affect the experience of our users, harm our reputation, cause our users to stop utilizing our offerings, divert our resources and delay market acceptance of our offerings, any of which could result in legal liability to us or harm our business, financial condition, results of operations and prospects.

We believe that if our users have a negative experience with our offerings, or if our brand or reputation is negatively affected, users may be less inclined to continue or resume utilizing our products or to recommend our offerings to other potential users. As such, a failure or significant interruption in our service could harm our reputation, business and operating results.

***We rely on other third-party data providers for real-time and accurate data for events, and we cannot guarantee that such third parties will perform adequately or will not terminate their relationships with us.***

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We currently rely on third-party data providers to obtain accurate information regarding schedules, results, performance and outcomes of events. We rely on this data to determine when and how bets are settled. If we experience errors or delays in receiving this data, it may result in us incorrectly settling bets. If we cannot adequately resolve the issue with our users, our users may have a negative experience with our offerings, our brand or reputation may be negatively affected, and our users may be less inclined to continue or resume utilizing our products or recommend our platform to other potential users.

***Our success in the i- gaming market depends on our ability to develop and manage frequent introductions of innovative products and operate within the guidelines of the content owners (publishers) in order to attract and retain users.***

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The i-gaming industries are characterized by dynamic customer demand and technological advances. As a result, we must continually introduce and successfully market new technologies in order to remain competitive and effectively stimulate customer demand. The process of developing new products and systems is inherently complex and uncertain. It requires accurate anticipation of changing customer needs and end user preferences as well as emerging technological trends. If our competitors develop new content and technologically innovative products, and we fail to keep pace, our business could be adversely affected. Additionally, the introduction of products embodying new technology and the emergence of new industry standards can render our existing offerings obsolete and unmarketable. To remain competitive, we must invest resources towards research and development efforts to introduce new and innovative products with dynamic features to attract new customers and retain existing customers. If we fail to accurately anticipate customer needs and end-user preferences through the development of new products and technologies, we could lose business to our competitors, which would adversely affect our results of operations and financial position.

We can provide no assurance that we will successfully develop new products or enhance and improve our existing products, that new products and enhanced and improved existing products will achieve market acceptance or that the introduction of new products or enhanced existing products by others will not render our products obsolete. Dynamic customer demand and technological advances often demand high levels of research and development expenditures in order to meet accelerated product introductions, and the life cycles of certain products may be short, which could adversely affect our operating results. In some cases, our new products and solutions may require long development and testing periods and may not be introduced in a timely manner or may not achieve the broad market acceptance necessary to generate significant revenue. Our inability to develop solutions that meet customer needs and compete successfully against competitors' offerings could have a material adverse effect on our business, financial condition and results of operations.

***Reductions in discretionary consumer spending could have an adverse effect on our business, financial condition, results of operations and prospects.***

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The demand for entertainment and leisure activities tends to be highly sensitive to changes in consumers' disposable income, and thus can be affected by changes in the economy and consumer tastes, both of which are difficult to predict and beyond our control. Unfavorable changes in general economic conditions, including recessions, economic slowdown, and sustained high levels of unemployment may reduce customers' disposable income or result in fewer individuals engaging in entertainment and leisure activities, including gambling. As a result, we cannot ensure that demand for our products or services will remain constant. Continued or renewed adverse developments affecting economies throughout the world, including a general tightening of availability of credit, decreased liquidity in many financial markets, increasing interest rates, increasing energy costs, acts of war or terrorism, natural disasters, declining consumer confidence, sustained high levels of unemployment or significant declines in stock markets, could lead to a further reduction in discretionary spending on leisure activities, such as gambling. Any significant or prolonged decrease in consumer spending on entertainment or leisure activities could reduce our online games, reducing our cash flows and revenues. If we experience a significant unexpected decrease in demand for our products, we could incur losses.

***Negative events or negative media coverage relating to, or a declining popularity of, daily fantasy sports, sports betting, the underlying sports or athletes, or online sports betting in particular, could have an adverse impact on our business.***

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Public opinion can significantly influence our business. Unfavorable publicity regarding us, for example, changes to our product, product quality, litigation, or regulatory activity, or regarding the actions of third parties with whom we have relationships or the underlying sports could seriously harm our reputation. Negative public perception could also lead to new restrictions on or to the prohibition of sports betting in jurisdictions in which we currently operate. Such negative publicity could also adversely affect the size, demographics, engagement, and loyalty of our customer base and result in decreased revenue or slower user growth rates, which could seriously harm our business.

Public opinion can also exert a significant influence over the regulation of the gaming industry. A negative shift in the public's perception of gaming could affect future legislation in different jurisdictions. Among other things, such a shift could cause jurisdictions to abandon proposals to legalize gaming, thereby limiting the number of new jurisdictions into which we could expand. Negative public perception could also lead to new restrictions on or to the prohibition of gaming in jurisdictions in which we currently operate.

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***We face competition from other companies and our operating results will suffer if we fail to compete effectively.***

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There is intense competition amongst gaming solution providers. There are a number of established, well financed companies producing both land-based and online gaming and interactive entertainment products and systems that compete with the products of the Company. As most of our competitors have financial resources that are greater than us, they may spend more money and time on developing and testing products, undertake more extensive marketing campaigns, adopt more aggressive pricing policies or otherwise develop more commercially successful products than us, which could impact our ability to win new marketing contracts. Furthermore, new competitors may enter our key market areas. If we are unable to obtain significant market presence or if we lose market share to our competitors, our results of operations and future prospects would be materially adversely affected. There are many companies with already established relationships with third parties, including gaming operators that are able to introduce directly competitive products and have the potential and resources to quickly develop competitive technologies. Our success depends on our ability to develop new products and enhance existing products.

***We rely on third-party payment processors to process deposits and withdrawals made by our users into the platform, and if we cannot manage our relationships with such third parties or other payment-related risks occur (such as risks associated with the fraudulent use of credit or debit cards, which could have adverse effects on our business due to chargebacks from customers), our business, financial condition and results of operations could be adversely affected.***

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We allow funding and payments to accounts using a variety of methods, including electronic funds transfer ("EFT"), and credit and debit cards. As we continue to introduce new funding or payment options to our players, we may be subject to additional regulatory and compliance requirements. We also may be subject to the risk of fraudulent use of credit or debit cards, or other funding and/or payment options. For certain funding or payment options, including credit and debit cards, we may pay interchange and other fees which may increase over time and, therefore, raise operating costs and reduce profitability. We rely on third parties to provide payment-processing services and it could disrupt our business if these companies become unwilling or unable to provide these services to us. We have had difficulty accessing the service of banks, credit card issuers and payment processing services providers in the past, which may make it difficult to sell and collect on the sales of our products and services. We are also subject to rules and requirements governing EFT which could change or be reinterpreted to make it difficult or impossible for us to comply. If we fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees or possibly lose our ability to accept credit or debit cards, or other forms of payment from customers which could have a material adverse impact on our business.

Chargebacks occur when customers seek to void credit card or other payment transactions. Cardholders are intended to be able to reverse card transactions only if there has been unauthorized use of the card or the services contracted for have not been provided. In our industry, customers occasionally seek to reverse online gaming losses through chargebacks, which have adverse effects on our business or results of operations.

***We rely on licenses to use the intellectual property rights of third parties which are incorporated into our products and services, and our failure to renew or expand existing licenses may require us to modify, limit or discontinue certain offerings.***

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A significant portion of our revenues may be generated from products using intellectual property we license from third parties. For example, we license intellectual property from third parties for use in our gaming products. Our future success may depend upon our ability to obtain licenses to use new and existing intellectual property and our ability to retain or expand existing licenses for certain products. If we are unable to obtain new licenses or renew or expand existing licenses, our operating results would be negatively impacted if we were unsuccessful in licensing certain of those rights and/or protecting those rights from infringement, including losses of proprietary information from breaches of our cyber security efforts.

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***We rely on information technology and other systems and platforms (including with respect to validating the identity and location of our users), and any failures, errors, defects or disruptions in our and third-party systems or platforms could diminish our brand and reputation, subject us to liability, disrupt our business, and adversely affect our operating results and growth prospects.***

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Our business depends upon the capacity, reliability and security of the infrastructure owned by third parties over which our offerings are deployed. We have no control over the operation, quality or maintenance of a significant portion of that infrastructure or whether or not those third parties will upgrade or improve their equipment. If one or more of these companies is unable or unwilling to supply or expand our levels of service in the future, our operations could be adversely impacted. Also, to the extent the number of users of networks utilizing our future products and services suddenly increases, the technology platform and secure hosting services which will be required to accommodate a higher volume of traffic may result in slower response times or service interruptions. System interruptions or increases in response time could result in a loss of potential or existing users and, if sustained or repeated, could reduce the appeal of the networks to users. In addition, users depend on real-time communications; outages caused by increased traffic could result in delays and system failures. These types of occurrences could cause users to perceive that our products and services do not function properly and could therefore adversely affect our ability to attract and retain licensees, strategic partners and customers.

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***Information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions.***

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We receive, process, store and use personal information and other customer data. There are numerous federal, state and local laws regarding privacy and the storing, sharing, use, processing, disclosure and protection of personal information and other data. Any failure or perceived failure by us to comply with our privacy policies, our privacy-related obligations to customers or other third parties, or our privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of personally identifiable information or other player data, may result in governmental enforcement actions, litigation or public statements against us by consumer advocacy groups or others and could cause our customers to lose trust in us which could have an adverse impact on our business. The costs of compliance with these types of laws may increase in the future as a result of changes in interpretation or changes in law. Any failure on our part to comply with these types of laws may subject us to significant liabilities.

Third parties we work with may violate applicable laws or our policies, and such violations may also put our customers' information at risk and could in turn have an adverse impact on our business. We will also be subject to payment card association rules and obligations under each association's contracts with payment card processors. Under these rules and obligations, if information is compromised, we could be liable to payment card issuers for the associated expense and penalties. If we fail to follow payment card industry security standards, even if no customer information is compromised, we could incur significant fines or experience a significant increase in payment card transaction costs.

Security breaches, computer malware and computer hacking attacks have become more prevalent. Any security breach caused by hacking which involves efforts to gain unauthorized access to information or systems, or to cause intentional malfunctions or loss or corruption of data, software, hardware or other computer equipment, and the inadvertent transmission of computer viruses could harm our business. Though it is difficult to determine what harm may directly result from any specific interruption or breach, any failure to maintain performance, reliability, security and availability of our network infrastructure to the satisfaction of our players may harm our reputation and our ability to retain existing players and attract new players.

Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems, change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures.

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***We are subject to risks related to holding cryptocurrencies and accepting cryptocurrencies as a form of payment.***

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We have in the past, and may in the future, accept bitcoin or other cryptocurrencies from our customers as a form of deposit on our platform.

Cryptocurrencies are not considered legal tender or backed by any government and have experienced price volatility, technological glitches and various law enforcement and regulatory interventions. The use of cryptocurrency such as bitcoin has been prohibited or effectively prohibited in some countries. If we fail to comply with any such prohibitions that may be applicable to us, we could face regulatory or other enforcement actions and potential fines and other consequences.

Cryptocurrencies have in the past and may in the future experience periods of extreme volatility. Fluctuations in the value of any cryptocurrencies that we hold may also lead to fluctuations in the value of our common stock. In addition, there is substantial uncertainty regarding the future legal and regulatory requirements relating to cryptocurrency or transactions utilizing cryptocurrency. For instance, governments may in the near future curtail or outlaw the acquisition, use or redemption of cryptocurrencies. In such case, ownership of, holding or trading in cryptocurrencies may then be considered illegal and subject to sanction. These uncertainties, as well as future accounting and tax developments, or other requirements relating to cryptocurrency, could have a material adverse effect on our business.

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***Our business depends substantially on the continuing efforts of our executive officers and our business may be severely disrupted if we lose their services.***

Our future success depends substantially on the continued services of our executive officers including an interim Chief Financial Officer, and especially our Chairman and Chief Executive Officer, Aaron Speach. We do not presently maintain key man life insurance on any of our executive officers and directors. If one or more of our executive officers are unable or unwilling to continue in their present positions, we may not be able to replace them readily, if at all. The loss of any of our executive officers could cause our business to be disrupted, and we may incur additional and unforeseen expenses to recruit and retain new officers.

**Risks Related to the Company's Legal and Regulatory Requirements**

***Our current operations are dependent on our ability to comply with our own gaming sub-license and market access rights secured with the Aspire acquisition, and if we do not retain these rights we will not be able to operate.***

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Our Curacao gaming license is a sublicense of a master license a The Curacao Ministry of Justice has only granted four online gaming Master Licenses. Our license is a sublicense from one of the four master license holders, Gaming Services Provider N.V. #365/JAZ. The Curacao Ministry of Justice allows an applicant for a sublicense from a Master License holder to operate under the master license holder's license, so long as they meet certain operating and compliance criteria. These criteria must be met at the stage of application as well as on an ongoing basis. As such, so long as we maintain the requisite criteria for holding the sublicense, as a sublicensee we can enjoy the same privileges and rights that the Master License holder has, but without the ability to issue licenses.

The acquisition of the Aspire B2C business included sublicenses to allow us to operate in several western European markets. We are required to comply with requirements of each of these licenses to maintain market access. If we fail to comply with the various regulations, we may be unable to conduct any gaming business in that jurisdiction and our business would be materially harmed.

All of our operations are conducted pursuant to the foregoing sublicenses. If we are unable to maintain our gaming sub-license for any reason, we would be unable to conduct any gaming business and our business would be materially harmed.

In addition, under our gaming sub-licenses, we can accept wagers from residents of a limited number of jurisdictions, primarily in parts of Asia and South America. In order to expand our operations in the future, particularly into the United States and additional European countries, we will need to obtain gaming licenses in such jurisdictions or partner with companies already operating in such jurisdictions. We can provide no assurance that we will be able to maintain our current gaming license or obtain future gaming licenses.

***We cannot be certain that our platform will maintain regulatory approval, and without regulatory approval we will not be able to market and grow our business around the world.***

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Any license, permit, approval or finding of suitability may be revoked, suspended or conditioned at any time. The loss of a license in one jurisdiction could trigger the loss of a license or affect our eligibility for a license in another jurisdiction. We may be unable to obtain or maintain all necessary registrations, licenses, permits or approvals, and could incur fines or experience delays related to the licensing process which could adversely affect our operations. A gaming regulatory body may refuse to issue or renew a registration.

We currently block direct access to wagering on our website from the United States and other jurisdictions in which we do not have license to operate through IP address filtering. Individuals are required to enter their age upon gaining access to our platform. Despite all such measures, it is conceivable that that a user, underage, or otherwise could devise a way to evade our blocking measures and access our website from the United States or any other foreign jurisdiction in which we are not currently permitted to operate.

Violations of laws in one jurisdiction could result in disciplinary action in other jurisdictions. Licenses, approvals or findings of suitability may be revoked, suspended or conditioned. In sum, we may not be able to obtain or maintain all necessary registrations, licenses, permits or approvals. The licensing process may result in delays or adversely affect our operations and our ability to maintain key personnel, and our efforts to comply with any new licensing regulations will increase our costs.

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***We are subject to various laws relating to foreign corrupt practices, the violation of which could adversely affect its operations, reputation, business, prospects, operating results and financial condition.***

We are subject to risks associated with doing business outside of the United States, including exposure to complex foreign and U.S. regulations such as the Foreign Corrupt Practices Act (the "FCPA") and other anti-corruption laws which generally prohibit U.S. companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or retaining business. Violations of the FCPA and other anti-corruption laws may result in severe criminal and civil sanctions and other penalties. It may be difficult to oversee the conduct of any contractors, third-party partners, representatives or agents who are not our employees, potentially exposing us to greater risk from their actions. If our employees or agents fail to comply with applicable laws or company policies governing our international operations, we may face legal proceedings and actions which could result in civil penalties, administration actions and criminal sanctions. Any determination that we have violated any anti-corruption laws could have a material adverse impact on our business.

Violations of these laws and regulations could result in significant fines, criminal sanctions against us, our officers or our employees. Additionally, any such violations could materially damage our reputation, brand, international expansion efforts, ability to attract and retain employees and our business, prospects, operating results and financial condition.

Historically, we have dealt with significant amounts of cash in our operations, which have subjected us to various reporting and anti-money laundering regulations. Any violation of anti-money laundering laws or regulations by us could have a material adverse impact on our business.

***Our growth prospects depend on a variety of U.S. and foreign laws, many of which are unsettled and still developing with respect to the legal status of real-money gaming in various jurisdictions, regulatory restrictions and/or taxes which could subject us to claims or otherwise harm our business.***

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If a large number of U.S. states or the federal government enact online real money gaming legislation and we are unable to obtain the necessary licenses to operate online real money gaming websites in the United States jurisdictions where such games are legalized, our future growth in real money gaming could be materially impaired.

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States or the federal government may legalize online real money gaming in a manner that is unfavorable to us. Several states and the federal government are considering draft laws that require online casinos to also have a license to operate a brick-and mortar casino, either directly or indirectly through an affiliate. If state jurisdictions enact legislation legalizing online real money casino gaming subject to this brick-and-mortar requirement, we may be unable to offer online real money gaming in such jurisdictions if we are unable to establish an affiliation with a brick-and-mortar casino in such jurisdiction on acceptable terms.

In the online real money gaming industry, a significant "first mover" advantage exists. Our ability to compete effectively in respect of a particular style of online real money gaming in the United States may be premised on introducing a style of gaming before our competitors. Failing to do so could materially impair our ability to grow in the online real money gaming space.

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***Failure to protect or enforce our intellectual property rights or the costs involved in such enforcement could harm our business, financial condition, and results of operations.***

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We may from time to time seek to enforce our intellectual property rights against infringers when we determine that a successful outcome is probable and may lead to an increase in the value of the intellectual property. If we choose to enforce our intellectual property rights against a party, then that individual or company has the right to ask the court to rule that such rights are invalid or should not be enforced. These lawsuits and proceedings are expensive and would consume time and resources and divert the attention of managerial and operational personnel even if we were successful in stopping the infringement of such rights. In addition, there is a risk that the court will decide that such rights are not valid and that we do not have the right to stop the other party from using the inventions.

Further, our competitors have been granted patents protecting various gaming products and solutions. If our products and solutions employ these processes, or other subject matter that is claimed under our competitors' patents, or if other companies obtain patents claiming subject matter that we use, those companies may bring infringement actions against us. The question of whether a product infringes a patent involves complex legal and factual issues, the determination of which is often uncertain. In addition, because patent applications can take many years to issue, there may be applications now pending of which we are unaware, which might later result in issued patents that our products and solutions may infringe. There can be no assurance that our products will not be determined to have infringed upon an existing third-party patent. If any of our products and solutions infringes a valid patent, we may be required to discontinue offering certain products or systems, pay damages, purchase a license to use the intellectual property in question from its owner, or redesign the product in question to avoid infringement. A license may not be available or may require us to pay substantial royalties, which could in turn force us to attempt to redesign the infringing product or to develop alternative technologies at a considerable expense. Additionally, we may not be successful in any attempt to redesign the infringing product or to develop alternative technologies, which could force us to withdraw our products or services from the market.

We may also infringe other intellectual property rights belonging to third parties, such as trademarks, copyrights and confidential information. As with patent litigation, the infringement of trademarks, copyrights and confidential information involve complex legal and factual issues and our products, branding or associated marketing materials may be found to have infringed existing third-party rights. When any third-party infringement occurs, we may be required to stop using the infringing intellectual property rights, pay damages and, if we wish to keep using the third-party intellectual property, purchase a license or otherwise redesign the product, branding or associated marketing materials to avoid further infringement. Such a license may not be available or may require us to pay substantial royalties.

The success of our business depends on our continued ability to use our tradenames in order to increase our brand awareness. As of the date hereof, we do not have any federally registered trademarks owned by us, but we may pursue registered trademarks in the future. The unauthorized use or other misappropriation of any of the foregoing trademarks or tradenames could diminish the value of our business which would have a material adverse effect on our financial condition and results of operation.

***If we are not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of our technology and products could be significantly diminished.***

We rely on trade secrets to protect our proprietary technologies. However, trade secrets are difficult to protect. We rely in part on confidentiality agreements with our employees, consultants, and other advisors to protect our trade secrets and other proprietary information. These agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover our trade secrets and proprietary information. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

**Risks Related to Our Common Stock**

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***The conversion price of our preferred stock is subject to adjustment based on the market price of our common stock, which may cause the number of shares issuable upon conversion of the preferred stock to increase substantially and may require us to increase our authorized shares of common stock to satisfy such conversions.***

On November 29, 2021, we issued 37,700 shares of our Series A convertible preferred stock for a purchase price of $1,000.00 per share. The preferred stock is convertible into common stock at an initial conversion price of $28.00 per share ("Preferred Conversion Price"); provided that on January 31, 2023 and on April 15, 2023 (the "Adjustment Dates"), the Preferred Conversion Price will be adjusted to the lesser of: (i) the Preferred Conversion Price in effect on the relevant Adjustment Date, or (ii) 85% of the average closing price of the Company's common stock for the fifteen trading days prior to the relevant Adjustment Date. As such, to the extent the closing price of our common stock as of the Adjustment Dates is substantially lower than the current conversion price of $28.00 per share, the number of the shares that we may be required to issue upon conversion of the preferred stock will be significantly higher than the current number of shares underlying the preferred stock. As of January 10, 2023, there are 1,563,684 shares of common stock underlying the preferred stock at a conversion price of $28.00 per share. If the closing price of our common stock on the Adjustment Dates was $0.557, which was the closing price of our common stock on January 10, 2023 the number of shares of common stock underlying our preferred stock would be 78,605,314 shares.

We have 100 million shares of common stock authorized pursuant to our articles of incorporation, of which 70,189,216 shares are available for issuance as of the date hereof. To the extent the number of shares underlying our preferred stock exceeds our available authorized shares, we will be required to increase our authorized shares of common stock, which will require a vote of our shareholders.

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***Future sales of shares by existing stockholders could cause our stock price to decline.***

If our existing stockholders, who acquired their shares of common stock at prices substantially below our current trading price, sell, or indicate an intention to sell, substantial amounts of our common stock in the public market after the contractual lock-up agreements described below expire and other restrictions on resale lapse, the trading price of our common stock could be adversely impacted.

Certain of our pre-IPO stockholders holding an aggregate of 3,033,770 shares, have agreed not to offer, sell, dispose of or hedge such shares of our common stock, subject to specified limited exceptions, during the period continuing through June 15, 2023, provided that if the common stock price is over $12.00 per share, then the shareholder can sell shares subject to a maximum sale on any trading day of 2% of the daily volume; and if the common stock price is over $20.00 per share, then the shareholder can sell shares subject to a maximum sale on any trading day of 6% of the daily volume. Upon the expiration of the lock-up agreements, all such shares will be eligible for resale in the public market, subject to applicable securities laws, including the Securities Act. Upon expiration of this lock-up period, the trading price of our common stock could be adversely impacted if these stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market.

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***Nevada law and provisions in our articles of incorporation and bylaws could make a takeover proposal more difficult.***

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We are a Nevada corporation and the anti-takeover provisions of the Nevada Revised Statutes may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the person becomes an interested stockholder, even if a change in control would be beneficial to our existing stockholders. In addition, our articles of incorporation and bylaws may discourage, delay or prevent a change in our management or control over us that stockholders may consider favorable. Our articles of incorporation and bylaws:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· authorize the issuance of "blank check" preferred stock that could be issued by our board of directors to thwart a takeover attempt;

· place restrictive requirements (including advance notification of stockholder nominations and proposals) on how special meetings of stockholders may be called by our stockholders; do not provide stockholders with the ability to cumulate their votes; and

· provide that our board of directors may amend our bylaws.

Additionally, our authorized capital includes preferred stock issuable in one or more series. Our board has the authority to issue preferred stock and determine the price, designation, rights, preferences, privileges, restrictions and conditions, including voting and dividend rights, of those shares without any further vote or action by stockholders. The rights of the holders of common stock will be subject to, and may be adversely affected by, the rights of holders of any preferred stock that may be issued in the future. The issuance of additional preferred stock, while providing desirable flexibility in connection with possible financings and acquisitions and other corporate purposes, could make it more difficult for a third party to acquire a majority of the voting power of our outstanding voting securities, which could deprive our holders of common stock of a premium that they might otherwise realize in connection with a proposed acquisition of our company.

***Our management team has limited experience managing a public company and regulatory compliance may divert our attention from the day-to-day management of its business.***

Our management team has limited experience managing a publicly traded company and limited experience complying with the increasingly complex laws pertaining to public companies. These obligations typically require substantial attention from our senior management and could divert our attention away from the day-to-day management of our business.

***Our interim chief financial officer is working for us on a part-time basis.***

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Our interim chief financial officer is currently part-time and is also providing consulting services related to financial reporting to other public and private entities. While we intend to hire a full-time chief financial officer in the near term, our present inability to employ our chief financial officer on a full-time basis could cause us to experience delays in the processing and preparation of our financial information which is necessary for the timely filing our financial reports with the Securities and Exchange Commission.

***Our current shareholders' ownership may be diluted if additional capital stock is issued to raise capital, to finance acquisitions or in connection with strategic transactions.***

We have in the past and intend in the future to seek to raise additional funds, finance acquisitions or develop strategic relationships by issuing equity or convertible debt securities, which would reduce the percentage ownership of our existing stockholders. Our board of directors has the authority, without action or vote of the stockholders, to issue all or any part of our authorized but unissued shares of common or preferred stock. Our articles of incorporation authorize us to issue up to 100,000,000 shares of common stock and 10,000,000 shares of preferred stock. Future issuances of common or preferred stock would reduce your influence over matters on which stockholders vote and would be dilutive to earnings per share. In addition, any newly issued preferred stock could have rights, preferences and privileges senior to those of the common stock. Those rights, preferences and privileges could include, among other things, the establishment of dividends that must be paid prior to declaring or paying dividends or other distributions to holders of our common stock or providing for preferential liquidation rights. These rights, preferences and privileges could negatively affect the rights of holders of our common stock, and the right to convert such preferred stock into shares of our common stock at a rate or price that would have a dilutive effect on the outstanding shares of our common stock.

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***As an "emerging growth company" under the Jumpstart Our Business Startups Act, or JOBS Act, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements.***

As an "emerging growth company" under the JOBS Act, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. We are an emerging growth company until the earliest of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· the last day of the fiscal year during which we have total annual gross revenues of $1.235 billion or more;

· the last day of the fiscal year following the fifth anniversary of this offering;

· the date on which we have, during the previous 3-year period, issued more than $1 billion in non-convertible debt; or

· the date on which we are deemed a "large accelerated issuer" as defined under the federal securities laws.

For so long as we remain an emerging growth company, we will not be required to:

· have an auditor report on our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis);

· submit certain executive compensation matters to shareholders advisory votes pursuant to the "say on frequency" and "say on pay" provisions (requiring a non-binding shareholder vote to approve compensation of certain executive officers) and the "say on golden parachute" provisions (requiring a non-binding shareholder vote to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010;

· include detailed compensation discussion and analysis in our filings under the Securities Exchange Act of 1934, as amended, and instead may provide a reduced level of disclosure concerning executive compensation;

· may present only two years of audited financial statements and only two years of related Management's Discussion and Analysis of Financial Condition and Results of Operations, or MD&A; and

· are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act.

We intend to take advantage of all of these reduced reporting requirements and exemptions.

Certain of these reduced reporting requirements and exemptions were already available to us due to the fact that we also qualify as a "smaller reporting company" under SEC rules. For instance, smaller reporting companies are not required to obtain an auditor attestation and report regarding management's assessment of internal control over financial reporting; are not required to provide a compensation discussion and analysis; are not required to provide a pay-for-performance graph or CEO pay ratio disclosure; and may present only two years of audited financial statements and related MD&A disclosure.

We cannot predict if investors will find our securities less attractive due to our reliance on these exemptions.

***Failure to maintain effective internal control over our financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could cause our financial reports to be inaccurate.***

We are required pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, to maintain internal control over financial reporting and to assess and report on the effectiveness of those controls. This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting. Our management concluded that our internal control over financial reporting were, and continue to be ineffective as of September 30, 2022 due to a lack of segregation of duties (resulting from the limited number of personnel available) and the lack of formal documentation of our control environment. While management is working to remediate the material weaknesses, there is no assurance that such changes, when economically feasible and sustainable, will remediate the identified material weaknesses or that the controls will prevent or detect future material weaknesses. If we are not able to maintain effective internal control over financial reporting, our financial statements, including related disclosures, may be inaccurate, which could have a material adverse effect on our business.

***Failure to continue improving our accounting systems and controls could impair our ability to comply with the financial reporting and internal controls requirements for publicly traded companies.***

As a public company, we operate in an increasingly demanding regulatory environment, which requires us to comply with the Sarbanes-Oxley Act of 2002, and the related rules and regulations of the SEC. Company responsibilities required by the Sarbanes-Oxley Act include establishing corporate oversight and adequate internal control over financial reporting and disclosure controls and procedures. Effective internal controls are necessary for us to produce reliable financial reports and are important to help prevent financial fraud. For as long as we remain an "emerging growth company" as defined in the JOBS Act, we have and intend to consider taking advantage of certain exemptions from various reporting requirements that are applicable to other public 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(b) of the Sarbanes-Oxley Act. We may continue to take advantage of these reporting exemptions until we are no longer an "emerging growth company." If we cannot provide reliable financial reports or prevent fraud, our business and results of operations could be harmed, and investors could lose confidence in our reported financial information.

***If securities or industry analysts do not publish research or reports about us, or if they adversely change their recommendations regarding our common stock, then our stock price and trading volume could decline.***

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us, our industry and our market. If no analyst elects to cover us and publish research or reports about us, the market for our common stock could be severely limited and our stock price could be adversely affected. As a small-cap company, we are more likely than our larger competitors to lack coverage from securities analysts. In addition, even if we receive analyst coverage, if one or more analysts ceases coverage of us or fails to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. If one or more analysts who elect to cover us issue negative reports or adversely change their recommendations regarding our common stock, our stock price could decline.

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|:---|:---|
| **Item 1B.** | **Unresolved Staff Comments.** |

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None.

**Item 2.** **Properties.**

Our corporate and executive offices are in located in a leased facility in Las Vegas, Nevada. Our European headquarters is located in a leased facility in Malta. We also had a leased facility in Dublin, Ireland through October 2022. We believe our facilities are sufficient to meet our current needs and that suitable space will be available as and when needed. We do not own any real property.

**Item 3.** **Legal Proceedings.**

The Company's previous financial advisor, Boustead Securities LLC ("Advisor") has alleged a breach by the Company over the termination of their engagement and the timing of the payment and amount of the fees owed to the Advisor (collectively the "Claims"). The fees the Company expects to pay are accrued in the accompanying balance sheet. On June 2, 2022, the Advisor named EBET in an arbitration proceeding with Financial Industry Regulatory Authority ("FINRA") in connection with the Claims. The statement of claim alleges damages of $5.7 million and seeks a declaration that the Company be required to utilize the Advisor for a certain follow-on offering pursuant to an alleged right of first refusal between the parties. On August 4, 2022, EBET, Inc. counterclaimed against Boustead Securities, LLC for tortious interference with prospective economic advantage and demanded damages and attorneys' fees in an amount to be determined. The case is ongoing, with a hearing before a 3-arbitrator panel currently scheduled for July 2023. Arbitration is inherently unpredictable. However, the Company believes that it has meritorious defenses to a portion of the alleged fee claim asserted and to the claim that the Company has any obligations pursuant to a right of first refusal between the parties. Nevertheless, cash flows or results of operations could be materially affected in any particular period by the resolution of this matter.

On September 15, 2022, the Company filed a Complaint in the United States District Court for the District of Nevada against its former CTO Jason Finch for: (1) Breach of Contract; (2) Violation of Nevada Revised Statutes section 205.511; (3) Conversion; and (4) Misappropriation of Trade Secrets. In the subject matter, we seek injunctive relief and demand damages and attorneys' fees in an amount to be determined. In reply to our Complaint, Mr. Finch filed a Motion to Dismiss the matter and such motion is currently pending decision before the court.

Other than as described above, we are not at this time involved in any additional legal proceedings that we believe could have a material effect on our business, financial condition, results of operations or cash flows.

**Item 4.** **Mine Safety Disclosures.**

Not applicable.

**PART II**

**Item 5.** **Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.**

Our common stock has been listed on the NASDAQ Capital Market under the symbol "EBET" since April 15, 2021.

**Holders of Common Equity**

As of January 10, 2023, we had approximately 69 stockholders of record of our common stock. This does not include beneficial owners of our common stock.

**Dividends**

We have never declared or paid any cash dividends on our capital stock. We currently intend to retain earnings, if any, to finance the growth and development of our business. We do not expect to pay any cash dividends on our common stock in the foreseeable future. Payment of future dividends, if any, will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in any financing instruments, provisions of applicable law and other factors the board deems relevant.

**Recent Sales of Unregistered Securities**

There have been no sales of unregistered securities during the quarter ended September 30, 2022, that have not been previously disclosed on a Form 8-K.

**Purchases of Equity Securities by the Issuer and Affiliated Purchasers**

We did not repurchase any of our equity securities during the year ended September 30, 2022.

**Equity Compensation Plan Information**

See Part III, Item 12 to this Form 10-K for information relating to securities authorized for issuance under our equity compensation plans.

**Item 6.** **Selected Financial Data.**

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

**Item 7.** **Management's Discussion and Analysis of Financial Condition and Results of Operations.**

*You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the financial statements and the related notes appearing elsewhere in this Form 10-K. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties, including those set forth under "Cautionary Statement About Forward-Looking Statements." Actual results and experience could differ materially from the anticipated results and other expectations expressed in our forward-looking statements as a result of a number of factors, including but not limited to those discussed in this Item and in Item 1A - "Risk Factors." Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those set forth under "Risk Factors" and elsewhere in this Form 10-K.*

**Overview**

We operate platforms to provide a real money online gambling experience focused on i-gaming including casino, sportsbook and esports events. We operate under a Curacao gaming sublicense and under an operator services agreement with Aspire Global plc ("Aspire") allowing us to provide online betting services to various countries around the world.

**Acquisition of Aspire Global Plc's ("Aspire") Business to Consumer ("B2C") Business**

In order to accelerate the growth and expand market access for our esports product offerings, on November 29, 2021, we acquired Aspire's B2C Business, for €65,000,000 payable as follows: (i) a cash amount of €50,000,000; (ii) €10,000,000, payable in accordance with the terms of an unsecured subordinated promissory note; and (iii) 186,838 shares of our common stock, which were valued at €5,000,000.

The acquisition of Aspire's B2C business provides the following strategic benefits:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· ownership of Aspire's portfolio of B2C proprietary online casino and sportsbook brands consisting of Karamba, Hopa, Griffon Casino, BetTarget, Dansk777, and GenerationVIP;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· market access for our esports products in key regulated markets including the United Kingdom, Germany, Ireland, Malta, and Denmark, among others, allowing us to cross-sell esports wagering opportunities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· enhanced strategic partnership with Aspire who provides the on-line gaming platform and a managed services offering, including customer service, customer on-boarding and payment processing ensuring operational stability and continuity.

Our gaming sub-license from the Curacao Gaming Authority and the licenses made available to us from the acquisition of the Aspire B2C business allows us to accept esports and sports wagers from residents of more than 160 jurisdictions.

*Focus on I-Gaming Operations*

 

During the quarter ending September 30, 2022, we took significant measures to increase the profitability of our business in the short term. These actions include optimizing the efficiency of marketing campaigns, reducing the total number of employees and contractors by approximately 45 positions, terminating software and other immaterial contracts as well as generally reducing the operating costs of the business. While these efforts focus on the goal of attaining profitability of our business, it is likely to reduce overall revenue growth in the short to medium term. In addition, even after these efforts, we are not currently generating sufficient cash from our operations to settle our debts as they fall due and continue to require near term financing to fund our operations and continue our business. These efforts have also resulted in an increased focus on our i-gaming business and the halting of investment in the Company's esports products and technologies. As a result of these actions as referenced above, we do not expect to launch our esports products in the foreseeable future.

We recorded a restructuring charge of approximately $1.0 million that included severance and other costs associated with termination of the employment contracts, consultant contracts and any costs to terminate software licenses and other commitments. Of these costs, $388,000 are included in general and administrative expenses, $521,000 are included in Product and technology expenses, and $130,000 are included in sales and marketing expenses. In connection with the preparation of our financial statements for inclusion in this annual report, we completed an impairment review of our property and equipment and intangible assets related to our esports product and technologies and recognized an impairment loss of $3.9 million.

**Results of Operations for the Year Ended September 30, 2022, compared to the Year Ended September 30, 2021**

**Results of Operations**

Results of operations in dollars and as a percentage of net revenue were as follows:

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| | | |
|:---|:---|:---|
|  | **Years Ended September 30,** | **Years Ended September 30,** |
|  | **2022** | **2021** |
|  | **%** | **%** |
| Revenue | 100% | 100% |
| Cost of revenue) | -61%) | -23% |
| Gross profit | 39% | 77% |
| Operating expenses: |  |  |
| Sales and marketing expenses | 47% | 1,955% |
| Product and technology expenses | 7% | 1,883% |
| Acquisition costs | 4% | 90% |
| Impairment loss | 7% | 0% |
| General and administrative expenses | 30% | 4,310% |
| Total operating expenses | 94% | 8,238% |
| Income (loss) from operations | -56%) | -8,161% |
| Other expenses: |  |  |
| Interest expense) | -17%) | -1,034% |
| Gain on derivative instruments | 2 | 0% |
| Foreign currency loss and other) | 0%) | -28% |
| Total other expense) | -15%) | -1,062% |
| Income (loss) before provision for income taxes | -71%) | -9,223% |
| Provision for income taxes | 0% | 0% |
| Net loss) | -71%) | -9,223% |

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*Revenue* 

For the year ended September 30, 2022, we generated $58,596,620 in revenue compared to $164,807 in revenue during the year ended September 30, 2021. The increase in revenue in the year ended September 30, 2022, when compared with the same period in the prior year, was driven by the acquisition of the Aspire B2C business in November 2021 which continues to generate significant revenue in the UK, Germany, Denmark, Ireland, Austria and other regulated markets, and accounted for substantially all of the increase in revenue for the year ended September 30, 2022, as compared to the year ended September 30, 2021. As a result of the Company's restructuring of the business to improve its immediate profitability, certain inefficient sales and marketing efforts will be curtailed, which may adversely impact revenue growth in the short to medium term.

*Cost of Revenue*

During the year ended September 30, 2022, cost of sales was $36,014,055 as compared with $37,744 in the same period in the prior year. The increase in cost of sales is due entirely to the acquisition of the Aspire B2C business in November 2021 and is consistent with the increase in revenue and consists of third-party costs associated with the betting software platform and gaming taxes.

*Sales and Marketing Expense*

Sales and marketing expense was $27,500,618 for the year ended September 30, 2022 compared to $3,221,218 for the year ended September 30, 2021, an increase of $24,279,400. The increase in sales and marketing expense is driven by increase in revenue from the acquisition of the Aspire B2C business, increase in stock-based compensation and increased levels of staff. Sales and marketing expenses also included $2,819,973 and $1,170,115 of stock-based compensation costs to employees and consultants for the years ended September 30, 2022 and 2021, respectively, payroll costs of $2,453,387 and $378,352, respectively, and external consultants of $1,128,213 and $1,654,100 for the years ended September 30, 2022 and 2021, respectively, and the initial roll out of our marketing campaigns focused primarily on our free to play game in the previous year. We expect sales and marketing expenses to increase in future periods as our marketing campaigns increase in both number and volume.

*Product and Technology Expense*

Product and technology expense was $3,993,846 for the year ended September 30, 2022 compared to $3,103,611 for the year ended September 30, 2021, an increase of $890,235. The increase is due to increased spending related to development of the esports operations that were abandoned in the fourth quarter of the current period. Product and technology expenses for the year ended September 30, 2022, included payroll-related costs of $2,199,267, stock-based compensation of $767,004 and other development costs of $1,027,575 consisting primarily of consulting and other development costs. Product and technology expenses for the year ended September 30, 2021, included payroll-related costs of $1,604,651, stock-based compensation of $625,443 and other development costs of $873,517 consisting primarily of consulting and other development costs.

*Acquisition Costs*

Acquisition costs were $2,240,147 for the year ended September 30, 2022, as compared to $147,616 for the year ended September 30, 2021. Acquisition costs included a non-cash hedging loss of $1,570,000 from executing a forward contract on the purchase price of the acquisition of the Aspire B2C business to hedge exposure to fluctuations in the Euro. Acquisition costs also included various legal and consultant fees associated with completing the acquisition.

*Impairment loss*

During the year ended September 30, 2022, we recognized an impairment loss of $3,851,503, comprised of impairment of property and equipment of $569,260 and impairment of intangible assets of $3,282,243. The impairments relate to the write down of our esports assets as of September 30, 2022.

*General and Administrative Expense*

General and administrative expense was $17,640,728 for the year ended September 30, 2022, as compared to $7,103,943 for the same period in the prior year. General and administrative expense for the year ended September 30, 2022 included payroll-related costs of $3,078,089, $1,860,395 of stock-based compensation cost, and professional fees including legal, accounting, investor relations and other professional fees, depreciation and amortization of intangible assets. General and administrative expense for the year ended September 30, 2021 included payroll-related costs of $1,696,435, $2,392,753 of stock-based compensation cost (of which $1,486,725 was to outside consultants), and professional fees of approximately $1,858,297. The increase in payroll costs over the prior period is due to the expansion of support staff associated with the growth from the Aspire B2C business acquisition.

*Interest and Other Expenses*

During the years ended September 30, 2022 and 2021, we recognized interest expense of $9,894,531 and $1,704,395, respectively, which included amortization of debt discounts and deferred finance costs of $4,778,405 and $1,508,482 related to the Senior Notes issued to acquire the Aspire business, and convertible debt issued to acquire certain intangible assets in the previous year. During the year ended September 30, 2022 we recognized a gain on derivative instruments related to foreign exchange rate swaps of $1,239,510. We also incurred a foreign currency loss of $128,311 and $46,304 during the years ended September 30, 2022 and 2021, respectively.

*Net Income/Loss*

Net loss for the year ended September 30, 2022, was $41,427,609 compared to a net loss of $15,200,024 for the same period in the prior year. The increase in net loss was primarily due to the significant increase in general and administrative expenses of $10,536,785, an increase in product and technology expenses of $890,235 and an increase in our sales and marketing costs of $24,279,400 as we expand our business and develop new products and services, plus acquisition costs of $2,240,147 and an impairment loss of $3,851,503 as described above. The increase in interest expense of $8,190,136 also contributed to the increase in net loss.

**Liquidity and Capital Resources**

On September 30, 2022, we had cash and cash equivalents of $5,486,210, and had a working capital deficit of $25,837,758. We have historically funded our operations from proceeds from debt and equity sales, and funds received from customers. Our forecasts for fiscal year 2023 indicate that we will need near term additional funding in order to have sufficient financial resources to satisfy our outstanding debts and to continue to settle our debts as they fall due. We do not have any commitments for such funding and there is no assurance that we will be able to raise additional financing on favorable terms, if at all.

The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern. Our continuation as a going concern is dependent upon our ability to obtain equity or debt financings to continue operations. We have a history of and expect to continue to report negative cash flows from operations and a net loss. Our forecasts for 2023 and beyond indicate that we will need additional funding in order to have sufficient financial resources to continue to settle our debts as they fall due. We have taken significant measures to increase the profitability of our business in the short term, but we are not currently generating sufficient cash from our operations to settle our debts as they fall due and continue to require near term financing. These actions include optimizing the efficiency of marketing campaigns, reducing the total number of employees and contractors, terminating software and other immaterial contracts as well as generally reducing the operating costs of the business. These efforts have also resulted in an increased focus on our i-gaming business and a significant reduction in the investment of our esports products and technologies, which resulted in the recognition of an impairment loss on certain intangible assets and fixed assets. As a result of our actions as referenced above, we do not expect to launch our esports products in the short or medium term. These factors raise substantial doubt regarding our ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. We may seek additional funding through a combination of equity offerings, debt financings, government or other third-party funding, commercialization, marketing and distribution arrangements, other collaborations, strategic alliances and licensing arrangements and delay planned cash outlays or a combination thereof. Management cannot be certain that such events or a combination thereof can be achieved.

**Acquisition of Aspire Global Business to Consumer ("B2C") Business**

In order to accelerate the growth, on November 29, 2021, we completed the acquisition of Aspire Global's B2C business for €65,000,000 payable as follows: (i) a cash amount of €50,000,000; (ii) €10,000,000, payable in accordance with the terms of an unsecured subordinated promissory note; and (iii) 186,838 shares of our common stock, which were valued at €5,000,000.

On September 30, 2021, we entered into subscription agreements (the "Subscription Agreements") with certain investors (the "Investors"). Pursuant to the Subscription Agreements, the Investors agreed to subscribe for and purchase, and we agreed to issue and sell to such Investors, simultaneous with the closing of the Acquisition Agreement, shares of Series A Convertible Preferred Stock (the "Preferred Stock") for a purchase price of $1,000.00 per share (the "Private Placement"). For each share of Preferred Stock issued, we issued the Investor a warrant to purchase 150% of the shares of common stock underlying the Preferred Stock (the "Warrants"). The aggregate Private Placement, which was completed on the closing date of the Acquisition Agreement was $37.7 million.

On November 29, 2021, we entered a credit agreement (the "Credit Agreement") with CP BF Lending, LLC ("Lender"), pursuant to which the Lender agreed to make a single loan to us of $30.0 million (the "Senior Note"). The Senior Note bears interest on the unpaid principal amount at a rate per annum equal to 15.0% as follows: (1) cash interest on the unpaid principal amount of the Senior Note at a rate equal to 14.0% per annum, plus (2) payable-in-kind interest ("PIK Interest") on the unpaid principal amount of the Senior Note at a rate equal to 1.0% per annum. We paid to Lender on the closing date a non-refundable origination fee in an amount equal to $750,000. To date, we have entered into multiple waiver agreements with the Lender to maintain compliance with certain financial and other covenants pursuant to the Credit Agreement. On January 10, 2023, the Company repaid $3,000,000 on the Senior Notes pursuant to the most receive waiver agreement with the Lender, which in turn reduced the minimum cash balance requirement under the Senior Notes to $1,500,000. These waivers will expire on January 31, 2023. We do not expect to satisfy the financial covenants prior to January 31, 2023 and are currently in discussions with the Lender on modifying the financial covenants. There is no assurance that we will be successful in making such modifications to the Credit Agreement.

On June 16, 2022, we issued, in a private placement priced at-the-market under Nasdaq rules: (i) 977,657 shares of common stock, and (ii) warrants to purchase up to an aggregate of 977,657 shares of common stock. The combined purchase price of one share of common stock and accompanying warrant is $3.58. The gross proceeds to us from the private placement were approximately $3.5 million, before deducting fees and other offering expenses, and excluding the proceeds, if any, from the exercise of the warrants.

As of March 31, 2022, we had not maintained compliance with the covenants of the Senior Notes and obtained a waiver from the Lender which waiver was contingent on the completion an equity raise of at least $3.5 million, which was completed in June 2022. In consideration for obtaining a waiver from the compliance with certain covenants, we agreed to amend the Senior Notes such that $5 million of principal loan balance becomes convertible at $3.58 per share commencing after we raised the $5,000,000 of common equity (including the foregoing $3.5 million).

During fiscal year September 30, 2021, we completed two private placements totaling 2,250,000 shares of our common stock for gross proceeds of $4.75 million.

In April 2021, we completed our IPO and issued 2,400,000 shares of common stock for gross cash proceeds of $14,400,000. We paid underwriting fees and other expenses of $885,800 and issued 168,000 warrants to purchase shares of common stock at a price of $7.20 per share for a period of five years.

As of September 30, 2022, we have incurred an accumulated deficit of $62,827,744 since inception and have not yet generated any meaningful income from operations.

*Cash used in operating activities*

Net cash used in operating activities was $11,394,834 for the year ended September 30, 2022, as compared to cash used in operating activities of $8,308,198 for the same period in the prior year. Net cash used in operating activities during the year ended September 30, 2022, included payments made for employee costs, professional fees to our consultants, attorneys and accountants for services related to completion of our audit, development of our new wagering platform and preparation of our public offering filings. Net cash used in operations was also a result of our increase in accounts receivable due to the growth in our business. Cash flow from operations also benefitted from deferred payments for professional fees to our consultants, attorneys and accountants primarily required to complete the acquisition of the Aspire B2C business in November 2021.

*Cash used in investing activities*

Net cash used in investing activities was $57,436,408 during the year ended September 30, 2022 related to the completion of the acquisition of the Aspire B2C business in November 2021. Also contributing to the cash used in investing activities were purchase of fixed assets of $1,200,882 due primarily to opening of our office in Malta and purchase of software assets to support the new wagering platform. Net cash used in investing activities was $577,811 for the year ended September 30, 2021 and was related to the purchase of software assets to support the new wagering platform, and the purchase of long-term assets related to intellectual property rights.

*Cash used provided by financing activities*

Net cash provided by financing activities was $63,655,757 for the year ended September 30, 2022 due to the issuance of the Preferred Stock and Senior Notes which resulted in cash proceeds of $33,516,000 and $26,627,111, respectively, as well as the net cash proceeds of $3,492,450 raised in June 2022 from a private placement. Net cash provided by financing activities was $17,896,957 for the year ended September 30, 2021 and was related to the sale of 2,000,000 shares of common stock at $2.00 per share in a private placement, partially offset by commissions to brokers of $351,929 as well as private placements of our common stock completed in January and February 2021, at $3.00 per share for gross proceeds of $750,000. In April 2021, we completed our IPO and issued 2,400,000 shares of common stock for gross cash proceeds of $14,400,000. We paid underwriting fees and other expenses of $885,800 and issued 168,000 warrants to purchase shares of common stock at a price of $7.20 per share for a period of five years.

**Off Balance Sheet Arrangements**

None.

**Critical Accounting Policies and Estimates**

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates, assumptions and judgments that affect the amounts reported in the financial statements, including the notes thereto. We consider critical accounting policies to be those that require more significant judgments and estimates in the preparation of our financial statements, including the following: long lived assets; intangible assets valuations; and income tax valuations. Management relies on historical experience and other assumptions believed to be reasonable in making its judgment and estimates. Actual results could differ materially from those estimates.

Management believes its application of accounting policies, and the estimates inherently required therein, are reasonable. These accounting policies and estimates are periodically reevaluated, and adjustments are made when facts and circumstances dictate a change.

 ****

***Stock-based Compensation***

Our historical and outstanding stock-based compensation awards, including the issuances of options and other stock awards under our equity compensation plans, have typically included service-based or performance-based vesting conditions. For awards with only service-based vesting conditions, we record compensation cost for these awards using the straight-line method over the vesting period. For awards with performance-based vesting conditions, we recognize compensation cost on a tranche-by-tranche basis.

Stock-based compensation expense is measured based on the grant-date fair value of the stock-based awards and is recognized over the requisite service period of the awards. The Black-Scholes model requires management to make a number of key assumptions, including expected volatility, expected term, risk-free interest rate and expected dividends. The risk-free interest rate is estimated using the rate of return on U.S. treasury notes with a life that approximates the expected term. The expected term assumption used in the Black-Scholes model represents the period of time that the options are expected to be outstanding and is estimated using the midpoint between the requisite service period and the contractual term of the option.

The assumptions underlying these valuations represent management's best estimates, which involve inherent uncertainties and the application of management judgment. As a result, if factors or expected outcomes change and our management uses significantly different assumptions or estimates, our stock-based compensation expense for future periods could be materially different, including as a result of adjustments to stock-based compensation expense recorded for prior period.

 ****

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

We regularly review our long-term assets, comprising intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability generally requires us to estimate the fair value of the long-term asset, including making assumptions and judgments on several items including, but not limited to, the future cash flows that will be generated by these assets. Measurement of any impairment loss for long-lived assets is based on the amount by which the carrying value exceeds the fair value of the asset.

***Business Combinations***

We allocate the fair value of purchase consideration to the assets acquired and liabilities assumed in the companies acquired based on their fair values at the acquisition date. The excess of the fair value of purchase consideration over the fair value of these assets acquired and liabilities assumed is recorded as goodwill and may involve engaging independent third parties to perform an appraisal. When determining the fair values of assets acquired and liabilities assumed in the acquired company, management makes significant estimates and assumptions, especially with respect to intangible assets.

Critical estimates in valuing intangible assets include, but are not limited to, expected future cash flows, which includes consideration of future growth rates, and discount rates. Fair value estimates are based on the assumptions management believes a market participant would use in pricing the asset or liability. Amounts recorded in a business combination may change during the measurement period, which is a period not to exceed one year from the date of acquisition, as additional information about conditions existing at the acquisition date becomes available.

***Goodwill***

 ****

We review goodwill for impairment annually or whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. A qualitative assessment is first performed to determine if the fair value of a reporting unit is more likely than not to be less than its carrying amount. Judgment in the assessment of qualitative factors of impairment may include changes in business climate, market conditions, or other events impacting the reporting unit. If we determine an impairment is more likely than not based on our qualitative assessment, a quantitative assessment of impairment is performed.

Performing a quantitative goodwill impairment test includes the determination of the fair value of a reporting unit and involves significant estimates and assumptions. These estimates and assumptions include, among others, revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions, and the determination of appropriate market comparables. If we determine the carrying amount exceeds fair value, goodwill is impaired, and the excess is recognized as an impairment loss.

---

| | |
|:---|:---|
| **Item 7A.** | **Quantitative and Qualitative Disclosure About Market Risk.** |

---

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

**Item 8.** **Financial Statements and Supplementary Data.**

**INDEX TO FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
|  | **Page** |
| [Report of Independent Registered Public Accounting Firm](#k22_9) | F-1 |
| [Consolidated Balance Sheets as of September 30, 2022 and 2021](#k22_11) | F-3 |
| [Consolidated Statements of Operations for the Years Ended September 30, 2022 and 2021](#k22_12) | F-4 |
| [Consolidated Statement of Changes in Shareholders' Equity for the Years Ended September 30, 2022 and 2021](#k22_13) | F-5 |
| [Consolidated Statements of Cash Flows for the Years Ended September 30, 2022 and 2021](#k22_14) | F-6 |
| [Notes to the Consolidated Financial Statements](#k22_15) | F-7 |

---

**<u>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</u>**

To the shareholders and the board of directors of EBET, Inc.

**Opinion on the Financial Statements**

We have audited the accompanying balance sheet of EBET, Inc. (the "Company") as of September 30, 2022, the related statement of operations, stockholders' equity (deficit), and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2022, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States.

**Substantial Doubt about the Company's Ability to Continue as a Going Concern**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company's significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s BF Borgers CPA PC

**BF Borgers CPA PC (PCAOB ID 5041)**

We have served as the Company's auditor since 2022

Lakewood, CO

January 13, 2023

<u>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</u>

To the Board of Directors and Shareholders

of EBET, Inc.

***Opinion on the Financial Statements***

We have audited the accompanying consolidated balance sheets of EBET, Inc. (the "Company") as of September 30, 2021, and the related consolidated statements of operations, shareholders' equity and cash flows for the year ended September 30, 2021 and the related notes and schedules (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2021, and the results of its operations and its cash flows for the year ended September 30, 2021, in conformity with accounting principles generally accepted in the United States of America.

***Basis for Opinion***

 

These financial statements are the responsibility of the entity's management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provide a reasonable basis for our opinion.

As discussed in Note 1 to the financial statements, the Company's need for additional financing in order to fund its operations in 2021 raises substantial doubt about its ability to continue as a going concern. These 2021 financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**CRITICAL AUDIT MATTERS**

Critical audit matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/ *PWR CPA LLP*

We have served as the Company's auditor since 2020.

 

Houston, Texas

December 23, 2021

**EBET, INC.**

**CONSOLIDATED BALANCE SHEETS**

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| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2022** | **September 30,**<br>**2021** |
| **ASSETS** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $5486210 | $9064859 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 1647345 | 21636 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 1772332 | 690637 |
| &nbsp;&nbsp;&nbsp;Derivative asset | 1116153 |  |
| &nbsp;&nbsp;&nbsp;Right of use asset, operating lease, current portion | 129975 | 170512 |
| &nbsp;&nbsp;&nbsp;Total current assets | 10152015 | 9947644 |
| Long term assets: |  |  |
| &nbsp;&nbsp;&nbsp;Fixed assets, net | 546408 | 85334 |
| &nbsp;&nbsp;&nbsp;Right of use asset, operating lease |  | 172915 |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 27545329 | 3856598 |
| &nbsp;&nbsp;&nbsp;Goodwill | 30657460 | – |
| &nbsp;&nbsp;&nbsp;**Total assets** | $68901212 | $14062491 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | $13384906 | $1721103 |
| &nbsp;&nbsp;&nbsp;Current lease liabilities | 129974 | 170511 |
| &nbsp;&nbsp;&nbsp;Borrowings, current portion | 21202585 | 1396133 |
| &nbsp;&nbsp;&nbsp;Liabilities to users | 1272308 | 58789 |
| &nbsp;&nbsp;&nbsp;Total current liabilities | 35989773 | 3346536 |
| Long-Term Liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Borrowings, net of current portion | 11145863 | 463925 |
| &nbsp;&nbsp;&nbsp;**Total liabilities** | 47135636 | 3810461 |
| **COMMITMENTS AND CONTINGENCIES** | **–** | **–** |
| **Stockholders' equity:** |  |  |
| &nbsp;&nbsp;&nbsp;Preferred Stock, $0.001 par value, 10,000,000 shares authorized, 37,700 and 0 issued and outstanding as of September 30, 2022 and September 30, 2021, respectively | 38 |  |
| &nbsp;&nbsp;&nbsp;Common stock; $0.001 par value, 100,000,000 shares authorized 16,654,573 and 13,315,414 shares issued and outstanding as of September 30, 2022 and September 30, 2021, respectively | 16654 | 13315 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 91941757 | 26834354 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive (deficit) income | (7365129) | 53911 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (62827744) | (16649550) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 21765576 | 10252030 |
| **TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY** | $68901212 | $14062491 |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

**EBET, INC.**

**CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** |
|  | **September 30,** | **September 30,** |
|  | **2022** | **2021** |
| Revenue | $58596620 | $164807 |
| Cost of revenue | (36014055) | (37744) |
| Gross profit | 22582565 | 127063 |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;Sales and marketing expenses | 27500618 | 3221218 |
| &nbsp;&nbsp;&nbsp;Product and technology expenses | 3993846 | 3103611 |
| &nbsp;&nbsp;&nbsp;Acquisition costs | 2240147 | 147616 |
| &nbsp;&nbsp;&nbsp;Impairment loss | 3851503 |  |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 17640728 | 7103943 |
| Total operating expenses | 55226842 | 13576388 |
| Income (loss) from operations | (32644277) | (13449325) |
| Other income (expenses): |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense | (9894531) | (1704395) |
| &nbsp;&nbsp;&nbsp;Gain on derivative instruments | 1239510 |  |
| &nbsp;&nbsp;&nbsp;Foreign currency loss | (128311) | (46304) |
| Total other expense | (8783332) | (1750699) |
| Loss before provision for income taxes | (41427609) | (15200024) |
| Provision for income taxes | – | – |
| Net loss | (41427609) | (15200024) |
| Preferred stock dividends | (4750585) | – |
| Net loss attributable to common shareholders | (46178194) | (15200024) |
| Other comprehensive income: |  |  |
| Foreign currency translation income (loss) | (7419040) | 53911 |
| Total other comprehensive income | (7419040) | 53911 |
| Comprehensive loss | $(53597234) | $(15146113) |
| Net loss per common share – basic and diluted | $(3.11) | $(1.33) |
| Weighted average common shares outstanding – basic and diluted | 14839645 | 11397739 |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

**EBET, INC.**

**CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY**

**FOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021**

 

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred stock** | **Preferred stock** | **Common Stock** | **Common Stock** | | | | |
|  | **Number of**<br>**Shares** |<br>**Amount** | **Number of**<br>**Shares** |<br>**Amount** |<br>**Additional**<br>**paid-in**<br>**capital** | **Accumulated**<br>**Other**<br>**Comprehensive**<br>**Income** |<br>**Accumulated**<br>**deficit** |<br><br>**Total** |
| **Balance at September 30, 2020** |  | $– | 7340421 | $7340 | $3053660 | $– | $(1449526) | $1611474 |
| Shares issued for cash, net |  |  | 4650014 | 4651 | 17877306 |  |  | 17881957 |
| Stock-based compensation |  |  | 683334 | 683 | 4187627 |  |  | 4188310 |
| Shares issued due to conversion of borrowings |  |  | 375000 | 375 | 187125 |  |  | 187500 |
| Shares and stock options issued for assets |  |  | 65000 | 65 | 1513837 |  |  | 1513902 |
| Cashless exercise of warrants |  |  | 196645 | 196 | (196) |  |  |  |
| Exercise of stock options for cash |  |  | 5000 | 5 | 14995 |  |  | 15000 |
| Net loss |  |  |  |  |  |  | (15200024) | (15200024) |
| Comprehensive income | – | – | – | – | – | 53911 | – | 53911 |
| **Balance at September 30, 2021** |  |  | 13315414 | 13315 | 26834354 | 53911 | (16649550) | 10252030 |
| Shares and warrants issued for cash, net |  |  | 977659 | 978 | 3491472 |  |  | 3492450 |
| Preferred shares issued for cash, net | 37700 | 38 |  |  | 33515962 |  |  | 33516000 |
| Shares issued to for acquisition of Aspire B2C business |  |  | 186838 | 187 | 5665183 |  |  | 5665370 |
| Cashless exercise of warrants |  |  | 859268 | 858 | (858) |  |  |  |
| Shares issued for conversion of borrowings |  |  | 825000 | 825 | 411675 |  |  | 412500 |
| Exercise of stock options for cash |  |  | 58785 | 59 | 20137 |  |  | 20196 |
| Stock-based compensation |  |  | 431609 | 432 | 5446940 |  |  | 5447372 |
| Preferred share dividends |  |  |  |  | 4750585 |  | (4750585) |  |
| Stock warrants issued in connections with Senior Notes |  |  |  |  | 11806307 |  |  | 11806307 |
| Net loss |  |  |  |  |  |  | (41427609) | (41427609) |
| Comprehensive income | – | – | – | – | – | (7419040) | – | (7419040) |
| **Balance at September 30, 2022** | 37700 | $38 | 16654573 | $16654 | $91941757 | $(7365129) | $(62827744) | $21765576 |

---

 

*The accompanying notes are an integral part of these consolidated financial statements.*

 

 

 

 

**EBET, INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

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| | | |
|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** |
|  | **September 30,** | **September 30,** |
|  | **2022** | **2021** |
| **Cash flow from operating activities:** |  |  |
| Net loss | $(41427609) | $(15200024) |
| **Adjustments to reconcile net loss to net cash used in operating activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Amortization of debt discount | 4778405 | 1508482 |
| &nbsp;&nbsp;&nbsp;Loss on extinguishment of debt |  |  |
| &nbsp;&nbsp;&nbsp;Gain on derivative instruments | (1116153) |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 6377301 | 390291 |
| &nbsp;&nbsp;&nbsp;Bad debt expense |  | 50932 |
| &nbsp;&nbsp;&nbsp;Amortization of right of use assets | 175497 | 37919 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation | 5447372 | 4188310 |
| &nbsp;&nbsp;&nbsp;Impairment loss | 3851503 |  |
| &nbsp;&nbsp;&nbsp;Foreign exchange loss | 128092 |  |
| &nbsp;&nbsp;&nbsp;Gain on cryptocurrency settlement | (428) | (45267) |
| **Changes in operating assets and liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable | (1793198) | (56888) |
| &nbsp;&nbsp;&nbsp;Prepaid expenses | (1128372) | (614250) |
| &nbsp;&nbsp;&nbsp;Other current assets |  | 35122 |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | 11988008 | 1729365 |
| &nbsp;&nbsp;&nbsp;Accounts payable - related parties |  | (152888) |
| &nbsp;&nbsp;&nbsp;Right of use lease liabilities | (14969) | (210835) |
| &nbsp;&nbsp;&nbsp;Liabilities to users | 1339717 | 31533 |
| **Net cash used in operating activities** | (11394834) | (8308198) |
| **Cash flow from investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Purchase of software and equipment | (1200882) | (157714) |
| &nbsp;&nbsp;&nbsp;Acquisition of Aspire B2C business | (56235526) |  |
| &nbsp;&nbsp;&nbsp;Purchase of other long-term assets | – | (420097) |
| **Net cash used by investing activities** | (57436408) | (577811) |
| **Cash flow from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from debt issuance, net of issuance costs | 26627111 |  |
| &nbsp;&nbsp;&nbsp;Proceeds from equity issuances, net of costs of capital | 37028646 | 17896957 |
| **Net cash provided by financing activities** | 63655757 | 17896957 |
| Effect of foreign exchange rates on cash | 1596836 | 53911 |
| **NET CHANGE IN CASH** | (3578649) | 9064859 |
| **CASH AT BEGINNING OF PERIOD** | 9064859 | – |
| **CASH AT END OF PERIOD** | $5486210 | $9064859 |
| **Supplemental disclosure of cash flow information:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $3575349 | $– |
| &nbsp;&nbsp;&nbsp;Cash paid for income taxes | $– | $– |
| **Non-cash transactions** |  |  |
| &nbsp;&nbsp;&nbsp;Preferred shares issued for dividends | $4750585 | $– |
| &nbsp;&nbsp;&nbsp;Stock warrants issued in connection with Senior Notes | $7661382 | $– |
| &nbsp;&nbsp;&nbsp;Common stock issued for acquisition of Aspire B2C business | $5665370 | $– |
| &nbsp;&nbsp;&nbsp;Promissory note issued for acquisition of Aspire B2C business | $11330740 | $– |
| &nbsp;&nbsp;&nbsp;Stock issued for conversion of borrowings | $412500 | $187500 |
| &nbsp;&nbsp;&nbsp;Stock issuable for intangible assets | $– | $1513902 |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

**EBET, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 1 – ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN**

*Organization*

EBET, Inc. ("EBET" or "the Company") was formed on September 24, 2020 as a Nevada corporation. EBET is a technology company operating platforms focused on i-gaming including casino, sportsbook and esports events. The Company operates under a Curacao gaming sublicense and under a strategic agreement with Aspire Global plc ("Aspire") allowing EBET to provide online betting services to various countries around the world. On May 5, 2022, the Company changed its name to EBET, Inc. from Esports Technologies, Inc.

*Acquisition of the B2C business of Aspire Global plc*

On October 1, 2021, the Company, and its wholly owned subsidiary, Esports Product Technologies Malta Ltd. ("Esports Malta"), entered into a Share Purchase Agreement (the "Acquisition Agreement") with Aspire and various Aspire group companies to acquire all of the issued and outstanding shares of Karamba Limited, a subsidiary of Aspire. The total acquisition price was €65,000,000 paid as follows: (i) cash amount of €50,000,000; (ii) €10,000,000, payable in accordance with the terms of an unsecured subordinated promissory note (the "Note"); and (iii) shares of Company common stock, which are valued at €5,000,000 (based on the weighted-average per-share price of the ten days prior to the execution date of the Acquisition Agreement (the "Exchange Shares"). See Notes 3, 4 and 5 for additional information.

*Going Concern*

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain equity or debt financings to continue operations. The Company has a history of and expects to continue to report negative cash flows from operations and a net loss. The Company's forecasts for 2023 and beyond indicate that it we will need additional funding in order to have sufficient financial resources to continue to settle its debts as they fall due. The Company has taken significant measures to increase the profitability of its business in the short term. These actions include optimizing the efficiency of marketing campaigns, reducing the total number of employees and contractors, terminating software and other immaterial contracts as well as generally reducing the operating costs of the business. These efforts have also resulted in an increased focus on the Company's i-gaming business and a significant reduction in the investment of the Company's esports products and technologies, which resulted in the recognition of an impairment loss on certain intangible assets and fixed assets. As a result of the Company's actions as referenced above, it does not expect to launch its esports products in the short or medium term. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company may seek additional funding through a combination of equity offerings, debt financings, government or other third-party funding, commercialization, marketing and distribution arrangements, other collaborations, strategic alliances and licensing arrangements and delay planned cash outlays or a combination thereof. Management cannot be certain that such events or a combination thereof can be achieved.

*Impact of COVID-19*

The outbreak of the 2019 novel coronavirus disease ("COVID-19"), which was declared a global pandemic by the World Health Organization on March 11, 2020, and the related responses by public health and governmental authorities to contain and combat its outbreak and spread, has severely impacted the U.S. and world economies. Economic recessions, including those brought on by the COVID-19 outbreak may have a negative effect on the demand for the Company's products and the Company's operating results. The range of possible impacts on the Company's business from the coronavirus pandemic could include: (i) changing demand for the Company's online betting products; and (ii) increasing contraction in the capital markets.

A significant or prolonged decrease in consumer spending on entertainment or leisure activities would also likely have an adverse effect on demand for the Company's products, reducing cash flows and revenues, and thereby materially harming the Company's business, financial condition and results of operations. In addition, a materially disruptive resurgence of COVID-19 cases or the emergence of additional variants or strains of COVID-19 could cause other widespread or more severe impacts depending on where infection rates are highest. As steps taken to mitigate the spread of COVID-19 necessitated a shift away from a traditional office environment for many employees, the Company implemented business continuity programs to ensure that employees were safe and that the business continued to function with minimal disruptions to normal work operations while employees worked remotely. The Company will continue to monitor developments relating to disruptions and uncertainties caused by COVID-19.

**NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

The significant accounting policies followed in the preparation of the consolidated financial statements are as follows:

**Basis of Presentation and Consolidation**

The basis of accounting applied is United States generally accepted accounting principles ("US GAAP"). All amounts included in these financial statements and footnotes are expressed in U.S. Dollars, unless otherwise noted. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts, transactions and balances have been eliminated in consolidation.

Certain reclassifications have been made to prior period amounts to conform to the current year presentation.

**Business combinations**

The Company accounts for business combinations under the acquisition method of accounting, in accordance with ASC 805, which requires assets acquired and liabilities assumed to be recognized at their fair values as of the acquisition date. Any fair value of purchase consideration in excess of the fair value of the assets acquired less liabilities assumed is recorded as goodwill. The fair values of the assets acquired, and liabilities assumed are determined based upon the valuation of the acquired business and involve management making significant estimates and assumptions.

**Use of Estimates**

The preparation of the financial statements in conformity with generally accepted accounting principles in the United States of America ("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 dates of the financial statements and the reported amounts of expenses during the reporting periods. Making estimates requires management to exercise judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, actual results could differ significantly from those estimates.

**Cash and Cash Equivalents**

Cash and cash equivalents include short-term investments with original maturities of 90 days or less at the date of purchase. The recorded value of our cash and cash equivalents approximates their fair value.

**Accounts Receivable** 

Accounts receivables are recorded at amortized cost, less any allowance for doubtful accounts. Accounts receivable consists primarily of amounts due from our platform provider. The receivable balance as of September 30, 2022 owed to the Company represents the net amount owed to the Company by Aspire related to the strategic agreement for the Company's i-gaming platform and is stated at historical cost less any allowance for doubtful accounts. The allowance for doubtful accounts was $0 and $50,932 as of September 30, 2022 and 2021, respectively, related to the Company's former third-party operator.

**Fixed Assets, net**

Software and equipment are carried at cost, net of accumulated depreciation. Depreciation is computed utilizing the straight-line method over the estimated useful life of the asset. Additions and improvements are capitalized, while repairs and maintenance are expensed as incurred. Software costs are depreciated over periods of one to three years.

**Intangible Assets**

*Cryptocurrencies*

There is currently no specific guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could have an effect on the Company's consolidated financial position and results from operations.

Cryptocurrencies held are accounted for as an indefinite-lived intangible asset under ASC 350, *Intangible – Goodwill and Other*. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value, which is measured using the quoted price of the cryptocurrency at the time its fair value is being measured. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted.

The Company uses its cryptocurrencies to pay vendors and users. The Company also receives payments on its receivables and player deposits in cryptocurrency. Gains and losses realized upon settlement of cryptocurrencies are also recorded in general and administrative expense in our consolidated statements of operations.

*Other Intangible Assets*

The Company's other intangible assets consist of customer relationships, trademarks and internet domain names. Certain intangible assets have a defined useful life and others are classified as indefinite-lived intangible assets. Other intangible assets with a defined useful life are amortized over their estimated useful economic lives on a straight-line basis. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted.

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

Long-lived assets consist of software and equipment, finite-lived acquired intangible assets, such as license agreements, and indefinite-lived assets such as internet domain names. Long-lived assets are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. Impairment expense is recognized to the extent an asset's expected undiscounted future cash flows are less than the asset's carrying amount. During the year ended September 30, 2022, the Company determined that its long-lived assets related to the esports business, including intangible assets, were impaired. As a result, the Company recognized an impairment loss of $3,851,503, including $3,282,243 related to intangible assets and $569,260 related to property and equipment.

**Leases**

The Company accounts for leases under ASC 842. The Company assesses whether a contract contains a lease on its execution date. If the contract contains a lease, lease classification is assessed upon its commencement date under ASC 842. For leases that are determined to qualify for treatment as operating leases, rent expense is recognized on a straight-line basis over the lease term. Leases that are determined to qualify for treatment as finance leases recognize interest expense as determined using the effective interest method with corresponding amortization of the right-of-use assets. For leases with terms of 12 months and greater, an asset and liability are initially recorded at an amount equal to the present value of the unpaid lease payments over the lease term. In determining the lease term for each lease, the Company includes options to extend the lease when it is reasonably certain that the option will be exercised. The Company uses the interest rate implicit in the lease, when known, or its estimated incremental borrowing rate, which is derived from information available at the lease commencement date including prevailing financial market conditions, in determining the present value of the unpaid lease payments.

The Company's only significant lease is for office space in Malta, which has a two-year lease term beginning August 1, 2021, and is classified as an operating lease. The lease has an option to extend the term for an additional two years with a 10% increase in annual rent. The Company paid €176,001 at commencement and owed an additional €160,001 in August 2022. The Company has been making monthly payments of €13,335 on this annual payment. The Company recognized a right of use asset and lease liability of $381,346 at commencement based on the present value of lease payments at commencement and utilizing an estimate incremental borrowing rate of 10%.

The following table summarizes the lease-related assets and liabilities recorded in the consolidated balance sheets at September 30, 2022 and 2021:

---

| | | |
|:---|:---|:---|
|  | **September 30, 2022** | **September 30, 2021** |
| Operating Leases: |  |  |
| Operating lease right-of-use assets | $129975 | $343427 |
| &nbsp;&nbsp;Right of use liability operating lease current portion | $129974 | $170511 |
| &nbsp;&nbsp;Right of use liability operating lease long term | – | – |
| Total operating lease liabilities | $129974 | $170511 |

---

The following table provides the maturities of lease liabilities at September 30, 2022:

---

| | |
|:---|:---|
|  | **Operating**<br>**Leases** |
| 2023 | $141312 |
| 2023 |  |
| 2024 |  |
| 2025 |  |
| 2026 and thereafter | – |
| Total future undiscounted lease payments | 141312 |
| Less: Interest | (11338) |
| Present value of lease liabilities | $129974 |

---

Operating lease expense was $201,978 and $31,877 during the years ended September 30, 2022 and 2021, respectively.

**Liabilities to Users**

The Company records liabilities for user account balances at a given reporting period based on deposits made by players either to the Company or the sales affiliate, less any losses on wagers and payout made to players. Liabilities to users amounts are not required to be backed by cash reserves of the Company. The user balances are maintained by the Company's third-party platform provider, and the Company has an asset of an equivalent amount included within *Prepaid expense and other current assets* on the Company's consolidated balance sheets.

**Revenue Recognition**

The Company recognizes revenue in accordance with ASC Topic 606, *Revenue From Contracts With Customers*, which was adopted on October 1, 2018 using the modified retrospective method. ASC Topic 606 requires companies to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the standard requires disclosures of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The adoption of ASC Topic 606 had no impact to the Company's comparative consolidated financial statements. Revenue is recognized based on the following five step model:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Identification of the contract with a customer

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Identification of the performance obligations in the contract

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Determination of the transaction price

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Allocation of the transaction price to the performance obligations in the contract

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Recognition of revenue when, or as, the Company satisfies a performance obligation

No single customer accounted for more than 10% of revenue for the year ended September 30, 2022. For the year ended September 30, 2021, a single customer accounted for approximately 77% of the Company's revenue and 100% of the Company's outstanding accounts receivable. In addition, no disaggregation of revenue is required because all current revenue is generated from gaming revenue.

i-gaming, or online casino, typically includes digital versions of wagering games available in land-based casinos, such as blackjack, roulette and slot machines. For these offerings, the Company functions similarly to land-based casinos, generating revenue through casino hold, as users play against the house. i-gaming revenue is generated from user wagers net of payouts made on users' winning wagers and incentives awarded to users.

Sportsbook or sports betting involves a user wagering money on an outcome or series of outcomes occurring. When a user's wager wins, the Company pays the user a pre-determined amount known as fixed odds. Sportsbook revenue is generated by setting odds such that there is a built-in theoretical margin in each sports wagering opportunity offered to users. Sportsbook revenue is generated from users' wagers net of payouts made on users' winning wagers and incentives awarded to users.

*Performance Obligations*

The Company operates an online betting platform allowing users to place wagers on a variety of live sporting events, i-gaming and esports events. Each wager placed by users create a single performance obligation for the Company to administer each event wagered. The performance obligation is satisfied once the event wagered on has been completed. Gross gaming revenue is the aggregate of gaming wins and losses based on results of each event that customers wager bets on.

*Transaction Price Considerations*

Variability in the transaction price arises primarily due to market-based pricing, cash discounts, revenue sharing and usage-based fees. The Company offers loyalty programs, free plays, deposit bonuses, discounts, rebates and other rewards and incentives to its customers. Revenue for Sportsbook and i-gaming is collected prior to the contest or event and is fixed once the outcome is known. Prizes paid and payouts made to users are recognized when awarded to the player.

**Cost of Revenue**

Cost of revenue consists of third-party costs associated with the betting software platform and gaming taxes.

**Sales and Marketing Expenses**

Sales and marketing expenses consist primarily of expenses associated with amounts paid to affiliates, advertising and related software, strategic league and team partnerships and costs related to free to play contests, and the compensation of sales and marketing personnel, including stock-based compensation expenses. Variable commission fees are paid to sales affiliates based on a percentage of revenue generated from the affiliate. The commissions rebated to affiliates are recorded as a component of marketing expense. Advertising costs are expensed as incurred. Advertising costs incurred was $1,188,392 and $452,473 for years ended September 30, 2022 and 2021, respectively.

**Product and Technology Expenses**

Product and technology expenses consist primarily of expenses which are not subject to capitalization or otherwise classified within Cost of Revenue. Product and Technology expenses include software licenses, depreciation of hardware and software and costs related to the compensation of product and technology personnel, including stock-based compensation.

**General and Administrative Expenses**

General and administrative expenses includes costs related to the compensation of the Company's administrative functions, insurance costs, professional fees and consulting expense.

**Income Taxes**

Deferred taxes are determined utilizing the "asset and liability" method, whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, when it's more likely than not that deferred tax assets will not be realized in the foreseeable future. Deferred tax liabilities and assets are classified as current or non-current based on the underlying asset or liability or if not directly related to and asset or liability based on the expected reversal dates of the specific temporary differences.

**Fair value of financial instruments**

The Company discloses fair value measurements for financial and non-financial assets and liabilities measured at fair value. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

---

| | |
|:---|:---|
| Level 1: | Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. |
| Level 2: | Observable prices that are based on inputs not quoted on active markets but are corroborated by market data. |
| Level 3: | Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. |

---

The following tables set forth the fair value of the Company's financial assets and liabilities measured at fair value as of September 30, 2022 and 2021 based on the three-tier fair value hierarchy:

---

| | | | |
|:---|:---|:---|:---|
|  | **Fair Value Measurements at September 30, 2022** | **Fair Value Measurements at September 30, 2022** | **Fair Value Measurements at September 30, 2022** |
|  | Level 1 | Level 2 | Level 3 |
| **Assets** |  |  |  |
| Cash | $5486210 | $– | $– |
| Derivative asset | – | 1116153 | – |
| &nbsp;&nbsp;&nbsp;Total assets | $5486210 | $1116153 | $– |
| **Liabilities** |  |  |  |
| Senior Notes, net of discount |  | 19595694 |  |
| Note due to Aspire |  | 10636343 |  |
| Convertible notes payable, net of discount |  | 1606891 |  |
| Other notes payable, net of discount | – | 509520 | – |
| Total liabilities | $– | $32348448 | $– |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Fair Value Measurements at September 30, 2021** | **Fair Value Measurements at September 30, 2021** | **Fair Value Measurements at September 30, 2021** |
|  | Level 1 | Level 2 | Level 3 |
| **Assets** |  |  |  |
| Cash | $9064859 | $– | $– |
| Derivative asset | – | – | – |
| &nbsp;&nbsp;&nbsp;Total assets | $9064859 | $– | $– |
| **Liabilities** |  |  |  |
| Senior Notes, net of discount |  |  |  |
| Note due to Aspire |  |  |  |
| Convertible notes payable, net of discount |  | 1396133 |  |
| Other notes payable, net of discount | – | 463925 | – |
| Total liabilities | $– | $1860058 | $– |

---

**<u>Derivative Instruments</u>**

The Company accounts for its derivative financial instruments in accordance with ASC Topic 815, *Derivatives and Hedging* ("ASC 815") and ASC Topic 820, *Fair Value Measurements and Disclosures* ("ASC 820")*.* The Company uses derivative financial instruments to reduce its exposure to changes in foreign currency exchange rates. All derivatives are recorded at fair value on the Consolidated Balance Sheets and changes in the fair value of derivative financial instruments are either recognized in Accumulated other comprehensive income (loss) (a component of Total shareholders' equity), Long-term debt or Net income depending on the nature of the underlying exposure, whether the derivative is formally designated as a hedge and, if designated, the extent to which the hedge is effective. The Company classifies the cash flows at settlement from derivatives in the same category as the cash flows from the related hedged items.

The Company's derivative instruments do not subject its earnings or cash flows to material risk, as gains and losses on these derivatives are intended to offset losses and gains on the item being hedged. The Company does not enter into derivative transactions for speculative purposes and it does not have any non-derivative instruments that are designated as hedging instruments pursuant to ASC 815. The Company manages the credit risk of its counterparties by dealing only with institutions that it considers financially sound and considers the risk of non-performance to be remote.

The Company entered into foreign exchange forward contracts to mitigate the change in fair value of specific liabilities and cash flows on the Consolidated Balance Sheets that were denominated in Euros related to the acquisition of the Aspire B2C business in November 2021. These undesignated hedging instruments are recorded at fair value as a derivative asset or liability on the Consolidated Balance Sheets with their corresponding change in fair value recognized in Other income (expense), net. The cash flows related to the gains and losses are classified in the consolidated statements of cash flows as part of cash flows from operating activities. The total notional amount of outstanding undesignated derivative instruments was $16,050,000 as of September 30, 2022. The Company recognized a gain on derivative instruments of $1,239,510 during the year ended September 30, 2022. Subsequent to September 30, 2022, the Company settled all of its foreign exchange forward contracts.

**Foreign Currency** 

The Company's reporting currency is the U.S. Dollar. Certain subsidiaries of the Company have a functional currency other than the U.S. Dollar and are translated to the Company's reporting currency at each reporting date. Non-monetary items are translated at historical rates. Monetary assets and liabilities are translated from British Pounds Sterling and Euro into U.S. Dollars, at the period-end exchange rate, while foreign currency expenses are translated at the exchange rate in effect on the date of the transaction. The net effect of translation is reflected as other comprehensive income. The gains or losses on transactions denominated in currencies other than an entity's functional currency are included in the consolidated statement of operations.

**Earnings per share**

The Company computes earnings per share in accordance with Accounting Standards Codification Topic 260 – Earnings per Share (Topic 260). Topic 260 requires presentation of both basic and diluted earnings per shares (EPS) on the face of the income statement. The basic net loss per common share is calculated by dividing the Company's net loss available to common shareholders by the weighted average number of common shares during the year. The diluted net loss per common share is calculated by dividing the Company's net loss available to common shareholders by the diluted weighted average number of common shares outstanding during the year. The diluted weighted average number of common shares outstanding is the basic weighted number of common shares adjusted for any potentially dilutive debt or equity.

**Embedded Conversion Features**

The Company evaluates embedded conversion features within convertible debt under ASC 815 "Derivatives and Hedging" to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 "Debt with Conversion and Other Options." Under the ASC 470-20, an entity must separately account for the liability and equity components of the convertible debt instruments that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer's economic interest cost. The effect of ASC 470-20 on the accounting for our convertible debt instruments is that the equity component is required to be included in the additional paid-in capital section of stockholders' equity on the consolidated balance sheets and the value of the equity component is treated as original issue discount for purposes of accounting for the debt component of the notes. As a result, the Company is required to record non-cash interest expense as a result of the amortization of the discounted carrying value of the convertible debt to their face amount over the term of the convertible debt. We report higher interest expense in our financial results because ASC 470-20 requires interest to include both the current period's amortization of the debt discount and the instrument's coupon interest.

For conventional convertible debt where the rate of conversion is below market value, the Company records a "beneficial conversion feature" ("BCF") and related debt discount. When the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument (offset to additional paid in capital) and amortized to interest expense over the life of the debt.

**Recently Issued Accounting Pronouncements**

From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board ("FASB") or other standard setting bodies that the Company adopts as of the specified effective date. The Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on the Company's financial position or results of operations upon adoption.

**NOTE 3 – BUSINESS COMBINATION**

 

*Acquisition of the B2C business of Aspire Global plc*

On October 1, 2021, in order to accelerate the growth and expand market access for our product offerings, the Company and Esports Malta entered into the "Acquisition Agreement" with Aspire, Aspire Global International Limited, AG Communications Limited, Aspire Global 7 Limited (collectively the "Aspire Related Companies"), and Karamba Limited ("Karamba") whereby Esports Malta acquired all of the issued and outstanding shares of Karamba from the Aspire Related Companies. The total acquisition price, paid at the closing of the acquisition of the Karamba shares, was €65,000,000 paid as follows: (i) a cash amount of €50,000,000; (ii) €10,000,000, paid in accordance with the terms of an unsecured subordinated promissory note (the "Note"); and (iii) shares of Company common stock, which were valued at €5,000,000 (based on the weighted-average per-share price of the ten days prior to the execution date of the Acquisition Agreement). The transaction closed on November 29, 2021.

The acquired assets were recorded at their estimated fair values. The purchase price allocation is preliminary, and as additional information becomes available, the Company may further revise the preliminary purchase price allocation, including the fair value of identified intangible assets, during the remainder of the measurement period. Measurement period adjustments will be recognized in the reporting period in which the adjustment amounts are determined. Any such adjustments may be material.

The purchase price of this acquisition was allocated on a preliminary basis as follows:

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| | |
|:---|:---|
|  | **Fair Value** |
| Trademarks | $21836528 |
| Customer relationships | 16162202 |
| Goodwill | 35620270 |
| **Total** | $73619000 |

---

Useful life is the period over which an asset is expected to add to the future cash flows of an entity. Useful life for identifiable assets is generally estimated using a modified straight-line method or a usage period. The Company has determined that the useful life of the trademarks vary from 5 years to an indefinite life and determined that the useful life of the Customer Relationships was three years.

Goodwill represents the excess of the gross considerations transferred over the fair value of the underlying net assets acquired and liabilities assumed. Goodwill recognized is not deductible for local tax purposes.

Upon completing the acquisition of Aspire, the company incurred the following costs:

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| | |
|:---|:---|
| Debt issuance costs | $3372889 |
| Equity issuance costs | $4184000 |
| Transaction expenses | $2240147 |

---

Debt issuance costs relate to costs associated with acquiring the loan from the CP BF Lending LLC. These have been recorded as reduction of the face value of the debt and are amortized over the life of the loan. Equity issuance costs relate to the costs associated with the private placement. These have been recorded as reduction of the equity proceeds. Transactions costs relate to all direct and indirect costs associated with the acquisition and expensed as incurred.

The Company's revenue and net loss for the year ended September 30, 2022 included $58,596,620 and $17,908,280, respectively from the Aspire B2C business since the acquisition date, including interest expense on the debt issued to acquire the business.

**Unaudited proforma information**

The following schedule contains pro-forma consolidated results of operations for the year ended September 30, 2021 as if the Aspire B2C acquisition occurred on October 1, 2020. The pro forma results of operations are presented for informational purposes only and are not indicative of the results of operations that would have been achieved if the acquisition had taken place on October 1, 2020, or of results that may occur in the future.

---

| | | |
|:---|:---|:---|
|  | **Fiscal Year Ended** | **Fiscal Year Ended** |
|  | **September 30, 2022** | **September 30, 2021** |
| Revenue | $68628158 | $76613148 |
| Operating loss | (32488215) | (12898566) |
| Net loss | (42698109) | (20728132) |
| Net loss attributable to common shareholders | (48398814) | (26428836) |
| Loss per common share - basic and diluted | $(3.26) | $(2.28) |

---

The most significant proforma adjustments relate to annual interest on the Senior Notes and Note to Aspire issued in connection with the acquisition, amortization expense of the estimated intangible assets recognized as part of the purchase price allocation, and the preferred dividends incurred in connection with the financing of the acquisition.

**NOTE 4 – BORROWINGS** 

The following is a summary of borrowings outstanding as at September 30, 2022 and September 30, 2021:

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Schedule of borrowings outstanding** |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | September 30, 2022 | September 30, 2022 | September 30, 2022 | September 30, 2022 | September 30, 2022 | September 30, 2022 | September 30, 2021 | September 30, 2021 | September 30, 2021 |
|  | Contractual Interest |  | Principal outstanding balance | Principal outstanding balance | Unamortized debt discount | Accrued Interest | Issuance costs | Carrying amount | Principal outstanding balance | Unamortized debt discount | Carrying amount |
|  | rate | Currency | Currency | USD | USD | USD | USD | USD | USD | USD | USD |
| Senior Note | 15% | USD | 30000000 | 30000000 | (8526776) | 558446 | (2435976) | 19595694 |  |  |  |
| Note due to Aspire | 10% | EUR | 10000000 | 9748000 |  | 888343 |  | 10636343 |  |  |  |
| Convertible notes | 10% | USD | 1606891 | 1606891 |  |  |  | 1606891 | 1912500 | (516367) | 1396133 |
| Other | 0% | USD | 675000 | 675000 | (165480) | – | – | 509520 | 675000 | (211075) | 463925 |
| Total borrowings |  |  |  | 42029891 | (8692256) | 1446789 | (2435976) | 32348448 | 2587500 | (727442) | 1860058 |
| Current |  |  |  |  |  |  |  | 21202585 |  |  | 1396133 |
| Long-term |  |  |  |  |  |  |  | 11145863 |  |  | 463925 |
| Total borrowings |  |  |  |  |  |  |  | $32348448 |  |  | $1860058 |

---

Se*nior Note*

On November 29, 2021, the Company entered into a credit agreement (the "Credit Agreement") with CP BF Lending, LLC ("Lender"), pursuant to which the Lender agreed to make a single loan to the Company of $30,000,000 (the "Senior Note"). The Senior Note bears interest on the unpaid principal amount at a rate per annum equal to 15.0% as follows: (1) cash interest on the unpaid principal amount of the Senior Note at a rate equal to 14.0% per annum, plus (2) payable-in-kind interest ("PIK Interest") on the unpaid principal amount of the Senior Note at a rate equal to 1.0% per annum. The Company paid to Lender on the closing date a non-refundable origination fee in an amount equal to $750,000.

The Senior Note matures in 36 months, provided that the Company may receive two 12-month extensions of the maturity date by paying to the Lender (1) an extension fee equal to 1.0% of the unpaid principal balance of the Senior Note as of the date of such extension, and (2) all reasonable and documented out-of-pocket fees and expenses paid or incurred by Lender, in each case in connection with the extension request, including but not limited to fees and expenses for appraisals, collateral exams and audits, and legal counsel. The foregoing extension right is subject to, among other items, (i) the Senior Note not being in default, (ii) the representations and warranties contained in Credit Agreement being true and correct; and (iii) the Lender granting its written approval thereof in its sole discretion.

The Senior Note may be prepaid by the Company at any time. In addition, the Credit Agreement provides that in the event there shall be excess cash flow from the Aspire Business (as such concept is defined in the Credit Agreement) for any calendar month, commencing with the month ended December 31, 2022, the Company shall apply such excess cash flow amount to prepay the outstanding principal balance of the Senior Note; provided that no such prepayment shall be required once the unpaid principal balance of the Senior Note has been reduced to $15,000,000.

The Credit Agreement requires the Company to meet certain financial covenants commencing June 30, 2022. The Senior Note is secured by all of the assets of the Company and its subsidiaries. The Senior Note may be accelerated by the Lender upon an event of default, which in addition to customary events of default include: (i) if (1) any of the Company or its subsidiaries shall fail to maintain in full force and effect any gaming approval (as defined in the Credit Agreement) required for the operation of its business or (2) any gaming regulator shall impose any condition or limitation on any of the foregoing entities that could be reasonably expected to have a material adverse effect; or (ii) the suspension from trading or failure of the Company's common stock to be trading or listed on the Nasdaq exchange for a period of three consecutive trading days.

As of June 30, 2022, the Company had not maintained compliance with the covenants of the Senior Note and obtained a waiver from its lender which waiver is contingent on the completion of an equity raise of $3.5 million, which was completed in June 2022. In consideration for obtaining a waiver from the compliance with certain covenants, the Company agreed to amend the Senior Note such that $5,000,000 of principal loan balance becomes convertible at $3.58 per share commencing after the Company raises the $5,000,000 of common equity (including the foregoing $3.5 million).

In connection with the Senior Note, the Company issued the Lender a warrant (the "Lender Warrant") to purchase 1,567,840 shares of Company common stock at an exercise price of $25.00 per share expiring on the earlier to occur of (i) five years following the issue date or (ii) the second anniversary of the satisfaction of all obligations of the Company under the Credit Agreement. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Company's common stock. In addition, the exercise price of the Lender Warrant is subject to "weighted-average" anti-dilution protection for issuances by the Company below the exercise price (other than certain defined exempt issuances), and, upon shareholder approval, which was received on February 9, 2022, the number of shares underlying the Lender Warrant shall also be adjusted for issuances to which the "weighted-average" anti-dilution protection applies. Pursuant to the foregoing anti-dilution provision, in connection with the $3.5 million offering completed in June 2022, the number of shares underlying the warrant increased to 1,654,538 and the exercise price was reduced to $23.69. The Lender will not have the right to exercise any portion of the Lender Warrant if the Lender (together with its affiliates) would beneficially own in excess of 4.99% of the number of shares of Company common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Lender Warrant, which beneficial ownership amount, at the election of the Lender may be increased to any other percentage not in excess of 19.99% as specified by the Lender. If a fundamental transaction occurs, then the successor entity will succeed to, and be substituted for the Company, and will assume all of the Company's obligations under the Lender Warrant with the same effect as if such successor entity had been named in the Lender Warrant itself.

On September 2, 2022, the Lender provided the Company with a limited waiver of these covenants until September 30, 2022 in exchange for a one-time payment of $151,158 to be added to the principal amount of the Senior Note. In addition, the Senior Note required the Company to maintain a minimum balance of $4.0 million in the account utilized to collect the revenues from the Company's i-gaming business.

On September 30, 2022, the Lender provided the Company with a limited waiver of these covenants until October 31, 2022 in exchange for a one-time payment of $152,032 to be added to the principal amount of the Senior Note. In addition, the Senior Note required the Company to maintain a minimum balance of $5.0 million in the account utilized to collect the revenues from the Company's i-gaming business.

On October 6, 2022, the Lender provided the Company with an additional limited waiver allowing the foregoing minimum balance to be reduced to $4.0 million until October 31, 2022, in exchange for a one-time payment of $76,409 to be added to the principal amount of the Senior Note. On October 31, 2022, the Lender provided the Company with a limited waiver of these covenants until November 30, 2022 in exchange for a one-time payment of $229,959 to be added to the principal amount of the Senior Note. On November 30, 2022, the Lender provided the Company with a limited waiver of these covenants until December 16, 2022. On December 16, 2022, the Lender provided the Company with a limited waiver of these covenants until January 9, 2023. On January 9, 2023, the Lender provided the Company with a limited waiver of these covenants until January 31, 2023 and required a principal payment of $3,000,000 which was made on January 10, 2023. This waiver and principal payment reduced the minimum balance in the account to $1,500,000. The Company does not expect to satisfy certain of these covenants prior to January 31, 2023 and is currently in discussions with the Lender on modifying the financial covenants, although there is no assurance that the Company will be successful in making such modifications to the Senior Note.

During the year ended September 30, 2022, the Company recognized interest expense of $4,216,442 from the amortization debt discount and debt issuance costs related to the Senior Note.

*Note due to Aspire* 

The Note provides for an interest rate of 10% per annum. The maturity date of the Note will be the earlier of that date which is four years from the issuance date or a liquidity event. The Note will require repayment of the principal amount plus any accrued interest in three equal installments, payable annually starting on the second anniversary after issuance. No interest payment shall be due until that date which is the last day of the end of the second-year anniversary of issuance should the Note remain unpaid at such time. Should the Note remain unpaid at the second-year anniversary, the total accrued interest due at that time shall be paid at the second year anniversary for accrued interest for the period from the issuance date through the second year anniversary date. Thereafter, and on each annual anniversary date thereafter, the interest due for the prior annual period shall be paid. Notwithstanding the foregoing, if the Company owes greater than $15,000,000 under the Credit Agreement, then the parties agree that the Company shall repay any principal amount plus any accrued interest due through the issuance of Company common stock in lieu of any cash payment and the amount of said common stock shares to be issued by the Company shall be determined by using the Conversion Price as defined below. Should an event of default occur on the Note, then at the election of Aspire, either (i) the Operator Services Agreement will be amended such that the fees payable shall increase by 5% during the continuation of the event of default, or (ii) Aspire may elect to convert the entire outstanding principal amount plus any accrued interest into shares of common stock of the Company at a price per share based on the weighted-average per-share price for the ten trading days prior to the date of the occurrence of the event of default ("Conversion Price"). In no event shall the Conversion Price be lower than $18.00 per share (as adjusted for stock splits, stock dividends, or similar events occurring after the date hereof) and the total maximum number of shares of common stock that may be issued to Aspire upon any such conversion in the aggregate shall be 650,000 shares (as adjusted for stock splits, stock dividends, or similar events occurring after the date hereof).

*Convertible Notes and other*

 

On September 1, 2020, ESEG entered into three promissory notes, with a combined principal amount of $2,100,000. The notes bore interest at the rate of 10% per annum and matured on March 1, 2022 and are now convertible at the noteholder's option. The Company also agreed to pay two of the lenders a total of $675,000 on September 1, 2025, bearing no interest. The Company issued each of the lenders a conversion option at a fixed price of $0.50 per share and issued 2,015,000 warrants to purchase shares of the Company's common stock at an exercise price of $0.30 per share, each with a term of five years. The convertible notes bear interest at 10% per annum and mature on March 1, 2022. The holder may convert the note into shares of common stock at any time throughout the maturity date, to the extent and provided that no holder of the notes was or will be permitted to convert such notes so long as it or any of its affiliates would beneficially own in excess of 4.99% of the Company's common stock after such conversion. The Company determined that the assignment of the notes payable by the subsidiary to the parent company was an extinguishment of the original notes payable due to the addition of a substantive conversion feature, and the Company recognized a loss on extinguishment of $265,779 during the year ended September 30, 2020.

The Company evaluated the conversion option and concluded a beneficial conversion feature was present at issuance. The Company recognized the beneficial conversion feature and relative fair value of the warrants as a debt discount and additional paid in capital. The fair value of the warrants at the grant date was estimated using a Black-Scholes model and the following assumptions: 1) volatility of approximately 85% based on a peer group of companies; 2) dividend yield of 0%; 3) risk-free rate of 0.26%; and 4) an expected term of five years. The $2,100,000 debt discount will be amortized through the maturity date of the convertible notes payable. During the year ended September 30, 2022, a total of $305,609 of principal and $106,891 of accrued interest was converted into 825,000 shares of common stock. During the twelve months ended September 30, 2021, a total of $187,500 of principal was converted into 375,000 shares of common stock. During the years ended September 30, 2022 and 2021, the Company recorded a charge of $561,963 and $1,466,966, respectively, in the accompanying consolidated statement of operations from the amortization of its debt discount related to the convertible notes payable and other liabilities described above.

**NOTE 5 – STOCKHOLDERS' EQUITY**

The Company is currently authorized to issue up to 100,000,000 shares of common stock with a par value of $0.001. In addition, the Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.001. The specific rights of the preferred stock, when so designated, shall be determined by the board of directors.

 ****

*June 2022 Private Placement* 

On June 16, 2022, the Company issued, in a private placement priced at-the-market under Nasdaq rules: (i) 977,657 shares of the Company's common stock, and (ii) warrants to purchase up to an aggregate of 977,657 shares of common stock. The combined purchase price of one share of common stock and accompanying warrant was $3.58. The gross proceeds to the Company from the private placement were approximately $3.5 million, before deducting fees and other offering expenses, and excluding the proceeds, if any, from the exercise of the warrants.

*Acquisition of the B2C segment of Aspire Global plc*

 

On October 1, 2021, in connection with the acquisition of the Aspire B2C business in November 2021, the Company entered into subscription agreements (the "Subscription Agreements") with certain investors (the "Investors"). Pursuant to the Subscription Agreements, the Investors agreed to subscribe for and purchase, and the Company agreed to issue and sell to such Investors, simultaneous with the closing of the Acquisition Agreement, an aggregate of 37,700 shares of Series A Convertible Preferred Stock (the "Preferred Stock") for a purchase price of $1,000.00 per share, for aggregate gross proceeds of $37,700,000 (the "Private Placement"). For each share of Preferred Stock issued, the Company issued the Investor a warrant to purchase 150% of the shares of Company common stock underlying the Preferred Stock (the "Warrants").

Pursuant to the Subscription Agreement, the Company has obtained shareholder approval of the conversion of the Preferred Stock and Warrants into Company common stock in compliance with the rules and regulations of the Nasdaq Stock Market ("Shareholder Approval").

The Preferred Stockholders are entitled to receive dividends, at a rate of 14.0% per annum, which shall be payable quarterly in arrears on January 1, April 1, July 1 and October 1, beginning on the first such date after the issuance date. With limited exceptions, the Preferred Stockholders have no voting rights. The dividends can be paid in either cash or in the issuance of additional preferred shares. Upon any liquidation, dissolution or winding-up of the Company, the holders of the Preferred Stock shall be entitled to receive out of the assets, whether capital or surplus, of the Company available to shareholders, an amount equal to the greater of: (i) the purchase price for each share of Preferred Stock then held, or (ii) the amount the holders would have received had the holders fully converted the Preferred Stock to Company common stock, in each case, before any distribution or payment shall be made to the holders of the Company's common stock. The Preferred Stock is convertible into Company common stock at an initial conversion price of $28.00 per share ("Conversion Price"); provided that the Conversion Price is subject to anti-dilution protection upon any subsequent transaction at a price lower than the Conversion Price then in effect. In addition, on December 31, 2022 and April 15, 2023 (each an "Adjustment Date"), the Conversion Price shall be adjusted to the lesser of: (i) the Conversion Price in effect on the Adjustment Date, or (ii) 85% of the average closing price of the Company's common stock for the fifteen trading days prior to the Adjustment Date. On December 30, 2022, the holders of a majority of the Preferred Stock approved an amendment to the terms of the Preferred Stock to: (i) extend the initial Adjustment Date from December 31, 2022 to January 31, 2023; and (ii) to modify the definition of "Exempt Issuance" to permit the issuance of shares of Company common stock to consultants. On December 30, 2022, the Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Series A Convertible Preferred Stock was filed in the State of Nevada.

The Warrants are exercisable and expire on the fifth anniversary thereafter. The Warrants were initially to be exercisable at an exercise price of $30.00 per share, provided that the exercise price is subject to anti-dilution protection upon any subsequent transaction at a price lower than the exercise price then in effect. Notwithstanding the foregoing anti-dilution provision, in connection with the $3.5 million offering completed in June 2022, the exercise price was reduced to $5.00. The Warrants can be exercised on a cashless basis if there is no effective registration statement registering, or no current prospectus available for, the resale of the ordinary shares underlying the Warrants.

The holders of the Preferred Stock and Warrants will not have the right to convert or exercise any portion of the Preferred Stock and Warrants to the extent that, after giving effect to such conversion, such holder (together with certain related parties) would beneficially own in excess of 4.99% of the Company's common stock outstanding immediately after giving effect to such conversion or exercise.

*Shares issued in the prior year*

During the three months ended December 31, 2020, the Company received gross cash proceeds of $4,000,000 in exchange for 2,000,000 shares of common stock. In conjunction with this fundraising, broker commission and expenses of $351,929 were paid and 173,625 common stock warrants with an exercise price of $2.00 and a five-year term were issued. The fair value of the warrants issued in connection with the financing was estimated to be $228,500 as discussed below.

In January 2021, the Company sold 250,014 shares of common stock to investors for $3.00 per share, receiving gross proceeds of $750,042. The company paid $30,314 of broker fees and commissions related to this fundraising and issued 8,750 warrants to purchase common stock with an exercise price of $3.00 per share and a term of 5 years. The fair value of the warrants issued in connection with the financing was estimated to be $228,500 as discussed below.

In April 2021, the Company completed its IPO and issued 2,400,000 shares of common stock for gross cash proceeds of $14,400,000 and received net proceeds of $13,514,200 after costs of $885,800 which were recorded in shareholders' equity. The Company also issued 168,000 common stock warrants with a five-year term and exercise price of $7.20 to the underwriter. These warrants had an estimated fair value at issuance of $5,474,076.

**2020 Stock Plan**

In December 2020, the Company adopted the EBET, Inc. 2020 Stock Plan, or the 2020 Plan. The 2020 Plan is a stock-based compensation plan that provides for discretionary grants of stock options, stock awards, stock unit awards and stock appreciation rights to key employees, non-employee directors and consultants.

Under the 2020 Plan, the aggregate value of all compensation granted or paid to any individual for service as a non-employee director with respect to any calendar year, including awards granted under the 2020 Plan and cash fees paid to such non-employee director, will not exceed $300,000 in total value. For purposes of this limitation, the value of awards is calculated based on the grant date fair value of such awards for financial reporting purposes.

The number of shares of the common stock that may be issued under the 2020 Plan is 5,000,000. As of September 30, 2022, the Company had awarded a total 2,907,019 shares under the 2020 Plan, with 2,092,981 remaining under the 2020 Plan.

*Common Stock Awards*

During the year ended September 30, 2021, the Company agreed to award a total of 1,210,750 restricted stock units that convert into common stock to various employees, consultants and officers under the 2020 Plan. Of the restricted stock unit awarded, 810,750 will vest annually over a period of one to four years, 200,000 will vest upon the completion of various performance goals related to the operations of the Company, and 200,000 shares of common stock underlying awards made to the Company's CEO will vest equally upon reaching trailing twelve months revenue of $10 million and $20 million. The Company estimated the fair value of the awards granted prior to the IPO, at $2 per share based on recent sales of common stock. For awards granted after the IPO, the closing price of the Company's stock on the grant date is used to determine the fair value.

In November 2020, the Company entered into four consulting agreements under which the Company issued a total of 683,334 shares of common stock, which vest equally over terms ranging from three to twelve months. The Company also awarded 100,000 shares to an additional consultant in May 2021 which vested immediately but were not yet issued as of September 30, 2021.

During the year ended September 30, 2021, the Company recognized a total of $2,766,480 of stock-based compensation expense related to common stock awards and expects to recognize additional compensation cost of $5,656,423 upon vesting of all awards.

During the year ended September 30, 2022, the Company agreed to award a total of 459,600 restricted stock units that convert into common stock to various employees, consultants and officers under the 2020 Plan. Of the restricted stock unit awarded, 414,600 will vest annually over a period of one to four years and 45,000 vest over six months. At September 30, 2022, the Company had 461,625 restricted stock units in issuance.

During the years ended September 30, 2022 and 2021, the Company recognized a total of $4,000,578 and $2,766,480, respectively, of stock-based compensation expense related to common stock awards and expects to recognize additional compensation cost of $4,075,076 upon vesting of all awards.

*Warrants*

As discussed above, the Company has issued common stock warrants in connection with its fundraising activities to brokers, an asset purchase agreement and convertible notes issued during the years ended September 30, 2022 and 2021. The following table summarizes warrant activity during the years ended September 30, 2022 and 2021:

---

| | | | |
|:---|:---|:---|:---|
|  | **Common Stock Warrants** | **Common Stock Warrants** | **Common Stock Warrants** |
|  | **Shares** | **Weighted<br> Average<br> Exercise<br> Price** | **Weighted<br> average<br> Remaining<br> Life in years** |
| Outstanding at September 30, 2020 | 2015000 | $0.30 | 4.24 |
| Granted | 386541 | 4.15 | 5.00 |
| Cancelled |  |  |  |
| Expired |  |  |  |
| Exercised | (202000) | 0.86 |  |
| Outstanding at September 30, 2021 | 2199541 | 0.93 | 4.04 |
| Granted | 4761199 | 22.23 | 5.00 |
| Cancelled |  |  |  |
| Expired |  |  |  |
| Exercised | (927375) | 1.78 |  |
| Outstanding at September 30, 2022 | 6033365 | $17.61 | 4.01 |
| Exercisable at September 30, 2022 | 6033365 | $17.61 | 4.01 |

---

The outstanding and exercisable common stock warrants as of September 30, 2022 had an estimated intrinsic value of $1,168,400.

During the year ended September 30, 2022, the Company estimated the fair value of the warrants using a Black-Scholes option pricing model and the following assumptions: 1) stock price of $2 to $28.95 per share; 2) dividend yield of 0%; 3) risk-free rate of between 1.18% and 3.35%; 4) expected term of between 5 years; 5) an exercise price of $2.49 or $28.95 and 6) expected volatility of 42.14% based on a peer group of public companies. The warrants issued in connection with the Senior Notes had a fair value of $19,467,688, and the relative fair value of $11,806,307 was recorded as debt discount. The estimated fair value of the warrants issued to preferred stockholders was $24,171,423, and the estimated fair value of the warrants issued in connection with the June 2022 private placement was $504,952.

During the year ended September 30, 2021, the Company estimated the fair value of the warrants using a Black-Scholes option pricing model and the following assumptions: 1) stock price of $2 to $3 per share; 2) dividend yield of 0%; 3) risk-free rate of between 0.18% and 0.81%; 4) expected term of between 2.5 and 5 years; 5) an exercise price of $0.25, $2 $3 or $7.20 and 6) expected volatility of between 84.1% and 99.0% based on a peer group of public companies. The warrants granted to brokers in connection with sales of common stock during the year ended September 30, 2021, had an estimated fair value of $5,474,076 which was reflected as a cost of capital, warrants granted to consultants for services had a fair value of $8,819, and the warrants granted in connection with the asset purchase agreement had an estimated fair value of $57,252.

*Options*

During the years ended September 30, 2022 and 2021, the Company entered into various agreements with employees, members of the Board of Directors and consultants whereby the Company awarded common stock options under the 2020 Plan. Of the 997,437 unvested options as of September 30, 2022, 20,000 will vest upon future performance conditions being met, and the remainder vest equally over periods of between one and four years from issuance.

The following table summarizes option activity during the years ended September 30, 2022 and 2021:

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| | | | |
|:---|:---|:---|:---|
|  | **Common Stock Options** | **Common Stock Options** | **Common Stock Options** |
|  | **Shares** | **Weighted<br> Average<br> Exercise<br> Price** | **Weighted<br> average<br> Remaining<br> Life in years** |
| Outstanding at September 30, 2020 |  | $– |  |
| Granted | 2714348 | 2.62 | 8.83 |
| Cancelled/Forfeited | (235000) | 0.66 |  |
| Exercised | (5000) | 3.00 |  |
| Outstanding at September 30, 2021 | 2474348 | $2.81 | 7.95 |
| Granted | 55000 | 28.06 | 10.00 |
| Cancelled/Forfeited | (495563) | 8.14 |  |
| Exercised | (56785) | 0.25 |  |
| Outstanding at September 30, 2022 | 1977000 | $2.25 | 7.33 |
| Exercisable at September 30, 2022 | 979563 | $1.33 | 6.70 |

---

During the years ended September 30, 2022 and 2021, the Company recognized stock-based compensation expense of $1,446,794 and $1,413,011, respectively, related to common stock options awarded. The exercisable common stock options had an intrinsic value as of September 30, 2022, of $705,736. The Company expects to recognize an additional $1,242,141 of compensation cost related to stock options expected to vest.

The Company estimated the fair value of the stock options awarded during the year ended September 30, 2022 using a Black-Scholes option pricing model and the following assumptions: 1) stock price of $3 to $31.33 per share; 2) dividend yield of 0%; 3) risk-free rate of between 0.85% and 1.20%; 4) expected term of between 3.5 and 6.25 years; 5) an exercise price between $0.25 and $31.33 and 6) expected volatility of 42.14% based on a peer group of public companies.

**NOTE 6 – LONG-LIVED ASSETS**

*Fixed Assets*

The Company's fixed assets consisted of the following as of September 30, 2022 and 2021:

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br> **2022** | **September 30,**<br> **2021** |
| Software | $391851 | $214996 |
| Furniture and fixtures | 368432 | – |
| Total fixed assets | 760283 | 214996 |
| Accumulated depreciation | (213875) | (129662) |
| Fixed assets, net | $546408 | $85334 |

---

The software costs above relate to acquired components of the Company's existing platform and other future products which were being depreciated over the expected useful life of 3 years. During the year ended September 30, 2022, the Company determined that the software related to the esports platform was impaired, and recognized a loss of $569,260, included in *Impairment loss* on the consolidated statement of comprehensive loss.

*Intangible Assets – Aspire b2C Acquisition*

 

As disclosed in Note 3, the Company acquired intangible assets as part of the Aspire B2C Business acquisition. The acquired intangibles consisted of the following as of September 30, 2022 and 2021:

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br> **2022** | **September 30,**<br> **2021** |
| Trademarks and tradenames, indefinite lives | $14232080 | $– |
| Trademarks and tradenames, three year lives | 4562064 |  |
| Customer relationships | 13910396 | – |
| Total acquired intangibles | 32704540 |  |
| Accumulated amortization | (5169148) | – |
| Acquired intangible assets, net | $27535392 | $– |

---

The Karamba trademarks and tradenames represent approximately 75% of the total of the acquired intangibles and have an indefinite useful life. The remaining trademarks and tradenames and customer relationships are amortized over an estimated useful life of three years. Amortization for the year ended September 30, 2023, 2024 and 2025 is expected to be approximately $6,146,000, $6,134,741 and $1,022,457, respectively.

*Intangible Assets – Domain Names*

On September 1, 2020, the Company's wholly owned subsidiary, ESEG, entered into domain purchase agreements to acquire the rights to certain domain names from third parties. The cost to acquire the domain names was $2,239,606, based on the estimated fair value of the consideration transferred to the sellers. ESEG issued notes payable with a combined principal amount of $2,100,000, which were to mature on March 1, 2022, bearing interest at 10%. These notes were exchanged for notes of the Company in September 2020. The Company also agreed to pay a total of $675,000 on September 1, 2025, with no interest. The Company estimated discount of these liabilities totaling $535,394 at the date of the transaction, to be amortized over the maturity period of the liabilities. The domain names were recorded as an intangible asset with an indefinite useful life. In connection with the preparation of these financial statements for inclusion in the Company's Form 10-K for the year ended September 30, 2022, the Company's management evaluated the domain names related to its esports operations at September 30, 2022 and determined that the assets were impaired due to the lack of progress in developing its esports operations and the Company's decision to no longer pursue those operations, recognizing an impairment loss of $2,239,606, included in *Impairment loss* on the consolidated statement of comprehensive loss.

*Intangible Assets - Cryptocurrencies*

The following table presents the activities of the Company's cryptocurrency holdings for the year ended September 30, 2022 and 2021:

---

| | |
|:---|:---|
| **Cryptocurrency at September 30, 2020** | $44562 |
| Additions of cryptocurrency | 36605 |
| Payments of cryptocurrency | (125530) |
| Gain on cryptocurrency | 45267 |
| **Cryptocurrency at September 30, 2021** | 904 |
| Additions of cryptocurrency | 21488 |
| Payments of cryptocurrency | (16971) |
| Gain on cryptocurrency | (428) |
| **Cryptocurrency at September 30, 2022** | $4993 |

---

Additions of cryptocurrency during the year ended September 30, 2022 represent net deposits from players, and payments of cryptocurrency represent payments of accounts payable and accrued expenses. Additions of cryptocurrency during the year ended September 30, 2021 represent settlement of outstanding accounts receivable of $18,158 and net deposits from players of $18,447. Payments of cryptocurrency during the year ended September 30, 2021 included payments of accounts payable and accrued expenses of $64,023 and prepaid expenses of $61,509. Use of cryptocurrency to settle receivables and payables during the period are reflected as a component of changes in operating assets and liabilities in the consolidated statement of cash flows.

*Intangible Assets - License Agreement*

On October 1, 2020, the Company entered into an option agreement which gave the Company rights to acquire a license for proprietary technology related to online betting. The Company paid $133,770 upon execution of the option agreement, paid an additional $286,328 in cash, and issued 65,000 shares of common stock upon exercise of the option on or about May 3, 2021. The shares had a fair value of $1,456,650 at the date of exercise of the option and execution of the license agreement resulting in total value for the license agreement of $1,876,748. During the year ended September 30, 2022 and 2021, the Company recognized amortization expense of $573,451 and $260,659 included in product and technology expenses. In connection with the preparation of these financial statements for inclusion in the Company's Form 10-K for the year ended September 30, 2022, the Company determined that the intangible asset, which was related to the esports operations due to the lack of progress in developing its esports operations and the Company's decision to no longer pursue those operations, was impaired and recognized an impairment loss of $1,042,637, included in *Impairment loss* on the consolidated statement of comprehensive loss.

**NOTE 7 – COMMITMENTS AND CONTINGENCIES**

On September 2, 2020, the Company entered into a financial advisor agreement with Boustead Securities LLC, the representative of the underwriters in the Company's initial public offering, to provide services related to fundraising on the Company's planned public listing. The Company agreed to pay the financial advisor a success fee of 4% of any gross proceeds from any debt financing, and a 7% success fee related to any equity or convertible debt financing, subject to customary approval by the regulatory authorities. In April 2021, the Company completed its IPO and issued 2,400,000 shares of common stock for gross cash proceeds of $14,400,000. The Company paid underwriting fees of $885,800 and issued 168,000 warrants to purchase shares of common stock at a price of $7.20 per share for a period of five 5 years.

On September 26, 2020, the Company entered into a consulting agreement with a registered foreign broker dealer for fundraising services and paid 10% of any gross proceeds through capital raises from non-US investors introduced by the consultant, up to a maximum payment to the consultant of $200,000 and the consultant also received warrants to purchase shares of the Company's common stock at an exercise price of $2.00 per share. These warrants were exercised in April 2021 and were converted into 62,386 shares of the Company stock.

***Financial Advisor's Claims***

The Company's previous financial advisor, Boustead Securities LLC ("Advisor") has alleged a breach by the Company over the termination of their engagement and the timing of the payment and amount of the fees owed to the Advisor among other claims (collectively the "Claims"). The fees the Company expects to pay are accrued in the accompanying balance sheet. On June 2, 2022, the Advisor named EBET in an arbitration proceeding with Financial Industry Regulatory Authority ("FINRA") in connection with the Claims. The statement of claim alleges damages of $5.7 million and seeks a declaration that the Company be required to utilize the Advisor for a certain follow-on offering pursuant to an alleged right of first refusal between the parties. On August 4, 2022, EBET, Inc. counterclaimed against Boustead Securities, LLC for tortious interference with prospective economic advantage and demanded damages and attorneys' fees in an amount to be determined. The case is ongoing, with a hearing before a 3-arbitrator panel currently scheduled for July 2023. Arbitration is inherently unpredictable. However, the Company believes that it has meritorious defenses to a portion of the alleged fee claim asserted and to the claim that the Company has any obligations pursuant to a right of first refusal between the parties. Nevertheless, cash flows or results of operations could be materially affected in any particular period by the resolution of this matter. At this time, any estimated loss potentially arising from the Claims cannot be reasonably estimated and no liability has been recognized.

***Employment Agreements***

On November 5, 2021, the Company entered into an amended and restated employment agreement, effective October 1, 2021, with Aaron Speach pursuant to which Mr. Speach agreed to continue to serve as the Company's Chief Executive Officer for an initial term of three years. The agreement provides for an initial annual base salary of $315,000, which may be increased to $350,000 retroactively as of the effective date provided the closing and consummation of the share purchase transaction by and between Company and Aspire Global plc occurs. Pursuant to the agreement, Mr. Speach is eligible for an annual bonus of up to 75% of his base salary, as determined solely at the discretion of the Compensation Committee. Pursuant to the agreement, if Mr. Speach is required to be located outside of the United States for a period of 30 consecutive days or more, the Company shall pay him a pro-rated monthly travel stipend of $3,500 for each month that he is so required to live outside of the United States. Pursuant to the agreement, Mr. Speach is eligible to receive the following potential performance stock grants: (i) 100,000 shares of Company common stock at such date as the Company reaches total gross revenues of $10,000,000 in any trailing 12 month period during the term of the employment agreement; and (ii) 100,000 shares of Company common stock at such date as the Company reaches total gross revenues of $20,000,000 in any trailing 12 month period during the term of the employment agreement. These awards were earned during the year ended September 30, 2022. Contemporaneous with the execution of the agreement, Mr. Speach received a restricted stock unit award (the "RSU Grant") for 100,000 shares of Company common stock. The RSU Grant shall vest in four equal annual installments, provided Mr. Speach is employed on each such vesting date. If Mr. Speach's employment is terminated at our election without "cause" (as defined in the agreement), Mr. Speach shall be entitled to receive severance payments equal to 150% of the balance due of Mr. Speach's base salary for the remainder of the initial term of three years.

On November 5, 2021, the Company's Board of Directors, upon recommendation of the Compensation Committee, approved the following policy for compensating non-employee members of the Board. Each independent director shall receive annual cash compensation of $40,000. In addition, the chairperson of the Audit Committee, Compensation Committee and Nominating and Governance Committee shall receive an annual compensation of $15,000, $10,000 and $5,000, respectively; the other members of such committees shall receive an annual compensation of $7,500, $5,000 and $2,500, respectively. In addition, the Company agreed to pay a one-time make-whole payment to the independent directors for services rendered since the Company's initial public offering of $27,000.

On September 9, 2022, the Company entered into an employment agreement with Mr. Matthew Lourie pursuant to which Mr. Lourie agreed to serve as interim Chief Financial Officer of the Company commencing on such date. The agreement provides for a monthly salary of $16,000. Mr. Lourie may receive a cash bonus of $20,000 and a restricted stock unit grant for 20,000 shares of Company common stock upon a successful transition of services to a full time Chief Financial Officer, provided that the final determination on the amount of the bonus and grant, if any, will be made by the Compensation Committee of the Board of Directors, based on criteria established by the Compensation Committee. Pursuant to the agreement, Mr. Lourie will receive a restricted stock unit award for 45,000 shares of Company common stock, which shall vest in six equal monthly installments, provided Mr. Lourie is employed on each such vesting date. The Company may terminate the agreement at any time during the term of the agreement on 30 days' notice.

**NOTE 8 – TRANSACTION WITH RELATED PARTIES**

At September 30, 2020 the Company owed $155,228 to Gogawi Inc. (a company controlled by certain initial shareholders of the Company). The advances were due on demand and were non-interest bearing. In May 2021, the Company repaid the advances in full.

On November 10, 2020, the Company entered into an employment agreement with Michael Barden, a family member of the Company's Chief Operating Officer, to serve as the Company's marketing director. The employment agreement provides for an annual salary of $132,000, a technology allowance of $5,000, and an award of 30,000 shares of common stock in the Company, vesting in four equal annual installments. On August 2, 2022, Mr. Barden's employment was terminated.

The Company engaged a firm owned by Matthew Lourie, the Company's Chief Financial Officer to provide financial reporting services. For the year ended September 30, 2022 and 2021, the Company incurred consulting fees of $18,273 and $122,950, respectively.

**NOTE 9 – INCOME TAXES**

Deferred taxes are determined by applying the provisions of enacted tax laws and rates for the jurisdictions in which the Company operates to the estimated future tax effects of the differences between the tax basis of assets and liabilities and their reported amounts in the Company's consolidated financial statements. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that the related tax benefits will not be realized.

The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company's income tax expense as reported is as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br> September 30, 2022** | **Year Ended<br> September 30, 2021** |
| Income tax benefit computed at the statutory rate | $8700000 | 3192000 |
| Non-deductible expenses | (2696000) | (1251000) |
| Change in valuation allowance | (6004000) | (1941000) |
| Provision for income taxes | $– | – |

---

Significant components of the Company's deferred tax assets after applying enacted corporate income tax rates are as follows:

---

| | | |
|:---|:---|:---|
|  | **As of<br> September 30, 2022** | **As of<br> September 30, 2021** |
| Deferred income tax assets: |  |  |
| Net operating losses | $8000000 | $1996000 |
| Valuation allowance | (8000000) | (1996000) |
| Net deferred income tax assets | $– | $– |

---

The Company has an operating loss carry forward of approximately $38,090,000. Management currently believes that since the Company has a history of losses it is more likely than not that the deferred tax regarding the loss carry forwards and other temporary differences will not be realized in the foreseeable future. The Company believes that carryforward limitations will be applied to the historical net operating losses prior to the Share Exchange.

The Company has recorded no liability for income taxes associated with unrecognized tax benefits at the date of adoption and has not recorded any liability associated with unrecognized tax benefits during 2022 and 2021. Accordingly, the Company has not recorded any interest or penalty in regard to any unrecognized benefit.

**NOTE 10 – LOSS PER COMMON SHARE**

The basic net loss per common share is calculated by dividing the Company's net loss available to common shareholders by the weighted average number of common shares during the year. The diluted net loss per common share is calculated by dividing the Company's net loss available to common shareholders by the diluted weighted average number of common shares outstanding during the year. The diluted weighted average number of common shares outstanding is the basic weighted number of common shares adjusted for any potentially dilutive debt or equity. For the years ended September 30, 2022 and 2021, common shares issuable under preferred stock (1,510,806 and 0 shares), convertible debt, (5,151,986 and 3,825,000 shares), stock options (1,977,000 and 2,474,348 shares) and common stock warrants (6,033,365 and 1,915,166 shares) were excluded from the calculation of diluted net loss per share due to their antidilutive effect.

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **September 30,**<br> **2022** | **September 30,**<br> **2021** |
| Numerator: |  |  |
| Net income (loss) | $(41427609) | $(15200024) |
| Preferred stock dividends | (4750585) | – |
| Net income (loss) attributable to common stockholders | $(46178194) | $(15200024) |
| Denominator: |  |  |
| Basic and diluted weighted average common shares | 14839645 | 11397739 |
| Basic and diluted net income (loss) per common share | $(3.11) | $(1.33) |

---

**NOTE 11 – SUBSEQUENT EVENTS**

On October 4, 2022, a convertible note holder converted $300,000 of principal into 600,000 shares of common stock.

In October 2022, the Company issued 20,750 related to outstanding restricted stock units.

On December 30, 2022, the holders of a majority of the Preferred Stock approved an amendment to the terms of the Preferred Stock to: (i) extend the initial Adjustment Date from December 31, 2022 to January 31, 2023; and (ii) to modify the definition of "Exempt Issuance" to permit the issuance of shares of Company common stock to consultants. On December 30, 2022, the Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Series A Convertible Preferred Stock was filed in the State of Nevada.

**Item 9.** **Changes in and Disagreements with Accountants on Accounting and Financial Disclosures.**

None.

---

| | |
|:---|:---|
| **Item 9A.** | **Controls and Procedures.** |

---

**Evaluation of Disclosure Controls and Procedures**

Our management, including our chief executive officer, who serves as our principal executive officer, and our chief financial officer, who serves as our principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Form 10-K. Based on this evaluation, our chief executive officer and our chief financial officer, concluded that our disclosure controls and procedures were effective at ensuring that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our chief executive officer and our chief financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding disclosure.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

**Attestation Report of the Registered Public Accounting Firm**

Our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal controls over financial reporting for as long as we are an "emerging growth company" pursuant to the provisions of the Jumpstart Our Business Startups Act.

**Management's Report on Internal Control Over Financial Reporting**

Our chief executive officer and our chief financial officer are responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Management conducted an assessment of the effectiveness of our internal control over financial reporting as of September 30, 2022. In making this assessment, management used the criteria described in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Our management concluded that our internal control over financial reporting were, and continue to be, ineffective, as of September 30, 2022, due to a lack of segregation of duties (resulting from the limited number of personnel available) and the lack of formal documentation of our control environment.

A material weakness is a control deficiency (within the meaning of the Public Company Accounting Oversight Board ("PCAOB") Auditing Standard 1305) or combination of control deficiencies that result in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

It should be noted that any system of controls, however well designed and operated, can provide only reasonable and not absolute assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of certain events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

In light of the material weaknesses described above, we performed additional analysis and other post-closing procedures to ensure our financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

**Changes in Internal Control over Financial Reporting**

There has been no change in our internal control over financial reporting during our most recent calendar quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

---

| | |
|:---|:---|
| **Item 9B.** | **Other Information.** |

---

None.

**PART III**

**Item 10.** **Directors, Executive Officers and Corporate Governance**

The information required by this item is incorporated by reference to our Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended September 30, 2022.

Our Board of Directors has adopted a written Code of Business Conduct and Ethics applicable to all officers, directors and employees, which is available on our website (ebet.gg) under "Governance Documents & Charters" within the "Corporate Governance" section. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of this Code and by posting such information on the website address and location specified above.

**Item 11.** **Executive Compensation**

The information required by this item is incorporated by reference to our Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended September 30, 2022.

**Item 12.** **Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters**

The information required by this item is incorporated by reference to our Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended September 30, 20221.

**Securities Authorized for Issuance under Equity Compensation Plans**

The following table sets forth information regarding our equity compensation plans at September 30, 2022:

---

| | | | |
|:---|:---|:---|:---|
| **Plan category** | **Number of securities to be issued upon exercise of outstanding options,**<br> **warrants and rights**<br> **(a)** | **Weighted-average exercise price of**<br> **outstanding options, warrants and rights**<br> **(b)** | **Number of securities (by class) remaining available for future issuance under equity compensation**<br> **plans (excluding securities reflected in column (a))**<br> **(c)** |
| Equity compensation plans approved by security holders (1) | 2438625 | $2.25 | 2092981 |
| Equity compensation plans not approved by security holders (2) | 2166 | $3.00 |  |

---

(1) Represents shares of common stock issuable upon exercise of outstanding
stock options and rights under our 2020 Stock Plan.

(2) Consists of warrants issued to consultants.

**Item 13.** **Certain Relationships and Related Transactions, and Director Independence**

The information required by this item is incorporated by reference to our Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended September 30, 2022.

**Item 14.** **Principal Accounting Fees and Services**

The information required by this item is incorporated by reference to our Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended September 30, 2022.

**PART IV**

**Item 15.** **Exhibits, Financial Statement Schedules**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp; The following documents are filed or furnished as part of this Form 10-K:

1. Financial Statements. The financial statements and notes thereto
which are attached hereto have been included by reference into Item 8 of this part of the annual report on Form 10-K. See the Index to
Financial Statements on page 32.

2. Financial Statement Schedules. The Financial Statement Schedules
have been omitted either because they are not required or because the information has been included in the financial statements or the
notes thereto included in this Annual Report on Form 10-K.

3. Exhibits

**EXHIBIT INDEX**

---

| | |
|:---|:---|
| **Exhibit**<br> **Number** | **Description of Document** |
| 2.1 | [Share Purchase Agreement, dated as of September 30, 2021](http://www.sec.gov/Archives/edgar/data/1829966/000168316821004621/esports_ex0201.htm) (incorporated by reference to the exhibit 2.1 of the Form 8-K filed October 1, 2021) |
| 3.1 | [Articles of Incorporation of EBET, Inc.](http://www.sec.gov/Archives/edgar/data/1829966/000168316821000854/esports_ex0301.htm) (incorporated by reference to exhibit 3.1 to the Company's Form S-1 file no. 333-254068) |
| 3.2 | <u>[Amended and Restated Bylaws of EBET, Inc.](http://www.sec.gov/Archives/edgar/data/1829966/000168316822003213/ebet_ex0302.htm)</u> (incorporated by reference to exhibit 3.2 to the Company's Form 8-K filed May 5, 2022) |
| 3.3 | <u>[Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock](http://www.sec.gov/Archives/edgar/data/1829966/000168316823000006/ebet_ex0301.htm)</u> (incorporated by reference to exhibit 3.1 to the Company's Form 8-K filed January 3, 2023) |
| 3.4 | <u>[Articles of Merger](http://www.sec.gov/Archives/edgar/data/1829966/000168316822003213/ebet_ex0301.htm)</u> (incorporated by reference to exhibit 3.1 to the Company's Form 8-K filed May 5, 2022) |
| 4.1 | [Form of Common Stock Certificate](http://www.sec.gov/Archives/edgar/data/1829966/000168316821001107/esports_ex0401.htm) (incorporated by reference to exhibit 4.1 to the Company's Form S-1/A file no. 333-254068) |
| 4.2 | [Form of Warrant issued in connection with Domain Purchase Agreements](http://www.sec.gov/Archives/edgar/data/1829966/000168316821000854/esports_ex0403.htm) (incorporated by reference to exhibit 4.3 to the Company's Form S-1 file no. 333-254068) |
| 4.3 | [Form of Convertible Note issued in connection with Domain Purchase Agreements](http://www.sec.gov/Archives/edgar/data/1829966/000168316821000854/esports_ex0404.htm) (incorporated by reference to exhibit 4.4 to the Company's Form S-1 file no. 333-254068) |
| 4.4 | [Form of Promissory Note between EBET, Inc., Esports Product Technologies Malta Ltd. and Aspire Global Plc](http://www.sec.gov/Archives/edgar/data/1829966/000168316821006036/esports_ex0401.htm) (incorporated by reference to exhibit 4.1 to the Company's Form 8-K filed December 1, 2021) |
| 4.5 | [Form of Preferred Stock Investor Warrant](http://www.sec.gov/Archives/edgar/data/1829966/000168316821006036/esports_ex0402.htm) (incorporated by reference to exhibit 4.2 to the Company's Form 8-K filed December 1, 2021) |
| 4.6 | [Form of Lender Warrant](http://www.sec.gov/Archives/edgar/data/1829966/000168316821006036/esports_ex0403.htm) (incorporated by reference to exhibit 4.3 to the Company's Form 8-K filed December 1, 2021) |
| 4.7 \* | [Description of Securities of EBET, Inc.](ebet_ex0407.htm) |
| 4.8 | <u>[Form of June 2022 Investor Warrant](http://www.sec.gov/Archives/edgar/data/1829966/000168316822004215/ebet_ex0401.htm)</u> (incorporated by reference to exhibit 4.1 to the Company's Form 8-K filed June 8, 2022) |

---

---

| | |
|:---|:---|
| 10.1 \*\* | <u>[2020 Stock Plan of EBET, Inc., as amended, and forms of award agreements thereunder](http://www.sec.gov/Archives/edgar/data/1829966/000168316822005444/ebet_ex9901.htm)</u> (incorporated by reference to exhibit 99.1 to the Company's Form S-8 file no. 333-266678) |
| 10.2 | [Domain Purchase Agreement between ESEG Limited and Dover Hill LLC](http://www.sec.gov/Archives/edgar/data/1829966/000168316821000854/esports_ex1007.htm) (incorporated by reference to exhibit 10.7 to the Company's Form S-1 file no. 333-254068) |
| 10.3 | [Domain Purchase Agreement between ESEG Limited and Esports Group LLC](http://www.sec.gov/Archives/edgar/data/1829966/000168316821000854/esports_ex1008.htm) (incorporated by reference to exhibit 10.8 to the Company's Form S-1 file no. 333-254068) |
| 10.4 | [Domain Purchase Agreement between ESEG Limited and YSW Holdings, Inc.](http://www.sec.gov/Archives/edgar/data/1829966/000168316821000854/esports_ex1009.htm) (incorporated by reference to exhibit 10.9 to the Company's Form S-1 file no. 333-254068) |
| 10.5 \*\* | [Form of Independent Director Agreement](http://www.sec.gov/Archives/edgar/data/1829966/000168316821000854/esports_ex1010.htm) (incorporated by reference to exhibit 10.10 to the Company's Form S-1 file no. 333-254068) |
| 10.6 + | [Software License Agreement between Galaxy Group Ltd. and ESEG Limited Dated September 28, 2020](http://www.sec.gov/Archives/edgar/data/1829966/000168316821001107/esports_ex1011.htm) (incorporated by reference to exhibit 10.11 to the Company's Form S-1 file no. 333-254068) |
| 10.7 + | [White Label Agreement by and between Splash Technology Limited, and EBET, Inc. dated February 5, 2021](http://www.sec.gov/Archives/edgar/data/1829966/000168316821001303/esports_ex1012.htm) (incorporated by reference to exhibit 10.12 to the Company's Form S-1 file no. 333-254068) |

---

---

| | |
|:---|:---|
| 10.8 | [License Agreement between EBET, Inc. and Colossus (IOM) Limited dated May 6, 2021](http://www.sec.gov/Archives/edgar/data/1829966/000168316821001919/esports_ex1001.htm) (incorporated by reference to exhibit 10.1 to the Company's Form 8-K filed May 12, 2021) |
| 10.9 \*\* | [First Amended and Restated Employment Agreement between EBET, Inc. and Aaron Speach dated November 5, 2021](http://www.sec.gov/Archives/edgar/data/1829966/000168316821005364/esports_ex1001.htm) (incorporated by reference to exhibit 10.1 to the Company's Form 8-K filed November 9, 2021) |
| 10.10 \*\* + | [First Amended and Restated Statement of Employment Terms between EBET, Inc. and Bart Barden dated November 5, 2021](http://www.sec.gov/Archives/edgar/data/1829966/000168316821005364/esports_ex1002.htm) (incorporated by reference to exhibit 10.2 to the Company's Form 8-K filed November 9, 2021) |
| 10.11 \*\* | [Non-Employee Director Compensation Policy](http://www.sec.gov/Archives/edgar/data/1829966/000168316821005364/esports_ex1003.htm) (incorporated by reference to exhibit 10.3 to the Company's Form 8-K filed November 9, 2021) |
| 10.12 | [Form of Preferred Stock Subscription Agreement](http://www.sec.gov/Archives/edgar/data/1829966/000168316821004621/esports_ex1001.htm) (incorporated by reference to the Exhibit 10.1 of the Form 8-K filed October 1, 2021) |
| 10.13 + | [Credit Agreement dated November 29, 2021 between EBET, Inc., certain subsidiaries of EBET, Inc., and CP BF Lending, LLC](http://www.sec.gov/Archives/edgar/data/1829966/000168316821006036/esports_ex1002.htm) (incorporated by reference to the Exhibit 10.2 of the Form 8-K filed December 1, 2021) |
| 10.14 \* \*\* | [First Amended and Restated Employment Agreement between EBET, Inc. and James Purcell dated December 22, 2021](http://www.sec.gov/Archives/edgar/data/1829966/000168316821006560/esports_ex1014.htm) |
| 10.15 | <u>[Form of June 2022 Securities Purchase Agreement](http://www.sec.gov/Archives/edgar/data/1829966/000168316822004215/ebet_ex1001.htm)</u> (incorporated by reference to exhibit 10.1 to the Company's Form 8-K filed June 8, 2022) |
| 10.16 | <u>[Note Conversion Option Agreement between EBET, Inc. and CP BF LENDING, LLC](http://www.sec.gov/Archives/edgar/data/1829966/000168316822004215/ebet_ex1002.htm)</u> (incorporated by reference to exhibit 10.2 to the Company's Form 8-K filed June 8, 2022) |
| 10.17 | <u>[Amendment to Note Conversion Option Agreement between EBET, Inc. and CP BF LENDING, LLC](http://www.sec.gov/Archives/edgar/data/1829966/000168316822004410/ebet_ex1001.htm)</u> (incorporated by reference to exhibit 10.1 to the Company's Form 8-K filed June 17, 2022) |
| 10.18 | <u>[Employment Agreement between EBET, Inc. and Matthew Lourie](http://www.sec.gov/Archives/edgar/data/1829966/000168316822006286/ebet_ex1001.htm)</u> (incorporated by reference to exhibit 10.1 to the Company's Form 8-K filed September 9, 2022) |
| 10.19 | <u>[Separation of Employment letter between EBET, Inc. and James Purcell](http://www.sec.gov/Archives/edgar/data/1829966/000168316822006286/ebet_ex1002.htm)</u> (incorporated by reference to exhibit 10.2 to the Company's Form 8-K filed September 9, 2022) |

---

---

| | |
|:---|:---|
| 21 | [List of Subsidiaries](http://www.sec.gov/Archives/edgar/data/1829966/000168316821006560/esports_ex2100.htm) (incorporated by reference to exhibit 21 to the Company's Form 10-K filed December 23, 2021) |
| 23.1 \* | [Consent of PWR CPA LLP](ebet_ex2301.htm) |
| 23.2 \* | [Consent of BF Borgers LLP](ebet_ex2302.htm) |
| 31.1 \* | [Certification of Principal Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended](ebet_ex3101.htm) |
| 31.2 \* | [Certification of Principal Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended](ebet_ex3102.htm) |
| 32.1 \* | [Certification of Principal Executive Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ebet_ex3201.htm) |
| 32.2 \* | [Certification of Principal Financial Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ebet_ex3202.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 (formatted in IXBRL, and included in exhibit 101). |

---

---

| | |
|:---|:---|
| \* | Filed herewith. |
| \*\* | Management contract or compensatory plan, contract or arrangement. |
| + | Pursuant to Item 601(b)(10)(iv) of Regulation S-K promulgated by the SEC, certain portions of this exhibit have been redacted. The Company hereby agrees to furnish supplementally to the SEC, upon its request, an unredacted copy of this exhibit. |

---

**Item 16.** **10-K Summary**

None.

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) 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.

---

| | |
|:---|:---|
| EBET, INC. | EBET, INC. |
| By: | /s/ Aaron Speach |
|  | Aaron Speach, |
|  | Chief Executive Officer and Chairman |

---

Date: January 13, 2023

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| Signature | Title | Date |
| /s/ Aaron Speach | Chief Executive Officer and Chairman | January 13, 2023 |
| Aaron Speech | (Principal Executive Officer) |  |
| /s/ Matthew Lourie | Chief Financial Officer | January 13, 2023 |
| Matthew Lourie | (Principal Financial and Accounting Officer) |  |
| /s/ Michael Nicklas | Director | January 13, 2023 |
| Michael Nicklas |  |  |
| /s/ Dennis Neilander | Director | January 13, 2023 |
| Dennis Neilander |  |  |
| /s/ Christopher S. Downs | Director | January 13, 2023 |
| Christopher S. Downs |  |  |

---

## Exhibit 4.7

**Exhibit 4.7**

**DESCRIPTION OF THE COMPANY'S SECURITIES**

*The following summary is a description of the material terms of our capital stock. This summary is not complete, and is qualified by reference to our amended and restated articles of incorporation, and our amended and restated bylaws, which are filed as exhibits to this Annual Report on Form 10-K and are incorporated by reference herein. We encourage you to read our amended and restated articles of incorporation, our amended and restated bylaws and the applicable provisions of the Nevada Revised Statutes for additional information.*

Our amended and restated articles of incorporation authorize us to issue up to 100,000,000 shares of common stock and 10,000,000 shares of preferred stock.

**Common Stock**

Shares of our common stock have the following rights, preferences and privileges:

*Voting*

 

Each holder of common stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Any action at a meeting at which a quorum is present will be decided by a majority of the voting power present in person or represented by proxy, except in the case of any election of directors, which will be decided by a plurality of votes cast. There is no cumulative voting.

*Dividends*

 

Holders of our common stock are entitled to receive dividends when, as and if declared by our board of directors out of funds legally available for payment, subject to the rights of holders, if any, of any class of stock having preference over the common stock. Any decision to pay dividends on our common stock will be at the discretion of our board of directors. Our board of directors may or may not determine to declare dividends in the future. The board's determination to issue dividends will depend upon our profitability and financial condition any contractual restrictions, restrictions imposed by applicable law and the SEC, and other factors that our board of directors deems relevant.

*Liquidation Rights*

 

In the event of a voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of our common stock will be entitled to share ratably on the basis of the number of shares held in any of the assets available for distribution after we have paid in full, or provided for payment of, all of our debts and after the holders of all outstanding series of any class of stock have preference over the common stock, if any, have received their liquidation preferences in full.

*Other*

 

Our issued and outstanding shares of common stock are fully paid and nonassessable. Holders of shares of our common stock are not entitled to preemptive rights. Shares of our common stock are not convertible into shares of any other class of capital stock, nor are they subject to any redemption or sinking fund provisions.

**Preferred Stock**

We are authorized to issue up to 10,000,000 shares of preferred stock. Our articles of incorporation authorizes the board to issue these shares in one or more series, to determine the designations and the powers, preferences and relative, participating, optional or other special rights and the qualifications, limitations and restrictions thereof, including the dividend rights, conversion or exchange rights, voting rights (including the number of votes per share), redemption rights and terms, liquidation preferences, sinking fund provisions and the number of shares constituting the series. Our board of directors could, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of common stock and which could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire, a majority of our outstanding voting stock.

*Series A Preferred Stock Offering*

On September 30, 2021, the Company entered into subscription agreements (the "Subscription Agreements") with certain investors (the "Investors"). Pursuant to the Subscription Agreements, the Investors agreed to subscribe for and purchase, and the Company agreed to issue and sell to such Investors shares of Series A Convertible Preferred Stock (the "Preferred Stock") for a purchase price of $1,000.00 per share (the "Private Placement"). For each share of Preferred Stock issued, the Company issued the Investor a warrant to purchase 150% of the shares of Company common stock underlying the Preferred Stock (the "Warrants"). The aggregate Private Placement, which was completed on November 29, 2021 was $37,700,000.

The Preferred Stock is entitled to receive dividends, at a rate of 14.0% per annum, in cash or in kind, which shall be payable quarterly in arrears on January 1, April 1, July 1 and October 1, beginning on the first such date after the issuance date and ending on the 18-month anniversary. With limited exceptions, the Preferred Stock will have no voting rights. Upon any liquidation, dissolution or winding-up of the Company, the holders of the Preferred Stock shall be entitled to receive out of the assets, whether capital or surplus, of the Company available to shareholders, an amount equal to the greater of: (i) the purchase price for each share of Preferred Stock then held, or (ii) the amount the holders would have received had the holders fully converted the Preferred Stock to Company common stock, in each case, before any distribution or payment shall be made to the holders of the Company's common stock. The Preferred Stock is convertible into Company common stock at an initial conversion price of $28.00 per share ("Conversion Price"); provided that the Conversion Price is subject to anti-dilution protection upon any subsequent transaction at a price lower than the Conversion Price then in effect. In addition, on each of January 31, 2023 and April 15, 2023 (each, an "Adjustment Date"), the Conversion Price shall be adjusted to the lesser of: (i) the Conversion Price in effect on the Adjustment Date, or (ii) 85% of the average closing price of the Company's common stock for the fifteen trading days prior to the Adjustment Date.

The Warrants expire on the fifth anniversary thereafter. The Warrants are exercisable at an exercise price of $5.00 per share, provided that the exercise price is subject to anti-dilution protection upon any subsequent transaction at a price lower than the exercise price then in effect. The Warrants can be exercised on a cashless basis if there is no effective registration statement registering, or no current prospectus available for, the resale of the shares of common stock underlying the Warrants.

The holders of the Preferred Stock and Warrants will not have the right to convert or exercise any portion of the Preferred Stock and Warrants to the extent that, after giving effect to such conversion, such holder (together with certain related parties) would beneficially own in excess of 4.99% of the Company's common stock outstanding immediately after giving effect to such conversion or exercise.

**Warrants and Convertible Notes**

On September 1, 2020, our wholly owned subsidiary, ESEG Limited, entered into three domain purchase agreements. Each of the domain purchase agreements required the issuance of a 10% convertible note in principal amount of $700,000 and the issuance of a warrant to purchase ordinary shares of ESEG. Two of these agreements also require an additional cash payment after five years, totaling $675,000. Upon our acquisition of ESEG, we exchanged the ESEG securities issued to the domain sellers for our securities. Accordingly, we issued each of the three domain seller a 10% convertible note in principal amount of $700,000, which matures on March 1, 2022 and is convertible at the option of the holder at a conversion price of $0.50 per share, and we issued the three domain sellers a five-year warrant to purchase 745,000 shares, 635,000 shares, and 635,000 shares, respectively, of our common stock at an exercise price of $0.30 per share. Each of the foregoing convertible notes and warrants provide that no holder of these notes or warrants will be permitted to convert such notes or exercise such warrants to the extent that the holder or any of its affiliates would beneficially own in excess of 4.99% of our common stock after such conversion or exercise.

**Articles of Incorporation and Bylaw Provisions**

Our articles of incorporation and bylaws include a number of anti-takeover provisions that may have the effect of encouraging persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with our board of directors rather than pursue non-negotiated takeover attempts. These provisions include:

*Advance Notice Requirements*. Our bylaws establish advance notice procedures with regard to stockholder proposals relating to the nomination of candidates for election as directors or new business to be brought before meetings of stockholders. These procedures provide that notice of stockholder proposals must be timely and given in writing to our corporate Secretary. Generally, to be timely, notice must be received at our principal executive offices not fewer than 120 calendar days prior to the first anniversary date on which our notice of meeting and related proxy statement were mailed to stockholders in connection with the previous year's annual meeting of stockholders. The notice must contain the information required by the bylaws, including information regarding the proposal and the proponent.

*Special Meetings of Stockholders*. Our bylaws provide that special meetings of stockholders may be called at any time by only the Chairman of the Board, the Chief Executive Officer, the President or the board of directors, or in their absence or disability, by any vice president.

*No Written Consent of Stockholders*. Our articles of incorporation and bylaws provide that any action required or permitted to be taken by stockholders must be effected at a duly called annual or special meeting of stockholders and may not be effected by any consent in writing by such stockholders.

*Amendment of Bylaws*. Our stockholders may amend any provisions of our bylaws by obtaining the affirmative vote of the holders of a majority of each class of issued and outstanding shares of our voting securities, at a meeting called for the purpose of amending and/or restating our bylaws.

*Preferred Stock*. Our articles of incorporation authorizes our board of directors to create and issue rights entitling our stockholders to purchase shares of our stock or other securities. The ability of our board to establish the rights and issue substantial amounts of preferred stock without the need for stockholder approval may delay or deter a change in control of us. See "Preferred Stock" above.

**Nevada Takeover Statute**

The Nevada Revised Statutes contain provisions governing the acquisition of a controlling interest in certain Nevada corporations. Nevada's "acquisition of controlling interest" statutes (NRS 78.378 through 78.3793, inclusive) contain provisions governing the acquisition of a controlling interest in certain Nevada corporations. These "control share" laws provide generally that any person that acquires a "controlling interest" in certain Nevada corporations may be denied voting rights, unless a majority of the disinterested stockholders of the corporation elects to restore such voting rights. These laws will apply to us if we were to have 200 or more stockholders of record (at least 100 of whom have addresses in Nevada appearing on our stock ledger) and do business in the State of Nevada directly or through an affiliated corporation, unless our articles of incorporation or bylaws in effect on the tenth day after the acquisition of a controlling interest provide otherwise. These laws provide that a person acquires a "controlling interest" whenever a person acquires shares of a subject corporation that, but for the application of these provisions of the NRS, would enable that person to exercise (1) one-fifth or more, but less than one-third, (2) one-third or more, but less than a majority or (3) a majority or more, of all of the voting power of the corporation in the election of directors. Once an acquirer crosses one of these thresholds, shares which it acquired in the transaction taking it over the threshold and within the 90 days immediately preceding the date when the acquiring person acquired or offered to acquire a controlling interest become "control shares" to which the voting restrictions described above apply. These laws may have a chilling effect on certain transactions if our amended and restated articles of incorporation or amended and restated bylaws are not amended to provide that these provisions do not apply to us or to an acquisition of a controlling interest, or if our disinterested stockholders do not confer voting rights in the control shares.

Nevada's "combinations with interested stockholders" statutes (NRS 78.411 through 78.444, inclusive) provide that specified types of business "combinations" between certain Nevada corporations and any person deemed to be an "interested stockholder" of the corporation are prohibited for two years after such person first becomes an "interested stockholder" unless the corporation's board of directors approves the combination (or the transaction by which such person becomes an "interested stockholder") in advance, or unless the combination is approved by the board of directors and 60% of the corporation's voting power not beneficially owned by the interested stockholder, its affiliates and associates. Furthermore, in the absence of prior approval certain restrictions may apply even after such two-year period. For purposes of these statutes, an "interested stockholder" is any person who is (1) the beneficial owner, directly or indirectly, of 10% or more of the voting power of the outstanding voting shares of the corporation, or (2) an affiliate or associate of the corporation and at any time within the two previous years was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the then-outstanding shares of the corporation. The definition of the term "combination" is sufficiently broad to cover most significant transactions between a corporation and an "interested stockholder". These laws generally apply to Nevada corporations with 200 or more stockholders of record. However, a Nevada corporation may elect in its articles of incorporation not to be governed by these particular laws, but if such election is not made in the corporation's original articles of incorporation, the amendment (1) must be approved by the affirmative vote of the holders of stock representing a majority of the outstanding voting power of the corporation not beneficially owned by interested stockholders or their affiliates and associates, and (2) is not effective until 18 months after the vote approving the amendment and does not apply to any combination with a person who first became an interested stockholder on or before the effective date of the amendment. We have not made such an election in our original articles of incorporation or in our amended and restated articles of incorporation.

**Limitations on Liability and Indemnification of Officers and Directors**

Our articles of incorporation and bylaws limit the liability of our officers and directors and provide that we will indemnify our officers and directors, in each case, to the fullest extent permitted by the Nevada Revised Statutes. We expect to obtain additional directors' and officers' liability insurance coverage prior to the completion of this offering.

**Listing**

Our common stock is listed on the NASDAQ Capital Market under the symbol "EBET."

**Transfer Agent**

The transfer agent for our common stock is Continental Stock Transfer and Trust located at 1 State Street, 30<sup>th</sup> Floor, New York, NY 10004.

## Exhibit 23.1

**Exhibit 23.1**

*Consent of Independent Registered Public Accounting Firm*

To Whom it May Concern

We hereby consent to the incorporation by reference in the Prospectus constituting a part of Registration Statement Form S-8 (file number 333-256062), Registration Statement Form S-8 (file number 333-266678), Registration Statement Form S-3 (file number 333-265538), Registration Statement Form S-3 (file number 333-266677) and Registration Statement Form S-1 (file number 333-262228) of our report dated December 23, 2021, relating to the consolidated financial statements, and schedules of EBET, Inc. appearing in the entity's Annual Report on Form 10-K for the year ended September 30, 2021.

We also consent to the reference to us under the caption "Experts" in the Prospectus.

*/s/PWR CPA, LLP*

PWR CPA, LLP

Houston, Texas

January 13, 2023

## Exhibit 23.2

**Exhibit 23.2**

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We hereby consent to the incorporation by reference in the Registration Statements on Forms S-8 (File Nos. 333-256062 and 333-266678), Forms S-3 (File Nos. 333-265538 and 333-266677) and Form S-1 (File No. 333-262228) of our report dated January 13, 2023, relating to the consolidated financial statements of EBET, Inc. as of September 30, 2022 and to all references to our firm included in this Annual Report on Form 10-K.

Certified Public Accountants

Lakewood, CO

January 13, 2023

## Exhibit 31.1

**EXHIBIT 31.1**

**CERTIFICATION BY OFFICER**

I, Aaron Speach, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Form 10-K for the year ended September 30, 2022 of EBET, 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 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 15(d)-15(f)) for the registrant and we 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, including its consolidated subsidiaries, 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.

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officers 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.

---

| | | |
|:---|:---|:---|
| Date: January 13, 2023 | By: | /s/ Aaron Speech |
|  |  | **Aaron Speech** |
|  |  | **Chief Executive Officer** |

---

## Exhibit 31.2

**EXHIBIT 31.2**

**CERTIFICATION BY OFFICER** 

I, Matthew Lourie, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Form 10-K for the year ended September 30, 2022 of EBET, 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 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 15(d)-15(f)) for the registrant and we 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, including its consolidated subsidiaries, 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.

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officers 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.

---

| | | |
|:---|:---|:---|
| Date: January 13, 2023 | By: | /s/ Matthew Lourie |
|  |  | **Matthew Lourie** |
|  |  | **Chief Financial Officer** |

---

## Exhibit 32.1

**EXHIBIT 32.1** 

**CERTIFICATION OF OFFICER** 

**Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** 

**(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)** 

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), the undersigned officer of EBET, Inc., a Nevada corporation (the "Company"), does hereby certify, to such officer's knowledge, that:

The Form 10-K for the year ended September 30, 2022 (the "Report") of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: January 13, 2023 | By: | /s/ Aaron Speach |
|  |  | **Aaron Speech** |
|  |  | **Chief Executive Officer** |

---

## Exhibit 32.2

**EXHIBIT 32.2** 

**CERTIFICATION OF OFFICER** 

**Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** 

**(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)** 

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), the undersigned officer of EBET, Inc., a Nevada corporation (the "Company"), does hereby certify, to such officer's knowledge, that:

The Form 10-K for the year ended September 30, 2022 (the "Report") of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: January 13, 2023 | By: | /s/ Matthew Lourie |
|  |  | **Matthew Lourie** |

---