MRDN 10-K & 10-Q changes, risk factors and insider trading

We had $30,125,944$18,078,300 cash on hand and a working capital deficit of $18,484,062$24,128,745 as of December 31, 2024.2025. With our current cash on hand, expected revenues, and based on our current average monthly expenses, we do not anticipate the need for additional funding in order to continue our operations at their current levels, and to pay the costs associated with being a public company, for the next 12 months, but may require additional funding in the future to support our operations and/or may seek to raise additional funding in the future to expand or complete acquisitions. We also anticipate needing to raise funding to repay the $9,600,000 outstanding under the Secured Convertible Note as of December 31, 2024, the $20.2$13 million owed under the Facility Agreement as of December 31, 2024,2025, and to pay certain post-closing amounts due in connection with the acquisition of the MeridianBet Group, as discussed in greater detail below under “The Company will likely need to raise funding to pay the post-closing obligations associated with the MeridianMeridianBet Purchase Agreement, the terms of which may not be favorable, may necessitate the payment of interest which otherwise would not need to be paid, and may cause dilution”.

The most likely source of future funds presently available to us will be through the sale of equity capital, including, potentially through sales under the Distribution Agreement.Agreement (discussed below). Any sale of share capital will result in dilution to existing shareholders. Furthermore, we may incur debt in the future, and may not have sufficient funds to repay our future indebtedness or may default on our future debts, jeopardizing our business viability.

We may not be able to borrow or raise additional capital in the future to meet our needs or to otherwise provide the capital necessary to expand our operations and business, which might result in the value of our common stock decreasing in value or becoming worthless. Additional financing may not be available to us on terms that are acceptable. Consequently, we may not be able to proceed with our intended business plans. Obtaining additional financing contains risks, including:

The Company will likely need to raise funding to pay the post-closing obligations associated with the MeridianMeridianBet Purchase Agreement, the terms of which may not be favorable, may necessitate the payment of interest which otherwise would not need to be paid, and may cause dilution.

The Company will likely need to raise funds in the future to pay such amounts (or certain portions thereof) to the Meridian Sellers. Debt funding may not be available on favorable terms, if at all. If we raise additional funds by issuing equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of our then issued and outstanding equity or debt, and our existing shareholders may experience dilution. If we are unable to obtain additional capital when required, or on satisfactory terms, we may be in breach of the MeridianMeridianBet Purchase Agreement, and the Meridian Sellers may seek damages from us as a result of such breach.

We may choose not to sell any shares of common stock under our Distribution Agreement.*

On November 22, 2024, we entered into an Equity Distribution Agreement (the “Distribution Agreement”) with Craig-Hallum Capital Group LLC (“Craig-Hallum”). Pursuant to the Distribution Agreement, the Company may sell, at its option, up to an aggregate of $20$20.0 million in shares of its common stock through Craig-Hallum, as sales agent. Sales of the common stock made pursuant to the Distribution Agreement, if any, will be made under the Company’s effectivea Registration Statement on Form S-3. Subject to the terms and conditions of the Distribution Agreement, Craig-Hallum may sell the shares, if any, only by methods deemed to be an “at the market” offering as defined in Rule 415 promulgated under the Securities Act, including without limitation sales made directly through The Nasdaq Capital Market, by means of ordinary brokers’ transactions, in negotiated transactions, to or through a market maker other than on an exchange or otherwise, at market prices prevailing at the time of sale, at prices related to such prevailing market prices, or at negotiated prices and/or any other method permitted by law. The Company is not obligated to sell, and Craig-Hallum is not obligated to buy or sell, any shares of common stock under the Distribution Agreement.

The Facility Agreement includes certain customary representations, warranties and covenants of Meridian Serbia, and requires Meridian Serbia to meet certain annual financial ratios, including maintaining a ratio of net debt/EBITDA of less than or equal to 3.0x, determined on an annual basis, beginning on December 31, 2024, which requirements were met as of December 31, 2024.2025. Pursuant to the terms of the Facility Agreement, Meridian Serbia is prohibited from declaring a dividend or making any payment on Meridian Serbia’s share capital, repaying any debt to any of its shareholders, granting loans to any party, or making any payment to any affiliates, without the prior written consent of Unicredit Bank, to the extent any of the forgoing would exceed 6,000,000 Euros (approximately $6,460,000) in aggregate on an annual basis, provided that for 2024, such limit is increased by 20,000,000 Euros (approximately $21,500,000$21,850,000 as of the agreement signing date).

In February 2022, an armed conflict escalated between Russia and Ukraine. The sanctions announced by the United States and other countries against Russia and Belarus following Russia’s invasion of Ukraine to date include restrictions on selling or importing goods, services, or technology in or from affected regions and travel bans and asset freezes impacting connected individuals and political, military, business, and financial organizations in Russia and Belarus. The United States and other countries could impose wider sanctions and take other actions should the conflict further escalate. Separately, in October 2023, Israel and certain Iranian-backed Palestinian forces began an armed conflict in Israel, the Gaza Strip, and surrounding areas. Although the Company does not currently, and does not plan to, do business in Russia, Belarus, Ukraine, or Israel, it is not possible to predict the broader consequences of these ongoing conflicts, which could include further sanctions, embargoes, regional instability, and geopolitical shifts. It is also not possible to predict with certainty these ongoing conflicts and additional adverse effects on existing macroeconomic conditions, consumer spending habits, currency exchange rates, and financial markets, all of which have impacted and could further impact the business, financial condition, and results of operations of the Company.

Global economic conditions continue to be volatile and uncertain due to, among other things, consumer confidence in future economic conditions, fears of recession and trade wars, the price of energy, fluctuating interest rates, the availability and cost of consumer credit, the availability and timing of government stimulus programs, levels of unemployment, rates of inflation, tax rates, the ongoing conflictconflicts between the Ukraine and RussiaRussia, Israel and Hamas, and the war between IsraelU.S. and Hamas.Iran. These conditions remain unpredictable and create uncertainties about our ability to raise capital in the future. In the event required capital becomes unavailable in the future, or more costly, it could have a material adverse effect on our business, results of operations, and financial condition.

Our business and operations have not to date been, but could in the future be, adversely affected by health epidemics and pandemics. However, economic recessions, including those brought on by epidemic or pandemic outbreaks may have a negative effect on the demand for our products, services and our operating results. The range of possible impacts on the Company’s business could include, but are not limited to: (i) changing demand for the Company’s products and services; (ii) the closure of, or reduction in the number of persons who may be present in, establishments using the Company’s technology (resulting in a decrease in demand for such technology); (iii) decreases in the amount of discretionary spending available to consumers and/or the amount such consumers are willing to spend; and (viv) increasing contraction in the capital markets.

Additionally, during September 2024, the Company, through RKings, experienced unauthorized charges on its Facebook account totaling $382,368. These charges have been recorded as Other Current Assets on the balance sheet, pending resolution. Facebook has committed to fully refund the unauthorized amounts. The Company will adjust this balance upon receipt of the refund. As of the date of this report, the full amount has since been refunded.

While these unauthorized transfers and charges were for the most part remedied quickly, and we believe that our liability and exposure to such transfers is minimal as a result of the EFTA, future unauthorized transfers, withdrawals, wires, checks and payments, from our bank accounts could have a material adverse effect on our cash flows and results of operations and result in material losses. The risk of such losses and unauthorized transactions may also be exacerbated by potential ineffective controls and procedures relating to the safeguarding of our account information.

The Company is 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”), notwithstanding a current freeze on enforcement of such FCPA at the direction of President Trump, 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-corruptionapplicable anti-corruption, sanctions, export control, financial crime, and similar laws may result in severe criminal and civil sanctions and other penalties. It may be difficult to oversee the conduct of any contractors, third partythird-party partners, representatives or agents who are not theirour employees, potentially exposing the Company to greater risk from their actions. If our employees or agents fail to comply with applicable laws or company policies governing their international operations, the Company may face legal proceedings and actions which could result in civil penalties, administrationadministrative actions and criminal sanctions. Any determination that the Company has violated any anti-corruption or similar laws could have a material adverse impact on our businesses.business. Changes in trade sanctionssanctions, lawsexport control, or other regulatory regimes in the United States or in foreign jurisdictions may restrict theirour business practices, including requiring the cessation of business activities in sanctionedcertain countries or with sanctionedcertain entities.counterparties.

Violations of these laws and regulations could result in significant fines, criminal sanctions against the Company, its officers or employees, requirements to obtain export licenses, disgorgement of profits, cessation of business activities in sanctionedcertain countries,jurisdictions, prohibitions on the conduct of theirour businesses and theirour inability to market andmarket, sell or offer the Company’s products or services in one or more countries. Additionally, any such violations could materially damage the Company’s reputation, brand, international expansion efforts, ability to attract and retain employees and the Company’s business, prospects, operating results and financial condition.

The Company also has to deal withhandles significant amounts of cash in theircertain aspects of its operations and are,is, and will continue to be, subject to various reportingreporting, financial transparency and anti-money laundering regulations.regulations in the United States and in the foreign jurisdictions in which it operates. Any violation of applicable anti-money launderinglaundering, counter-terrorist financing, or financial crime laws or regulations could have a material adverse impact on theirthe Company’s business.

According to actionnetwork.com, as of FebruaryMarch 25,11, 2024,2026, online sports betting is legal in 3732 states (including the District of Columbia). As a result, we believe that the current U.S. market for the Company’s products and services is robust and the Company hopes that more U.S. states will pass laws in the upcoming years to legalize more forms of online gambling. While the Company has engaged specialist legal counsel to assist with understanding the compliance requirements of U.S. gaming legislation and potentially submitting an application for a U.S. gaming license, the Company anticipates the majority of its revenues coming from the UK, Asia, South America, Europe, Africa, and Latin America.

Further, our competitors have been granted patents protecting various gaming products and solutions features, including systems, methods, and designs. 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, including those with currently pending patent applications, will not be determined to have infringed upon an existing third-party patent. If any of our products and solutions infringesinfringe upon 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 product or services from the market.

The Company is largely dependent upon the personal efforts and abilities of its existing management, including the MeridianBet Group’s Chief Executive Officer, Zoran Milošević, who plays an active role in the operations of the MeridianBet GroupGroup, the Company’s Interim Chief Executive Officer and President, William Scott, and the Company’s Chief ExecutiveFinancial Officer, AnthonyRichard BrianChristensen, Goodman,each whoof whom plays an active role in our operations. Moving forward, should the services of Mr. MiloševićMilošević, Mr. Scott, or Mr. GoodmanChristensen be lost for any reason, the Company will incur costs associated with recruiting replacements and any potential delays in operations which this may cause. If we are unable to replace such individuals with suitably trained alternative individual(s), we may be forced to scale back or curtail our operations.

Additionally, a required term and condition of the closing of the MeridianBet Group acquisition (the “Closing”) was that the Company and each of the Meridian Sellers enter into a Nominating and Voting Agreement, which provides among other things, that each Seller will vote their voting shares “For” appointment of those director nominees, nominated to the Board by the independent Nominating and Corporate Governance Committee which is composed of two members and not vote their shares to remove any directors nominated by the committee, subject to certain exceptions. The Voting Agreement expires pursuant to its terms on April 9, 2026.

Another required term and condition of the Closing was that the Company and Mr. Milošević enter into a Day-to-Day Management Agreement, which prohibits the Company or its executives from materially interfering in the operation of the business of, and day-to-day operations of, MeridianBet Group by its current leadership (i.e., Mr. Milošević, as Chief Executive Officer), while the Voting Agreement is in place. The Day-to-Day Management Agreement expires pursuant to its terms on April 9, 2026.

The employment agreements of Mr. Anthony Brian Goodman, our Chief Executive Officer, Ms. Weiting ‘Cathy’ Feng, our Chief Operating Officer, Ms. Snežana Božović, the Chief Operating Officer of Meridian Serbia and Secretary of MeridianBet, and Zoran Milošević, the Chief Executive Officer of Meridian Serbia, provide for the payment of certain severance payments upon termination.

The employment agreements of Mr. Anthony Brian Goodman, our Chief Executive Officer, Ms. Weiting ‘Cathy’ Feng, our Chief Operating Officer and Chief Financial Officer, Ms. Snežana Božović, the Chief Operating Officer of Meridian Serbia and Secretary of MeridianBet, and Zoran Milošević, the Chief Executive Officer of Meridian Serbia, provide that if they are terminated during the term of such agreements by the Company without cause (as defined in the agreements) or by the executives for good reason (as defined in the agreements), such executives are due a severance payment. That severance payment is equal to (a) a lump sum cash severance payment equal to the sum of (i) 18 months of Mr. Goodman’s and Mr. Milošević’s then current annual basic salary (six months of Ms. Feng’s and six months of Ms. Božović’s) plus (ii) an amount equal to his/her targeted bonus for the year of termination (such total payment referred to herein as the “Severance Payment”). Additionally, if an executive is terminated (a) by the Company for any reason other than cause or due to illness or death, or (b) by the executive for good reason, during the twelve month period following a Change of Control (as defined in the agreements) or in anticipation of a Change of Control, the Company is required to pay the executive, within 60 days following the later of (i) the date of such Change of Control termination; and (ii) the date of such Change of Control, a cash severance payment in a lump sum in an amount equal to 3.0 times the sum of (a) the current annual base salary of the executive (less any actual payments made in connection with any severance payments already paid); and (b) the amount of the most recent bonus paid to the executive for the last completed fiscal year, if any (less any actual payments made in connection with any other severance payments). Additionally, if either executive is involuntarily terminated, any unvested options vest immediately and are exercisable until the later of the original termination date thereof and one year after such termination date.

Potential competition from existing executive officers, after they leave our employment, and the Meridian Sellers, subject to the non-compete terms of the MeridianMeridianBet Purchase Agreement, could negatively impact the profitability of the Company.

Each of the Meridian Sellers agreed to a three year non-compete, agreeing to not compete against the Company following the Closing in Serbia, Bosnia and Herzegovina, Montenegro, and Malta, in connection with the manufacturing, selling, creating, renting, marketing, producing, undertaking, developing, supplying, or otherwise dealing with or in any product or service, that the MeridianBet Group or the Company or any of their respective subsidiaries and/or any of their respective affiliates or subsidiaries is researching, developing, manufacturing, distributing, selling and/or providing at any time during the two years prior to any competitive action by any Seller, in the betting and gambling industry (subject to the terms of, and exceptions set forth in, the MeridianMeridianBet Purchase Agreement). However, none of the Meridian Sellers will be prohibited from competing with us after such three year period; none of the executive officers or employees of MeridianBet Group or its subsidiaries will be restricted from competing against us at any time; and none of the Meridian Sellers will be restricted from competing against us in any jurisdictions other than Serbia, Bosnia and Herzegovina, Montenegro, and Malta, including, but not limited to in other jurisdictions where the Company operates.

The following table summarizes the consolidated results of operations for the changes between the periods. Effective on April 1, 2024, the Golden Matrix acquired 100% of the MeridianBet Group, which was accounted for as a reverse merger. As a result, the historical financial information below represents the accounts of MeridianBet Group. Golden Matrix’s operations before the MeridianMeridianBet PurchaseAcquisition were excluded prior to April 1, 2024, the effective closing date of the MeridianMeridianBet Purchase.Acquisition.

General and administrative expenses (G&A). General and administrative expenses increased by $31,344,423,$113,797,307, or 58%,133%, to $199,625,728 for the twelve months ended December 31, 2025, from $85,828,421 for the twelve months ended December 31, 2024, from $54,483,998 for the twelve months ended December 31, 2023.2024. General and administrative expenses consisted primarily of stock-based compensation, depreciation expenses, amortization expenses, salary and wages, professional fees, marketing expenses, bad debt expense, impairment losses, rents and utilities. The reasons for the increase in the G&A are discussed in greater detail below:

Stock-based compensation (within G&A) for the twelve months ended December 31, 2024,2025, was $4,627,557,$4,002,846, compared to $0$4,627,557, for the twelve months ended December 31, 2023,2024, a $4,627,557$624,711, increaseor 13% decrease from the prior period, which was due mainly to the reduced number of restricted stock units (RSUs) granted to employees and directors of the Company, as well as shares issued for services during the period.

Amortization expenses for the twelve months ended December 31, 2024,2025, were $6,373,696,$9,165,798, compared to $1,898,027$6,373,696, for the twelve months ended December 31, 2023,2024, aan $4,475,669,increase of $2,792,102, or 236%44%. increaseThe amortization expenses from theMeridianBet priorGroup period,increased by $1,218,088, or 52%, which was primarily due mainlyto certain previously capitalized intangible assets being completed and placed into service and therefore beginning amortization during the period. The amortization expenses from Golden Matrix increased by $1,574,014, or 39%, which was primarily due to the amortization of thenewly newrecognized intangible assets recognizedresulting as a result offrom the acquisitionacquisitions of Golden Matrix.Matrix and Classics Holdings.

Salaries and wages for the twelve months ended December 31, 2024,2025, were $21,230,038,$27,715,365, compared to $14,591,220$21,230,038, for the twelve months ended December 31, 2023,2024, a $6,638,818$6,485,327, or 45%31% increase from the prior period, which was due partially to $2,506,238 of salaries paid to employees of Golden Matrix after the acquisition.period. Salaries paid to employees of MeridianBet Group increased by $4,132,580,$3,478,266, or 19%, which was due mainly to increased headcount to both support revenueincreased growthoperations and to enable the entry into new marketsmarkets. Salaries paid to employees of Golden Matrix increased by $3,007,061, or 120%, which was due to the acquisition of Golden Matrix becoming effective on April 1, 2024, and because as a result, salaries for the currentperiod period,from January to March 2024 were not included in the prior-year comparative figures. The increase was further driven by severance payments to Anthony Brian Goodman, the former Chief Executive Officer, in the amount of $848,542, as well as an$423,750 increaseof inaccrued employeecash salaries, comparedbonuses to theexecutives priorand period.directors.

Professional fees for the twelve months ended December 31, 2024,2025, were $3,992,383,$4,225,324, compared to $2,024,135$3,992,383, for the twelve months ended December 31, 2023,2024, a $1,968,248$232,941, or 97%6% increase from the prior period,period. whichThe increase was primarily due partially to the $1,173,025fact ofthat professional fees incurred from January to March 2024 of Golden Matrix afterwere not included in the acquisition,prior-year incomparative connectionperiod, withas the acquisition of Golden Matrix,Matrix Classics,became fundeffective raisingon andApril accounting1, fees. Professional fees of MeridianBet Group increased by $795,223, which was mainly due to consulting services as well as legal and audit services, in connection with the acquisition with Golden Matrix.2024.

Bad debt expense for the twelve months ended December 31, 20242025 were $1,358,147,$725,061, compared to $304,358$1,358,147 for the twelve months ended December 31, 2023,2024, a $1,053,789$633,086, or 346%47% increasedecrease from the prior period,period. whichThe decrease was mainlyprimarily dueattributable to thereduced recognitionbad ofdebt anassociated allowance for doubtful accounts related to aged receivables fromwith the Company’s resale of gaming content business that were deemed uncollectible.business.

Interest earned. The interest earned increased by $120,325,$22,578, or 123%,10%, to $240,723 for the twelve months ended December 31, 2025, from $218,145 for the twelve months ended December 31, 2024, from $97,820 for the twelve months ended December 31, 2023.2024. The increase was mainly due to earnedhigher interestamounts incomeof fromfunds placed in term deposits with commercial banks.

Foreign exchange loss.gain The(loss). foreignForeign exchange lossresults increasedimproved by $(567,284),$1,255,045, toresulting $(494,825)in a gain of $760,220 for the twelve months ended December 31, 2024,2025, fromcompared to a gainloss of $72,459$494,825 for the twelvesame monthsperiod endedin December2024. 31,The 2023. This increaseimprovement was primarily drivenattributable byto favorable movements in the appreciationEUR/RSD/USD/GBP exchange rates, which positively affected the revaluation of the USDCompany’s againstmonetary the AUDassets and MXN,liabilities affecting subsidiaries that owe balances to the parent companydenominated in USDEUR, GBP, and the depreciation of the USD against the Euro and RSD, currencies in which the Company holds debts.RSD.

Other Income.income. Other income is related to income from marketing services for third-party advertising in MeridianBet GroupMeridian betting shops, the sale of fixed assets, value-added-tax (VAT) refunds, income from compensation for damages, income from reduction of liabilities and other income that is not directly related to the Company'sCompany’s core activity. For the twelve months ended December 31, 2024,2025, and 2023,2024, other income amounted to $2,262,782$2,558,579 and $1,572,256,$2,262,782, respectively. The increase of $690,526$295,797 for the twelve months ended December 31, 2024,2025, versus the twelve months ended December 31, 2023,2024, iswas primarily attributable to othera higher operating income from the franchise partnerspartners, such asincluding marketing services, customer support services, and staff training services, etc.services.

Net income (loss) attributable to noncontrolling interest. Net income (loss) attributable to noncontrolling interest in the acquired entity is measured at their proportionate share of the acquired entity’s and for (a) BitMeridian TechGaming TanzaniaBrazil SPE Ltda in the percentage of 10%,30%; (b) Meridian Gaming Peru in the percentage of 24.5%, (c) Fair Champions Meridian Ltd. Cyprus in the percentage of 49%,49%; and (dc) Classics Holding Pty Ltd Australia in the percentage of 20%. For the twelve months ended December 31, 2024,2025, and 2023,2024, net income (loss) attributable to noncontrolling interest amounted to $70,400$(2,084,286) and $192,348,$70,400, respectively. The decreaseincrease in net loss was primarily duedriven by goodwill and intangible asset impairment charges associated with the acquisition of Classics Holdings, as well as higher general and administrative expenses related to the netcommencement lossof incurredoperations byin the companies for the twelve months ended December 31, 2024.Brazil.

Net income (loss) attributable to GMGI.MRDN. Net incomeloss attributable to GMGIMRDN decreasedincreased by $15,182,787,$88,417,601, or 111%,5,973%, to a net loss of $89,897,850 for the twelve months ended December 31, 2025, from net loss of $1,480,249 for the twelve months ended December 31, 2024, from net income of $13,702,538 for the twelve months ended December 31, 2023.2024. The decreaseincrease was mainly due to an increase in the generalimpairment and administrative expenses, foreign exchange losses, and interest expensesloss as discussed above.

We had $30,125,944 of$18,078,300 cash on hand and a working capital deficit of $18,484,062$24,128,745 as of December 31, 2024.2025. We believe our cash on hand is sufficient to meet our current working capital and capital expenditure requirements for a period of at least twelve months. We will continue to evaluate our long-term operating performance and cash needs and we believe we are well positioned to continue to fund the long-term operations of our business. We may raise additional equity and debt funding in the future, including up to $8.5$16.9 million that is available to be sold under our November 22, 2024, Equity Distribution Agreement in at-the-market offeringsofferings, Oursubject materialto cashpotential requirementslimitations includeon such sales pursuant to the following“baby contractualshelf” obligations:Form S-3 rules, which prevent us from selling more than 1/3rd of our float every 12 months.

See “NOTENote 15 – LONGLong-Term TERM LIABILITIESLiabilities” in the notes to the financial statements included under “Item 8. Financial Statements and Supplementary Data”, for more details on these debts.

As discussed in greater detail in “NOTENote 22 -– MERIDIANBETMeridianBet GROUPGroup PURCHASEPurchase AGREEMENTAgreement”, in the notes to the financial statements included under “Item 8. Financial Statements and Supplementary Data”, the Company incurred the following payment obligations in connection with the MeridianMeridianBet PurchaseAcquisition:

The Company had $30,125,944 of$18,078,300 cash on hand at December 31, 20242025 and total assets of $213,717,593$118,078,800 ($45,066,481$35,438,153 of which were current assets) and a working capital deficit of $18,484,062$24,128,745 as of December 31, 2024.2025. The working capital deficit was mainly due to $17,291,241$10,581,035 of current portion of long-term loans included in current liabilitiesliabilities, as well as $19,870,460$16,199,672 of current consideration payable to the Meridian Sellers. Included in total assets at December 31, 20242025 was $71,249,119$8,450,955 of goodwill and $56,393,457$26,463,965 in net intangible assets, as discussed in greater detail above under “NOTENote 8 – INTANGIBLEIntangible ASSETSAssets – SOFTWARE,Software, LICENSES,Licenses, TRADEMARKS,Trademarks, DEVELOPEDDeveloped TECHNOLOGY,Technology, CUSTOMERCustomer RELATIONSHIPS,Relationships, ANDand NON-COMPETENon-Compete AGREEMENTSAgreements”, in the notes to the financial statements included under “Item 8. Financial Statements and Supplementary Data”.

The Company had $20,405,296$30,125,944 of cash on hand at December 31, 2024 and total assets of $79,852,980$213,717,593 ($26,929,402$45,066,481 of which were current assets) atand December 31, 2023. The Company had totala working capital deficit of $9,355,540$18,484,062 as of December 31, 2023.2024. The working capital deficit was mainly due to $17,291,241 of current portion of long-term loans included in current liabilities as well as $19,870,460 current consideration payable to the Meridian Sellers. Included in total assets at December 31, 20232024 was $15,107,422$71,249,119 of goodwill and $56,393,457 in net intangible assets, as discussed in greater detail above under “NOTENote 8 – INTANGIBLEIntangible ASSETSAssets – SOFTWARE,Software, LICENSES,Licenses, TRADEMARKS,Trademarks, DEVELOPEDDeveloped TECHNOLOGY,Technology, CUSTOMERCustomer RELATIONSHIPS,Relationships, ANDand NON-COMPETENon-Compete AGREEMENTSAgreements”, in the notes to the financial statements included under “Item 8. Financial Statements and Supplementary Data”.

The increasedecrease in cash of $9,720,648$12,047,644 between December 31, 2024,2025, and December 31, 2023,2024, was mainly due to the proceedsrepayment fromof loansdebt, andcash borrowings.used in investing activities, offset by cash provided by operating activities.

See “NOTENote 15 – LONGLong-Term TERM LIABILITIESLiabilities” in the notes to the financial statements included under “Item 8. Financial Statements and Supplementary Data”, for more details on the Company’s debts and lending facilities.

Cash flows from operating activities include net income adjusted for certain non-cash expenses, and changes in operating assets and liabilities. Non-cash expenses for the twelve months ended December 31, 2024,2025, mainly include stock-based compensation, amortization expenses on intangible assets, and depreciation on property plant and equipment.equipment, impairment losses on Goodwill and other intangible assets, and bad debt expense.

During the twelve months ended December 31, 2024,2025, cash used in investing activities was $37,434,035,$22,003,252, which was primarily due to $23,852,949$1,824,971 of consideration paid to the former owners of MeridianBet Group in connection with the MeridianMeridianBet Purchase,Acquisition, $4,126,172 of consideration paid to acquire Classics, $14,827,206$7,464,849 spent on intangible assets, and the $7,164,733$6,184,530 spent on property, plant and equipment, whichand was$5,431,507 partiallyspent offseton by $17,355,360 in cash assumed from investment in Golden Matrix.investment.

During the twelve months ended December 31, 2023,2024, cash used in investing activities was $13,065,811,$37,434,035, which was primarily due to $7,345,778$23,852,949 of consideration paid to the former owners of MeridianBet Group in connection with the MeridianBet Acquisition, $4,126,172 of consideration paid to acquire Classics Holdings, $14,827,206 spent on intangible assets, and $5,744,202the $7,164,733 spent on property, plant and equipment.equipment, which was partially offset by $17,355,360 in cash assumed from investment in Golden Matrix.

During the twelve months ended December 31, 2024, cash provided by financing activities was $27,712,266, which was primarily due to proceeds from loans of $25,972,500, attributable to the Unicredit Bank facility, Hipotekarna Bank facility and the Igor Salindrija borrowing, and proceeds from convertible note and warrant of $8,747,556, relating to the Secured Convertible Note and Lind Warrants,Warrants discussed in greater detail above in the notes to consolidated financial statements under “NOTE 15 – LONG TERM LIABILITIES—Lind Global Asset Management VIII LLC Securities SPA / Promissory Note” in the notessold to the financialInvestor statementsin includedJuly under “Item 8. Financial Statements and Supplementary Data”, for more details on these debts,2024, which was offset by repayment of lease of $2,474,864 and repayment of debt of $3,675,091. During the twelve months ended December 31, 2023, cash used in financing activities was $4,153,625, which was primarily due to repayment of lease of $2,354,666 and payments of dividends of $1,798,959 to the former owners of MeridianBet Group.

On November 22, 2024, we entered into an Equity Distribution Agreement with Craig-Hallum Capital Group LLC. Pursuant to the Distribution Agreement, the Company may sell, at its option, up to an aggregate of $20 million in shares of its common stock through Craig-Hallum, as sales agent. Sales of the common stock made pursuant to the Distribution Agreement, if any, will be made under the Company’s effectivea Registration Statement on Form S-3. Subject to the terms and conditions of the Distribution Agreement, Craig-Hallum may sell the shares, if any, only by methods deemed to be an “at the market” offering as defined in Rule 415 promulgated under the Securities Act, including without limitation sales made directly through The Nasdaq Capital Market, by means of ordinary brokers’ transactions, in negotiated transactions, to or through a market maker other than on an exchange or otherwise, at market prices prevailing at the time of sale, at prices related to such prevailing market prices, or at negotiated prices and/or any other method permitted by law. The Company is not obligated to sell, and Craig-Hallum is not obligated to buy or sell, any shares of common stock under the Distribution Agreement.

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A of the Company’s Form 10-K for the year ended December 31, 2025, filed with the Commission on March 31, 2026 (the “Form 10-K”), under the heading “Risk Factors”, except as discussed below, and investors should review the risks provided in the Form 10-K,10-K and below, prior to making an investment in the Company. The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in the Form 10-K, under “Risk Factors”, and below, any one or more of which could, directly or indirectly, cause the Company’s actual financial condition and operating results to vary materially from past, or from anticipated future, financial conditions and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price.

We offer a diverse and multifaceted portfolio of betting options that extends beyond traditional sports betting. We offer a portfolio of gaming products including casino games, slots, roulette, and other random number generator (RNG) games. We also own our own casino development studio, which has thus far produced 7595 slotproprietary games,titles, which are available online, where regulatory approval is granted, catering to customers on our proprietary casino platform. RNG games are games in which the outcome is determined by a random element generated by a computer algorithm. These games rely on chance rather than skill or strategy to determine the results.

We had $16,234,441$17,318,751 cash on hand and a working capital deficit of $22,777,000$24,909,577 as of MarchJune 31,30, 2026. We believe our cash on hand is sufficient to meet our current working capital and capital expenditure requirements for a period of at least twelve months. We will continue to evaluate our long-term operating performance and cash needs and we believe we are well positioned to continue to fund the long-term operations of our business. We may raise additional equity and debt funding in the future, including up to $16.9 million that is available to be sold under our November 22, 2024, Equity Distribution Agreement in at-the-market offerings, subject to potential limitations on such sales pursuant to the “baby shelf” Form S-3 rules, which prevent us from selling more than 1/3rd of our float every 12 months.

The outstanding balances of these debt facilities as of MarchJune 31,30, 2026 and December 31, 2025 are presented below:

See “Note 15 – Short-Term and Long-Term LiabilitiesLoans” in the notes to the financial statements included under “Part I. Financial Information—Item 1. Financial Statements”, for more details on these debts.

The Company has received confirmation from the former owners of MeridianBet Group that they will notextend demandthe repayment ordates conversionand ofwill thenot considerationrequire repayment until such time as the Company has thesufficient abilityfinancial resources to repay.do so.

The Company had $16,234,441$17,318,751 of cash on hand at MarchJune 31,30, 2026 and total assets of $111,867,270$115,125,515 ($30,482,524$35,209,391 of which were current assets) and a working capital deficit of $22,777,000$24,909,577 as of MarchJune 31,30, 2026. The working capital deficit was mainly due to $8,032,261$9,978,715 of current portion of long-term loans included in current liabilities, as well as $15,905,672$15,730,672 of current consideration payable to the Meridian Sellers. Included in total assets at MarchJune 31,30, 2026 was $8,844,034$8,846,513 of goodwill and $26,226,694$25,698,550 in net intangible assets, as discussed in greater detail above under “Note 8 – Intangible Assets – Software, Licenses, Trademarks, Developed Technology, Customer Relationships, and Non-Compete Agreements”, in the notes to the financial statements included under “Part I. Financial Information—Item 1. Financial Statements”.

The Company had $18,078,300 of cash on hand at December 31, 2025 and total assets of $118,078,800 ($35,438,153 of which were current assets) and a working capital deficit of $24,128,745 as of December 31, 2025. The working capital deficit was mainly due to $10,581,035 of current portion of long-term loans included in current liabilities, as well as $16,199,672 of current consideration payable to the Meridian Sellers. Included in total assets at December 31, 2025 was $8,450,955 of goodwill and $26,463,965 in net intangible assets, as discussed in greater detail above under “Note 8 – Intangible Assets – Software, Licenses, Trademarks, Developed Technology, Customer Relationships, and Non-Compete Agreements”, in the notes to the financial statements included under “Part I. Financial Information—Item 1. Financial Statements”.

The decrease in cash of $1,843,859$759,549 between MarchJune 31,30, 2026, and December 31, 2025, was mainly due to the repayment of debt and cash used in investing activities, offset by cash provided by operating activities.

See “Note 15 – Short-Term and Long-Term LiabilitiesLoans” in the notes to the financial statements included under “Part I. Financial Information—Item 1. Financial Statements”, for more details on the Company’s debts and lending facilities.

Cash flows from operating activities include net income adjusted for certain non-cash expenses, and changes in operating assets and liabilities. Non-cash expenses for the threesix months ended MarchJune 31,30, 2026, mainly include stock-based compensation, amortization expenses on intangible assets, depreciation on property plant and equipment and non-cash interest expense related to debt discount amortization.

The Company generated cash from operating activities of $5,155,437$12,954,795 during the threesix months ended MarchJune 31,30, 2026, due primarily to $2,168,157$4,130,027 of net income, a $2,357,254$3,293,938 decreaseincrease in accounts receivable,payable, $248,057 of stock-based compensation, $1,025,175$2,556,674 of amortization expenses relating to intangible assets, and $1,435,955$2,621,005 of depreciation expenses, which was mainly offset by a $1,863,677 decrease in accounts payable.expenses.

The Company generated cash from operating activities of $7,739,637$10,117,167 during the threesix months ended MarchJune 31,30, 2025, due primarily to a $4,122,296$4,530,082 increase in accounts payable and accrued liabilities, $1,040,325$2,456,639 of stock-based compensation, $952,546$1,950,094 of non-cash interest expense related to debt discount amortization, $2,152,640$4,618,020 of amortization expenses relating to intangible assets, and $1,436,247$2,780,271 of depreciation expenses, which was mainly offset by a $258,217$3,990,108 net loss, an $820,433$804,244 increase in inventory,taxes anpayable, $897,968and a $1,190,337 increase in accounts receivable, and an $880,465 decrease in taxes payable.receivable.

During the threesix months ended MarchJune 31,30, 2026, cash used in investing activities was $2,468,595,$4,182,414, which was primarily due to $806,390$517,579 paid to acquire subsidiaries, and $1,405,432$2,173,430 spent on intangible assets.assets, and $1,022,405 spent on property, plant and equipment.

During the threesix months ended MarchJune 31,30, 2025, cash used in investing activities was $5,340,839,$11,903,508, which was primarily due to $1,459,642$1,610,343 of consideration paid to the former owners of MeridianBet Group in connection with the MeridianBetMeridian Acquisition,Purchase, $426,700$715,650 of consideration paid to acquire 80%subsidiaries, of Classics Holdings, $2,339,700$5,976,880 spent on intangible assets, and $1,107,424$3,574,317 spent on property, plant and equipment.

During the threesix months ended MarchJune 31,30, 2025,2026, cash used in financing activities was $5,000,064,$7,932,294, which was primarily due to repayments on debt of $4,428,626$6,621,291 and a repayment of lease of $571,438.$1,309,888.

The Company had a net decrease in cash of $1,843,859$759,549 for the threesix months ended MarchJune 31,30, 2026, which is mainly due to repayment of debt, cash used in investing activities, offset by cash provided by operating activities.

In addition to our results calculated under generally accepted accounting principles in the United States (“GAAP”), we also present EBITDA and Adjusted EBITDA below. EBITDA and Adjusted EBITDA are “non-GAAP financial measures” presented as a supplemental measure of the Company’s performance. They are not presented in accordance with GAAP. The Company uses EBITDA and Adjusted EBITDA as a metric of profits and successful operations management. In particular, we use Adjusted EBITDA as a milestone for the purposes of certain incentive compensation programs applicable to some of our officers and directors, in order to evaluate our Company’s performance and determine whether certain restricted stock units and cash bonuses will vest as of the end of December 31, 2025. EBITDA means net loss before interest, taxes, depreciation and amortization. Adjusted EBITDA means EBITDA before stock-based compensation, unrealized foreign exchange gain or loss, severance costs related to the termination of executive officers and directors, and restructuring costs which include charges or expenses attributable to acquisition related costs. EBITDA and Adjusted EBITDA should be viewed as supplemental to, and not as an alternative for net income or loss calculated in accordance with GAAP.

Three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025.

Revenue. Revenue increased by $7,380,817,$6,948,631, or 17%,16%, to $50,103,870$50,193,999 for the three months ended MarchJune 31,30, 2026, from $42,723,053$43,245,368 for the three months ended MarchJune 31,30, 2025. Revenues from online casino from MeridianBet Group increased by $3,856,840,$1,765,415, or 33%,14%, to $15,252,268$14,489,125 for the three months ended MarchJune 31,30, 2026, from $11,395,428$12,723,710 for the three months ended MarchJune 31,30, 2025, mainly due to the increase in the offer of online casino games from different providers to 2,500+, the integration of 10+ new providers (some of which are AIR Dice, Push Gaming, and EGT Digital), launching of the new game "“Gates of Olympia"” from the Company’s studio Expanse, which became a top 3 most popular game in the first quarter of 2026, and revenues from online sports betting which increased by $1,848,088,$3,254,645, or 17%,33%, to $11,699,423$13,125,159 for the three months ended MarchJune 31,30, 2026, from $9,851,335$9,870,514 for the three months ended MarchJune 31,30, 2025, mainly due to the launch of our fifth-generation sports betting and online casino platform – ATLAS – inat the end of 2024, which includes three key new features, such as: Bet Boost – enhanced odds on selected bets, Auto Cashout – automatic cashout based on predefined conditions, and Early Payout –settlement of bets before the final result, as well as a complete redesign of the entire sports webpage, improvements to the live betting offered through the Watch & Bet feature, an increase in live streams, especially for tennis and optimizing the loyalty program for our online players. While the platform was launched at the end of 2024, its full operational and commercial impact was realized during 2026, contributing to higher revenues in 2026 compared with 2025. Revenues from retail sports betting and retail casino increased by $1,291,334,$1,568,432, or 19%,27%, to $6,967,386$7,375,033 for the three months ended MarchJune 31,30, 2026, from $5,676,052$5,806,601 for the three months ended MarchJune 31,30, 2025, mainly due to continued network expansion and a seriesnew ofbetshop strategicconcept operationalthat enhancements.adapts Weeach location to its local market. During the 12 months period from July 1, 2025 to June 30, 2026, we expanded our slot capacity by adding over 100 machines, representing approximately 10% growth of the total installed base. Additionally, we opened 10+ new locations, completed renovations and adaptations across 50 betshops, and relocated underperforming betshops to more optimal positions. We also introduced a new loyalty application and deployed additional operational systems that enhanced customer engagement and internal efficiency. Alongside these investments, we implemented a comprehensive field reorganization aimed at improving operational efficiency and service quality, resulting in a stronger and more optimized retail network.

COGS. Costs of goods (COGS) sold increased by $3,432,538,$4,470,730, or 19%,24%, to $21,959,630$23,339,079 for the three months ended MarchJune 31,30, 2026, from $18,527,092$18,868,349 for the three months ended MarchJune 31,30, 2025. MeridianBet Group COGS from online casino, online sports betting, retail casino, retail sports betting, bars and franchise fees increased by $2,853,120$3,820,679 in total, or 38%,45%, to $10,408,219$12,324,962 for the three months ended MarchJune 31,30, 2026, from $7,555,098$8,504,283 for the three months ended MarchJune 31,30, 2025, mainly due to the increase in the variable amounts of gaming tax and software fee costs which were in line with the increase in income from online casinos, online sports betting, retail casinos and retail sports betting.

Gross profit. Gross profit increased by $3,948,279,$2,477,901, or 16%,10%, to $28,144,240$26,854,920 for the three months ended MarchJune 31,30, 2026, from $24,195,961$24,377,019 for the three months ended MarchJune 31,30, 2025. MeridianBet Group gross profit from online casinos increased by $2,401,540$463,955 or 29%5%; gross profit from online sports betting increased by $1,046,799,$1,593,716, or 15%,23%, and gross profit from retail sports betting and retail casino increased by $760,027$710,959 or 19%17% for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025. The increase in gross profits was due to the increase in the revenues as discussed above.

General and administrative expenses (G&A). General and administrative expenses increaseddecreased by $685,138,$2,266,884, or 3%,8%, to $24,987,116$24,414,985 for the three months ended MarchJune 31,30, 2026, from $24,301,978$26,681,869 for the three months ended MarchJune 31,30, 2025. General and administrative expenses consisted primarily of stock-based compensation, depreciation expenses, amortization expenses, salary and wages, professional fees, marketing expenses, rents and utilities, as discussed below.

Stock-based compensation (within G&A) for the three months ended MarchJune 31,30, 2026, was $248,057,negative $(97,292), compared to $1,040,325$1,327,711 for the three months ended MarchJune 31,30, 2025, representing a $792,268$1,425,003 decrease from the prior period. The decrease was primarily attributable to fewer RSUs granted to the Company’s employees and directors, as well as fewer shares issued for services during the period.period, and the reversal of previously accrued stock-based quarterly salary compensation for the Company’s executives. The reversal resulted from an agreement entered into in June 2026 with certain executives to reduce the number of shares to be issued in settlement of accrued salary compensation, reflecting shares that had previously been issued upon the vesting of restricted stock units under the Company’s 2023 Equity Incentive Plan.

Amortization expenses for the three months ended MarchJune 31,30, 2026, were $1,025,175,$1,531,499, compared to $2,152,640$2,465,380 for the three months ended MarchJune 31,30, 2025, a $1,127,465,$933,881, or 52%38% decrease from the prior period. The decrease was primarily attributable to the impairment of intangible assets recognized in the prior year, which reduced the amortizable asset base.

Salaries and wages for the three months ended MarchJune 31,30, 2026, were $7,088,229,$7,188,363, compared to $6,290,867$6,841,937 for the three months ended MarchJune 31,30, 2025, a $797,362$346,426 or 13%5% increase from the prior period, which was due mainly to increased headcount to both support revenue growth and to enable the entry into new markets for the current period, as well as an increase in employee salaries, compared to the prior period.

Professional fees for the three months ended MarchJune 31,30, 2026, were $901,492,$1,097,191, compared to $920,240$1,155,410 for the three months ended MarchJune 31,30, 2025, ana $18,748$58,219 or 2%5% decrease from the prior period. The higherdecrease fees in the prior-year period werewas primarily attributable to lower legal and auditadvisory servicesfees relateddue to fewer acquisition, financing, and other corporate transaction activities during the MeridianBetcurrent Acquisition.period.

RentsMarketing and utilitiesexpenses for the three months ended MarchJune 31,30, 2026, were $2,242,256,$5,870,811, compared to $1,743,062$6,705,582 for the three months ended MarchJune 31,30, 2025, aan $499,194$834,771 or 29%12% increasedecrease from the prior period, which was mainlyprimarily duedriven toby the openingoptimization of newmarketing betting shops,costs, which contributedmainly to the growthconsisted of rentshifting toward more efficient and utilitycost-effective costs,marketing as well as the general increase in heating, electricity, telephonechannels and internet costs, due to inflationary trends.campaigns.

Interest expense. Interest expense decreased by $1,117,634,$1,181,484, or 76%,80%, to $353,726$300,185 for the three months ended MarchJune 31,30, 2026, from $1,471,360$1,481,669 for the three months ended MarchJune 31,30, 2025. The decrease primarily reflects the repayment of an October 2024 Secured Convertible Note in early April 2025, resulting in no interest accruals for the October 2024 Secured Convertible Note during the current quarter. In addition, the Company continued to repay the outstanding balances of its other loans, which further reduced interest expense during the period.

Interest earned. Interest earned decreasedincreased by $37,937, or 86%,$18,249, to $5,999$35,133 for the three months ended MarchJune 31,30, 2026, from $43,936$16,884 for the three months ended MarchJune 31,30, 2025. The decreaseincrease was mainly due to the maturity of term deposit agreements with banks during the period. The funds were subsequently reallocated into Eurobonds, which are expected to generate interest income infrom future periods.Eurobonds.

Foreign exchange gain.loss. Foreign exchange resultsloss decreasedincreased by $845,862,$98,620, to a loss of $412,194$162,075 for the three months ended MarchJune 31,30, 2026, compared to a gain of $433,668$63,455 for the three months ended MarchJune 31,30, 2025. The decreaseincrease in loss was primarily driven by volatility and unfavorable fluctuations in the EUR/RSD/USD exchange rates, which impacted the remeasurement of the Company’s monetary assets and liabilities denominated in euros and Serbian dinars. Volatility in the euro and Serbian dinar against the U.S. dollar, as well as across other currencies used by the Group, including differences between average and period-end exchange rates, resulted in higher unrealized foreign exchange losses.

Other Income. Other income is related to income from marketing services for third-party advertising in MeridianBet Group betting shops, sale of fixed assets, value-added-tax (VAT) refunds, income from compensation for damages, income from reduction of liabilities and other income that is not directly related to the Company'sCompany’s core activity. For the three months ended MarchJune 31,30, 2026, and 2025, other income amounted to $467,088$572,182 and $505,503,$591,576, respectively.

Provision for income taxes. We are subject to federal and state income taxes in the United States, as well as income taxes in the foreign jurisdictions in which we operate. Our effective tax rate was 24.3%24.21% and 56.5%-4.02% for the six months ended June 30, 2026 and 2025, respectively. In addition, our effective tax rate was 24.10% and -15.13% for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The decreaseincrease in the effective tax rate for the threesix months ended MarchJune 31,30, 2026, compared with the same period in 2025, was primarily due to a change in the jurisdictional mix of income.

Net income (loss) attributable to noncontrolling interest. Net income (loss) attributable to noncontrolling interest in the acquired entity is measured at theirthe proportionate share of theeach acquired entity’sentity, and for (a) Meridian Gaming Brazil SPE Ltda in the percentage of 30% (b) Fair Champions Meridian Ltd. Cyprus in the percentage of 49%, and (c) Classics Holding Pty Ltd Australia in the percentage of 20%. For the three months ended MarchJune 31,30, 2026, and 2025, net loss attributable to noncontrolling interest amounted to $92,638$203,180 and $26,609,$147,546, respectively. The increase in loss was primarily driven by higher net losses generated by these entities during the three months ended MarchJune 31,30, 2026.

Net income (loss) attributable to MRDN. Net income attributable to MRDN increased by $2,492,403$5,749,395 to $2,260,795$2,165,050 for the three months ended MarchJune 31,30, 2026, from a net loss of $231,608$(3,584,345) for the three months ended MarchJune 31,30, 2025. The increase was mainly due to higher revenues andrevenues, gross profits as well as lower costs as discussed above.

The discussion and analysis of the Company’s financial condition and results of operations are based upon its consolidated unaudited financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these unaudited financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an on-going basis, management evaluates past judgments and estimates, including those related to bad debts, accrued liabilities, goodwill and contingencies. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The accounting policies and related risks described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Commission on March 31, 2026, are those that depend most heavily on these judgments and estimates. As of MarchJune 31,30, 2026, there had been no material changes to any of the critical accounting policies contained therein. “Note 1 – Basis of Presentation and Accounting Policies,” of the notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Commission on March 31, 2026, describes the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements. The critical accounting estimates include transactions, assets, liabilities and obligations that are stated in foreign local currency and their conversion to US currency. Resulting loss on currency conversions related to assets and liabilities is recognized in shareholders’ equity in accumulated other comprehensive income (loss) on the Company’s consolidated balance sheets and realized foreign currency translation adjustments are recognized in other income in the consolidated statements of operations and comprehensive income.