Sports Entertainment Gaming Global reported a $3.23 million net loss

Cover page 8 changes

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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 the quarterly period ended March 31, June 30, 2026

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incorporation or organization)

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to purchase one share of common stock, each at an exercise price of $16,100.00 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

3 unchanged paragraphs

Large accelerated filer ☐

Non-accelerated filer ☒

Smaller reporting company ☒

Emerging growth company ☒

an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No of September 30, November 1, 2026, 3,413,024 4,205,728 shares of common stock, par value $ 0.001 per share were issued and outstanding.

1 unchanged paragraph

Financial statements 4 changes

Condensed Consolidated Balance Sheets as of March 31, June 30, 2026 (unaudited) and December 31, 2025

Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended March 31, June 30, 2026 and 2025 (unaudited)

Condensed Consolidated Statements of Equity for the three and six months ended March 31, June 30, 2026 and 2025 (unaudited)

Condensed Consolidated Statements of Cash Flows for the three six months ended March 31, June 30, 2026 and 2025 (unaudited)

Forward-looking statements 55 changes

our ability to continue

our ability to successfully

our ability to monetize

our dependence on third-party

our ability to complete,

our ability to remediate

our ability to regain compliance

ongoing litigation, governmental

general economic, geopolitical

the other risks described

disclosed in the Company's Current Report on Form 8-K filed on October 8, 2026, SEGG Media (formerly Lottery.com/AutoLotto)

reported that new testimony and an internal inquiry uncovered details about two connected transactions from 2020–2021. The

Report on Form 10-Q (this "Report") contains forward-looking statements within the meaning of Section 27A of the Securities

Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including statements regarding the financial condition, results of operations, future operating performance, liquidity, business strategy, and prospects of Sports Entertainment Gaming Global Corporation (doing business as "SEGG," "SEGG Media," the "Company," "we," "our," or

Act"), including statements regarding the financial condition, results of operations, future operating performance, liquidity, business strategy, and prospects of Sports Entertainment Gaming Global Corporation (doing business as "SEGG," "SEGG

Media," the "Company," "we," "our," or "us"). Forward-looking statements appear in a number of places in this Report, including, without limitation, under the heading in Part I, " Item 2. Management's Discussion and Analysis of Financial Condition and Results of

Discussion and Analysis of Financial Condition and Results of Operations. " In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as "plan," "believe," "expect," "anticipate,"

Forward-looking statements are typically identified by words such as "plan," "believe," "expect,"

"anticipate," "intend," "outlook," "estimate," "forecast," "project,"

"continue," "could," "may," "might," "possible," "potential,"

"potential," "predict," "should," "would" and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

statements are based on the current expectations of the management of SEGG Media and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties, or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors discussed and identified in the section entitled "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31,

These risks and uncertainties include, but are not limited to, those factors discussed and identified in the section entitled "Risk

Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025 (the "Annual Report") which was filed on July 10, 2026 and in this Report, as such factors may be updated in our periodic reports filed with the Securities and Exchange Commission (the "SEC"), as well as the following:

ability to continue implementing our strategic business plan;

ability to successfully operate and grow our digital media, sports, entertainment and gaming businesses;

ability to monetize our digital media audience through advertising, sponsorships, commercial partnerships, platform monetization and other revenue-generating activities;

dependence on third-party digital platforms and technology providers;

ability to complete, support and realize the anticipated benefits of strategic acquisitions;

ability to remediate material weaknesses in our internal control over financial reporting;

ability to regain compliance with Nasdaq listing standards and our SEC reporting obligations;

our ability to maintain sufficient liquidity and obtain additional financing;

litigation, governmental inquiries and regulatory matters;

economic, geopolitical and capital market conditions; and

other risks described in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025 and in this Report. risks described herein or in the "Risk Factors" sections of our other public filings referenced above are not exhaustive.

risks described herein or in the "Risk Factors" sections of our Other public filings referenced above are not exhaustive. Other sections of this Report describe additional factors that could adversely affect our business, financial condition or results of operations. New risk factors emerge from time to time and it is not possible to predict all such risk factors, nor can we assess the impact of all such risk factors on our business, or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Forward-looking statements are not guarantees of future performance. You should not put undue reliance on these statements, which speak only as of the date hereof. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Unless otherwise indicated, all

share and per-share amounts in this Quarterly Report, including in Management's Discussion and Analysis and Part II, have been adjusted to reflect the 1-for-20, 1-for-10 and 1-for-7 reverse stock splits of our common stock effective in August 2023, August 2025 and July

31, 2026, respectively. See Note 2 to the condensed consolidated financial statements.

disclosed in the Company's Current Report on Form 8-K filed on October 8, 2026, SEGG Media (formerly Lottery.com/AutoLotto) reported that new testimony and an internal inquiry uncovered details about two connected transactions from 2020–2021. The Company alleges that former Trident CEO Vadim Komissarov ("Komissarov"), with assistance from three former Lottery executives, arranged a circular scheme involving $9 million held in a restricted Massachusetts law-firm escrow account.

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Transactions in advance of filing amendments to the Company's previously issued financial statements.

this Report is the first quarterly report filed by the Company that includes the results of Veloce Media Group (Veloce Esports Limited, Quadrant, and Veloce Racing or collectively "Veloce"), in which the

and as further described in Note 3 to the condensed consolidated financial statements included in this Report, the Company's Audit

Audit Committee, in consultation with Company's management and its independent registered public accounting firm, has concluded that the Company's previously issued financial statements require certain corrections to address the Legacy Transactions. As such, the

Transactions. As such, the Annual Report on Form 10-K/A for the year ended December 31, 2021, its Annual Report on Form 10-K for the year ended December 31, 2022, and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022, June 30, 2022, and September 30, 2022 (collectively, the

September 30, 2022 (collectively, the "Affected Reports") should no longer be relied upon and require restatement, and that its financial statements for the years ended December 31, 2023, December 31, 2024, and December 31, 2025, and the interim periods within those years (collectively, the "Correction Periods"), require correction but were not rendered unreliable despite the corrections needed. The Company's Audit Committee and management do not believe the error corrections to

Periods"), require correction but were not rendered unreliable despite the corrections needed. The Company's Audit Committee and management do not believe the error corrections to Correction Period financial statements would alter a reasonable investor's assessment of the Company's financial condition or results of operations for those periods. The Company has yet to file the amended Annual or

Annual or Quarterly Reports reflecting the Legacy Transaction corrections. This Report presents the Company's financial statements for the period covered hereby, including comparative prior-period amounts on a corrected basis properly accounting for the Legacy Transactions in advance of filing amendments to the Company's previously issued financial statements.

described in Note 4, the Company acquired a controlling interest in Veloce Media Group (Veloce Esports Limited, Quadrant, and Veloce

Company acquired a controlling interest Racing, or collectively "Veloce") on February 17, 2026. as described in Note 4. Veloce's results are included in the Company's consolidated financial statements only from the acquisition date forward. As a result, only six weeks of results of operations for Veloce were reported by the Company for the three months ended March 31, 2026. This report and all subsequent quarterly reports on Form 10-Q will include results of operations for Veloce for entire quarters. The acquisition had a significant effect on revenue and expenses, and many components of the balance sheet, such that the Company's results of operations for the three and six months ended March 31, June 30, 2026 are not directly comparable to the corresponding prior-year period. periods.

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Condensed Consolidated Balance Sheets as of March 31, June 30, 2026 (unaudited) and December 31, 2025

Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended March 31, June 30, 2026 and 2025 (unaudited)

Condensed Consolidated Statements of Equity for the three and six months ended March 31, June 30, 2026 and 2025 (unaudited)

Condensed Consolidated Statements of Cash Flows for the three six months ended March 31, June 30, 2026 and 2025 (unaudited)

Notes to the financial statements 100 changes

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Common stock, par value $ 0.001 ,

500,000,000 shares authorized, 2,734,697

and 982,898 issued and outstanding March

31, 2026 and December 31, 2025, respectively

Common stock, par value $ 0.001 , 500,000,000 shares authorized, 3,184,816 and 982,975 issued and outstanding June 30, 2026 and December 31, 2025, respectively

Common stock, treasury at par; 48,337 shares and 0 , outstanding March 31, shares, June 30, 2026 and December 31, 2025, respectively ( 48 )

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Three Months Ended March 31,

General and administrative

Depreciation and amortization

Total operating expenses

Loss from operations

Total other expenses

Other comprehensive loss

Net loss per common share

Months Ended June 30,

Months Ended June 30,

other (income) expense, net

Net loss before income tax

Income tax expense (benefit)

Foreign currency translation adjustment, net

Net (income) loss attributable to noncontrolling interest

Net loss attributable to SEGG Media

Weighted average common shares outstanding

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the Three Months Ended March 31, 2026 and 2025

Conversion of debt to equity

Other comprehensive loss

Balance as of March 31, 2025

Balance as of December 31, 2025

Conversion of debt to Equity

Stock issued in lieu of cash

the Three and Six Months Ended June 30, 2026 and 2025

Balance as of December 31, 2024

Stock issued in lieu of cash

Proceeds from direct placement of common stock

from direct placement of common stock, shares

1 unchanged paragraph

Sales of common stock to public shareholders, shares

1 unchanged paragraph

Shares issued for acquisition, shares

1 unchanged paragraph

Prior period adjustment

Other comprehensive loss

Shares issued under stock purchase agreement, shares

Selling Shares At The Market ATM to public shareholders

Selling Shares At The Market ATM to public shareholders, shares comprehensive loss ( 199,163 )

Balance as of March 31, 2026 2025

issued in lieu of cash

of convertible debt to common stock

comprehensive income

as of December 31, 2025

issued in lieu of cash

from direct placement of common stock

of common stock to public shareholders

issued for acquisition

issued under stock purchase agreement

Noncontrolling interest

as of March 31, 2026

Stock issued in lieu of cash

Sales of common stock to public shareholders

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the Three Months Ended March 31, 2026 and 2025

Three Months Ended March 31,

Depreciation and amortization

Changes in assets and liabilities:

Other current assets

Other long-term assets

Proceeds from short-term loans

Interest paid in cash

the Six Months Ended June 30, 2026 and 2025

Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss attributable to SEGG Media

Adjustments to reconcile net income to net cash used in operating activities:

Income (loss) attributable to noncontrolling interest

Common stock granted for compensation

and as payment in lieu of cash payments for accrued liabilities in assets and liabilities:

Accrued and other expenses, net of acquisitions

Write-off of time barred accounts payable & accrued liabilities ( 2,678,303 ( 26,786 )

Net cash provided by (used in) operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases Proceeds from disposal of property and equipment

Payments made as deposits made for acquisitions

Proceeds from collection of note receivable

Net CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

1 unchanged paragraph

and 20 more changes in the filing

Note 1: Nature of Operations 25 changes

Sports Entertainment Gaming

Effective January 27, 2026, the

Company changed its corporate name from Lottery.com Inc. to Sports Entertainment Gaming Global Corporation to reflect the

Veloce Media Group, which

As previously noted, this Report and the

accompanying condensed consolidated financial statements include, for the first time, the results of Veloce, but only from the acquisition date.

Gaming Operations. The Company operates lottery, gaming and

Data Services and Technology . The Company develops and

The Company's operations span

Entertainment Gaming Global Corporation ("SEGG" or the "Company"), doing business as SEGG Media, is a Delaware corporation originally incorporated on March 17, 2016 as Trident Acquisitions Corp. ("Trident"). On October 29, 2021, the

Global Corporation ("SEGG" or the "Company"), doing business as SEGG Media, is a Delaware corporation originally incorporated on March 17, 2016 as Trident Acquisitions Corp ("Trident"). On October 29, 2021, the Trident completed a business combination with AutoLotto, Inc. ("AutoLotto"), which became its primary operating subsidiary and the Company was renamed Lottery.com Inc. In July 2022, the Company substantially curtailed its operations due to liquidity constraints and subsequently undertook a restructuring of its business. While operations of the lottery business in the United States were halted, respective subsidiaries, providing data services, and lottery activities in Mexico continued to operate. Since that time, the Company has reestablished certain operations, completed strategic acquisitions, expanded its portfolio of operating businesses, and continued implementing initiatives designed to strengthen its financial reporting processes and corporate governance framework.

January 27, 2026, the Company changed its corporate name from Lottery.com Inc. to Sports Entertainment Gaming Global Corporation to reflect the Company's expanded business activities across sports, entertainment, media, gaming, and technology. Following the acquisition of Veloce Esports Limited, a company organized under the laws of England and Wales and doing business as Veloce Media Group, as reported in an 8-K dated February 17, 2026, the Company currently operates a diversified portfolio of businesses spanning digital media, sports, entertainment, gaming and technology.

Media Group, which consists of Veloce eSports, Quadrant, and Veloce Racing, is a digital media business focused on sports, motorsports, gaming, and entertainment that generates revenue through digital advertising, sponsorships, commercial partnerships, platform monetization, content production and licensing, as well as sales of branded merchandise, talent management, and related media activities ("Veloce"). While benefiting from the Company's broader strategic, commercial and capital allocation initiatives

While benefiting from the Company's broader strategic, commercial and capital allocation initiatives, Veloce continues to operate as a standalone business within the Company's portfolio.

previously noted, the accompanying condensed consolidated financial statements include the results of Veloce only from the February 17, the Veloce acquisition, the Company conducts its operations through the following principal business activities:

Media and Consumer Brands. The Company owns and operates digital media businesses and consumer brands and related digital properties that generate revenue from digital advertising, sponsorships, content production and licensing, branded merchandise, and other-related media activities. These operations include Veloce's and the Company's portfolio of consumer brands, including Sports.com, Concerts.com, and Lottery.com's consumer brands.

Concerts.com, and Lottery.com.

Operations. The Company operates lottery, gaming and related interactive entertainment businesses, including business-to-consumer lottery operations in Mexico and related gaming initiatives in jurisdictions where permitted by applicable law.

Services and Technology . The Company develops and licenses proprietary technology, data products, application programming interfaces ("APIs"), analytics, and related digital services that support both the Company's internal operations and third-party customers.

Technology Partnership

April 28, 2026, the Company entered into a technology partnership and integration agreement with Polymarket to exclusively power Sports.com

Predict, the Company's sports prediction market platform, ahead of the 2026 FIFA World Cup. Under the arrangement, the Company and Polymarket participate in a transaction-based revenue share on trades executed through the platform. See Part I, Item 2, "Current

Plan of Operations - Sports.com Predict." Unless earlier terminated in accordance with its terms, the agreement remains in effect through June 30, 2029.

The Company operates in industries that are subject to a variety of federal, state, local, and international laws and regulations. Certain of the Company's operations, including its lottery and gaming activities, are subject to licensing, regulatory oversight, and other legal requirements in the jurisdictions in which they operate. In addition, the Company's businesses are subject to laws and regulations relating to advertising, consumer protection, data privacy, intellectual property, artificial intelligence, information security, e-commerce, employment, and other matters applicable to digital media and technology businesses.

Company's operations span multiple jurisdictions, and changes in applicable laws, regulations, licensing requirements, or governmental policies may affect the manner in which certain of its businesses are conducted. Management monitors applicable legal and regulatory developments and modifies the Company's operations as appropriate to maintain compliance with applicable requirements.

Note 2: Significant Accounting Policies 77 changes

The accompanying unaudited condensed

accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation

S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements.

for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six months ended March 31, June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026 or any other period. These condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and related notes for the year ended December

2026 or any other period. These condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and related notes for the year ended December 31, 2025 included in the Company's Annual Report on Form 10-K, as such statements will be amended as described in Note 3, Restatement of Previously Issued Financial Statements. As described in Note 3, the comparative prior-period amounts presented in these condensed consolidated financial statements reflect the correction of the errors described in Note 3 and may differ from amounts previously reported for the same periods.

Company has effected three reverse stock splits of its common stock: a 1-for-20 reverse stock split effective August 9, 2023, a 1-for-10 reverse stock split effective August 28, 2025, and a 1-for-7 reverse stock split effective July 31, 2026 (collectively, the "Reverse

Stock Splits"). All share and per-share amounts in these condensed consolidated financial statements and the accompanying notes have been retroactively adjusted to reflect the Reverse Stock Splits for all periods presented. These amounts include shares outstanding, weighted average shares, net loss per share, and the number of shares issuable under, and the exercise or conversion prices of, outstanding warrants, options and convertible instruments. The Reverse Stock Splits did not change the par value of the common stock ($0.001 per share) or the number of authorized shares.

3 unchanged paragraphs

million on March 31, 2026. For the quarter ended March 31,

2026, which included results of operations for Veloce from the acquisition on February 17 through March 31, the Company incurred a loss of $ 3.5 million.

former AutoLotto stockholders

the board of directors

AutoLotto management continuing

the post-combination company

the post-combination business maintaining

July 2022, the Company substantially curtailed its operations. Subsequently, the Company has reestablished operations, completed strategic acquisitions, and expanded its portfolio of operating businesses. The Company has experienced recurring net losses and negative cash flows from operations and has an accumulated deficit of approximately $ 290 . 292.8 million on June 30, 2026. For the six months ended June

30, 2026, which included results of operations for Veloce from the acquisition on February 17 through June 30, the Company incurred a net loss of $ 6.0 million. For the year ending ended December 31, 2025, the Company reported a net loss of $ 19.7 million. Subsequently, The Company sustained additional operating losses and anticipates additional operating losses for the next twelve months.

Company has historically funded its activities almost exclusively from debt and equity financing. Management's plans in order to meet its operating cash flow requirements include financing activities such as private placements of its common stock, preferred stock offerings, and issuances of debt and convertible debt. Management believes that it will be able to continue to raise funds by sale of its securities or by issuing convertible debt obligations to provide the additional cash needed to meet the Company's obligations as they become due. Despite the Company's historical record for funding activities from debt and equity financing and Management's belief that it will be able to continue to raise funds from similar activities, in accordance with ASC 205-40, management must evaluate whether conditions and events, considered in the aggregate, raise substantial doubt about the Company's ability to continue as a going concern within one year after the date the financial statements are issued. As such, Management concluded that substantial doubt exists.

205-40, management must evaluate whether conditions and events, considered in the aggregate, raise substantial doubt about the

Company's ability to continue as a going concern within one year after the date the financial statements are issued. As such,

Management concluded that substantial doubt exists.

of Trident Acquisition Acquisitions Corp. Business Combination

accounted for the October 29, 2021 Business Combination as a standard Special Purpose Acquisition Company (SPAC) transaction reverse recapitalization whereby AutoLotto was determined as the accounting acquirer and Trident Acquisition Acquisitions Corp. ("TDAC") ("Trident") as the accounting acquiree. This determination was primarily based on:

AutoLotto stockholders having the largest voting interest in Sports Entertainment Gaming Global Corporation f/k/a Lottery.com. Inc. ("SEGG Media");

board of directors of AutoLotto (now SEGG Media) having seven members, and AutoLotto's former stockholders having the ability to nominate the majority of the members of the board of directors;

management continuing to hold executive management roles for the post-combination company and being responsible for the day-to-day operations;

post-combination company assuming the Lottery.com name (now SEGG Media);

post-combination business maintaining the pre-existing AutoLotto headquarters; and the intended strategy of the Company being a continuation of AutoLotto's strategy; and

As is standard with a reverse merger into a SPAC, AutoLotto did not undergo a change of control during or resulting from the Business Combination with Trident.

the Business Combination was treated as the equivalent of AutoLotto issuing stock for the net assets of TDAC, Trident, accompanied by a recapitalization.

The net assets of TDAC Trident are stated at historical cost, with no goodwill or other intangible assets recorded.

TDAC Trident was the legal acquirer in the Business Combination, because AutoLotto was determined as the accounting acquirer, the historical financial statements of AutoLotto became the historical financial statements of the combined company, upon the consummation of the Business

3 unchanged paragraphs

segments are defined as components of an enterprise for which discrete financial information is available and is regularly reviewed by the Company's chief operating decision maker ("CODM") to allocate resources and assess performance in accordance with ASC 280 – Segment Reporting . We determined that our Chief Financial Officer is the Chief Operating the Company has operated as a single-reporting unit focused on its lottery and gaming platform, and its organizational structure, internal reporting systems, and resource allocation processes were aligned accordingly. As a result, the Company previously operated as one operating and reportable segment.

ASC 280 – Segment Reporting . We determined that our Chief Financial Officer is the Chief Operating Decision Maker ("CODM").

the Company has operated as a single-reporting unit focused on its lottery and gaming platform, and its organizational structure, internal reporting systems, and resource allocation processes were aligned accordingly. As a result, the Company previously operated as one operating and reportable segment.

3 unchanged paragraphs

instruments that are potentially subject to concentrations of credit risk are primarily cash. Cash holdings are placed with major financial institutions deemed to be of high-credit-quality in order to limit credit exposure. The Company maintains deposits and may occasionally hold certificates of deposit with banks which may exceed the Federal Deposit Insurance Corporation ("FDIC") insured limit and may from time to time have money in money market or other accounts which are not FDIC insured. In addition, deposits aggregating approximately $ 69,376 on

September 25, insured limit and may from time to time have money in money market or other accounts which are not FDIC insured. In addition, deposits aggregating approximately $ 111,020 on October 8, 2026 were held in foreign banks. Management believes the risk of loss in connection with these accounts is minimal.

1 unchanged paragraph

balances have been reclassified in the accompanying consolidated financial statements to conform to the current year presentation.

balances have been reclassified in the accompanying consolidated financial statements to conform to presentation for the current year. These reclassifications had no effect on the balances of current or total assets or liabilities and prior year's net loss or accumulated deficit.

1 unchanged paragraph

Solely for the convenience of the

Dollars ($) at the rate of exchange as quoted by OFX on March 31, 2026 (£1=$ 0.7569 )

for balance sheet amounts and at the average rate of exchange during the period for income and expense amounts (£1=$ 0.7472 ),

Assets and liabilities of subsidiaries operating outside the United States with a functional currency other than U.S. Dollars are translated into U.S. Dollars using end of period exchange rates. Sales, costs and expenses are translated at the average exchange rates in effect during the respective accounting period. For Global Gaming, translations are from Mexican Pesos [MXN] to U.S. Dollars. For Sports.com Media and Veloce translations are from British Pounds [GBP] to U.S. Dollars.

Media and Veloce translations are from British Pounds [GBP] to U.S. Dollars. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive income (loss).

for the convenience of the reader, U.S. dollar equivalents of British pound–denominated transactions are translated from British Pounds (£) to U.S.

Pounds (£) to U.S. Dollars ($) at the rate of exchange as quoted by OFX on June 30, 2026 ($1=£ 0.7545 ) for balance sheet amounts and at the average rate of exchange during the period for income and expense amounts ($1=£ 0.7452 ). Examples, see related party loans and notes disclosed in Note 10, Notes Payable and Convertible Debt, and Note 15, Related Party Transactions. .

of March 31, June 30, 2026 and December 31, 2025, cash was comprised of cash deposits. From time-to-time cash deposits with some banks may exceed federally insured limits with the majority of cash held in one financial institution. Management believes all financial institutions holding its cash are of high credit quality and does not believe the Company is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

Company had no marketable securities as of March 31, June 30, 2026 and December 31, 2025.

2 unchanged paragraphs

In the Fall of 2025, the

the Fall of 2025, the Company completed a similar project and offset older items in accounts receivable for the TinBu subsidiary against the allowance for uncollectible receivables. Approximately $ 55,000 representing individual items aged greater than 90 days was written off against the allowance leaving approximately $ 8,000 aged greater than 90 days in accounts receivable and reducing the allowance for uncollectable receivables to $ 0 at December 31, 2025. The Company increased its allowance for uncollectible receivables to $ 5,000 as of March 31, 2026 and subsequently increased it by an additional $ 15,000 resulting in a balance for the allowance of $ 20,000 as of June 30, 2026.

Credit Losses on Accounts Receivable and Contract Assets

The Company measures expected credit losses on its current accounts receivable and current contract assets in accordance with ASC Topic 326, Financial Instruments—Credit Losses. Effective January

Financial Instruments—Credit Losses. Effective January 1, 2026, the Company adopted ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets, on a prospective basis.

Accounts Receivable and Contract Assets, on a prospective basis. In connection with the adoption of this standard, the Company elected to apply the current-conditions practical expedient to all eligible short-term trade receivables and contract assets. Under this expedient, the Company measures the allowance for credit losses by assuming that economic conditions existing at the balance sheet date will remain constant over the remaining brief life of these assets. Accordingly, the Company is not required to develop or incorporate forward-looking macroeconomic forecasts into its credit loss model for these current assets. The adoption of this standard did not have a material impact on the Company's consolidated financial statements or opening retained earnings.

connection with the Company's acquisition of Veloce on February 17, 2026 (see Note 4, Business Combination and Acquisitions) , the Company's consolidated balance sheet now includes inventory, for the first time, held by Quadrant, a Veloce business that sells motorsports- and esports-related branded merchandise. Quadrant Esports Limited continues to operate as a standalone business following the acquisition; inventory has been incorporated into the Company's consolidated financial reporting for GAAP consolidation purposes.

inventory has been incorporated into the Company's consolidated financial reporting for GAAP consolidation purposes.

1 unchanged paragraph

of March 31, 2026, inventory consisted of $ 261,000 in finished goods.

of June 30, 2026, inventory consisted of $ 226,227 in finished goods.

1 unchanged paragraph

Company reserved for potential inability to realize $ 2,000,000 of prepaid advertising credits in future periods. For the period ending December 31, 2024, the Company determined that an estimated $ 4,745,000 of prepaid advertising credits purchased during 2017 and 2018 might not be able to be fully utilized. As a result, the Company decreased prepaid expenses by $ 4,745,000 and increased its reserve for loss of prepaid advertising credits by $ 4,745,000 for the year ended December 31, 2024. Similarly, for the period ending December 31, 2025, the Company determined that an estimated

$ 5,688,000 of prepaid advertising credits purchased during 2017 and 2018 might not be able to be fully utilized. As a result, the

Company decreased prepaid expenses by $ 5,688,000

and increased its reserve for loss of prepaid advertising credits by $ 5,688,000 for the year ended December 31, 2025. Prepaid expenses are included in current assets on the consolidated balance sheets. The

Company had total remaining prepaid expenses of $ 9,061,628 and of March 31, 2026 and December 31, 2025, respectively.

August 2, 2018, AutoLotto purchased 186,666

development partner representing 4 %

Veloce eSports Ltd. owns an

expenses consist primarily of payments made on contractual obligations for services to be consumed in future periods. The Company entered into an agreement with two third parties to provide advertising services and issued equity instruments as compensation for the advertising services ("Prepaid advertising credits"). The Company expenses the service as it is performed by the third parties. The value of the services provided have been used to value these contracts. For the year ended December 31, 2021 the Company reserved for potential inability to realize $ 2,000,000 of prepaid advertising credits in future periods. For the period ending December 31, 2024, the Company determined that an estimated $ 4,745,000 of prepaid advertising credits purchased during 2017 and 2018 might not be able to be fully utilized. As a result, the Company decreased prepaid expenses by $ 4,745,000 and increased its reserve for loss of prepaid advertising credits by $ 4,745,000 for the year ended December 31, 2024. Similarly, for the period ending December 31, 2025, the Company determined that an estimated $ 5,688,000 of prepaid advertising credits purchased during 2017 and 2018 might not be able to be fully utilized. As a result, the Company decreased prepaid expenses by $ 5,688,000 and increased its reserve for loss of prepaid advertising credits by $ 5,688,000 for the year ended December 31, 2025. Sponsorship fees paid in advance of the time period or the series of events covered by the agreement are recorded as prepaid sponsorship fees. The value of prepaid sponsorship fees at June 30, 2026 was $ 578,175 . Prepaid expenses are included in current assets on the consolidated balance sheets. The Company had total remaining prepaid expenses of $ 9,505,690 and $ 8,634,275 as of June 30, 2026 and December 31, 2025, respectively.

August 2, 2018, AutoLotto purchased 186,666 shares of Class A-1 common stock of a third-party business development partner representing

4 % of the total outstanding shares of the company. As this investment resulted in less than 20 % ownership, it was accounted for using the cost basis method.

eSports Ltd. owns an entity in RAK which is registered in Ras Al Khaimah. The entity, which is expected to be utilized for Veloce's Web3 initiatives, and has had no operating activity to date, is also accounted for on the cost basis method.

Web3 initiatives, and has had no operating activity to date, is also accounted for on the cost basis method.

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Computers and equipment

Furniture and fixtures

Schedule of Depreciation of Property and Equipment

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Software development costs incurred internally

development costs incurred internally to develop software programs and digital assets to be used solely to meet our internal needs and applications are capitalized once the preliminary project stage is complete and it is probable that the project will be completed and the software or digital asset will be used to perform the intended function. Additionally, we capitalize qualifying costs incurred for upgrades and enhancements to existing software and digital assets that result in additional functionality. Costs related to preliminary project planning activities, post-implementation activities, maintenance and minor modifications are expensed as incurred. Internal-use software and digital asset development costs are amortized on a straight-line basis over the estimated useful life of the software.

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is recognized at the point in time when control of the product transfers to the customer, which generally occurs upon shipment or delivery, depending upon the applicable contractual terms. The Company records estimates for product returns, discounts, and other variable consideration, where applicable, based on historical experience and expected future activity.

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Company's performance obligation is satisfied when the lottery game or other gaming product is delivered to the customer. Revenue is recognized at the point in time when control transfers to the customer.

Management 518 changes

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The adoption did not have a material impact on the Company's consolidated financial statements or related disclosures for 2025. The Veloce acquisition may result in additional future disclosures regarding taxes paid [federal, state, and foreign] and breakdown of pretax income and tax expense [domestic and foreign].

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires enhanced income tax disclosures, including additional information in the effective tax rate reconciliation and expanded disclosures of income taxes paid. ASU 2023-09 was effective for the Company's annual reporting period beginning January 1, 2025. The adoption did not have a material impact on the Company's consolidated financial statements or related disclosures for 2025. The Veloce acquisition may result in additional future disclosures regarding taxes paid [federal, state, and foreign] and breakdown of pretax income and tax expense [domestic and foreign].

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As referenced in the

Explanatory Note ( supra)

and further described in Note 3 ( infra)

Company accounts for the correction of these errors in accordance with FASB Accounting Standards Codification Topic 250, Accounting

referenced in the Explanatory Note (supra) and further described in Note 3 (infra) of this Report, , the Company has identified errors in previously issued financial statements relating to certain historical transactions (referred to herein as Legacy Transactions) that predate the Company's October 2021 business combination. The

that predate the Company's October 2021 business combination. The Company accounts for the correction of these errors in accordance with FASB Accounting Standards Codification Topic 250, Accounting Changes and Error Corrections, which requires that identified errors be evaluated to determine whether they are material to any previously issued financial statements. Errors determined to be material to previously issued financial statements are corrected through a restatement of those financial statements; errors determined not to be material to previously issued financial statements are corrected in the financial statements for the period in which they are identified or, as applicable here, through amendment as described in Note 3.

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Entertainment Gaming Global Corporation ("SEGG" or the "Company"), formerly known as Lottery.com

Anthony DiMatteo, Lottery's co-founder and former Chief Executive Officer, Matthew Clemenson, Lottery's co-founder and former Chief Revenue Officer, and Ryan Dickinson, Lottery's former President and Chief Financial Officer (collectively, the

Company's current officers or directors had any involvement in the Legacy Transactions, and no individual who participated in the Legacy Transactions is currently employed by or engaged with the Company in any capacity.

"New Information"), the Company's current management determined that, in December 2020, Komissarov instructed the

a result of the Legacy Transactions, the Company has determined that its previously issued financial statements contain the following errors: (i) an overstatement of revenue, deferred revenue and cash in the fourth quarter of 2020 arising from the improper recognition of the $ 9,000,000

Entertainment Gaming Global Corporation ("SEGG" or the "Company"), formerly known as Lottery.com Inc. ("Lottery"), and prior to its business combination with the special purpose acquisition company Trident Acquisitions Corp. ("Trident")

in October 2021, has identified two related historical, connected transactions from

Acquisition Corp. ("Trident") in October 2021, known as AutoLotto, Inc. ("AutoLotto"), has identified two related historical, connected transactions from 2020 and 2021 (the "Legacy Transactions") that predate the Company's business combination and the tenure of its current executive management team and Board of Directors, which resulted in material errors in the financial statements for 2020, 2021 and 2022. The Legacy Transactions were planned and executed by Vadim Komissarov, Trident's former Chief Executive Officer ("Komissarov"), with the assistance of Lawrence

The Legacy Transactions were planned and executed by Vadim Komissarov, Trident's former Chief Executive Officer ("Komissarov"), with the assistance of Lawrence Anthony DiMatteo, Lottery's co-founder and former Chief Executive Officer, Matthew Clemenson, Lottery's co-founder and former Chief Revenue Officer, and Ryan Dickinson, Lottery's former President and Chief Financial Officer (collectively, the "Lottery Former Executives"). On June 24, 2026, Komissarov was sentenced to three years in prison for, among other things, his involvement in the Legacy Transactions. Clemenson and Dickinson pleaded guilty on May 22, 2025, for, among other things, their involvement in the Legacy Transactions, and currently await sentencing. The internal inquiry concluded that none of the Company's current officers or directors had any involvement in the Legacy Transactions, and no individual who participated in the Legacy Transactions is currently employed by or engaged with the Company in any capacity.

July 15, 2026 and August 7, 2026, the Company obtained sworn testimony given in depositions of Dickinson and of Datassure's former Chief Executive Officer, Jeffery Sparrow, taken in a matter unrelated to the Legacy Transactions (the

Chief Executive Officer, Jeffery Sparrow, taken in a matter unrelated to the Legacy Transactions (the "Depositions"). Based on the testimony given in the Depositions, together with additional information obtained through a subsequent inquiry conducted by the Company's current Chief Financial Officer and Chief Operating Officer (collectively, the

Company's current Chief Financial Officer and Chief Operating Officer (collectively, the "New Information"), the Company's current management determined that, in December 2020, Komissarov instructed the Lottery Former Executives to record a $ 9,000,000 transaction with Datassure as revenue and cash, notwithstanding that AutoLotto was unable to possess, access, or transfer those funds, which were instead held in a restricted escrow account at Boston Law Group P.C., a Massachusetts law firm. The New Information indicates that the restricted funds held in escrow belonged to an acquaintance of Komissarov and that, pursuant to a series of escrow reports provided by Boston Law Group, AutoLotto purportedly received $ 9,000,000 for selling customer data to Datassure and then used that

Boston Law Group, AutoLotto purportedly received $ 9,000,000 for selling customer data to Datassure and then used that $ 9,000,000 , together with other consideration, to fund AutoLotto's acquisition of Global Gaming Enterprises, Inc. ("Global Gaming") from

Gaming") from Pan European Associates, S.R.O., a Czech company created by Komissarov ("Pan Euro"), thereby returning the $ 9,000,000 to its original source, an acquaintance of Komissarov's. At Komissarov's direction and with his participation, the Lottery Former Executives recorded the revenue and cash transaction in December 2020, recorded related revenue transactions in the first and second quarters of 2021, and overstated the price paid for the June 30, 2021 acquisition of Global

Executives recorded the revenue and cash transaction in December 2020, recorded related revenue transactions in the first and second quarters of 2021, and overstated the price paid for the June 30, 2021 acquisition of Global Gaming as $ 10,572,674 , creating supporting books and records that caused both transactions to appear bona fide.

a result of the Legacy Transactions, the Company has determined that its previously issued financial statements contain the following errors: (i) an overstatement of revenue, deferred revenue and cash in the fourth quarter of 2020 arising from the improper recognition of the $ 9,000,000 Datassure transaction, notwithstanding that the underlying funds were never available to the Company; (ii) an overstatement of revenue recognized in the first and second quarters of 2021 arising from related transactions; and (iii) an overstatement of the purchase price recorded for the Company's June 30, 2021 acquisition of Global Gaming, with resulting overstatements of goodwill and identifiable intangible assets recognized in that acquisition and of the amortization and impairment expense recognized on those assets in subsequent periods.

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as a result the Company's Annual Report on Form 10-K/A for the year ended December

Reports on Form 10-Q for the quarters ended March 31, 2022, June 30, 2022, and September

30, 2022 (collectively, the "Affected Reports") should no longer be relied upon and require restatement; and

The Company intends to restate the Affected Reports by amendment. It also intends to amend its filings for the Correction

consultation with management and the Company's independent registered public accounting firm, on October 5, 2026, the Company's

Company's Audit Committee determined that:

effects of correcting these errors are most significant for the years in which they occurred; as a result the Company's Annual

Report on Form 10-K/A for the year ended December 31, 2021, its Annual Report on Form 10-K for the year ended December 31, 2022, and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022, June 30, 2022, and September 30, 2022 (collectively, the "Affected Reports") should no longer be relied upon and require restatement; and the

Company's financial statements for the years ended December 31, 2023, December 31, 2024, and December 31, 2025, and the interim periods within those years (collectively, the "Correction Periods"), require correction to reflect the effects of the Legacy

Legacy Transactions, but do not have the same reliability concerns because effects of correcting the errors are much less significant in subsequent accounting periods, will result in lower restated amounts for losses and accumulated deficit, and would not significantly alter a reasonable investor's assessment of the Company's financial condition or results of operations for those periods.

Company intends to restate the Affected Reports by amendment. It also intends to amend its filings for the Correction Periods, so that every previously filed report affected by the Legacy Transactions is refiled to reflect the corrections.

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Company expects the restatement of the Affected Reports to: decrease previously reported revenue, deferred revenue, and cash at December

31, 2020; decrease revenue reported for the quarters ended March 31, 2021 and June 30, 2021; increase accumulated deficit reported at

December 31, 2020 decrease revenue reported for the quarters ended March 31, 2021 and June 30, 2021; increase accumulated deficit reported at December 31, 2020 and 2021; decrease goodwill, intangible assets, and total assets at December 31, 2021 and in all subsequent reporting periods; and decrease amortization expense associated with the Global Gaming intangible assets for all reporting periods after December 31, 2021. The Company expects these corrections to increase previously reported net loss for the years ended December 31, 2020 and December 31, 2021, with the most significant effects on the Company's balance sheet and results of operations occurring in those two years.

31, 2021. The Company expects these corrections to increase previously reported net loss for the years ended December 31, 2020 and December

31, 2021, with the most significant effects on the Company's balance sheet and results of operations occurring in those two years.

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The following table presents the estimated effect of the restatement and correction on the Company's previously reported consolidated balance sheets and statements of operations for the periods indicated.

As Previously Reported

Intangible assets, net

Noncontrolling Interest

As Previously Reported

Amortization expense

Total operating expenses

Income (Loss) from operations

* Loss per share in the adjustment column and "As

4, Controls and Procedures.

The Company has completed its internal inquiry into the matters described in this Note. The amounts and comparisons described above reflect the results of that inquiry but could potentially change as the Company finalizes its restatement work and completes the related audit and interim review procedures. The disclosures in this Note, together with the Company's Current

following table presents the estimated effect of the restatement and correction on the Company's previously reported consolidated balance sheets and statements of operations for the periods indicated. The Company believes these amounts are final but cautions that if additional information is discovered or received, either from third parties or during completion of the Company's restatement work and the related audit and review procedures, amounts presented could potentially change:

Schedule of Error Corrections and Previously Issued Financial Statements

Balance Sheet (as of Dec. 31, 2025)

Accumulated other comprehensive income (loss)

Total SEGG stockholder's equity

Total liabilities and stockholder' stockholder's equity

Statement of Operations (Three Months Ended March 31, June 30, 2025)

Net income (loss) before income tax

Net income (loss) attributable to SEGG

Net loss per share, basic and diluted*

Weighted average common shares outstanding

of Operations (Six Months Ended June 30, 2025)

Income (Loss) before income tax

Income (loss) attributable to SEGG

loss per share, basic and diluted*

average common shares outstanding

per share in the adjustment column and "As Restated" column reflect a 7 for 1 reverse split executed July 26, 2026

Internal Control Considerations

Company alleges that the Legacy Transactions (and original financial reporting thereof) were directly caused by intentional and unlawful acts committed by Komissarov, , and reflected either a continuation of the material weaknesses in internal control over financial reporting previously disclosed by the Company or represented evidence of additional material weakness specific to the pre-and early post-business-combination period. Management and the Audit Committee will evaluate the efficacy of the Company's internal controls to determine if additional improvements are recommended in light of the Legacy Transactions. As of the date of this Report, the Company has not reached any conclusions beyond the material weaknesses previously disclosed. See Part I, Item 4, Controls and Procedures .

Completion of Inquiry and Other Matters

Company has completed its internal inquiry into the matters described in this Note. The amounts and comparisons described above reflect the results of that inquiry but could potentially change as the Company finalizes its restatement work and completes the related audit and interim review procedures. The disclosures in this Note, together with the Company's Current Report on Form 8-K regarding these matters, are intended to constitute the full extent of the Company's public disclosure regarding the Legacy Transactions as of the date of this Report. Except as may otherwise be required by applicable law, it should not be inferred that the Company intends to release additional findings beyond what is described in this Note, the amended financial statements for the Correction Periods, or the restated financial statements for the Affected Reports.

with this the Report on Form 10-Q for the fiscal quarter ended March 31, 2026, and for all Quarterly Reports on Form 10-Q and Annual

Reports on Form 10-K filed thereafter, the Company presents will present its financial statements and other financial information as if all amended and restated financial statements for the Correction Periods and the Affected Reports had already been filed, including by presenting corrected historical and comparative financial information for prior periods, rather than presenting such prior periods on an as-previously-reported (and since-superseded) basis and separately filing the corresponding amended reports for the Correction

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October 29, 2021, the Company Trident and AutoLotto consummated the transactions contemplated by the Merger Agreement. At the Closing, each share of common stock and preferred stock of AutoLotto that was issued and outstanding immediately prior to the effective time of the Merger Business Combination (other than excluded shares as contemplated by the Merger Agreement) was cancelled and converted into the right to receive approximately

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The Closing was a triggering event

Merger closing was a triggering event for the Series B convertible notes, of which $ 63.8 million was converted into 2,320 shares of AutoLotto that were then converted into 6,975 shares of Lottery.com common stock using the Exchange Ratio and applying subsequent reverse stock splits.

6,975 shares of Lottery.com common stock using the Exchange Ratio and applying subsequent reverse stock splits. Neither the Closing nor the Business Combination resulted in a change of control with respect to AutoLotto.

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June 30, 2021, the Company completed its acquisition of 100

Company accounted for the Business Combination as a reverse recapitalization whereby AutoLotto was determined as the accounting acquirer and TDAC Trident as the accounting acquiree. Refer to Note 2, Significant Accounting Policies , for further details. Accordingly, the Business Combination was treated as the equivalent of AutoLotto issuing stock for the net assets of TDAC, accompanied by a recapitalization.

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and 438 more changes in the filing

Business 33 changes

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useful lives, depreciation of property, plant and equipment, and amortization of intangible assets

useful lives, depreciation of property, plant and equipment, and amortization of intangible assets of property, plant and equipment and amortization of intangible assets is dependent upon estimates of useful lives based on management's judgment. The assessment of any impairment of these assets is dependent upon estimates of recoverable amounts that consider factors such as economic and market conditions and the useful lives of assets.

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As previously disclosed, in connection with the filing

In connection with the filing of Amendment No. 1 to

As previously disclosed in the Company's Annual Report

Annual Report and continued evaluating additional measures designed to address the identified material weaknesses and improve the Company's internal control over financial reporting.

The previously identified material weaknesses included

These material weaknesses originated during prior periods

During the period ended December 31, 2025, the Company

During the three months ended March 31, 2026, the Company

Management has also identified

a concentration of authority resulting from the Company's Chief Financial Officer simultaneously serving as Interim Chief Executive

Officer. This dual role could potentially impair the effective segregation of duties and oversight functions that are fundamental to an effective control environment, particularly with respect to the review and approval of significant transactions, financial reporting, and significant management judgments. During this dual role, the Company has implemented compensating controls, including enhanced involvement of the Chairman, the Audit Committee, and other members of the Board of Directors and management in significant decisions and financial reporting oversight. The Board of Directors has initiated a search for a permanent Chief Executive Officer.

as described above, there were no changes in the Company's internal control over financial reporting during the three months ended March 31, 2026 that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. The previously identified material weaknesses described above have not yet been remediated, and management will continue implementing remediation activities until the identified control deficiencies have been addressed and the effectiveness of the related controls has been demonstrated through testing.

cannot assure you that the remediation steps described above will be sufficient to remediate the identified material weaknesses or prevent the identification of additional material weaknesses in the future. If these material weaknesses are not remediated in a timely manner, there remains a reasonable possibility that a material misstatement of the Company's annual or interim financial statements would not be prevented or detected on a timely basis.

Evaluation of Disclosure Controls and Procedures

previously disclosed, in connection with the filing of the Company's Annual Report on Form 10-K for the year ended December 31, 2021 (the "Original 2021 Annual Report") on April

2021 (the "Original 2021 Annual Report") on April 1, 2022, our management, with the participation of our then Chief Executive

1, 2022, our management, with the participation of our then Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December

Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2021. Based on their evaluation, our then Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2021, our disclosure controls and procedures were not effective due to material weaknesses in our internal control over financial reporting with respect to our financial statement close and reporting process.

connection with the filing of Amendment No. 1 to the Company's Annual Report on Form 10-K/A for the year ended December 31, 2021 (the "Amended 2021 Annual Report"), our management, with the participation of our Chief Executive Officer, reevaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2021 and determined they were not effective due to the material weaknesses in our internal control over financial reporting with respect to our financial statement close and reporting process. Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosures.

Act) as of December 31, 2021 and determined they were not effective due to the material weaknesses in our internal control over financial reporting with respect to our financial statement close and reporting process. Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosures.

Based on an evaluation of the effectiveness of our disclosure controls and procedures as of March 31, June 30, 2026, the end of the period covered by this Report, and in light of the material weaknesses described below, including the matter described under "Restatement-Related Matter" below and in Note 3 to the condensed consolidated financial statements included in this Report, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of March 31, 2026.

Matter" below and in Note 3 to the condensed consolidated financial statements included in this Report, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2026.

Material Weakness in Internal Control Over Financial Reporting

previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, management identified material weaknesses in the Company's internal control over financial reporting. During the three months ended March 31, June 30, 2026, management continued implementing the remediation activities described in the Annual Report and continued evaluating additional measures designed to address the identified material weaknesses and improve the Company's internal control over financial reporting.

previously identified material weaknesses included (i) an insufficient number of personnel with appropriate technical accounting expertise to account for complex or non-routine transactions, (ii) deficiencies in the design and operating effectiveness of policies and procedures related to the review, supervision, and monitoring of the Company's accounting and financial reporting functions, (iii) challenges in the timely completion of the financial close process, and (iv) incomplete segregation of duties across certain transaction cycles and processes.

material weaknesses originated during prior periods and reflect a legacy control environment that did not adequately support the Company's operational complexity and public company reporting requirements.

the period ended December 31, 2025, the Company implemented remediation steps designed to address the identified material weaknesses and improve its internal control over financial reporting and related financial reporting processes. Remediation activities included expanding the finance and accounting organization through targeted hiring and the engagement of external technical accounting resources, formalizing accounting policies and financial reporting procedures, enhancing review and supervisory controls, improving the financial close process, strengthening segregation of duties where practical, and implementing compensating controls where segregation of duties was not yet achievable.

the three months ended June 30, 2026, the Company continued implementation of remediation steps. The Company also expanded the accounting and finance resources available to support its financial reporting processes, including through personnel added in connection with the acquisition of Veloce. In addition, the Company continued increasing oversight of financial reporting through the Audit Committee and Board of Directors and extending, where appropriate, its financial reporting policies and internal control framework to newly acquired operations.

Board of Directors and extending, where appropriate, its financial reporting policies and internal control framework to newly acquired operations.

remediation activities described above are ongoing. The previously identified material weaknesses will not be considered remediated until the applicable controls have been fully implemented, have operated for a sufficient period of time, and management has concluded, through testing, that the controls are designed appropriately and operating effectively. Accordingly, management has not concluded that the identified material weaknesses have been remediated.

In addition, as described in Note 3 to the condensed consolidated financial statements included in this Report, the Company's completed internal inquiry identified the Legacy Transactions, which originated in 2020 and 2021 and predate the Company's October 2021 business combination and its current management team. Management believes the circumstances related to the Legacy Transactions reflect a continuation of the material weaknesses described above or evidence of additional material weakness specific to the pre-business-combination period, for example, relating to the design or operation of controls over the identification, evaluation, and approval of related-party and other complex or non-routine transactions, or over the reliability of representations made by then-management to the Company's then-independent registered public accounting firm. The Company has not, as of the date of this Report, reached a conclusion on that evaluation beyond the material weaknesses previously disclosed, and will take appropriate remediation steps or disclose the results of that evaluation, including any additional material weakness identified, if necessary, once it is complete.