UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from ________ to _________
Commission File Number:
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(Exact name of registrant as specified in its charter) |
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(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
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(Address of Principal Executive Offices) |
(Zip Code) |
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(Registrant’s telephone number, including area code)
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(Former Name, former address, and former fiscal year, if changed since the last report)
Securities registered under Section 12(b) of the Exchange Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check all that apply):
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Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by a check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of November 14, 2025, there were
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TABLE OF CONTENTS
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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| Table of Contents |
Part I
Item 1. Financial Statements
APPLE iSPORTS GROUP, INC.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 2025 AND 2024 (UNAUDITED)
APPLE iSPORTS GROUP, INC.
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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Condensed Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024 |
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F-1 |
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F-2 |
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F-3 |
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F-4 |
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Notes to Condensed Consolidated Financial Statements (unaudited) |
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F-5 |
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| 3 |
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| Table of Contents |
APPLE iSPORTS GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
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September 30, |
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December 31, |
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2025 |
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2024 |
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Assets |
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(UNAUDITED) |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Goods and service tax receivable |
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Marketable security |
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Prepaid and other assets |
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Total current assets |
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Deposits |
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Notes receivable |
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Accrued interest income |
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Total assets |
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$ |
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$ |
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Liabilities and Stockholders’ Deficit |
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Current liabilities: |
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Accounts payable and accrued expenses |
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$ |
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$ |
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Accounts payable and accrued expenses – related parties |
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Due to related party |
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Loans payable - related parties |
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Accrued interest - related parties |
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Accrued payroll |
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Total current liabilities |
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Total liabilities |
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Commitments and contingencies |
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Stockholders’ deficit: |
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Common stock, $
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Additional paid-in capital |
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Treasury stock,
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(
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(
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Accumulated other comprehensive income |
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Accumulated deficit |
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(
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(
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Total stockholders’ deficit |
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(
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(
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Total Liabilities and Stockholders’ Deficit |
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$ |
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$ |
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See accompanying notes to condensed consolidated financial statements.
| F-1 |
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| Table of Contents |
APPLE iSPORTS GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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2025 |
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2024 |
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2025 |
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2024 |
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Net revenues |
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$ |
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$ |
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$ |
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$ |
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Operating expenses: |
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Corporate expense |
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Consulting and professional fees |
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Selling, general and administrative |
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Total operating expenses |
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Loss from operations |
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(
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(
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(
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(
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Other (expenses) and income: |
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Issuance cost related to equity contract |
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(
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(
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Forgiveness of debt |
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(
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Interest expense, net |
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(
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(
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(
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(
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Foreign exchange gain (loss) |
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(
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(
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Total other (expenses) and income |
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(
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(
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(
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Operating loss before income taxes |
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(
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(
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(
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(
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Provision for income taxes |
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Net loss |
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$ |
(
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$ |
(
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$ |
(
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$ |
(
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Foreign currency translation adjustment |
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(
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(
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(
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(
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Comprehensive loss |
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(
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(
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(
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(
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Net loss per share - basic and diluted |
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$ |
(
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$ |
(
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$ |
(
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$ |
(
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Weighted number of shares outstanding |
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Basic and Diluted |
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See accompanying notes to condensed consolidated financial statements.
| F-2 |
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|
| Table of Contents |
APPLE iSPORTS GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
(UNAUDITED )
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Accumulated |
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Additional |
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Other |
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Total |
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Common |
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Paid-In |
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Treasury |
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Comprehensive |
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Accumulated |
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Stockholders’ |
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Shares |
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Par Value |
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Capital |
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Stock |
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Income |
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Deficit |
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(Deficit) |
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Balance as of December 31, 2024 |
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$ |
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$ |
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$ |
(
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$ |
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$ |
(
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$ |
(
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Conversion of loan to common stock |
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Issuance of common stock |
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Stock-based compensation |
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Other comprehensive income (loss) |
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(
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(
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Net loss |
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(
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(
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Balance as of March 31, 2025 |
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$ |
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$ |
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$ |
(
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$ |
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$ |
(
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$ |
(
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Other comprehensive income (loss) |
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(
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) |
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(
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Net Loss |
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(
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) |
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(
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) |
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Balance as of June 30, 2025 |
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$ |
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$ |
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$ |
(
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) |
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$ |
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$ |
(
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) |
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$ |
(
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) |
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Issuance of warrant |
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Stock-based compensation |
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Other comprehensive income (loss) |
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(
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) |
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(
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) |
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Net Loss |
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(
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) |
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(
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) |
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Balance as of September 30, 2025 |
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$ |
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$ |
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$ |
(
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) |
|
$ |
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$ |
(
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) |
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$ |
(
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) |
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Accumulated |
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Additional |
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Other |
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Total |
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Common |
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Paid-In |
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Treasury |
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Comprehensive |
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Accumulated |
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Stockholders’ |
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Shares |
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Par Value |
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Capital |
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Stock |
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Income |
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Deficit |
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(Deficit) |
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Balance as of December 31, 2023 |
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$ |
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$ |
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$ |
(
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) |
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$ |
(
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) |
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$ |
(
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) |
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$ |
(
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) |
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Issuance of common stock |
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Other comprehensive income (loss) |
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Net loss |
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(
|
) |
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(
|
) |
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Balance March 31, 2024 |
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$ |
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$ |
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|
$ |
(
|
) |
|
$ |
|
|
|
$ |
|
) |
|
$ |
(
|
) |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock issuance modification |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
(
|
) |
|
Net loss for period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
(
|
) |
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of June 30, 2024 |
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
(
|
) |
|
$ |
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
(
|
) |
|
Net loss for period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance September 30, 2024 |
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
(
|
) |
|
$ |
(
|
) |
|
$ |
(
|
) |
|
$ |
(
|
) |
See accompanying notes to condensed consolidated financial statements.
| F-3 |
|
|
| Table of Contents |
APPLE iSPORTS GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
Nine Months Ended |
|
|||||
|
|
|
September 30, |
|
|||||
|
|
|
2025 |
|
|
2024 |
|
||
|
Cash flows from operating activities |
|
|
|
|
|
|
||
|
Net loss |
|
$ |
(
|
) |
|
$ |
(
|
) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
|
Foreign exchange (gain) loss |
|
|
(
|
) |
|
|
|
|
|
Forgiveness of debt |
|
|
|
|
|
|
(
|
) |
|
Non Cash Expense from issuance cost related to equity contract |
|
|
|
|
|
|
|
|
|
Non Cash Expense from stock issuance modification |
|
|
|
|
|
|
|
|
|
Adjustment for stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
Good and services tax receivable |
|
|
|
|
|
|
|
|
|
Accrued interest income |
|
|
(
|
) |
|
|
(
|
) |
|
Accounts payable and accrued expenses |
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses – related parties |
|
|
|
|
|
|
|
|
|
Accrued interest – related party |
|
|
|
|
|
|
|
|
|
Accrued payroll |
|
|
(
|
) |
|
|
|
|
|
Prepaid and other assets |
|
|
(
|
) |
|
|
(
|
) |
|
Deposits |
|
|
(
|
) |
|
|
(
|
) |
|
Net cash used in operating activities |
|
|
(
|
) |
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
Notes receivable |
|
|
(
|
) |
|
|
(
|
) |
|
Net cash used in investing activities |
|
|
(
|
) |
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
Proceeds from loan payable from related parties |
|
|
|
|
|
|
|
|
|
Payments to loans payable from related parties |
|
|
(
|
) |
|
|
(
|
) |
|
Proceeds from conversion of loan to common stock |
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of changes in exchange rates on cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
|
|
|
$ |
|
|
|
Cash paid for income tax |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of Non-Cash Financing activities: |
|
|
|
|
|
|
|
|
|
Non Cash decrease in related party loans payable due to conversion to common stock |
|
$ |
(
|
) |
|
$ |
|
|
|
Non Cash decrease in accrued interest related party due to conversion to common stock |
|
$ |
(
|
) |
|
$ |
|
|
|
Non Cash increase in common stock due to conversion of related party loan |
|
$ |
|
|
|
$ |
|
|
|
Non Cash increase in Additional Paid in capital due to conversion of related party loan |
|
$ |
|
|
|
$ |
|
|
|
Non Cash increase in Additonal Paid in capital due to issuance of warrant |
|
$ |
|
|
|
$ |
|
|
|
Non Cash increase in Issuance cost and Accrued Expenses for the commitment fee for Common Stock purchase agreement |
|
$ |
|
|
|
$ |
|
|
See accompanying notes to condensed consolidated financial statements.
| F-4 |
|
|
| Table of Contents |
APPLE iSPORTS GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1. COMPANY HISTORY AND NATURE OF BUSINESS
Apple iSports Group, Inc. (the “Company”) was incorporated under the laws of the State of Nevada in 1975 as Vita Plus Industries, Inc. In March 1999, the Company sold its remaining inventory and changed its name to Prevention Insurance.com and effective August 31, 2023, changed its name to Apple iSports Group, Inc. Effective March 23, 2023, the Company closed a share exchange pursuant to a Stock Exchange Agreement (the “Stock Exchange Agreement”), with Apple iSports, Inc. (“AiS”), a Delaware corporation and the stockholders of AiS. Under the Stock Exchange Agreement, the Company issued to the AiS stockholders
AiS, formed on May 29, 2019, in the State of Delaware, has been engaged in the development of an online sports portal that will include a technology infrastructure that will enable racing and sports betting, and sports content to be more robust. On November 9, 2021, AiS incorporated Apple iSports Pty Ltd (“AIS Australia”) as a wholly owned subsidiary of AiS.
Paramount Capital Inc. was formed on September 19, 2019, in the State of Wyoming. It is a wholly-owned subsidiary of the Company, and since its inception, it has had limited operating activity. Effective September 19, 2024, the Company amended Paramount Capital Inc.’s name to AiSportsTek, Inc.
NOTE 2. GOING CONCERN
The Company’s condensed consolidated financial statements are prepared on a going concern basis of accounting, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues and cash flows sufficient to cover its operating costs and allow it to continue as a going concern. For the Nine Months Ended September 30, 2025, the Company reported a net loss of $
The Company’s ability to continue as a going concern for the next 12 months from the date of this Quarterly Report is dependent upon its ability to develop additional sources of debt and/or equity to fund the continued development of its multi-faceted sports betting platform and ultimately achieve profitable operations. The Company plans to obtain such resources by relying upon continued advances from significant stockholders sufficient to meet its minimal operating expenses and seeking third-party equity and/or debt financing. However, the Company cannot provide any assurances that it will be successful in accomplishing any of its plans. These condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Certain prior year amounts have been reclassified for consistency with the current year's presentation. These reclassifications had no effect on the reported results of operations.
These condensed consolidated financial statements incorporate the financial statements of the Company and its wholly owned subsidiary, AiS, AIS Australia and AiSportsTek, Inc. All significant intercompany transactions and balances have been eliminated in consolidation. The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional financing needed to execute its business plan.
| F-5 |
|
|
| Table of Contents |
The Company is an emerging growth company as the term is used in The Jumpstart Our Business Startups Act, enacted on April 5, 2012, and has elected to comply with certain reduced public company reporting requirements.
Unaudited Interim Financial Information
The unaudited interim condensed consolidated financial statements and related notes have been prepared in accordance with U.S. GAAP for interim financial information, within the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and disclosures normally included in the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The unaudited interim condensed consolidated financial statements have been prepared on a basis consistent with the audited financial statements and in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the consolidated results for the interim periods presented and of the consolidated financial condition as of the date of the interim condensed consolidated balance sheet. The financial data and the other information disclosed in these notes to the interim condensed consolidated financial statements related to the interim periods are unaudited. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2024, and notes thereto.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions.
Intellectual property rights
The Company depends in part upon proprietary technology and is actively looking to increase and enhance its proprietary technology through the acquisition of third-party intellectual property. As such, in 2022, the Company entered into an agreement to transfer 1,000,000 AUD (U.S. $
Foreign Currency Transactions and Translation
The Company’s functional currency is the United States Dollar (“US $”). The Company’s wholly owned subsidiary, AIS Australia’s functional currency in which it operates is Australian Dollars (“AUD”).
For the purpose of presenting these condensed consolidated financial statements, the reporting currency is US$. AIS Australia’s assets and liabilities are expressed in US$ at the exchange rate on the balance sheet date, stockholder’s equity accounts are translated at historical rates, and income and expense items are translated at the average exchange rate during the period The resulting translation adjustments are reported under accumulated other comprehensive income in the stockholder’s deficit section of the balance sheets.
| F-6 |
|
|
| Table of Contents |
Transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. Gains or losses resulting from transactions in currencies other than the functional currencies are recognized as part of operating expenses in the condensed consolidated statement of comprehensive loss.
Exchange rates used for the translations are as follows:
|
AUD to U.S. $ |
|
Period End |
|
|
Average |
|
||
|
December 31, 2024 |
|
|
|
|
|
|
|
|
|
September 30, 2025 |
|
|
|
|
|
|
|
|
|
September 30, 2024 |
|
|
|
|
|
|
|
|
Fair Values of Financial Instruments
The Company adopted Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements,” which defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement, and enhances disclosure requirements for fair value measures. Current assets and current liabilities qualify as financial instruments and management believes their carrying amounts are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their current interest rate is equivalent to interest rates currently available. The three levels are defined as follows:
|
|
· |
Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
|
|
|
|
|
|
· |
Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the financial instruments. |
|
|
|
|
|
|
· |
Level 3 — inputs to the valuation methodology are unobservable and significant to the fair value. |
As of the balance sheet date, the estimated fair values of accounts payable, accrued expenses, loan payable – related parties, and due to related party approximated their fair values due to the short-term nature of these instruments. The fair value of the Company’s recently issued notes receivable approximates its carrying value due to the recency of its issuance relative to September 30, 2025, which was otherwise issued at market terms that the Company believes would be currently available for similar loan issuances. Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates the hierarchy disclosures each reporting period.
Related Party Transactions
The Company adopted ASC 850, Related Party Disclosures , for the identification of related parties and disclosure of related party transactions. See Note 5 below for details of related party transactions in the period presented.
Cash and Cash Equivalents
The Company maintains cash balances in a non-interest-bearing account that currently does not exceed federally insured limits. Australian bank accounts are insured with deposit protection up to
Deposits
In April 2024, the Company entered into a term sheet agreement for the proposed purchase of a customer database and web domain from an Australian proprietary limited company. The completion of the proposed purchase of these certain assets is subject to, among other things, the completion of due diligence, the negotiation of definitive agreements (including an asset purchase agreement), the satisfaction of the conditions negotiated therein, approval of the transaction by the board and stockholders of both companies, as well as regulatory approvals and other customary conditions. There can be no assurance that the definitive agreements will be entered into or that the proposed purchase of these certain assets will be consummated on the terms or timeframe currently contemplated or at all. As of September 30, 2025, the Company has not yet executed the definitive agreements. Concurrent with the term sheet, the Company paid a deposit of 60,000 AUD (U.S. $
In November 2024, the Company entered into a Letter of Intent for the purchase of broadband infrastructure and private 5G LTE networks. The completion of the proposed purchase of these assets is subject to, among other things, the completion of due diligence, negotiation of the Purchase Price, and a definitive agreement. As of September 30, 2025, the Company has not yet executed the definitive agreements. Concurrent with the Letter of Intent, the Company paid a deposit of $
Convertible Notes Receivable
Notes receivable are classified as held-for-investment based on the Company’s intent and ability to hold the loans for the foreseeable future or until maturity. Notes receivable are carried at amortized cost and are reduced by loan origination costs and the allowance for estimated credit losses, as necessary.
| F-7 |
|
|
| Table of Contents |
Provisions for credit losses are charged to operations in amounts sufficient to maintain the allowance for credit losses at levels considered adequate to cover expected credit losses on the loans. In determining expected credit losses, the Company considers its historical level of credit losses, current economic trends, and reasonable and supportable forecasts that affect the collectability of the future cash flows.
The Company recognizes interest income on loans, including the amortization of discounts and premiums, using the effective interest method. The effective interest method is applied on a loan-by-loan basis when the collectability of the future payments is reasonably assured. Interest income is accrued on the unpaid principal balance unless the collectability of the loan is in doubt. Loans are placed on non-accrual status if the collection of principal and interest is considered doubtful, which is typically 90 days after the loan becomes delinquent.
Revenue Recognition
The Company determines revenue recognition through the following steps:
Step 1: Identify the contract(s) with customers
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to performance obligations in the contract
Step 5: Recognize revenue when the entity satisfies a performance obligation
Revenue is recognized when performance obligations are satisfied through the transfer of control of promised goods or services to the Company’s customers in an amount that reflects the consideration expected to be received in exchange for transferring goods or services to customers. Control transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the product. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance.
Comprehensive income (loss)
The Company follows ASC 220 in reporting comprehensive income (loss). Comprehensive income (loss) is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income (loss).
Earnings (Loss) Per Share
The Company follows ASC 260 when reporting earnings (loss) per share (EPS), resulting in the presentation of basic and diluted earnings (loss) per share. Basic EPS is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted EPS is computed by dividing net income (loss) by the weighted average shares outstanding, assuming all dilutive potential common shares were issued. Diluted EPS is not presented when its effect is anti-dilutive. The Company considers the
Income Taxes
The Company accounts for income taxes pursuant to FASB ASC 740. Deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.
| F-8 |
|
|
| Table of Contents |
The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s condensed consolidated financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under the Federal tax laws. Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimates.
The Company evaluates tax positions in a two-step process. The Company first determines whether it is more likely than not that a tax position will be sustained upon examination, based on the technical merits of the position. If a tax position meets the more-likely-than-not recognition threshold, it is then measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely to be realized upon ultimate settlement. The Company classifies gross interest and penalties and unrecognized tax benefits that are not expected to result in payment or receipt of cash within one year as long-term liabilities in the financial statements.
Accounting Pronouncements Not Yet Adopted
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective for the annual periods beginning the year ended December 31, 2025. Early adoption is permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. The Company is currently evaluating the impact of this accounting standard on its condensed consolidated financial statements.
In March 2024, the FASB Issued ASU No. 2024-01, Compensation - Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards , which clarifies the accounting for profit interest. This update did not have a material impact on the Corporation’s consolidated financial statements and related disclosures.
In March 2024, the FASB Issued ASU No. 2024-02, Codification Improvements - Amendments to Remove References to the Concepts Statements , which removes various references to the Concepts Statements from the FASB Accounting Standards Codification. This update did not have a material impact on the Corporation’s consolidated financial statements and related disclosures.
In March 2025, the FASB issued ASU No. 2025-02, Liabilities (Topic 405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122, which amends an SEC paragraph noted in Codification pursuant to the issuance of SEC Staff accounting Bulletin No. 112 which removes text of SAB Topic 5FF, Accounting for Obligations To Safeguard Crypto-Assets an Entity Holds for Its Platform Users. This update did not have a material impact on the Corporation’s consolidated financial statements and related disclosures.
NOTE 4. CONVERTIBLE NOTES RECEIVABLE
On March 6, 2024, the Company entered into a Convertible Promissory Note Purchase Agreement with SeaPort Inc., whereby the Company agreed to loan a maximum of $
| F-9 |
|
|
| Table of Contents |
NOTE 5. RELATED PARTIES
Related Party Payables
|
Related Party |
|
Note |
|
September 30, 2025 |
|
|
December 31, 2024 |
|
||
|
Cres Discretionary Trust No. 2 |
|
(a) |
|
$ |
|
|
|
$ |
|
|
|
Apple iSports Investment Group Pty |
|
(b) |
|
|
|
|
|
|
|
|
|
ABA Investment Group Pty Ltd |
|
(c) |
|
|
|
|
|
|
|
|
|
Utti Oco Pty Ltd |
|
(d) |
|
|
|
|
|
|
|
|
|
Mt. Wills Gold Mines Pty Ltd |
|
(e) |
|
|
|
|
|
|
|
|
|
Total loan payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cres Discretionary Trust No. 2 |
|
(a) |
|
|
|
|
|
|
|
|
|
Apple iSports Investment Group Pty |
|
(b) |
|
|
|
|
|
|
|
|
|
ABA Investment Group Pty Ltd |
|
(c) |
|
|
|
|
|
|
|
|
|
Total accrued interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due to Director |
|
(f) |
|
|
|
|
|
|
|
|
|
Total Due to related party |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|||||||||||
|
|
|
|
September 30, |
|
|
September 30, |
|
|||||||||||
|
|
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|||||
|
Related party interest expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cres Discretionary Trust No. 2 |
|
(a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
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Apple iSports Investment Group Pty |
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ABA Investment Group Pty Ltd |
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Total related party interest expenses |
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a) On May 30, 2019, the Company entered into a loan agreement with Cres Discretionary Trust No.2 (the “Lender”). The Company’s director is the sole officer and controlling stockholder of the Lender. The Lender is also the Company’s majority shareholder. The loan is unsecured, has a
b) On April 8, 2022, the Company’s wholly-owned subsidiary, AIS Australia, entered into a loan agreement with Apple iSports Investment Group Pty Ltd (the “Subsidiary Lender”). The Subsidiary Lender is
c) On April 8, 2022, the Company’s wholly owned subsidiary, AIS Australia, entered into a loan agreement with ABA Investment Group Ltd (the “Subsidiary Lender 2”). Subsidiary Lender 2 is
d) On March 31, 2022, the Company entered into a loan agreement with Utti Pty Ltd (“Utti”). Utti is owned by a director of the Company. The loan is unsecured, bears interest at a rate of
e) On March 31, 2022, the Company entered into a loan agreement with Mt. Wills Gold Mines Pty Ltd (“Mt. Wills”). The Company’s director is also a director and shareholder of Mt. Wills. The loan is unsecured, bears interest at a rate of
f) A director of the Company has advanced cash to the Company. The advances were unsecured and interest-free.
NOTE 6. INCOME TAXES
The Company utilized the asset and liability method of accounting for income taxes in accordance with FASB ASC 740-10. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.
a. United States (U.S.)
The Company is subject to U.S. tax laws at a tax rate of
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b. Australia (AU)
Apple iSports Pty Ltd, a second-tier subsidiary of the Company, was incorporated in Australia in November 2021 and may be subject to a corporate income tax on its activities conducted in Australia and income arising in or from Australia. No provision for income tax has been made as the subsidiary had no taxable income for the three and nine months ended September 30, 2025 and 2024. The applicable statutory tax rate is
Significant components of the Company’s net deferred income tax assets as of the Nine Months Ended September 30, 2025, and the year ended December 31, 2024, consist of net operating loss carryforwards. The net operating loss forward for U.S. federal tax and Australian tax purposes is available for carryforward indefinitely for use in offsetting taxable income. The U.S. federal net operating loss carry forward offset is limited to up to 80% of the taxable income. The State of Delaware’s net operating loss carryforwards are available for carry forward for 20 years for use in offsetting taxable income. Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carry-forward period.
There is no income tax benefit for the losses for the Nine Months Ended September 30, 2025 and 2024, since management has determined that the realization of the net tax deferred asset is not assured and has created a valuation allowance for the entire amount of such benefits.
NOTE 7. STOCKHOLDERS’ DEFICIT
The Company’s Articles of Incorporation, as amended, have authorized
Preferred Stock
As of September 30, 2025, and December 31, 2024, the Company was authorized to issue
No shares of preferred stock were issued or outstanding during the Nine Months Ended September 30, 2025, and the year ended December 31, 2024.
Common Stock and Warrants
As of September 30, 2025, and December 31, 2024, the Company was authorized to issue
On August 4, 2025, the Company entered into a common stock purchase agreement with an investor (the “Common Stock Purchase Agreement”). Pursuant to the Common Stock Purchase Agreement, the Company shall issue and sell to the investor, and the investor shall purchase up to a maximum of $
The Company, from time to time, may submit draw down requests to the investor to purchase shares of the Company’s common stock at a prescribed purchase price. The amount of each draw down request shall not exceed 400% of the average daily trading volume for the 10 trading days immediately preceding a draw down request. The investor shall be obligated to accept the Company’s draw down notice, provided that the investor, in its sole discretion, shall not be obligated to accept more than 50% of the requested draw down amount and shall have the option to purchase up to 200% of the draw down amount requested. The price per share to be paid by the investor shall equal 90% of the average daily closing price during the pricing period for such draw down.
Pursuant to the Common Stock Purchase Agreement, the investor is entitled to a commission equal to 2% of the gross proceeds. The Company was not obligated to pay the commission during the three months ended September 30, 2025 and recorded it as a non-operating expense or issuance cost related to equity contract. As of September 30, 2025, there have been no share issuances of the Company’s common stock in connection with the Common Stock Purchase Agreement.
Regarding the warrants, the Company performed an analysis of the related provisions and concluded that the warrants met the guidance for being classified as an equity instrument. As the Company has not received any proceeds from share issuances under the Common Stock Purchase Agreement, the Company recognized the relative fair value of the warrant of $
On March 6, 2025, the Company entered into a subscription agreement with two unaffiliated third parties pursuant to which the Company received a total of $
On February 13, 2025, the Company entered into a subscription agreement with an unaffiliated third-party pursuant to which the Company received $
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On January 9, 2025 (“Effective Date”), the Company and Cres Pty Ltd at Cres Discretionary Trust No 2 (“Cres”) entered into a loan conversion agreement by which the Company converted and discharged certain outstanding loans to the Company in exchange for certain shares of the Company’s common stock. The loan converted by Cres was $
On July 24, 2024, the Company entered into a subscription agreement with an unaffiliated third-party pursuant to which the Company received $
On April 26, 2024, the Company entered into a subscription agreement with unaffiliated third parties pursuant to which the Company received $
On February 16, 2024, the Company entered into a subscription agreement with unaffiliated third parties pursuant to which the Company received $
On March 23, 2024, pursuant to the Stock Exchange Agreement with AiS, the Company issued
On June 20, 2023, the Company received a subscription agreement for the purchase of
Treasury Stock
The Company’s treasury stock comprised one share of common stock acquired at a cost of $
NOTE 8. COMMITMENTS AND CONTINGENCIES
In the ordinary course of business, the Company or its subsidiaries may be named a party to claims and/or legal proceedings. Neither the Company nor its subsidiaries have been named in and are not aware of any matters which management believes will result, either individually or in the aggregate, in a material adverse effect on its financial condition or results of operations.
As of September 30, 2025, the Company leased short-term office spaces (12 months or less), and as an accounting policy election, the Company has excluded all short-term leases from the presentation on the balance sheet.
NOTE 9. STOCK PLAN
Australian Plan
On July 25, 2025, the Board of Directors adopted and approved the creation of a Stock Option Plan for Australian employees of the Company and its subsidiary. It also approved the stock option grant of a total of
The following tables summarize information about stock options transactions and related information:
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Plan Authorized Shares |
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Common Stock |
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As of September 30, 2025, stock option grants totaling
Compensation cost recorded for stock-based compensation awards (including awards to non-employee directors and consultants) reflected as a stock compensation expense was $
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The following tables summarize information about vested common stock transactions and related information for shares subject to time-based vesting:
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US Plan
On November 1, 2024, the Board of Directors of the Company approved the creation of the 2024 Stock Incentive Plan (“2024 Stock Plan”). The maximum number of common stock authorized and available for issuance under the 2024 Stock Plan initially was
On March 12, 2025, the Board approved an amendment of the Company’s 2024 Stock Incentive Plan to increase the shares issued under the plan from
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As of September 30, 2025, stock option grants totaling 13,725,000 shares of common stock had a weighted average grant date fair value of $
Compensation cost recorded for stock-based compensation awards (including awards to non-employee directors and consultants) reflected as a stock compensation expense was $
The following tables summarize information about vested common stock transactions and related information for shares subject to time-based vesting:
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NOTE 10. SEGMENT REPORTING
Operating segments are defined as components of an enterprise with separate financial information, which are evaluated regularly by the chief operating decision maker (“CODM”) and are used in resource allocation and performance assessments. The Company’s Chief Executive Officer is the Company’s CODM. The Company is organized and operates as one operating and reportable segment that is developing a digital sports betting and gaming platform.
The Company’s CODM reviews financial information and operational forecasts presented on a consolidated basis for the purpose of making operating decisions and assessing financial performance. The Company’s CODM assesses performance for the Company’s single reportable segment based on the Company’s net income (loss) as reported on the consolidated statement of comprehensive income (loss).
NOTE 11. SUBSEQUENT EVENTS
We evaluated subsequent events after September 30, 2025 through the date of the issuance of these financial statements. Based on this evaluation, we identified the following subsequent events, from September 30, 2025 through the date the financial statements were issued.
On November 1, 2025 the company entered into a Loan Agreement with a third party for the sum of $350,000 AUD ($
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements made in this quarterly report on Form 10-Q are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the registrant to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company’s plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this quarterly report will prove to be accurate. Considering the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the registrant or any other person that the objectives and plans of the registrant will be achieved.
The forward-looking statements are not meant to predict or guarantee actual results, performance, events, or circumstances and may not be realized because they are based upon our current projections, plans, objectives, beliefs, expectations, estimates, and assumptions and are subject to a number of risks and uncertainties and other influences, many of which we have no control over. Actual results and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements as a result of these risks and uncertainties. Factors that may influence or contribute to the accuracy of the forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation:
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Market acceptance of our products and services; |
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Competition from existing products or new products that may emerge; |
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The implementation of our business model and strategic plans for our business and our products; |
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Estimates of our future revenue, expenses, capital requirements and our need for financing; |
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Our financial performance; |
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Current and future government regulations regarding the sports betting industry; |
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Developments relating to our competitors; and |
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Other risks and uncertainties. |
Readers are cautioned not to place undue reliance on forward-looking statements because of the risks and uncertainties related to them and the risk factors. We disclaim any obligation to update the forward-looking statements contained in this Report to reflect any new information or future events or circumstances or otherwise, except as required by law.
Readers should read this Report in conjunction with the discussion under the caption “ Risk Factors ,” our financial statements and the related notes thereto in this Report, and other documents that we may file from time to time with the SEC.
The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this annual report.
Our audited and unaudited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
Overview
AiS has been engaged in the development of a digital sports betting and gaming platform. Our platform, when complete, will provide users with sports content, racing, and sports betting, and sport streaming solutions. We aim to create excitement and engagement and deliver the best experiences that enhance sports fandom. Users can access our products via multiple devices, including the web and mobile devices.
Apple iSports is at the forefront of the convergence between technology, gaming, media, and entertainment, particularly as the boundaries between sports, wagering, and entertainment continue to blur. Through our strategic business acquisitions, and partnerships, we aim to address the critical infrastructure and connectivity gaps in today’s rapidly evolving digital landscape. As demand for high-speed access to content via broadband, cellular, and satellite networks continues to surge, our mission is to enhance and expand the underlying systems that power next-generation media consumption. This investment in infrastructure not only ensures seamless streaming and interactive experiences for fans but also empowers athletes and content creators with the tools and platforms to reach broader audiences and unlock new monetization opportunities, such as iGaming opportunities and other forms of engagement.
AiS is seeking an Online Bookmaking License in Australia through the Northern Territory Racing Commission, which will enable racing and sports betting throughout the country, one of the most mature legal betting markets in the world. In addition, we are licensed in North Dakota as an (ADW) provider, subject to completion of the TRPB examination, which will allow us to provide pari-mutuel betting on racing in North Dakota and up to an additional 20 states that do not have specific regulations. NFL and other sports bets in the US are regulated separately from racing wagering. We will seek market access licenses for several states that offer sports betting licenses over a three-year timeline.
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Since the inception of AiS through September 30, 2025, we (i) established a core team with the industry skills and experience to manage the Company, and (ii) we received approximately $3,023,397 in private placement funding and the current outstanding balance to related parties in excess of $2,810,039. |
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From December 2021 to October 2022, we developed our Go-to-Market outline and marketing strategy, including identifying preferred suppliers for each product and initiating relationships with key suppliers and consultants. |
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In June 2022, we submitted our application to the North Dakota Racing Commission for an (ADW) license, subject to the approval of the Thoroughbred Racing Protective Bureau. Completion of the TRPB examination is required to receive a state-issued ADW. This will be concluded after closing the capital raising. |
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Effective March 23, 2023, we completed a change of control transaction pursuant to a Stock Exchange Agreement (the “Stock Exchange Agreement”) with AiS and the shareholders of AiS. The stock exchange was accounted for under the business combination under the common control of accounting. Consequently, the assets and liabilities, as well as the historical operations, reflected in the financial statements before the stock exchange liabilities and the historical operations that are reflected in the financial statements prior to the stock exchange are those of AiS and the Company combined. They are recorded at the historical cost basis, and the condensed consolidated financial statements after completion of the stock exchange include the combined assets and liabilities of AiS and the Company from the closing date of the stock exchange, as a result of the issuance of the shares of our common stock pursuant to the stock exchange, a change in control of the Company occurred as of the date of consummation of the transaction. |
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In May 2023, we began brand awareness activities by advertising around Australia on SEN Radio, the largest sports radio network in Australia. As of September 2025, the contract was suspended until the Company moves closer to going live. |
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In April 2025, we entered into a strategic and financial agreement with Pacifico Financial Group to accelerate various capital raising activities. |
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In May 2025, we entered into a letter of intent to purchase AmeriCrew Inc, a leading telecommunications infrastructure provider. On or about July 13, 2025, the proposed transaction of AmeriCrew, is no longer viable and will not be purchased. |
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In July 2025, we entered into a binding agreement to purchase Lucky Bet, a fully operational gaming platform provider with significant customer base and revenue. |
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In August 2025, we entered into an Equity Backstop agreement with LDA Capital Group allowing draw-down of up to $25 million, with an ability to extend the draw-down up to $50 million based on completion of a Registration Statement and trade volume metrics. |
Effective March 23, 2023, we completed a change of control transaction pursuant to a Stock Exchange Agreement (the “Stock Exchange Agreement”) with AiS and the shareholders of AiS. The stock exchange was accounted for under the business combination under the common control of accounting. Consequently, the assets and liabilities and the historical operations that are reflected in the financial statements before the stock exchange are those of AiS and the Company combined. They are recorded at the historical cost basis and the condensed consolidated financial statements after completion of the stock exchange include the combined assets and liabilities of AiS and the Company from the closing date of the stock exchange, as a result of the issuance of the shares of our common stock pursuant to the stock exchange, a change in control of the Company occurred as of the date of consummation of the transaction.
Our address is 100 Spectrum Center Dr., Suite 900, Irvine, CA 92612, and our phone number is (949) 247-4210. We also maintain satellite offices at Level 1, Paspalis Centrepoint, 48-50 Smith Street Mall, Darwin NT 0800 Australia, and Lonsdale Street, Level 7, Melbourne, Australia 3000. In addition, as mentioned, we have two websites (which do not form a part of these filings): www.appleisports.com in the U.S. and www.appleisports.com.au in Australia.
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Our corporate structure is depicted below:
Results of Operations
For the Nine Months Ended September 30, 2025, Compared to the Nine Months Ended September 30, 2024
Revenues
During the Nine Months Ended September 30, 2025, and 2024, the Company had no revenues.
Operating Expenses
During the Nine Months Ended September 30, 2025, and 2024, the Company had total operating expenses of $6,067,188 and $2,602,391, respectively. During the Nine Months Ended September 30, 2025, operating expenses consisted of corporate expenses of $402,871, consulting and professional fees of $5,561,355, and selling, general, and administrative expenses of $102,962. During the Nine Months Ended September 30, 2024, operating expenses consisted of corporate expenses of $546,019, consulting and professional fees of $1,528,580, and selling, general, and administrative expenses of $527,792. The 133% increase in operating expenses during the Nine Months Ended September 30, 2025, compared to the Nine Months Ended September 30, 2024, is primarily due to an increase in Consulting and professional fees. This is attributed to an increase of $4,373,843 from the stock options which were granted during the nine months, $2,566,695 related to the US plan and $1,807,148 related to the Australian Plan. See Note 9 of the unaudited financial statements included herein for additional detail on the stock incentive plan. This was offset by a decrease in marketing-related expenses during the Nine Months Ended September 30, 2025, until the Company moves closer to the Go Live date.
Other Income (Expenses)
During the Nine Months ended September 30, 2025, and 2024, we had $2,295,042 and $0 respectively, in issuance cost related to equity contract. The significant increase in issuance cost was a result of the common stock purchase agreement entered into on August 4, 2025. See note 7 for further details.
During the Nine Months Ended September 30, 2025, and 2024, we had $30,905 and $65,492, respectively, in interest expense attributable to related party debt, net of interest income. The significant decrease in interest expense is attributable to the conversion of the related party Cres loan on January 9, 2025, which resulted in a reduction of interest expense for the Nine Months Ended September 30, 2025.
During the Nine Months Ended September 30, 2025, and 2024, the company had $141,394 and ($3,124), respectively, in Foreign exchange gain (loss). This was attributable to international exposure to exchange rate fluctuations resulting in fluctuations that impact our results of operations
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During the Nine Months Ended September 30, 2025 and 2024, the company had a total of $0 and $658,533 related to forgiveness of debt. This was related to the Company’s rescission of the third-party intellectual property and reversal of 1,000,000 AUD of accounts payable and recognized forgiveness of debt income of 1,000,000 AUD ($658,533) during the Nine Months Ended September 30, 2024.
During the Nine Months Ended September 30, 2025, and 2024, we had a net loss of $8,251,741 and $2,012,474, respectively, for the reasons discussed above.
For the Three Months Ended September 30, 2025, Compared to the Three Months Ended September 30, 2024
Revenues
During the three months ended September 30, 2025, and 2024, the Company had no revenues.
Operating Expenses
During the three months ended September 30, 2025, and 2024, the Company had total operating expenses of $2,238,807 and $723,929, respectively. During the three months ended September 30, 2025, operating expenses consisted of corporate expenses of $137,256, consulting, and professional fees of $2,058,803, and selling, general, and administrative expenses of $42,748. During the three months ended September 30, 2024, operating expenses consisted of corporate expenses of $185,410, consulting, and professional fees of $421,759, and selling, general, and administrative expenses of $116,760. The 217% increase is primarily related to an increase of $1,807,148 from the stock options which were granted during the three months. See Note 9 of the unaudited financial statements included herein for additional detail on the stock incentive plan. This was offset by the decrease in marketing-related expenses until the Company moves closer to the Go Live date.
Other Income (Expenses)
During the three months ended September 30, 2025, and 2024, we had $2,295,042 and $0 respectively, in issuance cost related to equity contract. The significant increase in issuance cost was a result of the common stock purchase agreement entered into on August 4, 2025. See note 7 for further details.
During the three months ended September 30, 2025, and 2024, we had $13,031 and $20,756, respectively, in interest expense attributable to related party debt, net of interest income. The significant decrease in interest expense is attributable to the conversion of the related party Cres loan on January 9, 2025, which resulted in a reduction of interest expense for the three months.
During the three months ended September 30, 2025, and 2024, the company had $33,468 and $3,475, respectively, in Foreign exchange gain (loss). This was attributable to international exposure to exchange rate fluctuations resulting in fluctuations that impact our results of operations
During the three months ended September 30, 2025, and 2024, the company had a total of $0 and $600 related to forgiveness of debt. This was related to the Company’s rescission of the third-party intellectual property and reversal of 1,000,000 AUD of accounts payable and recognized forgiveness of debt income of 1,000,000 AUD ($658,533) during the three months ended September 30, 2024.
During the three months ended September 30, 2025, and 2024, we had a net loss of $4,513,412 and $748,760, respectively, for the reasons discussed above.
Liquidity and Capital Resources
As of September 30, 2025, the Company had a working capital deficit of $6,073,549 compared with a working capital deficit of $6,124,806 as of December 31, 2024. The decrease in working capital deficit is primarily a result of a decrease in related party loans for the Nine Months Ended September 30, 2025, due to the conversion of certain outstanding related party loans.
The Company can provide no assurance that it can continue to satisfy its cash requirements for at least the next twelve months. The following is a summary of the Company’s cash flows provided by (used in) operating, investing, and financing activities for the Nine Months Ended September 30, 2025, and 2024:
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September 30, |
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2025 |
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2024 |
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Net Cash Used in Operating Activities |
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$ | (3,935,587 | ) |
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$ | (1,909,836 | ) |
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Net Cash Used in Investing Activities |
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(600 | ) |
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(80,000 | ) |
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Net Cash Provided by Financing Activities |
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3,903,199 |
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1,944,271 |
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Effect of changes in exchange rate on cash and cash equivalents |
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125 |
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51,758 |
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Net Change in Cash |
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$ | (32,863 | ) |
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$ | 6,193 |
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Operating Activities
During the Nine Months Ended September 30, 2025, the Company incurred a net loss of $8,251,741 which after adjusting for decrease in goods and services tax receivable of $41,416, foreign exchange gain of $141,394, accrued payroll of $92,095, and prepaid and other assets of $4,060 offset by an increase in accounts payable and accrued expenses of $320,493, accounts payable and accrued expenses to related parties $264,111, accrued interest to related party of $33,385, accrued interest income of $2,992, and an increase in Deposits of $149,900 stock based compensation of $1,807,148, and issuance cost of $2,240,042 resulted in net cash of $3,935,587 being used in operating activities during the period. By comparison, during the Nine Months Ended September 30, 2024, the Company incurred a net loss of $2,012,474 which after adjusting for decreases in goods and services tax receivable of $22,369, accrued payroll of $236,924, foreign exchange gain of $3,124, accounts payable and accrued expenses of $415,675, and non cash expenses from stock issuance modification of $80,000 increase in accrued interest of $1,990, in accrued interest to related party of $60,701, prepaid and other assets of $16,120, deposits of $39,512, and forgiveness of debt of $658,533 resulted in net cash of $1,909,836 being used in operating activities during the period. The primary cause for the year-over-year change in operating activities was related to the increase in expenses related to stock-based compensation for the company’s stock incentive plan. Additionally, there was an increase in liabilities related to common stock that were subscribed but not issued during the nine months. This was offset by forgiveness of debt for intellectual property from the prior year.
Investing Activities
During the Nine Months Ended September 30, 2025, the Company had a receivable of $600 for proceeds owed by a related party. By comparison, during the Nine Months Ended September 30, 2024, the Company loaned $80,000 to SeaPort, Inc.
Financing Activities
During the Nine Months Ended September 30, 2025, the Company incurred $3,903,199 from financing activities by way of an increase of $162,409 from payments to related parties’ loans payable, offset by $1,220,409 of proceeds from related parties loans payable, $2,845,199 from stock issuances. By comparison, during the Nine Months Ended September 30, 2024, the Company received $1,944,271 from financing activities by way of $599,371 from proceeds from loans payable from related parties, net, $1,344,900 from stock issuances. The year-over-year changes were primarily related to the issuance of shares of common stock.
The Company is dependent upon the receipt of capital investment or other financing to fund its ongoing operations and to execute its business plan of seeking a combination with a private operating company. In addition, the Company is dependent upon certain related parties to provide continued funding and capital resources. No assurances can be given that the Company will be successful in locating or negotiating with any target company or that the related parties will continue to fund the Company’s working capital needs. As a result, there is substantial doubt about the Company’s ability to continue as a going concern.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Contractual Obligations
None.
Critical Accounting Estimates
The preparation of financial statements in conformity with generally accepted accounting principles of the United States (“GAAP”) requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses in the financial statements and accompanying notes. Critical accounting estimates are those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are likely to have a material impact on the financial condition or results of operations of the Company. We identified that the assumptions and estimates associated with the valuation of stock option grants are a critical accounting estimate. We also have other key accounting policies, which involve the use of estimates, judgments, and assumptions that are significant to understanding our results, which are found in Note 3 – Summary of Significant Accounting Policies and Basis of Presentation of the accompanying condensed consolidated financial statements. Although we believe that our estimates, assumptions, and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments, or conditions.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
In connection with the preparation of this quarterly report, an evaluation was carried out by the Company’s management, with the participation of the principal executive officer and the principal financial officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act (“Exchange Act”) as of September 30, 2025. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to management, including the principal executive officer and the principal financial officer, to allow timely decisions regarding required disclosures.
Based on that evaluation, the Company’s management concluded, as of the end of the period covered by this report, that the Company’s disclosure controls and procedures were not effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Commission’s rules and forms, and that such information was not accumulated and communicated to management, including the principal executive officer and the principal financial officer, to allow timely decisions regarding required disclosures.
Effective disclosure controls and internal controls are necessary for us to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate the material weaknesses. These remediation measures may be time-consuming and costly, and there is no assurance that these initiatives will ultimately have the intended effects.
Management has implemented remediation steps to improve our disclosure controls and procedures and our internal control over financial reporting. By enhancing access to accounting literature, identification of third-party professionals with whom to consult regarding complex accounting applications, and consideration of additional staff with the requisite experience and training to supplement existing accounting professionals.
If we identify any new material weakness in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such a case, we may be unable to maintain compliance with securities law requirements regarding the timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting, and our stock price may decline as a result. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.
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 is also 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.
Changes in Internal Controls over Financial Reporting
During the Nine Months Ended September 30, 2025, other than the remediation steps addressed above, there has been no change in internal control over financial reporting that has materially affected or is reasonably likely to affect our internal control over financial reporting materially.
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PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
There are presently no pending legal proceedings to which the Company or any of its property is subject, or any material proceedings to which any director, officer or affiliate of the Company, any owner of record or beneficially of more than five percent of any class of voting securities is a party or has a material interest adverse to the Company, and no such proceedings are known to the Company to be threatened or contemplated against it.
Item 1A. Risk Factors.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable to our Company.
Item 5. Other Information.
None.
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Item 6. Exhibits
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Exhibit |
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Description |
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101.INS |
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INLINE XBRL INSTANCE DOCUMENT* |
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101.SCH |
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INLINE XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT* |
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101.CAL |
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INLINE XBRL TAXONOMY CALCULATION LINKBASE DOCUMENT* |
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101.DEF |
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INLINE XBRL TAXONOMY DEFINITION LINKBASE DOCUMENT* |
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101.LAB |
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INLINE XBRL TAXONOMY LABEL LINKBASE DOCUMENT* |
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101.PRE |
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INLINE XBRL TAXONOMY PRESENTATION LINKBASE DOCUMENT* |
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104 |
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COVER PAGE INTERACTIVE DATA FILE (FORMATTED AS INLINE XBRL AND CONTAINED IN EXHIBIT 101)* |
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In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed. |
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* |
Filed herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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APPLE iSPORTS GROUP, INC. |
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Date: November 14, 2025 |
/s/ Joe Martinez |
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Joe Martinez Chief Executive Officer (Principal Executive Officer) |
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Date: November 14, 2025 |
/s/ Joe Martinez |
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Joe Martinez Acting Chief Financial Officer (Acting Principal Financial and Accounting Officer) |
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