Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C., 20549

FORM 10-K

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

For the fiscal year ended September 30, 2023

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

For the transition period from _________________ to ___________________

Commission File Number: 001-40334

EBET, Inc.

(Exact Name of Registrant as Specified in its Charter)

Nevada

85-3201309

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer Identification No.)

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

(Address of Principal Executive Offices) (Zip Code)

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

Securities registered pursuant to Section 12(b) of the Exchange Act: None.

Securities registered pursuant to Section 12(g) of the Exchange Act: Common Stock, par value $0.001.

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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods as the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (check one)

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☒		Smaller reporting company ☒
		Emerging growth company ☒

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

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

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

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

The aggregate market value of the registrant’s voting equity held by non-affiliates of the registrant, computed by reference to the price at which the common stock was last sold as of the last business day of the registrant’s most recently completed second fiscal quarter, was $5,189,593. In determining the market value of the voting equity held by non-affiliates, securities of the registrant beneficially owned by directors, officers and 10% or greater shareholders of the registrant have been excluded. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

The number of shares of the registrant’s common stock outstanding as of January 11, 2024 was 14,979,642.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of this registrant’s definitive proxy statement for its 2024 Annual Meeting of Stockholders to be filed with the SEC no later than 120 days after the end of the registrant’s fiscal year are incorporated herein by reference in Part III of this Annual Report on Form 10-K.

TABLE OF CONTENTS

		Page
PART I

ITEM 1.	Business	1
ITEM 1A.	Risk Factors	8
ITEM 1B.	Unresolved Staff Comments	23
ITEM 2.	Properties	23
ITEM 3.	Legal Proceedings	23
ITEM 4.	Mine Safety Disclosures	24

PART II

ITEM 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	25
ITEM 6.	[Reserved]	25
ITEM 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	26
ITEM 7A.	Quantitative and Qualitative Disclosures About Market Risks	33
ITEM 8.	Financial Statements and Supplementary Data	34
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	35
ITEM 9A.	Controls and Procedures	35
ITEM 9B.	Other Information	36
ITEM 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	36

PART III

ITEM 10.	Directors, Executive Officers and Corporate Governance	37
ITEM 11.	Executive Compensation	37
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	37
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	37
ITEM 14.	Principal Accountant Fees and Services	37

PART IV

ITEM 15.	Exhibits, Financial Statement Schedules	38

Exhibit Index		38

ITEM 16.	10-K Summary	40

Signatures		41

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

Cautionary Statement About Forward-Looking Statements

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

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

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

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

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

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

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

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

	·	market acceptance of our new offerings;

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

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

	·	our ability and third parties’ abilities to protect intellectual property rights;

	·	our ability to adequately support future growth; and

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

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

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

PART I

Item 1.

Business.

Overview

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

Aspire Global Plc’s (“Aspire”) Business to Consumer (“B2C”) Business

In order to accelerate the growth and expand market access for our esports product offerings, on November 29, 2021, we acquired Aspire’s B2C Business.

The acquisition of Aspire’s B2C business was intended to provide the following strategic benefits:

	·	ownership of a portfolio of B2C proprietary online casino and sportsbook brands consisting of Karamba, Hopa, Griffon Casino, BetTarget, Dansk777, and GenerationVIP;

	·	operator service agreements with Aspire who provides the on-line gaming platform and a managed services offering, including customer service, customer on-boarding and payment processing ensuring operational stability and continuity.

Focus on i-Gaming Operations

During the quarter ending September 30, 2022, the Company halted further development of its esports products and platform. These efforts have resulted in an increased focus on the Company’s i-gaming business and the halting of further investment in the Company’s esports products and technologies. As a result of the Company’s actions as referenced above, it does not expect to launch its esports products in the foreseeable future.

Recent Developments

On April 27, 2023, the Company was notified by its gaming platform operator services provider Aspire Global plc (“Aspire”) that the gaming regulatory authority in Germany had sent a letter received by Aspire on April 25, 2023 stating that Aspire would be required to shut down activity of its gaming operations in Germany effective as of 10 days from receipt of said letter until such time as Aspire was otherwise granted a license to operate in Germany. Aspire informed the Company that although it sought an extension of the requested shutdown deadline, it was not successful in receiving an extension of time and/or any form of other relief from this request. In order to meet the subject German regulator requirement, Aspire shut down its activities in Germany on May 7, 2023 and as a result the gaming websites owned by the Company that operate in Germany were shut down on that date. During the year ended September 30, 2023 and 2022 revenue generated in German markets was $9,686,372 and $17,555,683, respectively. During the same periods gross profit contributed from the German markets was $2,775,605 and $3,741,443, respectively. As of September 30, 2023, the Company determined that its intangible assets and goodwill were impaired as a result of the loss of the gaming websites owned by the Company that operate in Germany after being shut down in May 2023, and the overall decline in the Company’s results of operations throughout the fiscal year. The Company recognized a total impairment loss of $44,917,891, consisting of $24,790,233 related to goodwill and $20,127,658 related to intangible assets, primarily indefinite lived assets and customer relationships, which were fully impaired as of September 30, 2023.

On June 7, 2023, the Board of Directors of the Company created a Strategic Alternatives Committee to review and evaluate potential strategic alternatives in its sole discretion and exercise related powers that are typical of such committees. The directors who are members of the Strategic Alternatives Committee are Christopher Downs (the Chairman), Dennis Neilander and Michael Nicklas. On June 30, 2023, the Compensation Committee and the Strategic Alternatives Committee reviewed and approved the payment of compensation to members of the Strategic Alternatives Committee in addition to the Company’s standard compensation arrangements for non-employee directors, the Strategic Alternatives Committee recommended that the full Board approve it, and the Board did so. Under this plan, the Chairman of the committee will receive a monthly retainer of $15,000 and the other two members of the committee will receive a monthly retainer of $12,000. These fee arrangements will be reevaluated if the committee remains in place after six months.

On June 28, 2023, based on the approval of the Strategic Alternatives Committee, that committee’s favorable recommendation to the Board, and the Board’s subsequent approval, the Company hired Houlihan Lokey Capital, Inc. (“Houlihan”) as the Company’s exclusive financial advisor to provide financial advisory and investment banking services in connection with one or more of a sale, recapitalization, restructuring or any other financial transactions involving the Company. The continued engagement of Houlihan is required by the Lender during the term of the Forbearance Agreement discussed below.

On June 30, 2023, the Company, the subsidiaries of the Company and CP BF Lending, LLC (“Lender”) entered into a forbearance agreement (the “Forbearance Agreement”). Pursuant to the Forbearance Agreement, the Company acknowledged, among other items, that, as of June 30, 2023, it was in default under the Credit Agreement, the Lender had the right to accelerate the Loan, and the Lender had the right to impose the default rate of interest under the Credit Agreement. Pursuant to the Forbearance Agreement, the Lender agreed to forbear from exercising its rights and remedies against the Company and the Guarantors under the Credit Documents until the earlier of September 15, 2023, which has been extended by the Lender as described in the following paragraphs, or until a termination event occurs pursuant to the Forbearance Agreement. A termination event under the Forbearance Agreement consists of the filing of a bankruptcy proceeding by the Company or any Guarantor, the occurrence of a new event of default under the Credit Agreement, or the failure by the Company or any Guarantor to perform any material requirement, covenant, or obligation under the Forbearance Agreement. During the forbearance period, the Lender agreed, among other items, not to accelerate the Loan, initiate any bankruptcy filings, or apply any default rates of interest. As partial consideration for the Lender agreeing to enter into the Forbearance Agreement, the Company paid a forbearance fee equal to 50 basis points of the outstanding principal amount of the Loan (or $130,425), which amount was added to the principal balance of the loan. In addition, on June 30, 2023, the Company made a prepayment of the Loan in the amount of $2.0 million, which in turn reduced the minimum cash balance requirement under the Credit Agreement to $0.

On September 15, 2023, the Company, the subsidiaries of the Company and the Lender entered into an amendment number 1 to the Forbearance Agreement (the “Forbearance Amendment No. 1”). The Amendment extended the Forbearance Date from September 15, 2023 until October 31, 2023. As partial consideration for the Lender agreeing to enter into the Amendment, the Company paid a forbearance fee of $90,000, which was added to the outstanding principal amount of the Loan.

In connection with the Forbearance Amendment No. 1, the Lender agreed to provide the Company with a revolving line of credit in the amount of $2.0 million (the “Revolving Note”), with any advances under the Revolving Note to be made in the sole discretion of the Lender. On September 29, 2023, the Lender agreed to increase the maximum available amount of the Revolving Loan to $4.0 million. The Company paid Lender a fee of $40,000 in connection with the increase. The Revolving Note has a maturity date of November 29, 2024 and carries an interest rate of 15.0% per annum, provided that upon an occurrence of default the interest rate will increase to the default rate under the Loan. The Revolving Note is an Obligation as defined in the Credit Agreement and as such is secured by the collateral in which the Company and the Guarantors have granted liens and security interests to the Lender in connection with the Loan. All discretionary advances shall terminate automatically and all outstanding principal together with accrued but unpaid interest and fees shall become immediately due and payable, without notice to or action by any party, on the earlier of the termination date of the Forbearance Agreement, or the maturity date of the Revolving Note, unless otherwise extended by the Lender. As of September 30, 2023, the outstanding balance on the Revolving Note was $1,690,000.

On October 1, 2023, the Company, the subsidiaries of the Company and the Lender entered into an amendment number 2 to the Forbearance Agreement (the “Forbearance Amendment No. 2”). The Forbearance Amendment No. 2 extended the Forbearance Date from October 31, 2023 until June 30, 2025, and provided that instead of interest being payable monthly in cash, such interest shall accrue in arrears and can be added to the outstanding principal balance of the Loan. The interest rate on the Loan and the Revolving Note was increased to 16.5% per annum. The Forbearance Amendment No. 2 further added that the Company’s suspension from trading or failure to be listed on the Nasdaq Capital Market for more than 30 calendar days would constitute a Termination Event under the Forbearance Agreement as amended. Pursuant to Forbearance Amendment No. 2, the Company agreed that to the extent it receives net proceeds from or in connection with a judgment, settlement or other in or out of court resolution of a commercial tort claim, the Company will: (i) make a prepayment on the Loan or the Revolving Note (discussed below) of 100% of such net proceeds; and (ii) make an additional payment to the Lender equal to 5% of any such net proceeds (prior to the payments set forth in subsection (i)) in excess of $50.0 million. On November 11, 2023, Lender provided the Company with an extension of the Nasdaq Capital Market delisting/suspension Termination Event for an additional 40 calendar days up to December 23, 2023 and on December 19, 2023, the Lender provided the Company with an additional extension of 40 days.

On January 9, 2024, the Company, the subsidiaries of the Company and the Lender entered into a Third Amendment to Credit Agreement (the “Amendment No. 3”). The Amendment No. 3 increased the maximum available amount of the Revolving Loan from $4.0 million to $6.5 million and provided such additional loan availability under a use of proceeds that including working capital as well as funding for our litigation matters, materially including our litigation against Aspire. In connection with entering into Amendment No. 3, the Company and the Lender entered in a second amended and restated note conversion option agreement (the “Conversion Agreement”), pursuant to which the Company agreed that the Lender shall have the right to convert the principal balance and accrued interest under the Loan and Revolving Note into shares of Company common stock at a conversion price of $0.116 per share (subject to adjustment for stock splits, stock dividends and other similar events). The foregoing conversion price is subject to future adjustment to the lowest price per share referenced in any equity related instrument the Company issues to any other person until the Lender has exercised its conversion rights. Pursuant to the Conversion Agreement, the Lender is prohibited from converting its debt to the extent that such conversion would result in the number of shares of common stock beneficially owned by Lender and its affiliates exceeding 9.99% of the total number of shares of common stock outstanding immediately after giving effect to the conversion, which percentage may be increased or decreased at the holder’s election provided any adjustment would not become effective for 61 days. The Company agreed to file a resale registration statement providing for the resale by the Lender of the shares of common stock that may be received upon the foregoing conversion within 30 calendar days of the Lender’s request, and to use commercially reasonable efforts to cause such registration statement to become effective within 90 days of such request. To the extent that the Company does not have sufficient authorized shares of common stock to allow for the full conversion permitted by the Conversion Agreement, upon the Lender’s request, the Company will be required to use its reasonable best efforts to obtain approval of an increase in the Company's authorized shares from its shareholders. During any period of time that the Company does not have sufficient authorized shares to allow for the full conversion permitted by the Conversion Agreement, the Company will be prohibited from issuing any shares of common stock or common stock equivalents. As a result of Amendment No. 3, the exercise price of the warrants issued to the holders of Preferred Stock was reset to $0.116 per share.

Due to a failure to meet the Nasdaq Stock Market listing standards, the Company’s common stock was delisted from The Nasdaq Capital Market on October 13, 2023. The Company’s common stock was initially traded on the OTC Pink Sheets until December 6, 2023, when the Company began trading on the OTCQB exchange.

Market for i-Gaming Gambling

Online gambling has been legalized by various countries globally owing to employment opportunities and more tax revenue for local and state governments. According to Mordor Intelligence, the European online gambling market is forecasted to be $52.3 billion for 2024 and is expected to reach $88.2 billion by 2029, potentially registering a compound annual growth rate (“CAGR”) of 11.01%. According to Mordor intelligence, the US online gambling (i-gaming) market is expected to reach USD $10.98 billion by 2029, a potential CAGR of 16.52% from 2024 to 2029. The growing consumer adoption of betting apps and free to play models in online gambling are among major factors expected to drive market growth in the coming years. The development can be ascribed to the legalization of gambling in various European countries, including UK, Italy, Malta, France, Spain, and Germany. Other regions such as the US, Canada and Asia are recording higher CAGR figures.

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

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

Our Products and Services

We currently operate 6 online wagering brands, via websites and mobile apps, where we accept deposits and funds from our customers and offer our customers the ability to use those funds to wager on slot and table games, live casino games as well as virtual sport computer simulated games and sportsbetting.

Our Technology and Product Development

In order to create the best real-money wagering experience for our customers, we have developed a new front-end framework for our brands, and have rolled it out for Karamba. We plan to roll it out to the rest of the brands in 2024. This new framework will:

	·	Provide our customers with a much-improved user experience;
	·	Increase customer acquisition and conversion rates
	·	Optimize and increase customer retention metrics.

Our Intellectual Property

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

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

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

Competition

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

Human Capital Resources

As a multinational technology company with approximately 28 employees and contractors located in 7 countries, our business success is driven by our highly skilled workforce. With our global technology and product team, we are focused on delivering new, innovative and exciting products to our growing base of customers.

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

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

Government Regulation

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

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

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

Data Protection and Privacy

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

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

We have in the past and may in the future incur data breaches that adversely affect our operations. During the most recent quarter, we became aware of what appeared to be unsolicited marketing contacts from unknown third parties offering player incentives on signup to certain of our sites (“Marketing Contacts”). We investigated these Marketing Contacts both internally and with the assistance of a third-party forensic firm and were unable to identify the source of any such contact as having occurred on our platform or system. We have no role in the player registration process and are totally reliant on our platform provider, Aspire, to manage, control and operate such process. Upon first learning of the Marketing Contacts, we notified Aspire of the issue and continue to monitor the situation with Aspire. To date, we have no reason to believe that our own internal systems or any system under our control has any issue, weakness or vulnerability – however there is always a risk that bugs, flaws, hacks, incidents could occur, resulting in unsolicited emails and texts to users and new registrants on our sites given what has apparently occurred with the Marketing Contacts on the Aspire platform. Although the subject Marketing Contacts events ceased in November 2023 there is no certainty that such incidents could not occur again.

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

Curacao License

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

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

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

Responsible and Safer Gaming

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

Corporate Structure

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

Available Information

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

Item 1A.

Risk Factors.

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

Risks Related to the Company’s Business, Operations and Industry

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

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

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

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

We are party to a Forbearance Agreement (including that forbearance agreed pursuant to that certain Amendment to Credit Agreement No. 3) which expires on June 30, 2025, unless extended by the Lender, and if we are unable to comply with the Forbearance Agreement then the lender could declare a default of the Credit Agreement wherein we would be required to immediately repay the amounts due under the Credit Agreement.

On November 29, 2021, we entered into a Credit Agreement with CP BF Lending, LLC (“Lender”) to finance the acquisition of the Aspire assets that we purchased on the same date, via a term loan in the maximum principal amount of $30.0 million with a maturity of 36 months. On June 30, 2023, we, our subsidiaries and our Lender with respect to our Senior Notes, entered into a Forbearance Agreement. Pursuant to the Forbearance Agreement, we acknowledged, among other items, that, as June 30, 2023, we were in default under the Credit Agreement, the Lender had the right to accelerate the Loan, and the Lender had the right to impose the default rate of interest under the Credit Agreement. Pursuant to the Forbearance Agreement, the Lender agreed to forbear from exercising its rights and remedies against the Company and the Guarantors under the Credit Documents until the earlier of September 15, 2023. A termination event under the Forbearance Agreement consists of the filing of a bankruptcy proceeding by us or any guarantor, the occurrence of a new event of default under the Credit Agreement, or the failure by us or any guarantor to perform any material requirement, covenant, or obligation under the Forbearance Agreement. During the forbearance period, the Lender agreed, among other items, not to accelerate the Loan, initiate any bankruptcy filings, or apply any default rates of interest.

On October 1, 2023, we, our subsidiaries and the Lender entered into an amendment number 2 to the Forbearance Agreement (the “Forbearance Amendment No. 2”). The Forbearance Amendment No. 2 extended the Forbearance Date from October 31, 2023 until June 30, 2025, and provides that instead of interest being payable monthly in cash, such interest shall accrue in arrears and can be added to the outstanding principal balance of the Loan. The interest rate on the Loan and the Revolving Note was increased to 16.5% per annum. Pursuant to Forbearance Amendment No. 2, we agreed that to the extent we receive net proceeds from or in connection with a judgment, settlement or other in or out of court resolution of a commercial tort claim, the Company will: (i) make a prepayment on the Loan or the Revolving Note of 100% of such net proceeds; and (ii) make an additional payment to the Lender equal to 5% of any such net proceeds (prior to the payments set forth in subsection (i)) in excess of $50.0 million.

The borrowings under the Credit Agreement are secured by a first priority lien on our assets. If we fail to comply with the terms of the Forbearance Agreement, the Lender could declare an event of default, which would give it the right to declare all borrowings outstanding, together with accrued and unpaid interest and fees, to be immediately due and payable. In addition, since the borrowings under the Credit Agreement are secured by a first priority lien on our assets, upon such an event of default, the Lender may foreclose on our assets.

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

We have sustained losses from operations since inception, which as of September 30, 2023, accumulated to $151,158,440, including an operating loss of $65,708,506 and $32,644,277 for the years ended September 30, 2023 and 2022, respectively, and have a working capital deficit of $60,685,945. We do not expect to be profitable in the foreseeable future and have had recurring negative cash flows from operations. These net losses and negative cash flows have had, and will continue to have, an adverse effect on our stockholders’ equity and working capital. The continuation of the Company as a going concern is dependent upon our ability to obtain continued financial support from our stockholders, necessary equity or debt financing to continue operations and the attainment of profitable operations. These factors, among others, raised substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern requires that we obtain sufficient funding to finance our operations in the near term. If we are unable to obtain sufficient funding, our business, prospects, financial condition and results of operations will be materially and adversely affected, and we may be unable to continue as a going concern. If we are unable to continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our audited financial statements, and it is likely that investors will lose all or a part of their investment. If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable terms or at all.

Accordingly, our auditor has concluded that substantial doubt exists regarding our ability to continue as a going concern. Our audited financial statements appearing at the end of this Annual Report have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of these uncertainties related to our ability to operate on a going concern basis. In its report on our financial statements for the years ended September 30, 2023 and 2022, our independent registered public accounting firm included an explanatory paragraph stating that our recurring losses from operations and negative cash flows since inception and our need to raise additional funding to finance our operations raise substantial doubt about our ability to continue as a going concern. The perception that we may not be able to continue as a going concern may cause others to choose not to deal with us due to concerns about our ability to meet our contractual obligations.

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

Although our predecessor has been in business since 2016, during our predecessor’s existence substantially all of our efforts prior to the acquisition of the Aspire i-gaming assets were focused on developing our technology and intellectual property and operating our first-generation website. As a result, we have generated limited revenues and have incurred a substantial accumulated deficit as of September 30, 2023. There can be no assurance that we will generate sufficient revenues leading to profitability. If we cannot achieve our business objectives including working with our Lender in connection with amending certain financial covenants contained in the Credit Agreement, raising additional capital and reducing our gaming platform services fees, investors in our shares will likely suffer a loss of their entire investment.

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

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

Our current and future online offerings are part of new and evolving industries, presenting significant uncertainty and business risks, and we are reliant on our service provider to comply with evolving regulations.

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

We are dependent on third parties to comply with a variety of gaming regulations, and their failure to have complied or comply with these regulations going forward could adversely affect our business. In April 2023, we were notified by our gaming platform operator services provider, Aspire, that the gaming regulatory authority in Germany had sent Aspire a letter stating that Aspire would be required to shut down activity of its gaming operations in Germany unless Aspire was otherwise granted a license to operate in Germany within weeks of receipt of said letter. Aspire was apparently unable to meet any such license requirements as set out by the German regulator in the time required and in order to meet the subject German regulator requirement, Aspire shut down its activities in Germany on May 7, 2023. As a result, the gaming websites owned by us that operate in Germany were shut down on that date. These events had an immediate and ongoing negative impact on our revenues and business in general, the extent to which we continue to determine. There is no certainty that such events would not occur again in any connection with activity we undertake pursuant to our operator agreements with Aspire.

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

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

	·	successfully develop and introduce our updated website;

	·	maintain our management team;

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

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

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

These factors are our best estimates of possible factors that will affect our future operating results, however, they should not be considered a complete recitation of possible factors that could affect the Company.

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

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

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

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

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

Our technology infrastructure is critical to the performance of our offerings and to user satisfaction. As part of the acquisition of Aspires’ B2C Business, we entered into Operator Services Agreements with Aspire for a three (3) year period each, which requires Aspire to provide key licensing and operational services in each jurisdiction where Aspire is licensed and operational. However, the systems provided by Aspire, on which we rely, may not be adequately designed with the necessary reliability and redundancy to avoid performance delays or outages that could be harmful to our business. We cannot assure you that the measures we take, in connection with Aspire, to prevent or hinder cyber-attacks and protect our systems, data and user information and to prevent outages, data or information loss, fraud and to prevent or detect security breaches, including a disaster recovery strategy for server and equipment failure and back-office systems and the use of third parties for certain cybersecurity services, will provide absolute security. We have experienced, and we may in the future experience, website disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, human or software errors and capacity constraints. Such disruptions and/or future disruptions from unauthorized access to, fraudulent manipulation of, or tampering with our computer systems and technological infrastructure, or those of third parties, could result in a wide range of negative outcomes, each of which could materially adversely affect our business, financial condition, results of operations and prospects.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

During the most recent quarter, we became aware of what appeared to be unsolicited marketing contacts from unknown third parties offering player incentives on signup to certain of our sites (“Marketing Contacts”). We investigated these Marketing Contacts both internally and with the assistance of a third-party forensic firm and were unable to identify the source of any such contact as having occurred on our platform or system. We have no role in the player registration process and are totally reliant on our platform provider, Aspire, to manage, control and operate such process. Upon first learning of the Marketing Contacts, we notified Aspire of the issue and continue to monitor the situation with Aspire. To date, we have no reason to believe that our own internal systems or any system under our control has any issue, weakness or vulnerability – however there is always a risk that bugs, flaws, hacks, incidents could occur, resulting in unsolicited emails and texts to users and new registrants on our sites given what has apparently occurred with the Marketing Contacts on the Aspire platform. Although the subject Marketing Contacts events ceased in November 2023 there is no certainty that such an incidents could not occur again.

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

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

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

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

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

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

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

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

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

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

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

Risks Related to the Company’s Legal and Regulatory Requirements

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

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

The acquisition of the Aspire B2C business included sublicenses to allow us to operate in several western European markets. We are required to comply with requirements of each of these licenses to maintain market access. If we fail to comply with the various regulations, we may be unable to conduct any gaming business in that jurisdiction and our business would be materially harmed. In April 2023, we were notified by Aspire that the gaming regulatory authority in Germany had sent a letter to Aspire stating that Aspire would be required to shut down activity of its gaming operations in Germany until such time as Aspire was otherwise granted a license to operate in Germany. In order to meet the subject German regulator requirement, Aspire shut down its activities in Germany on May 7, 2023 and as a result the gaming websites owned by us that operate in Germany were shut down on that date. There is no assurance that similar actions will not be taken by additional jurisdictions in the future.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Risks Related to Our Common Stock

Our common stock is subject to the “penny stock” rules of the SEC and FINRA’s sales practice requirements, and the trading market in our common stock is limited, which makes transactions in our common stock cumbersome and may reduce the value of an investment in the stock.

The SEC has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

	·	that a broker or dealer approve a person’s account for transactions in penny stocks; and

	·	the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:

	·	obtain financial information and investment experience objectives of the person; and

	·	make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form sets forth:

	·	the basis on which the broker or dealer made the suitability determination; and

	·	that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of common stock and cause a decline in the market value of stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

In addition to the “penny stock” rules promulgated by the SEC, the Financial Industry Regulatory Authority (FINRA) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. FINRA’s requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock.

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

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

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

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

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

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

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

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

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

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

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

We have in the past and intend in the future to seek to raise additional funds, finance acquisitions or develop strategic relationships by issuing equity or convertible debt securities, which would reduce the percentage ownership of our existing stockholders. Our board of directors has the authority, without action or vote of the stockholders, to issue all or any part of our authorized but unissued shares of common or preferred stock. Our articles of incorporation authorize us to issue up to 500,000,000 shares of common stock and 10,000,000 shares of preferred stock. Future issuances of common or preferred stock would reduce your influence over matters on which stockholders vote and would be dilutive to earnings per share. In addition, any newly issued preferred stock could have rights, preferences and privileges senior to those of the common stock. Those rights, preferences and privileges could include, among other things, the ability to vote such shares at a disproportionate rate as compared to our common stockholders, the establishment of dividends that must be paid prior to declaring or paying dividends or other distributions to holders of our common stock or providing for preferential liquidation rights. These rights, preferences and privileges could negatively affect the rights of holders of our common stock, and the right to convert such preferred stock into shares of our common stock at a rate or price that would have a dilutive effect on the outstanding shares of our common stock.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

We are required pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, to maintain internal control over financial reporting and to assess and report on the effectiveness of those controls. This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting. Our management concluded that our internal control over financial reporting were and continue to be ineffective as of September 30, 2023 due to a lack of segregation of duties (resulting from the limited number of personnel available) and the lack of formal documentation of our control environment. While management is working to remediate the material weaknesses, there is no assurance that such changes, when economically feasible and sustainable, will remediate the identified material weaknesses or that the controls will prevent or detect future material weaknesses. If we are not able to maintain effective internal control over financial reporting, our financial statements, including related disclosures, may be inaccurate, which could have a material adverse effect on our business.

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

As a public company, we operate in an increasingly demanding regulatory environment, which requires us to comply with the Sarbanes-Oxley Act of 2002, and the related rules and regulations of the SEC. Company responsibilities required by the Sarbanes-Oxley Act include establishing corporate oversight and adequate internal control over financial reporting and disclosure controls and procedures. Effective internal controls are necessary for us to produce reliable financial reports and are important to help prevent financial fraud. For as long as we remain an “emerging growth company” as defined in the JOBS Act, we have and intend to consider taking advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act. We may continue to take advantage of these reporting exemptions until we are no longer an “emerging growth company.” If we cannot provide reliable financial reports or prevent fraud, our business and results of operations could be harmed, and investors could lose confidence in our reported financial information.

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

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

Item 1B.

Unresolved Staff Comments.

None.

Item 2.

Properties.

Our corporate and executive offices are located in a shared office leased facility in Las Vegas, Nevada. We believe our facilities are sufficient to meet our current needs and that suitable space will be available as and when needed. We do not own any real property.

Item 3.

Legal Proceedings.

The Company’s previous financial advisor, Boustead Securities LLC (“Advisor”) has alleged a breach by the Company over the termination of their engagement and the timing of the payment and amount of the fees owed to the Advisor (collectively the “Claims”). On June 2, 2022, the Advisor named EBET in an arbitration proceeding with Financial Industry Regulatory Authority (“FINRA”) in connection with the Claims. The Statement of Claim alleged damages of $5.7 million and sought a declaration that the Company be required to utilize the Advisor for a certain follow-on offering pursuant to an alleged right of first refusal between the parties. On August 4, 2022, EBET, Inc. counterclaimed against Boustead Securities, LLC for tortious interference with prospective economic advantage and demanded damages and attorneys’ fees in an amount to be determined. Boustead Securities, LLC’s current Second Amended Statement of Claim, filed on May 24, 2023, alleges $12 million in damages and no longer seeks declaratory relief. In response to Boustead Securities, LLC’s Second Amended Statement of Claim, Company maintains its counterclaim and all affirmative defenses previously asserted. The arbitration occurred on November 6, 2023, ended on November 8, 2023. On January 5, 2024, the arbitration panel awarded the Advisor $15.2 million in damages and attorneys’ fees. The Company has accrued the awarded amounts in the accompanying consolidated balance sheet.

On June 26, 2023, a former vendor of the Company, Litebox USA, LLC filed a Complaint against EBET, Inc. alleging causes of action including Breach of Contract; Breach of the Implied Covenant of Good Faith and Fair Dealing; Unjust Enrichment; Quantum Meruit; Promissory Estoppel; Open Book Account/Account Stated; and other causes of action. The action stems from an alleged nonpayment pursuant to a Master Service Agreement and three separate Statements of Work for the alleged development of software thereunder. EBET, Inc. filed a demurrer to this Complaint and the hearing on same is set for June 2024. EBET intends to vigorously defend this matter.

On September 28, 2023, EBET, INC. filed a lawsuit in the State of Nevada against Aspire Global PLC, AG Communications and affiliated entities asserting damages in an amount of no less than 65,000,000 Euro plus punitive and other damages proven at trial (“Aspire Litigation”) and including causes of action against Aspire and the other defendants for fraud, material breach of the share purchase agreement whereon the Company had acquired the i-gaming B2C assets including the Karamba, Hopa, Griffon Casino, BetTarget, Dansk777, and GenerationVIP domains, sites, player database and other related assets and also related to the operator service agreements and Promissory Note entered concurrent with the closing of the share purchase agreement, and other causes of action. On November 7, 2023, Aspire and the other defendants removed the subject matter to the United States District Court for the District of Nevada. On December 12, 2024, Aspire filed a Motion to Dismiss our Complaint in the matter and on January 9, 2024 we filed an Opposition to Aspire’s Motion to Dismiss. The Aspire Litigation is material to the Company and the result of such litigation is highly likely to have a material impact on the Company going forward.

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

Item 4.

Mine Safety Disclosures.

Not applicable.

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock is quoted on the OTCQB of the OTC Markets marketplace under the trading symbol EBET. Over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down, or commission, and may not necessarily represent actual transactions. Historically, trading in our stock has been limited and the trades that occurred cannot be characterized as those in the established public trading market. As a result, the trading prices of our common stock may not reflect the price that would result if our stock was more actively traded.

Holders of Common Equity

As of January 11, 2024, we had approximately 104 stockholders of record of our common stock. This does not include beneficial owners of our common stock.

Dividends

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

Recent Sales of Unregistered Securities

There have been no sales of unregistered securities during the quarter ended September 30, 2023, that have not been previously disclosed on a Form 8-K.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

We did not repurchase any of our equity securities during the year ended September 30, 2023.

Equity Compensation Plan Information

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

Item 6.

[Reserved].

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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

Overview

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

Aspire Global Plc’s (“Aspire”) Business to Consumer (“B2C”) Business

In order to accelerate /the growth and expand market access for our esports product offerings, on November 29, 2021, we acquired Aspire’s B2C Business.

The acquisition of Aspire’s B2C business was intended to provide the following benefits:

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

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

Our gaming sub-license from the Curacao Gaming Authority and the licenses made available to us from the acquisition of the Aspire B2C business allows us to accept esports and sports wagers from residents of more than 160 jurisdictions. On April 27, 2023, the Company was notified by its gaming platform operator services provider Aspire Global plc (“Aspire”) that the gaming regulatory authority in Germany had sent a letter received by Aspire on April 25, 2023 stating that Aspire would be required to shut down activity of its gaming operations in Germany effective as of 10 days from receipt of said letter until such time as Aspire was otherwise granted a license to operate in Germany. Aspire informed the Company that although it sought an extension of the requested shutdown deadline, it was not successful in receiving an extension of time and/or any form of other relief from this request. In order to meet the subject German regulator requirement, Aspire shut down its activities in Germany on May 7, 2023 and as a result the gaming websites owned by the Company that operate in Germany were shut down on that date. During the year ended September 30, 2023 and 2022 revenue generated in German markets was $9,686,372 and $17,555,683, respectively. During the same periods gross profit contributed from the German markets was $2,775,605 and $3,741,443, respectively.

Focus on I-Gaming Operations

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

During the year ended September 30, 2023, we recorded restructuring charges of $0.9 million, which primarily included costs associated with the restructuring advisor and the Strategic Alternatives Committee. Of these costs, $850,000 are included in general and administrative costs and $76,000 are included in product and technology costs.

During the year ended September 30, 2022, we recorded a restructuring charge of approximately $1.0 million that included severance and other costs associated with termination of the employment contracts, consultant contracts and any costs to terminate software licenses and other commitments. Of these costs, $388,000 are included in general and administrative expenses, $521,000 are included in Product and technology expenses, and $130,000 are included in sales and marketing expenses. In connection with the preparation of our financial statements for inclusion in this annual report, we completed an impairment review of our property and equipment and intangible assets related to our esports product and technologies and recognized an impairment loss of $3.9 million.

Results of Operations for the Year Ended September 30, 2023, compared to the Year Ended September 30, 2022

Results of Operations

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

	Years Ended September 30,
	2023					2022
	$			%		$			%

Revenue	$	39,177,504			100%	$	58,596,620			100%
Cost of revenue		(21,974,147	)		56%		(36,014,055	)		61%

Gross profit		17,203,357			44%		22,582,565			39%

Operating expenses:
Sales and marketing expenses		10,743,972			27%		27,500,618			47%
General and administrative expenses		26,100,283			67%		17,640,728			30%
Product and technology expenses		1,149,717			3%		3,993,846			7%
Impairment loss		44,917,891			115%		3,851,503			7%
Acquisition costs		–			0%		2,240,147			4%
Total operating expenses		82,911,863			212%		55,226,842			94%

Income (loss) from operations		(65,708,506	)		-168%		(32,644,277	)		-56%

Other expenses:
Interest expense		(17,113,413	)		-44%		(9,894,531	)		-17%
Gain on derivative instruments		(142,187	)		0%		1,239,510			2%
Fair value of warrant liability		1,114,925			3%		–			–
Foreign currency loss and other		(2,394,696	)		6%		(128,311	)
Total other expense		(18,535,371	)		-47%		(8,783,332	)		-15%

Income (loss) before provision for income taxes		(84,243,877	)		-225%		(41,427,609	)		-71%
Provision for income taxes		–			0%		–			0%

Net loss	$	(84,243,877	)		-225%	$	(41,427,609	)		-71%

Revenue

For the year ended September 30, 2023, we generated $39,177,504 in revenue compared to $58,596,620 in revenue during the year ended September 30, 2022. The decrease in revenue in the year ended September 30, 2023, when compared with the same period in the prior year, was driven by the loss of the Company’s German operations in May 2023 and the Company’s shift to focus on higher margin revenue sources. As a result of the Company’s restructuring of the business to improve its immediate profitability, certain inefficient sales and marketing efforts have been curtailed, which have adversely impacted revenue growth since the restructuring.

Cost of Revenue

During the year ended September 30, 2023, cost of sales was $21,974,147 as compared to $36,014,055 in the same period in the prior year. The decrease in cost of sales is due to the decline in volume of revenue disclosed above. The improvement in gross profit percentage is a result of the Company’s restructuring efforts to focus on higher margin revenue sources, reduce costs and increase efficiencies.

Sales and Marketing Expense

Sales and marketing expense was $10,743,972 for the year ended September 30, 2023 compared to $27,500,618 for the year ended September 30, 2022, a decrease of $16,756,646. The decrease in sales and marketing expense is due to the decline in revenue volume from the loss of the Company’s German operations in May 2023 described above, and the Company’s efforts to focus on higher margin revenue sources, reduce costs and improve efficiencies. Sales and marketing expenses also included $527,080 and $2,819,973 of stock-based compensation costs to employees and consultants for the years ended September 30, 2023 and 2022, respectively, and payroll costs of $1,037,882 and $2,453,387, respectively. We expect sales and marketing expenses to increase in future periods as our marketing campaigns increase in both number and volume.

General and Administrative Expense

General and administrative expense was $26,100,283 for the year ended September 30, 2023, as compared to $17,640,728 for the same period in the prior year. General and administrative expense for the year ended September 30, 2023 included $11,597,240 in expense related to the final settlement with the Advisor, payroll-related costs of $653,313, restructuring costs of $850,482, stock-based compensation cost of $700,479, depreciation and amortization of $6,971,311 and professional and consulting fees of $2,873,222 including legal, accounting, investor relations and other professional fees. General and administrative expense for the year ended September 30, 2022 included payroll-related costs of $3,078,089, depreciation and amortization of $6,670,490, stock-based compensation cost of $1,860,395, and professional fees of $3,561,159 including legal, accounting, investor relations and other professional fees.

Product and Technology Expense

Product and technology expense was $1,149,717 for the year ended September 30, 2023 compared to $3,993,846 for the year ended September 30, 2022, a decrease of $2,844,129. The decrease is due to decreased spending related to development of the esports operations that were abandoned in the fourth quarter of fiscal 2022 and reduced headcount. Product and technology expenses for the year ended September 30, 2023, included payroll-related costs of $653,330, restructuring costs of $76,003, stock-based compensation of $63,234 and other development costs of $313,464 which consisting primarily of software-related costs.

Product and technology expenses for the year ended September 30, 2022, included payroll-related costs of $2,199,267, stock-based compensation of $767,004 and other development costs of $1,027,575 consisting primarily of consulting and other development costs.

Impairment loss

During the year ended September 30, 2023, we recognized an impairment loss of $44,917,891, consisting of $24,790,233 related to goodwill and $20,127,658 related to intangible assets, primarily indefinite lived assets and customer relationships. The Company determined that its intangible assets and goodwill were impaired as a result of the loss of revenue generated by the gaming websites owned by the Company that operate in Germany after being shut down in May 2023 and the decline in our results of operations overall. During the year ended September 30, 2022, we recognized an impairment loss of $3,851,503 comprised of impairment of property and equipment of $569,260 and impairment of intangible assets of $3,282,243. The impairments relate to the write down of our esports assets as of September 30, 2022.

Acquisition Costs

Acquisition costs were $0 for the year ended September 30, 2023, as compared to $2,240,147 for the year ended September 30, 2022. Acquisition costs for the year ended September 30, 2022 included a non-cash hedging loss of $1,570,000 from executing a forward contract on the purchase price of the acquisition of the Aspire B2C business to hedge exposure to fluctuations in the Euro. Acquisition costs also included various legal and consultant fees associated with completing the acquisition.

Interest and Other Expenses

During the years ended September 30, 2023 and 2022, we recognized interest expense of $17,113,413 and $9,894,531, respectively, which included amortization of debt discounts and deferred finance costs of $11,012,829 and $4,778,405 related to the Senior Notes issued to acquire the Aspire business, and convertible debt issued to acquire certain intangible assets in the previous year. During the years ended September 30, 2023 and 2022 we recognized a loss of $142,187 and a gain of $1,239,510, respectively on derivative instruments related to foreign exchange rate swaps that terminated in the first quarter of fiscal 2023. We also incurred a foreign currency loss of $2,394,696 and $128,311 during the years ended September 30, 2023 and 2022, respectively, primarily due to fluctuations in the EUR to USD and GBP to USD exchange rates.

Liquidity and Capital Resources

On September 30, 2023, we had cash and cash equivalents of $304,709, and had a working capital deficit of $49,973,256. We have historically funded our operations from proceeds from debt and equity sales, and funds received from operations. Our forecasts for fiscal year 2024 indicate that we will need additional near term funding in order to have sufficient financial resources to satisfy our outstanding debts and to continue to settle our debts as they fall due. We do not have any commitments for equity funding and are reliant on the Revolving Note to fund our operations. Pursuant to the Revolving Note, our Lender is not required to provide us with any specific amount of financing and we are dependent on our Lender agreeing to provide us with future working capital.

The following is a summary of borrowings outstanding as at September 30, 2023:


				September 30, 2023
	Contractual Interest		Principal outstanding balance		Principal outstanding balance	Unamortized debt discount		Issuance costs	Issuance costs	Accrued Interest
	rate	Cur	Local		USD	USD		USD	USD	USD
Senior Note	15.0%	USD	26,350,630		26,350,630	–		–	26,350,630	–
Revolving Note	15.0%	USD	1,690,000		1,690,000	–		–	1,690,000	–
Note due to Aspire	10%	EUR	10,000,000		10,594,000	–		–	10,594,000	2,049,029
Convertible notes	10%	USD	617,500		617,500	–		–	617,500	62,681
Other	0%	USD	675,000		675,000	(115,403	)	–	559,597	–
Total borrowings					39,927,130	(115,403	)	–	39,811,727	2,111,710

Current									39,252,130	2,111,710
Long-term									559,597	–
Total borrowings									39,811,727	2,111,710

On November 29, 2021, we entered a credit agreement (the “Credit Agreement”) with CP BF Lending, LLC (“Lender”), pursuant to which the Lender agreed to make a single loan to us of $30.0 million (the “Senior Note”). The Senior Note bears interest on the unpaid principal amount at a rate per annum equal to 15.0% as follows: (1) cash interest on the unpaid principal amount of the Senior Note at a rate equal to 14.0% per annum, plus (2) payable-in-kind interest (“PIK Interest”) on the unpaid principal amount of the Senior Note at a rate equal to 1.0% per annum. On June 30, 2023, the Company, the subsidiaries of the Company and the Lender entered into a forbearance agreement (the “Forbearance Agreement”). Pursuant to the Forbearance Agreement, the Company acknowledged, among other items, that, as June 30, 2023, it was in default under the Credit Agreement, the Lender had the right to accelerate the Loan, and the Lender had the right to impose the default rate of interest under the Credit Agreement. Pursuant to the Forbearance Agreement, the Lender agreed to forbear from exercising its rights and remedies against the Company and the Guarantors under the Credit Documents until the earlier of September 15, 2023. A termination event under the Forbearance Agreement consists of the filing of a bankruptcy proceeding by the Company or any Guarantor, the occurrence of a new event of default under the Credit Agreement, or the failure by the Company or any Guarantor to perform any material requirement, covenant, or obligation under the Forbearance Agreement. During the forbearance period, the Lender agreed, among other items, not to accelerate the Loan, initiate any bankruptcy filings, or apply any default rates of interest. As partial consideration for the Lender agreeing to enter into the Forbearance Agreement, the Company paid a forbearance fee equal to 50 basis points of the outstanding principal amount of the Loan (or $130,425), which amount was added to the principal balance of the loan. In addition, on June 30, 2023, the Company made a prepayment of the Loan in the amount of $2.0 million, which in turn reduced the minimum cash balance requirement under the Credit Agreement to $0. On September 15, 2023, the Company, the subsidiaries of the Company and the Lender entered into an amendment number 1 to the Forbearance Agreement (the “Forbearance Amendment No. 1”). The Forbearance Amendment No. 1 extended the Forbearance Date from September 15, 2023 until October 31, 2023.

In connection with the Forbearance Agreement, the Lender agreed to provide the Company with a revolving line of credit in the amount of $2.0 million (the “Revolving Note”), with any advances under the Revolving Note to be made in the sole discretion of the Lender. On September 29, 2023, the Lender agreed to increase the maximum available amount of the Revolving Loan to $4.0 million. The Company paid Lender a fee of $40,000 in connection with the increase. The Revolving Note will have a maturity date of November 29, 2024 and carry an interest rate of 15.0% per annum, provided that upon an occurrence of default the interest rate will increase to the default rate under the Loan. The Revolving Note shall be an Obligation as defined in the Credit Agreement and as such shall be secured by the collateral in which the Company and the Guarantors have granted liens and security interests to the Lender in connection with the Loan. All discretionary advances shall terminate automatically and all outstanding principal together with accrued but unpaid interest and fees shall become immediately due and payable, without notice to or action by any party, on the earlier of the termination date of the Forbearance Agreement, or the maturity date of the Revolving Note, unless otherwise extended by the Lender. As of September 30, 2023, the outstanding balance on the Revolving Note was $1,690,000.

Effective on October 1, 2023, the Company, the subsidiaries of the Company and the Lender entered into an amendment number 2 to the Forbearance Agreement (the “Forbearance Amendment No. 2”). The Forbearance Amendment No. 2 extended the Forbearance Date from October 31, 2023 until June 30, 2025, and provides that instead of interest being payable monthly in cash, such interest shall accrue in arrears and can be added to the outstanding principal balance of the Loan. The interest rate on the Loan and the Revolving Note was increased to 16.5% per annum. The Forbearance Amendment No. 2 further adds that the Company’s suspension from trading or failure to be listed on the Nasdaq Capital Market for more than 30 calendar days will constitute a Termination Event under the Forbearance Agreement as amended. On November 11, 2023, Lender provided the Company with an extension of the Nasdaq Capital Market delisting/suspension Termination Event for an additional 40 calendar days up to December 23, 2023. Pursuant to Forbearance Amendment No. 2, the Company agreed that to the extent it receives net proceeds from or in connection with a judgment, settlement or other in or out of court resolution of a commercial tort claim, the Company will: (i) make a prepayment on the Loan or the Revolving Note (discussed below) of 100% of such net proceeds; and (ii) make an additional payment to the Lender equal to 5% of any such net proceeds (prior to the payments set forth in subsection (i)) in excess of $50.0 million.

Effective on October 1, 2023, the Company entered into an amended and restated note conversion option agreement (the “Option Agreement”) with the Lender. Pursuant to the Option Agreement, the Company agreed to permit the Lender the right to convert any amounts due pursuant to the Loan and the Revolving Note into shares of Company common stock at a conversion price of $1.25 per share with respect to the initial $5.0 million and at a conversion price of $2.50 per share with respect to the remaining amounts.

The Option Agreement provides that the Lender (together with its affiliates) may not convert any portion of the Loan or Revolving Loan during an initial 45-day lockup or to the extent that the Lender would own more than 9.99% of the Company’s outstanding common stock immediately after exercise, except that upon prior notice from the Lender to the Company, the Lender may increase or decrease the amount of ownership of outstanding stock after conversion of the Loan, provided that any modification will not be effective until 61 days following notice to the Company.

The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern. Our continuation as a going concern is dependent upon our ability to obtain equity or debt financings to continue operations. We have a history of and expect to continue to report negative cash flows from operations and a net loss. Our forecasts for 2024 and beyond indicate that we will need additional funding in order to have sufficient financial resources to continue to settle our debts as they fall due. We have taken significant measures to increase the profitability of our business in the short term, but we are not currently generating sufficient cash from our operations to settle our debts as they fall due and continue to require near term financing. These actions include optimizing the efficiency of marketing campaigns, reducing the total number of employees and contractors, terminating software and other immaterial contracts as well as generally reducing the operating costs of the business. These efforts have also resulted in an increased focus on our i-gaming business and a significant reduction in the investment of our esports products and technologies, which resulted in the recognition of an impairment loss on certain intangible assets and fixed assets. As a result of our actions as referenced above, we do not expect to launch our esports products in the short or medium term. These factors raise substantial doubt regarding our ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. We may seek additional funding through a combination of equity offerings, debt financings, government or other third-party funding, commercialization, marketing and distribution arrangements, other collaborations, strategic alliances and licensing arrangements and delay planned cash outlays or a combination thereof. Management cannot be certain that such events or a combination thereof can be achieved.

As of September 30, 2023, we have incurred an accumulated deficit of $151,158,440 since inception and have not yet generated any meaningful income from operations.

Cash used in operating activities

Net cash used in operating activities was $10,006,250 for the year ended September 30, 2023, as compared to cash used in operating activities of $11,394,834 for the same period in the prior year. Net cash used in operating activities during the year ended September 30, 2023 and 2022, included payments made for employee costs, professional fees to our consultants, attorneys and accountants for services related to the Company’s restructuring and a reduction of accounts payable. Net cash used in operating activities during the year ended September 30, 2022, included payments made for employee costs, professional fees to our consultants, attorneys and accountants for services related to completion of our audit, development of our new wagering platform and preparation of our public offering filings. Cash flow from operations during the year ended September 30, 2022 also benefitted from deferred payments for professional fees to our consultants, attorneys and accountants primarily required to complete the acquisition of the Aspire B2C business in November 2021.

Cash used in investing activities

Net cash provided by investing activities was $12,380 during the year ended September 30, 2023 related to acquisitions of new property and equipment. Net cash used in investing activities was $57,436,408 during the year ended September 30, 2022 related primarily to the completion of the acquisition of the Aspire B2C business in November 2021. Also contributing to the cash used in investing activities were purchase of fixed assets of $1,200,882 due primarily to opening of our office in Malta and purchase of software assets to support the new wagering platform.

Cash used provided by financing activities

Net cash provided by financing activities was $3,545,947 for the year ended September 30, 2023 due to the cash received from sale of common stock of $5,921,982, proceeds from settlement of derivatives of $973,965 and proceeds from the revolving note of $1,650,000, partially offset by the repayment of $5,000,000 on the Senior Notes.

Net cash provided by financing activities was $63,655,757 for the year ended September 30, 2022 due to the issuance of the Preferred and Common Stock and Senior Notes which resulted in net cash proceeds of $33,516,000 and $26,627,111, respectively, as well as the net cash proceeds of $3,492,450 raised in June 2022 from a private placement and $20,196 in cash proceeds from the exercise of stock options.

Off Balance Sheet Arrangements

None.

Critical Accounting Policies and Estimates

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

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

Stock-based Compensation

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

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

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

Impairment of Long-Lived Assets

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

Business Combinations

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

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

Goodwill

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

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

Item 7A.

Quantitative and Qualitative Disclosure About Market Risk.

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

Item 8.

Financial Statements and Supplementary Data.

INDEX TO FINANCIAL STATEMENTS

		Page

Report of Independent Registered Public Accounting Firm		F-1

Consolidated Balance Sheets as of September 30, 2023 and 2022		F-2

Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended September 30, 2023 and 2022		F-3

Consolidated Statement of Changes in Shareholders’ Equity (Deficit) for the Years Ended September 30, 2023 and 2022		F-4

Consolidated Statements of Cash Flows for the Years Ended September 30, 2023 and 2022		F-5

Notes to the Consolidated Financial Statements		F-6

Report of Independent Registered Public Accounting Firm

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

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of EBET, Inc. as of September 30, 2023 and 2022, the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

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

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

Basis for Opinion

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

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

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

/S/ BF Borgers CPA PC

BF Borgers CPA PC (PCAOB ID 5041)

We have served as the Company's auditor since 2022

Lakewood, CO

January 12, 2024

F-1

EBET, INC.

CONSOLIDATED BALANCE SHEETS


	September 30,			September 30,
	2023			2022

ASSETS
Current assets:
Cash	$	304,709		$	5,486,210
Accounts receivable, net		643,254			1,647,345
Prepaid expenses and other current assets		1,331,201			1,772,332
Derivative asset		–			1,116,153
Right of use asset, operating lease, current portion		–			129,975

Total current assets		2,279,164			10,152,015

Long term assets:
Fixed assets, net		161,213			546,408
Intangible assets, net		3,701,609			27,545,329
Goodwill		8,962,652			30,657,460

Total assets	$	15,104,638		$	68,901,212

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued liabilities	$	22,775,031		$	14,273,249
Current lease liabilities		–			129,974
Borrowings, current portion		39,252,130			21,202,585
Liabilities to users		937,948			1,272,308
Total current liabilities		62,965,109			36,878,116

Long-Term Liabilities:
Borrowings, net of current portion		559,597			10,257,520

Total liabilities		63,524,706			47,135,636

COMMITMENTS AND CONTINGENCIES		–			–

Stockholders' equity (deficit):
Preferred Stock, $0.001 par value, 10,000,000 shares authorized, 0 and 37,700 issued and outstanding as of September 30, 2023 and 2022, respectively		–			38
Common Stock; $0.001 par value, 500,000,000 shares authorized 14,979,642 and 555,153 shares issued and outstanding as of September 30, 2023 and 2022, respectively		14,980			555
Additional paid-in capital		103,255,793			91,957,856
Accumulated other comprehensive (deficit) income		(532,401	)		(7,365,129	)
Accumulated deficit		(151,158,440	)		(62,827,744	)
Total stockholders’ equity (deficit)		(48,420,068	)		21,765,576

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)	$	15,104,638		$	68,901,212

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

F-2

EBET, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS


	For the Years Ended
	September 30,
	2023			2022

Revenue	$	39,177,504		$	58,596,620
Cost of revenue		(21,974,147	)		(36,014,055	)

Gross profit		17,203,357			22,582,565

Operating expenses:
Sales and marketing expenses		10,743,972			27,500,618
General and administrative expenses		26,100,283			17,640,728
Product and technology expenses		1,149,717			3,993,846
Impairment loss		44,917,891			3,851,503
Acquisition costs		–			2,240,147
Total operating expenses		82,911,863			55,226,842

Loss from operations		(65,708,506	)		(32,644,277	)

Other income (expenses):
Interest expense		(17,113,413	)		(9,894,531	)
Gain (loss) on derivative instruments		(142,187	)		1,239,510
Fair value of warrant liability		1,114,925			–
Foreign currency loss		(2,394,696	)		(128,311	)
Total other expense		(18,535,371	)		(8,783,332	)

Loss before provision for income taxes		(84,243,877	)		(41,427,609	)
Provision for income taxes		–			–

Net loss		(84,243,877	)		(41,427,609	)

Preferred stock dividends		(4,086,819	)		(4,750,585	)
Net loss attributable to common shareholders		(88,330,696	)		(46,178,194	)

Other comprehensive income:
Foreign currency translation income (loss)		6,832,727			(7,419,040	)
Total other comprehensive income		6,832,727			(7,419,040	)

Comprehensive loss	$	(81,497,969	)	$	(53,597,234	)

Net loss per common share – basic and diluted	$	(32.23	)	$	(93.35	)

Weighted average common shares outstanding – basic and diluted		2,740,990			494,655

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

F-3

EBET, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)

FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022


														Accumulated
	Preferred stock						Common Stock				Additional			Other
	Number of						Number of				paid-in			Comprehensive			Accumulated
	Shares			Amount			Shares		Amount		capital			Income			deficit			Total

Balance at September 30, 2021		–		$	–			443,848	$	444	$	26,847,225		$	53,911		$	(16,649,550	)	$	10,252,030

Shares and warrants issued for cash, net		–			–			32,587		32		3,492,418			–			–			3,492,450
Preferred shares issued for cash, net		37,700			38			–		–		33,515,962			–			–			33,516,000
Shares issued to for acquisition of Aspire B2C business		–			–			6,228		6		5,665,364			–			–			5,665,370
Cashless exercise of warrants		–			–			28,643		29		(29	)		–			–			–
Shares issued for conversion of borrowings		–			–			27,500		28		412,472			–			–			412,500
Exercise of stock options for cash		–			–			1,960		2		20,194			–			–			20,196
Stock-based compensation		–			–			14,387		14		5,447,358			–			–			5,447,372
Preferred share dividends		–			–			–		–		4,750,585			–			(4,750,585	)		–
Stock warrants issued in connections with Senior Notes		–			–			–		–		11,806,307			–			–			11,806,307
Net loss		–			–			–		–		–			–			(41,427,609	)		(41,427,609	)
Comprehensive income		–			–			–		–		–			(7,419,040	)		–			(7,419,040	)
Balance at September 30, 2022		37,700			38			555,153		555		91,957,856			(7,365,129	)		(62,827,744	)		21,765,576

Stock-based compensation		–			–			4,076		5		1,290,786			–			–			1,290,791
Shares issued for conversion of borrowings		–			–			75,179		75		1,127,582			–			–			1,127,657
Common stock issued for cash		–			–			212,418		212		5,921,770			–			–			5,921,982
Reclassification of warrants as liabilities		–			–			–		–		(1,114,925	)		–			–			(1,114,925	)
Conversion of preferred stock		(37,700	)		(38	)		14,132,816		14,133		(14,095	)		–			–			–
Preferred share dividends		–			–			–		–		4,086,819			–			(4,086,819	)		–
Net loss		–			–			–		–		–			–			(84,243,877	)		(84,243,877	)
Comprehensive income		–			–			–		–		–			6,832,728			–			6,832,728
Balance at September 30, 2023		–		$	–			14,979,642	$	14,980	$	103,255,793		$	(532,401	)	$	(151,158,440	)	$	(48,420,068	)

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

F-4

EBET, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the Years Ended
	September 30,
	2023			2022
Cash flow from operating activities:
Net loss	$	(84,243,877	)	$	(41,427,609	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount		11,012,829			4,778,405
(Gain) loss on derivative instruments		142,187			(1,116,153	)
Change in fair value of warrant liabilities		(1,114,925	)		–
Depreciation and amortization		6,971,311			6,377,301
Amortization of right of use assets		142,444			175,497
Stock-based compensation		1,290,791			5,447,372
Impairment loss		44,917,891			3,851,503
Foreign exchange loss		2,394,696			128,092
Gain on cryptocurrency settlement		–			(428	)
Changes in operating assets and liabilities:
Accounts receivable		1,155,206			(1,793,198	)
Prepaid expenses		569,573			(1,128,372	)
Accounts payable and accrued liabilities		7,351,432			11,988,008
Right of use lease liabilities		(142,443	)		(14,969	)
Liabilities to users		(453,365	)		1,339,717
Net cash used in operating activities		(10,006,250	)		(11,394,834	)

Cash flow from investing activities:
Purchase of software and equipment		(11,390	)		(1,200,882	)
Acquisition of Aspire B2C business		–			(56,235,526	)
Proceeds from sale of fixed assets		23,770			–
Net cash used by investing activities		12,380			(57,436,408	)

Cash flow from financing activities:
Proceeds from settlement of derivative instruments		973,965			–
Repayment of notes payable		(5,000,000	)		–
Proceeds from debt issuance, net of issuance costs		–			26,627,111
Proceeds from revolving line of credit		1,650,000			–
Proceeds from equity issuances, net of costs of capital		5,921,982			37,028,646
Net cash provided by financing activities		3,545,947			63,655,757

Effect of foreign exchange rates on cash		1,266,422			1,596,836

NET CHANGE IN CASH		(5,181,501	)		(3,578,649	)
CASH AT BEGINNING OF PERIOD		5,486,210			9,064,859
CASH AT END OF PERIOD	$	304,709		$	5,486,210

Supplemental disclosure of cash flow information:
Cash paid for interest	$	4,011,085		$	3,575,349
Cash paid for income taxes	$	–		$	–

Non-cash transactions
Preferred shares issued for dividends	$	4,086,819		$	4,750,585
Stock warrants issued in connection with Senior Notes	$	–		$	7,661,382
Common stock issued for acquisition of Aspire B2C business	$	–		$	5,665,370
Promissory note issued for acquisition of Aspire B2C business	$	–		$	11,330,740
Stock issued for conversion of borrowings	$	1,127,657		$	412,500
Capitalized interest and waiver fees on Senior Notes and Revolving Loan	$	832,184		$	–
Stock issuable for intangible assets	$	–		$	1,513,902
Stock issued for conversion of preferred stock	$	422,837		$	–
Reclassification of warrant as liabilities	$	1,294,638		$	–

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

F-5

EBET, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN

Organization

EBET, Inc. (“EBET” or “the Company”) was formed on September 24, 2020 as a Nevada corporation. EBET is a technology company operating platforms focused on i-gaming including casino and sportsbook. The Company operates under a Curacao gaming sublicense pursuant to a set of agreements with Aspire Global plc (“Aspire”) as a platform provider allowing EBET to provide online betting services to various countries around the world.

At the Company’s annual meeting of stockholders completed on July 26, 2023, the stockholders of the Company approved an amendment to the Company’s amended and restated articles of incorporation (the “Amendment”) to effect the reverse stock split at a ratio in the range of 1-for-2 to 1-for-30, with such ratio to be determined in the discretion of the Company’s board of directors and with such reverse stock split to be effected at such time and date, if at all, as determined by the Company’s board of directors in its sole discretion prior to the one-year anniversary of the annual meeting.

Pursuant to such authority granted by the Company’s stockholders, the Company’s board of directors approved a one-for-thirty (1:30) reverse stock split (the “Reverse Stock Split”) of the Company’s common stock and the filing of the Amendment to effectuate the Reverse Stock Split. The Amendment was filed with the Secretary of State of the State of Nevada and the Reverse Stock Split became effective in accordance with the terms of the Amendment at 4:01 p.m. Eastern Time on September 29, 2023 (the “Effective Time”). The Amendment provides that, at the Effective Time, every thirty shares of the Company’s issued and outstanding common stock will automatically be combined into one issued and outstanding share of common stock, without any change in par value per share, which will remain $0.001. All common share and per share amounts have been retroactively adjusted to reflect the Reverse Stock Split.

Acquisition of the B2C business of Aspire Global plc

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

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain equity or debt financings to continue operations. The Company has a history of and expects to continue to report negative cash flows from operations and a net loss. The Company's forecasts for 2024 and beyond indicate that it will need additional funding in order to have sufficient financial resources to continue to settle its debts as they fall due. The Company has taken significant measures in an attempt to increase the profitability of its business in the short term. These actions include optimizing the efficiency of marketing campaigns, reducing the total number of employees and contractors, terminating software and other immaterial contracts as well as generally reducing the operating costs of the business. These efforts have also resulted in an increased focus on the Company’s i-gaming business and a significant reduction in the investment of the Company’s esports products and technologies, which resulted in the recognition of an impairment loss on certain intangible assets and fixed assets. As a result of the Company’s actions as referenced above, it does not expect to launch its esports products in the foreseeable future. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company may seek additional funding through a combination of equity offerings, debt financings, government or other third-party funding, commercialization, marketing and distribution arrangements, other collaborations, strategic alliances and licensing arrangements and delay planned cash outlays or a combination thereof. Management cannot be certain that such events or a combination thereof can be achieved.

F-6

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Basis of Presentation and Consolidation

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

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

Business combinations

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

Use of Estimates

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

Cash and Cash Equivalents

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

Accounts Receivable

Accounts receivables are recorded at amortized cost, less any allowance for doubtful accounts. Accounts receivable consists primarily of amounts due from our platform provider. The receivable balance owed to the Company represents the net amount owed to the Company by Aspire related to the strategic agreement for the Company’s i-gaming platform and is stated at historical cost less any allowance for doubtful accounts. The allowance for doubtful accounts was $0 as of September 30, 2023 and 2022.

F-7

Fixed Assets, net

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

Intangible Assets

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

Impairment of Long-Lived Assets

Long-lived assets consist of software and equipment, finite-lived acquired intangible assets, such as license agreements, and indefinite-lived assets such as internet domain names. Long-lived assets are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. Impairment expense is recognized to the extent an asset’s expected undiscounted future cash flows are less than the asset’s carrying amount. As of September 30, 2023, the Company determined that it’s intangible assets and goodwill were impaired and recognized an impairment loss of $44,917,891, consisting of $24,790,233 related to goodwill and $20,127,658 related to intangible assets, primarily indefinite lived assets and customer relationships, which were fully impaired as of September 30, 2023. During the year ended September 30, 2022, the Company determined that its long-lived assets related to the esports business, including intangible assets, were impaired. As a result, the Company recognized an impairment loss of $3,851,503, including $3,282,243 related to intangible assets and $569,260 related to property and equipment.

Leases

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

The Company’s only significant lease was for office space in Malta, which had a two-year lease term beginning August 1, 2021, and is classified as an operating lease. The lease has an option to extend the term for an additional two years with a 10% increase in annual rent. The Company recognized a right of use asset and lease liability of $381,346 at commencement based on the present value of lease payments at commencement and utilizing an estimate incremental borrowing rate of 10%. The lease term expired in July 2023.

F-8

The following table summarizes the lease-related assets and liabilities recorded in the consolidated balance sheets at September 30, 2023 and 2022:


	September 30, 2023		September 30, 2022
Operating Leases:
Operating lease right-of-use assets	$	–	$	129,975
Right of use liability operating lease current portion	$	–	$	129,974
Right of use liability operating lease long term		–		–
Total operating lease liabilities	$	–	$	129,974

Operating lease expense was $142,375 and $201,978 during the years ended September 30, 2023 and 2022, respectively.

Liabilities to Users

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

Revenue Recognition

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

·	Identification of the contract with a customer

·	Identification of the performance obligations in the contract

·	Determination of the transaction price

·	Allocation of the transaction price to the performance obligations in the contract

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

F-9

No single customer accounted for more than 10% of revenue for the years ended September 30, 2023 and 2022. In addition, no disaggregation of revenue is required because all current revenue is generated from gaming revenue.

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

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

Performance Obligations

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

Transaction Price Considerations

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

Cost of Revenue

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

Sales and Marketing Expenses

Sales and marketing expenses consist primarily of expenses associated with amounts paid to affiliates, advertising and related software, strategic league and team partnerships and costs related to free to play contests, and the compensation of sales and marketing personnel, including stock-based compensation expenses. Variable commission fees are paid to sales affiliates based on a percentage of revenue generated from the affiliate. The commissions rebated to affiliates are recorded as a component of marketing expense. Advertising costs are expensed as incurred.

Product and Technology Expenses

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

F-10

General and Administrative Expenses

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

Income Taxes

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

Fair value of financial instruments

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

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

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

The following tables set forth the fair value of the Company’s financial assets and liabilities measured at fair value as of September 30, 2023 and 2022 based on the three-tier fair value hierarchy:

Fair Value Measurements at September 30, 2023

Level 1

Level 2

Level 3

Assets

Cash

304,709

–

Total assets

304,709

–

Liabilities

Senior Notes, net of discount

–

26,350,630

–

Revolving line of credit

–

1,690,000

–

Note due to Aspire

–

10,594,000

–

Convertible notes payable, net of discount

–

617,500

–

Other notes payable, net of discount

–

559,597

–

Total liabilities

–

39,811,727

–

F-11

Fair Value Measurements at September 30, 2022

Level 1

Level 2

Level 3

Assets

Cash

5,486,210

–

Derivative asset

–

1,116,153

–

Total assets

5,486,210

1,116,153

–

Liabilities

Senior Notes, net of discount

–

19,595,694

–

Note due to Aspire

–

9,748,000

–

Convertible notes payable, net of discount

–

1,606,891

–

Other notes payable, net of discount

–

509,520

–

Total liabilities

–

31,460,105

–

Derivative Instruments

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

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

The Company entered into foreign exchange forward contracts to mitigate the change in fair value of specific liabilities and cash flows on the Consolidated Balance Sheets that were denominated in Euros related to the acquisition of the Aspire B2C business in November 2021. These undesignated hedging instruments are recorded at fair value as a derivative asset or liability on the Consolidated Balance Sheets with their corresponding change in fair value recognized in Other income (expense), net. The cash flows related to the gains and losses are classified in the consolidated statements of cash flows as part of cash flows from operating activities. The total notional amount of outstanding undesignated derivative instruments was $16,050,000 as of September 30, 2022. During the year ended September 30, 2023, the Company settled all of its foreign exchange forward contracts. The Company recognized a loss of $142,187 and a gain on derivative instruments of $1,239,510 during the years ended September 30, 2023 and 2022, respectively.

F-12

Foreign Currency

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

Earnings per share

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

Embedded Conversion Features

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

Recently Issued Accounting Pronouncements

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

F-13

NOTE 3 – BUSINESS COMBINATION

Acquisition of the B2C business of Aspire Global plc

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

The acquired assets were recorded at their estimated fair values. The purchase price of this acquisition was allocated follows:


	Fair Value
Trademarks	$	21,836,528
Customer relationships		16,162,202
Goodwill		35,620,270
Total	$	73,619,000

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

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

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

Schedule of acquisition costs
Debt issuance costs	$	3,372,889
Equity issuance costs	$	4,184,000
Transaction expenses	$	2,240,147

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

F-14

Unaudited proforma information

The following schedule contains pro-forma consolidated results of operations for the year ended September 30, 2023 and 2022 as if the Aspire B2C acquisition occurred on October 1, 2021. The pro forma results of operations are presented for informational purposes only and are not indicative of the results of operations that would have been achieved if the acquisition had taken place on October 1, 2021, or of results that may occur in the future.


	Fiscal Year Ended
	September 30, 2023			September 30, 2022
Revenue	$	39,177,504		$	68,628,158
Operating loss		(65,708,506	)		(32,488,215	)
Net loss		(84,243,877	)		(42,698,109	)
Net loss attributable to common shareholders		(88,330,696	)		(48,398,814	)
Loss per common share - basic and diluted	$	(32.23	)	$	(97.84	)

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

NOTE 4 – BORROWINGS

The following is a summary of borrowings outstanding as at September 30, 2023 and 2022:

Schedule of borrowings outstanding
				September 30, 2023
	Contractual Interest		Principal outstanding balance		Principal outstanding balance	Unamortized debt discount		Issuance costs	Issuance costs	Accrued Interest
	rate	Cur	Local		USD	USD		USD	USD	USD
Senior Note	15.0%	USD	26,350,630		26,350,630	–		–	26,350,630	–
Revolving Note	15.0%	USD	1,690,000		1,690,000	–		–	1,690,000	–
Note due to Aspire	10%	EUR	10,000,000		10,594,000	–		–	10,594,000	2,049,029
Convertible notes	10%	USD	617,500		617,500	–		–	617,500	62,681
Other	0%	USD	675,000		675,000	(115,403	)	–	559,597	–
Total borrowings					39,927,130	(115,403	)	–	39,811,727	2,111,710

Current									39,252,130	2,111,710
Long-term									559,597	–
Total borrowings									39,811,727	2,111,710

F-15

				September 30, 2022
	Contractual Interest		Principal outstanding balance	Principal outstanding balance	Unamortized debt discount		Issuance costs		Carrying Amount	Accrued Interest
	rate	Cur	Local	USD	USD		USD		USD	USD
Senior notes	15%	USD	30,558,446	30,558,446	(8,526,776	)	(2,435,976	)	19,595,694	–
Note due to Aspire	10%	EUR	10,000,000	9,748,000	–		–		9,748,000	888,343
Convertible notes	10%	USD	1,606,891	1,606,891	–		–		1,606,891	200,947
Other	0%	USD	675,000	675,000	(165,480	)	–		509,520	–
Total borrowings				42,588,337	(8,692,256	)	(2,435,976	)	31,460,105	1,089,290

Current									21,202,585	1,089,290
Long-term									10,257,520	–
Total borrowings									31,460,105	1,089,290

Senior Notes

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

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

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

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

F-16

As of March 31, 2022, the Company had not maintained compliance with the covenants of the Senior Notes and obtained a waiver from its lender which waiver was contingent on the completion of an equity raise of $3.5 million, which was completed in June 2022. In consideration for obtaining a waiver from the compliance with certain covenants, the Company agreed to amend the Senior Notes such that $5 million of principal loan balance becomes convertible at $107.40 per share commencing after the Company raises the $5,000,000 of common equity (including the foregoing $3.5 million). On February 2, 2023, the conversion option became exercisable upon closing of the offering that generated $6,500,000 of gross proceeds.

In connection with the Loan, the Company issued the Lender a warrant (the “Lender Warrant”) to purchase 52,262 shares of Company common stock at an initial exercise price of $750 per share expiring on the earlier to occur of (i) five years following the issue date or (ii) the second anniversary of the satisfaction of all obligations of the Company under the Credit Agreement. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Company’s common stock. In addition, the exercise price of the Lender Warrant is subject to “weighted-average” anti-dilution protection for issuances by the Company below the exercise price (other than certain defined exempt issuances), and, upon shareholder approval, which was received on February 9, 2022, the number of shares underlying the Lender Warrant shall also be adjusted for issuances to which the “weighted-average” anti-dilution protection applies. Pursuant to the foregoing anti-dilution provision, in connection with the $3.5 million offering completed in June 2022, the number of shares underlying the warrant increased to 55,152 and the exercise price was reduced to $710.70. Pursuant to the foregoing anti-dilution provision, in connection with the $6.5 million offering completed in February 2023, the number of shares underlying the warrant increased to 77,082 and the exercise price was reduced to $508.50. The Lender will not have the right to exercise any portion of the Lender Warrant if the Lender (together with its affiliates) would beneficially own in excess of 4.99% of the number of shares of Company common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Lender Warrant, which beneficial ownership amount, at the election of the Lender may be increased to any other percentage not in excess of 19.99% as specified by the Lender. If a fundamental transaction occurs, then the successor entity will succeed to, and be substituted for the Company, and will assume all of the Company’s obligations under the Lender Warrant with the same effect as if such successor entity had been named in the Lender Warrant itself. On December 29, 2023, the Lender agreed to cancel all 77,082 outstanding common stock warrants it held.

Between September 2, 2022 and June 20, 2023, the Lender provided the Company with multiple limited waivers of the Senior Note covenants in exchange for aggregate payments of $609,558 which were added to the principal amount of the Senior Note. During this period, the Company made a principal repayment of $3,000,000 which reduced the minimum cash balance requirement from $5,000,000 to $2,000,000.

On June 30, 2023, the Company, the subsidiaries of the Company and the Lender entered into a forbearance agreement (the “Forbearance Agreement”). Pursuant to the Forbearance Agreement, the Company acknowledged, among other items, that, as June 30, 2023, it was in default under the Credit Agreement, the Lender had the right to accelerate the Loan, and the Lender had the right to impose the default rate of interest under the Credit Agreement. Pursuant to the Forbearance Agreement, the Lender agreed to forbear from exercising its rights and remedies against the Company and the Guarantors under the Credit Documents until the earlier of September 15, 2023 or a termination event. A termination event under the Forbearance Agreement consists of the filing of a bankruptcy proceeding by the Company or any Guarantor, the occurrence of a new event of default under the Credit Agreement, or the failure by the Company or any Guarantor to perform any material requirement, covenant, or obligation under the Forbearance Agreement. During the forbearance period, the Lender agreed, among other items, not to accelerate the Loan, initiate any bankruptcy filings, or apply any default rates of interest. As partial consideration for the Lender agreeing to enter into the Forbearance Agreement, the Company paid a forbearance fee equal to 50 basis points of the outstanding principal amount of the Loan (or $130,425), which amount was added to the principal balance of the loan. In addition, on June 30, 2023, the Company made a prepayment of the Loan in the amount of $2.0 million, which in turn reduced the minimum cash balance requirement under the Credit Agreement to $0. On September 15, 2023, the Company, the subsidiaries of the Company and the Lender entered into an amendment number 1 to the Forbearance Agreement (the “Forbearance Amendment No. 1”). The Forbearance Amendment No. 1 extended the Forbearance Date from September 15, 2023 until October 31, 2023.

F-17

On October 1, 2023, the Company, the subsidiaries of the Company and the Lender entered into an amendment number 2 to the Forbearance Agreement (the “Forbearance Amendment No. 2”). The Forbearance Amendment No. 2 extended the Forbearance Date from October 31, 2023 until June 30, 2025, and provides that instead of interest being payable monthly in cash, such interest shall accrue in arrears and can be added to the outstanding principal balance of the Loan and Revolving Note. The interest rate on the Loan and the Revolving Note was increased to 16.5% per annum. The Forbearance Amendment No. 2 further adds that the Company’s suspension from trading or failure to be listed on the Nasdaq Capital Market for more than 30 calendar days will constitute a Termination Event under the Forbearance Agreement as amended. On November 11, 2023, Lender provided the Company with an extension of the Nasdaq Capital Market delisting/suspension Termination Event for an additional 40 calendar days up to December 23, 2023, and on December 19, 2023, the Lender provided the Company with an additional extension of 40 days. Pursuant to Forbearance Amendment No. 2, the Company agreed that to the extent it receives net proceeds from or in connection with a judgment, settlement or other in or out of court resolution of a commercial tort claim, the Company will: (i) make a prepayment on the Loan or the Revolving Note (discussed below) of 100% of such net proceeds; and (ii) make an additional payment to the Lender equal to 5% of any such net proceeds (prior to the payments set forth in subsection (i)) in excess of $50.0 million.

Effective October 1, 2023, the Company entered into an amended and restated note conversion option agreement (the “Option Agreement”) with the Lender. Pursuant to the Option, the Company agreed that Lender have the right to convert any amounts due pursuant to the Loan and the Revolving Note into shares of Company common stock at a conversion price of $1.25 per share with respect to the initial $5.0 million and at a conversion price of $2.50 per share with respect to the remaining amounts. In addition, the Company agreed to file a registration statement registering the resale of the shares of Company common stock underlying the Loan within 45 days of the date of the Option and to use its commercially reasonable efforts to cause such registration statement to become effective within 120 days of the date of the Option.

F-18

As a result of the event of default on the Senior Note, the Company amortized all remaining debt discount and debt issuance costs associated with the Senior Note. During the year ended September 30, 2023 and 2022, the Company recognized interest expense of $10,962,752 and $4,216,442, respectively, from the amortization debt discount and debt issuance costs related to the Senior Note. There was no unamortized debt discount and debt issuance costs associated with the Senior Note as of September 30, 2023.

Note due to Aspire

The Note provides for an interest rate of 10% per annum. The maturity date of the Note will be the earlier of that date which is four years from the issuance date or a liquidity event. The Note will require repayment of the principal amount plus any accrued interest in three equal installments, payable annually starting on the second anniversary after issuance. No interest payment shall be due until that date which is the last day of the end of the second-year anniversary of issuance should the Note remain unpaid at such time. Should the Note remain unpaid at the second-year anniversary, the total accrued interest due at that time shall be paid at the second-year anniversary for accrued interest for the period from the issuance date through the second-year anniversary date. Thereafter, and on each annual anniversary date thereafter, the interest due for the prior annual period shall be paid. Notwithstanding the foregoing, if the Company owes greater than $15,000,000 under the Credit Agreement, then the parties agree that the Company shall repay any principal amount plus any accrued interest due through the issuance of Company common stock in lieu of any cash payment and the amount of said common stock shares to be issued by the Company shall be determined by using the Conversion Price as defined below. Should an event of default occur on the Note, then at the election of Aspire, either (i) the Operator Services Agreement will be amended such that the fees payable shall increase by 5% during the continuation of the event of default, or (ii) Aspire may elect to convert the entire outstanding principal amount plus any accrued interest into shares of common stock of the Company at a price per share based on the weighted-average per-share price for the ten trading days prior to the date of the occurrence of the event of default (“Conversion Price”). In no event shall the Conversion Price be lower than $540.00 per share (as adjusted for stock splits, stock dividends, or similar events occurring after the date hereof) and the total maximum number of shares of common stock that may be issued to Aspire upon any such conversion in the aggregate shall be 21,667 shares (as adjusted for stock splits, stock dividends, or similar events occurring after the date hereof). As a result of the default on the Senior Note and the Forbearance Agreement described above, a potential event of default exists pursuant to the terms of the Note, and as such as classified all principal and interest as a current liability.

Convertible Notes and other

On September 1, 2020, ESEG Limited, a wholly owned subsidiary of the Company, entered into three promissory notes, with a combined principal amount of $2,100,000. The notes bore interest at the rate of 10% per annum through maturity and matured on March 1, 2022 and are now convertible at the noteholder’s option. The Company also agreed to pay two of the lenders a total of $675,000 on September 1, 2025, bearing no interest. The Company issued each of the lenders a conversion option at a fixed price of $15 per share and issued 67,167 warrants to purchase shares of the Company’s common stock at an exercise price of $9.00 per share, each with a term of five years. The holder may convert the note into shares of common stock at any time throughout the maturity date, to the extent and provided that no holder of the notes was or will be permitted to convert such notes so long as it or any of its affiliates would beneficially own in excess of 4.99% of the Company’s common stock after such conversion.

The Company evaluated the conversion option and concluded a beneficial conversion feature was present at issuance. The Company recognized the beneficial conversion feature and relative fair value of the warrants as a debt discount and additional paid in capital. The fair value of the warrants at the grant date was estimated using a Black-Scholes model and the following assumptions: 1) volatility of approximately 85% based on a peer group of companies; 2) dividend yield of 0%; 3) risk-free rate of 0.26%; and 4) an expected term of five years. The $2,100,000 debt discount will be amortized through the maturity date of the convertible notes payable. During the twelve months ended September 30, 2021, a total of $187,500 of principal was converted into 12,500 shares of common stock. During the year ended September 30, 2022, a total of $305,609 of principal and $106,891 of accrued interest was converted into 27,500 shares of common stock. During the year ended September 30, 2023, a total of $989,391 of principal and $138,266 of accrued interest was converted into 75,179 shares of common stock. As of September 30, 2023, the outstanding principal and accrued interest balance of the convertible notes was $617,500 and $62,681, respectively.

During the year ended September 30, 2023 and 2022, the Company recorded a charge of $50,077 and $561,963, respectively, in the accompanying consolidated statement of operations from the amortization of its debt discount related to the convertible notes payable and other liabilities described above.

F-19

NOTE 5 – STOCKHOLDERS’ EQUITY

On July 26, 2023, the Company increased its authorized common shares to 500,000,000 shares of common stock with a par value of $0.001. In addition, the Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.001. The specific rights of the preferred stock, when so designated, shall be determined by the board of directors.

Pursuant to such authority granted by the Company’s stockholders, the Company’s board of directors approved a one-for-thirty (1:30) reverse stock split (the “Reverse Stock Split”) of the Company’s common stock and the filing of the Amendment to effectuate the Reverse Stock Split. The Amendment was filed with the Secretary of State of the State of Nevada and the Reverse Stock Split became effective in accordance with the terms of the Amendment at 4:01 p.m. Eastern Time on September 29, 2023 (the “Effective Time”). The Amendment provides that, at the Effective Time, every thirty shares of the Company’s issued and outstanding common stock will automatically be combined into one issued and outstanding share of common stock, without any change in par value per share, which will remain $0.001. The Reverse Stock Split is presented retroactively.

June 2022 Private Placement

On June 16, 2022, the Company issued, in a private placement priced at-the-market under Nasdaq rules: (i) 32,587 shares of the Company’s common stock, and (ii) warrants to purchase up to an aggregate of 32,587 shares of common stock. The combined purchase price of one share of common stock and accompanying warrant was $107.40. The gross proceeds to the Company from the private placement were approximately $3.5 million, before deducting fees and other offering expenses, and excluding the proceeds, if any, from the exercise of the warrants.

February 2023 Private Placement

On February 2, 2023 the Company entered into Securities Purchase Agreements (the “Purchase Agreements”) with several institutional and accredited investors to issue, in an offering (the “February Offering”): (i) 212,418 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share, and (ii) warrants to purchase up to an aggregate of 212,418 shares of Common Stock (the “Warrants”). The combined purchase price of one share of Common Stock and accompanying Warrant was $30.60.

Subject to certain ownership limitations, the Warrants are exercisable commencing six months after issuance. Each Warrant is exercisable into one share of Common Stock at a price per share of $30.60 (as adjusted from time to time in accordance with the terms thereof) and will expire five and one-half years from the issuance date. The closing of the sales of these securities under the Purchase Agreements was on February 6, 2023.

F-20

On February 2, 2023, the Company entered into a Placement Agent Agreement (the “Placement Agent Agreement”) with WestPark Capital, Inc. (the “WestPark”), pursuant to which the Company has agreed to pay WestPark an aggregate fee equal to 7.0% of the gross proceeds received by the Company from the sale of the securities in the transaction. In addition, the Company agreed to pay to WestPark on the Closing Date a cash fee equal to 1.0% of gross proceeds received by the Company from the sale of the securities in the transaction for non-accountable expenses. The Company also agreed to pay WestPark up to $50,000 of fees and other expenses.

The Company received gross proceeds of $6,500,000 and paid fees and expenses of $577,018.

Acquisition of the B2C segment of Aspire Global plc

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

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

The Preferred Stockholders are entitled to receive dividends, at a rate of 14.0% per annum, which shall be payable quarterly in arrears on January 1, April 1, July 1 and October 1, beginning on the first such date after the issuance date. With limited exceptions, the Preferred Stockholders have no voting rights. The dividends can be paid in either cash or in the issuance of additional preferred shares. Upon any liquidation, dissolution or winding-up of the Company, the holders of the Preferred Stock shall be entitled to receive out of the assets, whether capital or surplus, of the Company available to shareholders, an amount equal to the greater of: (i) the purchase price for each share of Preferred Stock then held, or (ii) the amount the holders would have received had the holders fully converted the Preferred Stock to Company common stock, in each case, before any distribution or payment shall be made to the holders of the Company’s common stock. The Preferred Stock is convertible into Company common stock at an initial conversion price of $840.00 per share (“Conversion Price”); provided that the Conversion Price is subject to anti-dilution protection upon any subsequent transaction at a price lower than the Conversion Price then in effect. In addition, on December 31, 2022 and April 15, 2023 (each an “Adjustment Date”), the Conversion Price shall be adjusted to the lesser of: (i) the Conversion Price in effect on the Adjustment Date, or (ii) 85% of the average closing price of the Company’s common stock for the fifteen trading days prior to the Adjustment Date. On December 30, 2022, the holders of a majority of the Preferred Stock approved an amendment to the terms of the Preferred Stock to: (i) extend the initial Adjustment Date from December 31, 2022 to January 31, 2023; and (ii) to modify the definition of “Exempt Issuance” to permit the issuance of shares of Company common stock to consultants. On December 30, 2022, the Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Series A Convertible Preferred Stock was filed in the State of Nevada.

The Warrants are exercisable and expire on the fifth anniversary thereafter. The Warrants were initially to be exercisable at an exercise price of $900.00 per share, provided that the exercise price is subject to anti-dilution protection upon any subsequent transaction at a price lower than the exercise price then in effect. Notwithstanding the foregoing anti-dilution provision, in connection with the $3.5 million offering completed in June 2022, the exercise price was reduced to $45.00. In February 2023, the warrants exercise price was reset to $30.60 in connection with the February 2023 equity financing. The Warrants can be exercised on a cashless basis if there is no effective registration statement registering, or no current prospectus available for, the resale of the ordinary shares underlying the Warrants.

F-21

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

During the year ended September 30, 2023, the Company issued 14,132,816 shares of common stock pursuant to exercise of all 37,700 shares of Preferred Stock. As of September 30, 2023, there were no shares of Preferred Stock outstanding.

2020 Stock Plan

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

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

On July 26, 2023, the Company amended the 2020 Plan to increase the number of shares of common stock that may be issued under the 2020 Plan to 250,000. As of September 30, 2023, the Company had awarded a total 46,192 shares under the 2020 Plan, with 203,808 remaining under the 2020 Plan.

Common Stock Awards

The Company has awarded restricted stock units and shares of common stock to various employees, consultants and officers under the 2020 Plan. The majority of these awards will vest equally over terms of up to four years. At September 30, 2023, the Company had 7,046 restricted stock units in issuance. During the year ended September 30, 2023, 4,080 restricted stock units were converted into shares of common stock.

During the years ended September 30, 2023 and 2022, the Company recognized a total of $939,915 and $4,000,578, respectively, of stock-based compensation expense related to common stock awards and expects to recognize additional compensation cost of $1,541,232 upon vesting of all awards.

F-22

Warrants

As discussed above, the Company has issued common stock warrants in connection with its fundraising activities to brokers, an asset purchase agreement and convertible notes issued during the years ended September 30, 2023 and 2022. The following table summarizes warrant activity during the years ended September 30, 2023 and 2022:

Schedule of warrant activity
	Common Stock Warrants
	Shares			Weighted Average Exercise Price	Weighted average Remaining Life in years

Outstanding at September 30, 2021	73,321		$	27.76	4.04
Granted	158,730			344.92	5.00
Cancelled	–			–	–
Expired	–			–	–
Exercised	(30,914	)		53.30	–
Outstanding at September 30, 2022	201,137		$	274.05	4.01
Granted	234,354			75.32	5.00
Cancelled	–			–	–
Expired	–			–	–
Exercised	–			–	–
Outstanding at September 30, 2023	435,491		$	122.04	3.91
Exercisable at September 30, 2023	435,491		$	122.04	3.91

The outstanding and exercisable common stock warrants as of September 30, 2023 had no intrinsic value.

As a result of the reset of the conversion price of the Company’s preferred stock to $21.30 on April 28, 2023 as disclosed above, as of June 30, 2023 the Company had insufficient shares to settle its equity-linked instruments until it increased its authorized shares of Company common stock in July 2023. The Company applied a sequencing approach to determine which instruments may not be settled in shares based on the Company’s current authorized shares of common stock and should be accounted for as derivatives under ASC 815. The Company ordered its equity-linked instruments in order of issuance date, excluding employee awards that are not within the scope of ASC 815. Based on this analysis, the Company determined the 212,418 common stock warrants issued in connection with the sale of common stock on February 6, 2023 should be accounted for as liabilities at fair value. The Company estimated the fair value at April 28, 2023 using a Black Scholes option pricing model and the following inputs: 1) exercise price of $30.60; 2) volatility based on a peer group of companies of 89%; 3) risk-free rate of 3.51%; 4) dividend yield of 0% and 5) expected term of 5.3 years. The Company reclassified $1,294,638 from additional paid in capital to the warrant liability. On July 26, 2023, as a result of the increase in authorized shares of common stock, the warrants were reclassified to APIC, as the Company had sufficient authorized shares to settle the warrants. The Company estimated the fair value as of July 26, 2023 to be $179,713 using the following assumptions: 1) exercise price of $30.60; 2) volatility based on a peer group of companies of 89%; 3) risk-free rate of 4.09%; 4) dividend yield of 0% and 5) expected term of 5.0 years.

F-23

During the year ended September 30, 2023, the Company estimated the fair value of the warrants using a Black-Scholes option pricing model and the following assumptions: 1) stock price of $60 to $868.50 per share; 2) dividend yield of 0%; 3) risk-free rate of between 1.18% and 3.35%; 4) expected term of between 5 years; 5) an exercise price of $74.70 or $868.50 and 6) expected volatility of 42.14% based on a peer group of public companies. The warrants issued in connection with the Senior Notes had a fair value of $19,467,688, and the relative fair value of $11,806,307 was recorded as debt discount. The estimated fair value of the warrants issued to preferred stockholders was $24,171,423, and the estimated fair value of the warrants issued in connection with the June 2022 private placement was $504,952.

Options

During the years ended September 30, 2023 and 2022, the Company entered into various agreements with employees, members of the Board of Directors and consultants whereby the Company awarded common stock options under the 2020 Plan. Of the 2,457 unvested options as of September 30, 2023, 667 will vest upon future performance conditions being met, and the remainder vest equally over periods of between one and four years from issuance.

The following table summarizes option activity during the years ended September 30, 2023 and 2022:

Schedule of option activity
	Common Stock Options
	Shares			Weighted Average Exercise Price	Weighted average Remaining Life in years
Outstanding at September 30, 2021	82,489		$	84.27	7.95
Granted	1,837			841.90	10.00
Cancelled/Forfeited	(16,525	)		244.50	–
Exercised	(1,894	)		7.50	–
Outstanding at September 30, 2022	65,907		$	67.41	7.33
Granted	–			–	–
Cancelled/Forfeited	(45,620	)		46.90	–
Exercised	–			–	–
Outstanding at September 30, 2023	20,287		$	113.55	5.37
Exercisable at September 30, 2023	17,830		$	94.83	5.07

During the years ended September 30, 2023 and 2022, the Company recognized stock-based compensation expense of $1,288,432 and $1,446,794, respectively, related to common stock options awarded. The exercisable common stock options had no intrinsic value as of September 30, 2023. The Company expects to recognize an additional $1,332,132 of compensation cost related to stock options expected to vest.

The Company estimated the fair value of the stock options awarded during the year ended September 30, 2022 using a Black-Scholes option pricing model and the following assumptions: 1) stock price of $90 to $939.90 per share; 2) dividend yield of 0%; 3) risk-free rate of between 0.85% and 1.20%; 4) expected term of between 3.5 and 6.25 years; 5) an exercise price between $7.50 and $939.90 and 6) expected volatility of 42.14% based on a peer group of public companies.

F-24

NOTE 6 – LONG-LIVED ASSETS

Fixed Assets

The Company’s fixed assets consisted of the following as of September 30, 2023 and 2022:

Schedule of fixed assets
	September 30, 2023			September 30, 2022
Software	$	264,850		$	391,851
Furniture and fixtures		388,226			368,432
Total fixed assets		653,076			760,283
Accumulated depreciation		(491,863	)		(213,875	)
Fixed assets, net	$	161,213		$	546,408

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

Depreciation expense was $432,164 and $146,797 for the year ended September 30, 2023 and 2022, respectively.

Intangible Assets – Aspire b2C Acquisition

As disclosed in Note 3, the Company acquired intangible assets as part of the Aspire B2C Business acquisition. The acquired intangibles consisted of the following as of September 30, 2023 and 2022:

Schedule of intangible assets acquired
	September 30, 2023			September 30, 2022
Trademarks and tradenames, indefinite lives	$	2,210,000		$	14,232,080
Trademarks and tradenames, three year lives		4,533,030			4,562,064
Customer relationships		–			13,910,396
Other		12,693			10,493
Total acquired intangibles		6,755,723			32,715,033
Accumulated amortization		(3,054,114	)		(5,169,704	)
Acquired intangible assets, net	$	3,701,609		$	27,545,329

F-25

As of September 30, 2023, the Company determined that its intangible assets and goodwill were impaired as a result of the loss of revenue generated by the gaming websites owned by the Company that operate in Germany after being shut down in May 2023, and the overall decline in the Company’s results of operations during fiscal year ended September 30, 2023. The Company recognized a total impairment loss of $44,917,891, consisting of $24,790,233 related to goodwill and $20,127,658 related to intangible assets, primarily indefinite lived assets and customer relationships, which were fully impaired as of September 30, 2023. The remaining trademarks and tradenames and customer relationships are amortized over an estimated useful life of three years. Amortization expense on the Aspire intangible assets was $6,539,147 and $5,949,143, respectively, for the years ended September 30, 2023 and 2022.

The Karamba trademarks and tradenames have an indefinite useful life. The remaining trademarks and tradenames are amortized over an estimated useful life of three years. Amortization for the year ended September 30, 2024 and 2025 is expected to be approximately $1,267,642 and $211,274, respectively.

Intangible Assets – Domain Names

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

Intangible Assets - License Agreement

On October 1, 2020, the Company entered into an option agreement which gave the Company rights to acquire a license for proprietary technology related to online betting. The Company paid $133,770 upon execution of the option agreement, paid an additional $286,328 in cash, and issued 2,167 shares of common stock upon exercise of the option on or about May 3, 2021. The shares had a fair value of $1,456,650 at the date of exercise of the option and execution of the license agreement resulting in total value for the license agreement of $1,876,748. During the year ended September 30, 2022, the Company recognized amortization expense of $573,451 included in product and technology expenses. In connection with the preparation of the financial statements for inclusion in the Company’s Form 10-K for the year ended September 30, 2022, the Company determined that the intangible asset, which was related to the esports operations due to the lack of progress in developing its esports operations and the Company’s decision to no longer pursue those operations, was impaired and recognized an impairment loss of $1,042,637, included in Impairment loss on the consolidated statement of comprehensive loss.

F-26

NOTE 7 – COMMITMENTS AND CONTINGENCIES

Financial Advisor’s Claims

Other Contingencies

On September 28, 2023, EBET, INC. filed a lawsuit in the State of Nevada against Aspire Global PLC, AG Communications and affiliated entities asserting damages in an amount of no less than 65,000,000 Euro plus punitive and other damages proven at trial (“Aspire Litigation”) and including causes of action against Aspire and the other defendants for fraud and material breach of the share purchase agreement whereon the Company had acquired the i-gaming B2C assets including the Karamba, Hopa, Griffon Casino, BetTarget, Dansk777, and GenerationVIP domains, sites, player database and other related assets and also related to the operator service agreements and Promissory Note entered concurrent with the closing of the share purchase agreement. On November 7, 2023, Aspire and the other defendants removed the subject matter to the United States District Court for the District of Nevada. The Aspire Litigation is material to the Company and the result of such litigation is highly likely to have a material impact on the Company going forward.

Other Commitments

During June 2023, the Compensation Committee of the Company’s Board of Directors, the recently formed Strategic Alternatives Committee of the Board, and the Board reviewed and considered, and discussed with the Company’s executive officers, a plan to retain the Company’s executives through the conclusion of the Company’s strategic process by providing these officers with appropriate financial incentives to do so. In that regard, the Board and the Committees considered advice provided by the Company’s compensation consultant, Frederick W. Cook & Co., Inc. (“FW Cook”) and used FW Cook’s recommendations as part of their decision-making process in arriving at what the Board and the Committees regard as appropriate to achieve the Company’s retention goals. On June 30, 2023, the Compensation Committee and the Strategic Alternatives Committee reviewed and approved an executive retention plan, the Strategic Alternatives Committee recommended that the full Board approve it, and the Board did so. On June 30, 2023, the Compensation Committee and the Strategic Alternatives Committee reviewed and approved the payment of compensation to members of the Strategic Alternatives Committee in addition to the Company’s standard compensation arrangements for non-employee directors, the Strategic Alternatives Committee recommended that the full Board approve it, and the Board did so. The directors who are members of the Strategic Alternatives Committee are Christopher Downs (the Chairman), Dennis Neilander and Michael Nicklas. Under this plan, the Chairman of the committee will receive a monthly retainer of $15,000 and the other two members of the committee will receive a monthly retainer of $12,000. These fee arrangements will be reevaluated if the committee remains in place after six months.

F-27

Following the approval of the executive retention plan by the Committees and the Board and in accordance with the executive retention plan, on June 30, 2023, the Company agreed to enter into amendments to the employment agreements (each, a “Retention Letter”), with each of Aaron Speach, the Company’s Chief Executive Officer, and Matthew Lourie, the Company’s Chief Financial Officer.

Pursuant to the Retention Letters,

	(a)	Mr. Speach will be entitled to receive a cash retention bonus of $175,000 payable 20% upon execution of the Retention Letter, 40% after three months, and the remainder after six months, and

	(b)	Mr. Lourie will be entitled to an increase in his base salary to $320,000 and to receive a cash retention bonus of $240,000 payable 20% upon execution of the Retention Letter, 30% after three months, 30% after six months, and the remainder after nine months.

Any unpaid retention bonus will be paid earlier if the Company completes a strategic transaction (a “Transaction”), or if the executive is terminated without “cause”.

In addition, pursuant to the Retention Letters, each of Mr. Speach and Mr. Lourie will be eligible to receive a cash transaction bonus equal to 0.95% of the gross proceeds of any Transaction, provided that the net proceeds from the Transaction are at least $26.0 million; and further provided that the executive may receive an additional 0.25% of the gross proceeds if the net proceeds from the Transaction are not less than the amount that would result in (a) the Company repaying its outstanding debt and all trade creditors, and (b) the Series A preferred holders and common shareholders receiving consideration of not less than the value of their equity holdings as of June 30, 2023 (the “Deal Threshold”).

If Mr. Speach and Mr. Lourie are terminated without “cause” prior to June 30, 2024, the Company agreed to pay a cash severance payment of:

	(a)	with respect to Mr. Speach, the greater of 1.0 times Mr. Speach’s base salary or the severance payable pursuant to Mr. Speach’s current employment agreement; and

	(b)	with respect to Mr. Lourie, 0.5 times Mr. Lourie’s base salary.

In addition to the amounts payable to Messrs. Speach and Lourie set forth above, the Company also agreed on June 30, 2023 to pay additional retention bonuses under the executive retention plan to two consultants and advisors of up to $310,000, in the aggregate, and additional cash transaction bonuses equal to 1.9% of the gross proceeds of any Transaction, provided that the net proceeds from the Transaction are at least $26.0 million; and provided further that an additional 0.50% of the gross proceeds will be payable if the net proceeds from the Transaction are not less than the Deal Threshold.

NOTE 8 – TRANSACTION WITH RELATED PARTIES

On November 10, 2020, the Company entered into an employment agreement with Michael Barden, a family member of the Company’s former Chief Operating Officer, to serve as the Company’s marketing director. The employment agreement provides for an annual salary of $132,000, a technology allowance of $5,000, and an award of 1,000 shares of common stock in the Company, vesting in four equal annual installments. On August 2, 2022, Mr. Barden’s employment was terminated.

The Company engaged a firm owned by Matthew Lourie, the Company’s Chief Financial Officer to provide financial reporting services. For the years ended September 30, 2023 and 2022, the Company incurred consulting fees of $72,658 and $18,273, respectively.

F-28

NOTE 9 – INCOME TAXES

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

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


	Year Ended September 30, 2023			Year Ended September 30, 2022
Income tax benefit computed at the statutory rate	$	17,691,000		$	8,700,000
Non-deductible expenses		(12,221,000	)		(2,696,000	)
Return to provision adjustment		(175,000	)		–
Change in valuation allowance		(5,295,000	)		(6,004,000	)
Provision for income taxes	$	–		$	–

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

Schedule of deferred tax assets
	As of September 30, 2023			As of September 30, 2022
Deferred income tax assets:
Net operating losses	$	13,295,000		$	8,000,000
Valuation allowance		(13,295,000	)		(8,000,000	)
Net deferred income tax assets	$	–		$	–

The Company has an operating loss carry forward of approximately $52,595,000. Management currently believes that since the Company has a history of losses it is more likely than not that the deferred tax regarding the loss carry forwards and other temporary differences will not be realized in the foreseeable future. The Company believes that carryforward limitations will be applied to the historical net operating losses prior to the Share Exchange.

The Company has recorded no liability for income taxes associated with unrecognized tax benefits at the date of adoption and has not recorded any liability associated with unrecognized tax benefits during 2023 and 2022. Accordingly, the Company has not recorded any interest or penalty in regard to any unrecognized benefit.

F-29

NOTE 10 – LOSS PER COMMON SHARE

The basic net loss per common share is calculated by dividing the Company's net loss available to common shareholders by the weighted average number of common shares during the year. The diluted net loss per common share is calculated by dividing the Company's net loss available to common shareholders by the diluted weighted average number of common shares outstanding during the year. The diluted weighted average number of common shares outstanding is the basic weighted number of common shares adjusted for any potentially dilutive debt or equity. For the years ended September 30, 2022 and 2023, common shares issuable under preferred stock (0 and 50,361 shares), convertible debt, (113,567 and 171,733 shares), stock options (20,287 and 65,907 shares) and common stock warrants (435,491 and 201,137 shares) were excluded from the calculation of diluted net loss per share due to their antidilutive effect.

Schedule of loss per common share
	Year Ended
	September 30, 2023			September 30, 2022
Numerator:
Net income (loss)	$	(84,243,877	)	$	(41,427,609	)
Preferred stock dividends		(4,086,819	)		(4,750,585	)
Net income (loss) attributable to common stockholders	$	(88,330,696	)	$	(46,178,194	)

Denominator:
Basic and diluted weighted average common shares		2,740,990			494,655
Basic and diluted net income (loss) per common share	$	(32.23	)	$	(93.35	)

NOTE 11 – SUBSEQUENT EVENTS

On October 12, 2023, the Company received written notice (the “Notice”) from the Nasdaq Stock Market, LLC (“Nasdaq”) that it would delist the Company’s shares of common stock from the Nasdaq Capital Market upon the opening of trading on October 13, 2023. The Company’s common stock was traded on the OTC Pink Sheets until December 6, 2023, when the Company was uplisted to the OTCQB exchange.

F-30

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures.

None.

Item 9A.

Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, including our chief executive officer, who serves as our principal executive officer, and our chief financial officer, who serves as our principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Form 10-K. Based on this evaluation, our chief executive officer and our chief financial officer, concluded that as a result of the material weakness in our internal control over financial reporting discussed below our disclosure controls and procedures were not effective at ensuring that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our chief executive officer and our chief financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding disclosure.

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

Attestation Report of the Registered Public Accounting Firm

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

Management’s Report on Internal Control Over Financial Reporting

Our chief executive officer and our chief financial officer are responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Management conducted an assessment of the effectiveness of our internal control over financial reporting as of September 30, 2023. In making this assessment, management used the criteria described in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Our management concluded that our internal control over financial reporting were, and continue to be, ineffective, as of September 30, 2023, due to a lack of segregation of duties (resulting from the limited number of personnel available) and the lack of formal documentation of our control environment.

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

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

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

Changes in Internal Control over Financial Reporting

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

Item 9B.

Other Information.

None.

Item 9C.

Disclosure Regarding Foreign Jurisdictions That Prevent Inspections

Not applicable.

PART III

Item 10.

Directors, Executive Officers and Corporate Governance.

The information required by this item is incorporated by reference to our Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended September 30, 2023.

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

Item 11.

Executive Compensation.

Item 12.

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

Securities Authorized for Issuance under Equity Compensation Plans

The following table sets forth information regarding our equity compensation plans at September 30, 2023:

Plan category

Number of securities to be issued upon exercise of outstanding options,

warrants and rights

(a)

Weighted-average exercise price of

outstanding options, warrants and rights

(b)

Number of securities (by class) remaining available for future issuance under equity compensation

plans (excluding securities reflected in column (a))

(c)

Equity compensation plans approved by security holders (1)

27,337

113.55

203,808

Equity compensation plans not approved by security holders (2)

90.00

–

	(1)	Represents shares of common stock issuable upon exercise of outstanding stock options and rights under our 2020 Stock Plan.
	(2)	Consists of warrants issued to consultants.

Item 13.

Certain Relationships and Related Transactions, and Director Independence.

Item 14.

Principal Accounting Fees and Services.

PART IV

Item 15.

Exhibits, Financial Statement Schedules.

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

	1.	Financial Statements. The financial statements and notes thereto which are attached hereto have been included by reference into Item 8 of this part of the annual report on Form 10-K. See the Index to Financial Statements on page 33.

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

	3.	Exhibits

EXHIBIT INDEX

Exhibit Number	Description of Document
2.1	Share Purchase Agreement, dated as of September 30, 2021 (incorporated by reference to the exhibit 2.1 of the Form 8-K filed October 1, 2021)

3.1	Articles of Incorporation of EBET, Inc. (incorporated by reference to exhibit 3.1 to the Company’s Form S-1 file no. 333-254068)

3.2	Amended and Restated Bylaws of EBET, Inc. (incorporated by reference to exhibit 3.2 to the Company’s Form 8-K filed May 5, 2022)

3.3	Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (incorporated by reference to exhibit 3.1 to the Company’s Form 8-K filed January 3, 2023)

3.4	Articles of Merger (incorporated by reference to exhibit 3.1 to the Company’s Form 8-K filed May 5, 2022)

3.5	Certificate of Amendment of the Articles of Incorporation of EBET, Inc. (incorporated by reference to exhibit 3.1 to the Company’s Form 8-K filed July 28, 2023)

3.6	Amendment to EBET, Inc. Articles of Incorporation (incorporated by reference to exhibit 3.1 to the Company’s Form 8-K filed October 2, 2023)

4.1	Form of Common Stock Certificate (incorporated by reference to exhibit 4.1 to the Company’s Form S-1/A file no. 333-254068)

4.2	Form of Warrant issued in connection with Domain Purchase Agreements (incorporated by reference to exhibit 4.3 to the Company’s Form S-1 file no. 333-254068)

4.3	Form of Convertible Note issued in connection with Domain Purchase Agreements (incorporated by reference to exhibit 4.4 to the Company’s Form S-1 file no. 333-254068)

4.4	Form of Promissory Note between EBET, Inc., Esports Product Technologies Malta Ltd. and Aspire Global Plc (incorporated by reference to exhibit 4.1 to the Company’s Form 8-K filed December 1, 2021)

4.5	Form of Preferred Stock Investor Warrant (incorporated by reference to exhibit 4.2 to the Company’s Form 8-K filed December 1, 2021)

4.6	Form of Lender Warrant (incorporated by reference to exhibit 4.3 to the Company’s Form 8-K filed December 1, 2021)

4.7 *	Description of Securities of EBET, Inc.

4.8	Form of June 2022 Investor Warrant (incorporated by reference to exhibit 4.1 to the Company’s Form 8-K filed June 8, 2022)

4.9	Form of February 2023 Investor Warrant (incorporated by reference to exhibit 4.1 to the Company’s Form 8-K filed February 2, 2023)

10.1 **	2020 Stock Plan of EBET, Inc., as amended, and forms of award agreements thereunder (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed July 28, 2023)

10.2	Domain Purchase Agreement between ESEG Limited and Dover Hill LLC (incorporated by reference to exhibit 10.7 to the Company’s Form S-1 file no. 333-254068)

10.3	Domain Purchase Agreement between ESEG Limited and Esports Group LLC (incorporated by reference to exhibit 10.8 to the Company’s Form S-1 file no. 333-254068)

10.4	Domain Purchase Agreement between ESEG Limited and YSW Holdings, Inc. (incorporated by reference to exhibit 10.9 to the Company’s Form S-1 file no. 333-254068)

10.5 **	Form of Independent Director Agreement (incorporated by reference to exhibit 10.10 to the Company’s Form S-1 file no. 333-254068)

10.6 +	Software License Agreement between Galaxy Group Ltd. and ESEG Limited Dated September 28, 2020 (incorporated by reference to exhibit 10.11 to the Company’s Form S-1 file no. 333-254068)

10.7 +	White Label Agreement by and between Splash Technology Limited, and EBET, Inc. dated February 5, 2021 (incorporated by reference to exhibit 10.12 to the Company’s Form S-1 file no. 333-254068)

10.8	License Agreement between EBET, Inc. and Colossus (IOM) Limited dated May 6, 2021 (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed May 12, 2021)

10.9 **	First Amended and Restated Employment Agreement between EBET, Inc. and Aaron Speach dated November 5, 2021 (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed November 9, 2021)

10.10 **	Non-Employee Director Compensation Policy (incorporated by reference to exhibit 10.3 to the Company’s Form 8-K filed November 9, 2021)

10.11 +	Credit Agreement dated November 29, 2021 between EBET, Inc., certain subsidiaries of EBET, Inc., and CP BF Lending, LLC (incorporated by reference to the Exhibit 10.2 of the Form 8-K filed December 1, 2021)

10.12	Note Conversion Option Agreement between EBET, Inc. and CP BF LENDING, LLC (incorporated by reference to exhibit 10.2 to the Company’s Form 8-K filed June 8, 2022)

10.13	Amendment to Note Conversion Option Agreement between EBET, Inc. and CP BF LENDING, LLC (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed June 17, 2022)

10.14	Employment Agreement between EBET, Inc. and Matthew Lourie (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed September 9, 2022)

10.15 ¥	Forbearance Agreement dated June 30, 2023 between EBET, Inc., certain subsidiaries of EBET, Inc., and CP BF Lending, LLC (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed July 3, 2023)

10.16	Form of Revolving Note issuable by EBET, Inc. to CP BF Lending, LLC (incorporated by reference to exhibit 10.2 to the Company’s Form 8-K filed July 3, 2023)

10.17	Forbearance Agreement Amendment No. 1 dated September 15, 2023 between EBET, Inc., certain subsidiaries of EBET, Inc., and CP BF Lending, LLC (incorporated by reference to exhibit 10.2 to the Company’s Form 8-K filed September 19, 2023)

10.18 ¥	Forbearance Agreement Amendment No. 2 dated October 2, 2023 between EBET, Inc., certain subsidiaries of EBET, Inc., and CP BF Lending, LLC (incorporated by reference to exhibit 10.3 to the Company’s Form 8-K filed October 2, 2023)

10.19	Amended and Restated Note Conversion Option Agreement dated October 2, 2023 between EBET, Inc. and CP BF Lending, LLC (incorporated by reference to exhibit 10.5 to the Company’s Form 8-K filed October 2, 2023)

10.20 *	Third Amendment to Credit Agreement to Credit Agreement dated January 9, 2024 between EBET, Inc., certain subsidiaries of EBET, Inc., and CP BF Lending, LLC

10.21*	Second Amended and Restated Note Conversion Option Agreement dated January 9, 2024 between EBET, Inc. and CP BF Lending, LLC

21	List of Subsidiaries (incorporated by reference to exhibit 21 to the Company’s Form 10-K filed December 23, 2021)

23.1 *	Consent of BF Borgers LLP

31.1 *	Certification of Principal Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended

31.2 *	Certification of Principal Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended

32.1 *	Certification of Principal Executive Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2 *	Certification of Principal Financial Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted in IXBRL, and included in exhibit 101).

*	Filed herewith.
**	Management contract or compensatory plan, contract or arrangement.
+	Pursuant to Item 601(b)(10)(iv) of Regulation S-K promulgated by the SEC, certain portions of this exhibit have been redacted. The Company hereby agrees to furnish supplementally to the SEC, upon its request, an unredacted copy of this exhibit.
¥	Schedules and exhibits omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company will furnish a copy of any omitted schedule or exhibit to the SEC upon request.

Item 16.

10-K Summary.

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	EBET, INC.

	By:	/s/ Aaron Speach
		Aaron Speach,
		Chief Executive Officer and Chairman

Date: January 12, 2024

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

Signature	Title	Date

/s/ Aaron Speach	Chief Executive Officer and Chairman	January 12, 2024
Aaron Speach	(Principal Executive Officer)


/s/ Matthew Lourie	Chief Financial Officer	January 12, 2024
Matthew Lourie	(Principal Financial and Accounting Officer)


/s/ Michael Nicklas	Director	January 12, 2024
Michael Nicklas


/s/ Dennis Neilander	Director	January 12, 2024
Dennis Neilander


/s/ Christopher S. Downs	Director	January 12, 2024
Christopher S. Downs

EXHIBIT 4.7

DESCRIPTION OF THE COMPANY’S SECURITIES

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

Our amended and restated articles of incorporation authorize us to issue up to 500,000,000 shares of common stock and 10,000,000 shares of preferred stock.

Common Stock

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

Voting

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

Dividends

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

Liquidation Rights

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

Other

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

Preferred Stock

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

Series A Preferred Stock Offering

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

The Preferred Stock was entitled to receive dividends, at a rate of 14.0% per annum, in cash or in kind, beginning on the first such date after the issuance date and ending on the 18-month anniversary. The Preferred Stock was convertible into Company common stock at a conversion price of $2.58 per share. As of August 28, 2023, the Company had received conversion notices with respect all 37,700 shares of Preferred Stock, resulting in the issuance of 14,132,816 shares of common stock and no shares of Preferred Stock outstanding.

The Warrants expire on the fifth anniversary thereafter. The Warrants are exercisable at an exercise price of $0.116 per share, provided that the exercise price is subject to anti-dilution protection upon any subsequent transaction at a price lower than the exercise price then in effect. The Warrants can be exercised on a cashless basis if there is no effective registration statement registering, or no current prospectus available for, the resale of the shares of common stock underlying the Warrants.

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

Warrants and Convertible Notes

On September 1, 2020, our wholly owned subsidiary, ESEG Limited, entered into three domain purchase agreements. Each of the domain purchase agreements required the issuance of a 10% convertible note in principal amount of $700,000 and the issuance of a warrant to purchase ordinary shares of ESEG. Two of these agreements also require an additional cash payment after five years, totaling $675,000. Upon our acquisition of ESEG, we exchanged the ESEG securities issued to the domain sellers for our securities. Accordingly, we issued each of the three domain seller a 10% convertible note in principal amount of $700,000, which matures on March 1, 2022 and is convertible at the option of the holder at a conversion price of $15.00 per share, and we issued the three domain sellers a five-year warrant to purchase 24,833 shares, 21,667 shares, and 21,667 shares, respectively, of our common stock at an exercise price of $9.00 per share. Each of the foregoing convertible notes and warrants provide that no holder of these notes or warrants will be permitted to convert such notes or exercise such warrants to the extent that the holder or any of its affiliates would beneficially own in excess of 4.99% of our common stock after such conversion or exercise.

On January 9, 2024, we entered into an agreement with our secured lender (“Lender”), pursuant to which we agreed that the Lender shall have the right to convert the principal balance and accrued interest under its loan and revolving note, in aggregate principal amount of $31,458,644, into shares of our common stock at a conversion price of $0.116 per share (subject to adjustment for stock splits, stock dividends and other similar events). The foregoing conversion price is subject to future adjustment to the lowest price per share referenced in any equity related instrument we issue to any other person until the Lender has exercised its conversion rights. Pursuant to the agreement, the Lender is prohibited from converting its debt to the extent that such conversion would result in the number of shares of common stock beneficially owned by Lender and its affiliates exceeding 9.99% of the total number of shares of common stock outstanding immediately after giving effect to the conversion, which percentage may be increased or decreased at the holder’s election provided any adjustment would not become effective for 61 days. We agreed to file a resale registration statement providing for the resale by the Lender of the shares of common stock that may be received upon the foregoing conversion within 30 calendar days of the Lender’s request, and to use commercially reasonable efforts to cause such registration statement to become effective within 90 days of such request. To the extent that we do not have sufficient authorized shares of common stock to allow for the full conversion permitted, upon the Lender’s request, we will be required to use its reasonable best efforts to obtain approval of an increase in our authorized shares from our shareholders. During any period of time that we do not have sufficient authorized shares to allow for the full conversion permitted, we will be prohibited from issuing any shares of common stock or common stock equivalents.

Articles of Incorporation and Bylaw Provisions

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

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

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

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

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

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

Nevada Takeover Statute

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

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

Limitations on Liability and Indemnification of Officers and Directors

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

Listing

Our common stock is quoted on the OTCQB under the symbol “EBET.”

Transfer Agent

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

EXHIBIT 10.20

EXECUTION

THIRD AMENDMENT TO CREDIT AGREEMENT

among

EBET, INC. F/K/A ESPORTS TECHNOLOGIES, INC.
as the Borrower,

the SUBSIDIARIES OF THE BORROWER,
as Guarantors

and

CP BF LENDING, LLC,
as Lender

Dated as of January 9, 2024

THIRD AMENDMENT TO CREDIT AGREEMENT

This THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of January 9, 2024 (the “Effective Date”) by and between EBET, INC. f/k/a ESPORTS TECHNOLOGIES, INC., a Nevada corporation (the “Borrower”), the Guarantors, and CP BF LENDING, LLC, a Delaware limited liability company (the “Lender”).

WHEREAS, the Lender and the Borrower are parties to that certain Credit Agreement dated as of November 29, 2021, as amended (the “Credit Agreement”) whereby the Lender advanced a term loan to the Borrower in the original principal amount of THIRTY MILLION DOLLARS and 00/100 CENTS (US$30,000,000.00) (the “Loan” as defined in the Credit Agreement) which Loan and other Obligations under the Credit Agreement have been unconditionally guaranteed by the Guarantors;

WHEREAS, the Lender, the Borrower and the Guarantors have entered into a First Amendment and Limited Waiver Agreement dated as of May 16, 2022 (the “First Amendment”), as modified by a Limited Waiver Extension Agreement dated as of May 31, 2022, a Second Limited Waiver Agreement dated as of June 15, 2022, a Third Limited Waiver Agreement dated as of July 15, 2022, a Fourth Limited Waiver Agreement dated as of August 2, 2022, a Fifth Limited Waiver Agreement dated as of August 15, 2022, a Sixth Limited Waiver Agreement dated as of September 2, 2022, a Seventh Limited Waiver Agreement dated as of September 30, 2022, an Eighth Limited Waiver Agreement dated as of October 6, 2022, a Ninth Limited Waiver Agreement dated as of October 31, 2022, a Tenth Limited Waiver Agreement dated as of November 30, 2022, an Eleventh Limited Waiver Agreement dated as of December 16, 2022, a Twelfth Limited Waiver Agreement dated as of January 9, 2023, a Thirteenth Limited Waiver Agreement dated as of January 31, 2023, a Fourteenth Limited Waiver Agreement dated as of February 1, 2023, a Fifteenth Limited Waiver Agreement dated as of April 28, 2023, a Sixteenth Limited Waiver Agreement dated as of May 12, 2023, a Seventeenth Limited Waiver Agreement dated as of May 26, 2023, an Eighteenth Limited Waiver Agreement dated as of June 9, 2023, and a Nineteenth Limited Waiver dated as of June 20, 2023 (collectively, the “Limited Waiver Agreement”), the Forbearance Agreement dated as of June 30, 2023, as the same may be amended from time to time (the “Forbearance Agreement”),the Forbearance Agreement Amendment No. 1 dated as of September 15, 2023, and the Forbearance Agreement Amendment No. 2 dated as of October 1, 2023 (collectively, the “Forbearance Agreement Amendment”);

WHEREAS, in connection with the Forbearance Agreement, the Borrower and Guarantors requested that certain modifications be made to the Credit Agreement to provide for a discretionary TWO MILLION DOLLAR and 00/100 CENTS (US$2,000,000.00) revolving loan, and Lender agreed, pursuant to the terms of the Forbearance Agreement to so amend the Credit Agreement to extend to the Borrower a discretionary TWO MILLION DOLLAR and 00/100 CENTS (US$2,000,000.00) revolving loan which Revolving Loan is evidenced by the Revolving Note;

WHEREAS, pursuant to a Second Amendment to Credit Agreement dated as of September 29, 2023, the Borrower has requested that the Lender agreed to increase the maximum amount available at any time under the Revolving Loan to FOUR MILLION DOLLARS and 00/100 CENTS (US$4,000,000.00), and the Lender has agreed to extend such additional credit pursuant to the terms of this Amendment;

WHEREAS, the Borrower has requested that the Lender increase the maximum amount available at any time under the Revolving Loan to SIX MILLION FIVE HUNDRED THOUSAND DOLLARS and 00/100 CENTS (US$6,500,000.00), and the Lender has agreed to extend such additional credit pursuant to the terms of this Amendment; and

WHEREAS, as of the date hereof prior to giving effect to this Amendment, the Borrower confirms that the principal amount outstanding in respect of the Loan is TWENTY SEVEN MILLION SIX HUNDRED THIRTEEN THOUSAND SEVEN HUNDRED THIRTY DOLLARS and 09/100 CENTS (US$27,613,730.09 ), together with interest accrued and unpaid thereon (including PIK interest), and the principal amount outstanding in respect of the Revolving Loan is THREE MILLION EIGHT HUNDRED FORTY FOUR THOUSAND NINE HUNDRED THIRTEEN DOLLARS and 48/100 CENTS (US$3,844,913.48 ) (including PIK interest), together with all fees, costs, expenses and other charges due and owing by the Borrower under the Credit Documents and that all such amounts are unconditionally owing by the Borrower to the Lender, without offset, defense or counterclaim of any kind, nature or description whatsoever.

NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Credit Parties and the Lender hereby agree to the following amendments to the Credit Agreement and the Revolving Note.

1. Defined Terms. Capitalized terms used herein and not otherwise defined in the recitals shall have the meanings ascribed to them in the Credit Documents.

2. Amendments to Credit Agreement. Effective as of the Effective Date but subject to the satisfaction of the conditions precedent set forth in Section 5 below, the parties hereto agree that the Credit Agreement is hereby amended as follows:

a. Section 2.1(b) of the Credit Agreement is deleted in its entirety and the following is substituted in place thereof:

“(b) Subject to and upon the terms and conditions hereof and relying on the representations and warranties set forth herein, Lender agrees, in its sole and absolute discretion, to make the Revolving Loan advances from time to time to the Borrower in the aggregate amount up to but not exceeding SIX MILLION FIVE HUNDRED THOUSAND DOLLARS and 00/100 CENTS (US$6,500,000.00) outstanding at any time. Any principal amounts of the Revolving Loan subsequently repaid or prepaid may be re-borrowed pursuant to the terms of the Revolving Note. The Revolving Loan shall terminate immediately and without further action on the earlier of the occurrence of a Termination Event or the Maturity Date.”

b. Section 2.1(e) of the Credit Agreement is deleted in its entirety and the following is substituted in place thereof:

“(e) Revolving Loan advances in excess of FOUR MILLION DOLLARS and 00/100 CENTS (US$4,000,000.00) shall not be available to the Borrower or made by the Lender until such time as the Lender has received fully executed documents which provide that all advances in excess of FOUR MILLION DOLLARS and 00/100 CENTS (US$4,000,000.00) made under the Revolving Loan will be secured by a Lien on all Collateral granted by Karamba Limited under the laws of Malta, which documents must be executed on or before January 19, 2024 unless otherwise waived or modified by the Lender.”

3. Amendment to Revolving Note. Effective as of the date of satisfaction of the conditions precedent set forth in Section 5 below, the parties hereto agree that the Revolving Note is hereby amended as follows:

a. All references to the principal sum of “FOUR MILLION DOLLARS” are hereby amended by deleting “FOUR MILLION DOLLARS” and substituting “SIX MILLION FIVE HUNDRED THOUSAND DOLLARS and 00/100 CENTS” in place thereof, and all references to the principal sum of “(US$4,000,000.00)” are hereby amended by deleting “($4,000,000.00)” and by substituting “($6,500,000.00)” in place thereof.

4. Conditions Precedent to the Effectiveness of this Amendment. The effectiveness of this Amendment is subject to the following conditions precedent:

(a) The Lender shall have received this Amendment, duly executed by the Borrower and the Guarantors.

(b) a certificate dated the date hereof, signed by a duly authorized officer, director or manager of the Borrower and the Guarantors, containing certified copies of (i) resolutions duly adopted by the board of directors or other applicable authorizing body of the Borrower and the Guarantors, as applicable, authorizing the execution and delivery of this Amendment and all documents required to be delivered in connection herewith, and all transactions contemplated herein; (ii) a statement containing the true and correct names, titles and signatures of individuals or entities authorized to sign such documents and authorize such transactions; (iii) a statement that the Borrower and each Guarantor is in good standing (or the substantive equivalent in each relevant jurisdiction) in the Borrower’s and each Guarantors’ jurisdiction of incorporation, organization or formation and in each jurisdiction in which it is qualified as a foreign corporation or other entity to do business; and (v) and a statement that there have been no modifications to the Borrower’s or any Guarantor’s formation or governance documents since November 29, 2021 except as contained in the documents attached to the certificate.

(c) The Lender shall have received such documents and certificates as the Lender or its counsel may reasonably request relating to the organization, existence and good standing of the Credit Parties, the authorization of this Amendment and any other legal matters relating to such Credit Parties, the Credit Documents or this Amendment, all in form and substance reasonably satisfactory to the Lender and its counsel.

(d) The Lender shall have received a Second Amended and Restated Note Conversion Option Agreement, duly executed by the Borrower and the Guarantors

(e) The Lender shall have received payment of the Lender’s fees and reasonable out-of-pocket expenses (including reasonable out-of-pocket fees and expenses of counsels for the Lender) in connection with this Amendment.

5. Representations and Warranties of the Credit Parties. Each Credit Party for itself hereby represents and warrants as follows:

(a) This Amendment, the Credit Agreement (as amended hereby) and the Revolving Note (as amended hereby), as applicable, constitute the legal, valid and binding obligations of such Credit Party enforceable against such Credit Party in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting Lenders’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

(b) As of the date hereof and giving effect to the terms of this Amendment, (i) no Default or Event of Default, other than as referenced in the Forbearance Agreement as amended by the Forbearance Agreement Amendment, shall have occurred and be continuing and (ii) the representations and warranties of the Borrower set forth in the Credit Agreement are true and correct in all material effects (provided that any representation or warranty qualified by materiality or Material Adverse Change is true and correct in all respects) (except to the extent any such representation or warranty expressly relates to an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date).

6. Credit Documents. This Amendment shall constitute a “Credit Document” as defined in the Credit Agreement, as the same may be amended from time to time. All references in the Credit Agreement to “this Amendment”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Credit Documents to the Credit Agreement, “thereunder”, “thereof” or words of like import referring to the Credit Agreement shall be deemed to refer to the Credit Agreement as modified by this Amendment. For the avoidance of doubt, any default by the Borrower or any Guarantor under the terms of this Amendment shall constitute an Event of Default under the Credit Agreement.

7. Governing Law, Jurisdiction, Counterparts, Jury Trial Waiver Confidentiality. This Amendment shall be governed by, and construed in accordance with, the law of New York without reference to its conflicts of law principles (other than Section 5-1401 of the New York General Obligations Law). The provisions of Sections 9.7, 9.8, 9.9 and 9.16 of the Credit Agreement are hereby incorporated by reference as if fully set forth herein and shall apply mutatis mutandis.

8. Effect on Credit Documents. The Credit Agreement and each of the other Credit Documents shall be and remain in full force and effect in accordance with their respective terms and are hereby ratified and confirmed in all respects. The execution, delivery, and performance of this Amendment shall not operate, except as expressly set forth herein, as a modification or waiver of any right, power, or remedy of the Lender under the Credit Agreement, or any other Credit Document. The amendments contained in this Amendment are limited to the specifics hereof, shall not apply with respect to any facts or occurrences other than those on which the same are based, shall not excuse future non-compliance by the Borrower or any Guarantor with respect to any Credit Document to which it is a party, and shall not operate as a waiver or forbearance to any further or other matter under the Credit Documents. Each Credit Party hereby ratifies and reaffirms (i) the validity, legality and enforceability of the Credit Documents; (ii) that its reaffirmation of the Credit Documents is a material inducement to the Lender to enter into this Amendment; (iii) that its obligations under the Credit Documents shall remain in full force and effect until all the Obligations have been paid in full; and (iv) that the Revolving Loan as amended by this Amendment is an “Obligation” under the Credit Documents and is secured by the Collateral. Guarantors expressly agree that the Guaranty of each extends to all Obligations under the Credit Documents, including Obligations under the Revolving Note. The Borrower and each Credit Party represents and warrants that the representations and warranties contained in this Amendment, Credit Agreement and in the other Credit Documents are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties were true and correct on and as of such earlier date.

9. Successors and Assigns. This Amendment binds and benefits the respective successors and assigns of the parties, except that neither the Borrower nor any Guarantor may assign or delegate any of its rights or obligations under this Amendment without the prior written consent of the Lender. The Lender may assign all or a portion of all of its rights and obligations under this Amendment.

10. No Amendment. Any amendment, or waiver of, or any consent given under, any provision of this Amendment shall be in writing and, in the case of any amendment, signed by the parties or their permitted successors and assigns.

11. Entire Agreement. This Amendment and the other Credit Documents represent the final and complete agreement of the parties hereto with respect to the subject matter herein, and all prior negotiations, representations, understandings, writings and statements of any nature with respect thereto are hereby superseded in their entirety by the terms of this Amendment and the other Credit Documents.

12. Further Assurances. The Borrower and each Guarantor shall execute and deliver any and all reasonable additional documents, agreements and instruments, and take such additional reasonable action (including the filing and recording of financing statements) as may be reasonably requested by the Lender, without payment of further consideration, to effectuate the intent and purpose of this Amendment and consistent with the provisions of, and limitations contained in, the Credit Documents. The Borrower and each Guarantor agree to cooperate with, and shall cause their Subsidiaries and their advisors to cooperate with, any financial advisors or appraisers that may from time to time be retained by or on behalf of the Lender, including, without limitation, providing reasonable access (upon reasonable advance notice) to their premises, personnel and books and records.

13. Advice of Counsel. Each Credit Party has freely and voluntarily entered into this Amendment with the advice of legal counsel of its choosing, or has knowingly waived the right to do so.

14. Reimbursement of Costs and Expenses. Each Credit Party agrees to pay all costs, fees and expenses of the Lender (including attorneys' fees), expended or incurred by the Lender in connection with the negotiation, preparation, administration and enforcement of this Amendment, the Credit Documents, the Obligations, any of the Collateral and all fees, costs and expenses incurred in connection with any bankruptcy or insolvency proceeding (including, without limitation, any adversary proceeding, contested matter or motion brought by the Lender or any other Person). Without in any way limiting the foregoing, each Credit Party hereby reaffirms its agreement under the applicable Credit Documents to pay or reimburse the Lender for certain costs and expenses incurred by the Lender. The Credit Parties are jointly and severally liable for their obligations under this Section 15.

15. Release. The Borrower and each Guarantor hereby release, waive, and forever relinquish all claims, demands, obligations, liabilities and causes of action of whatever kind or nature, whether known or unknown, which any of them have, may have, or might assert at the time of execution of the Agreement against the Lender and/or its parents, affiliates, participants, officers, directors, employees, agents, attorneys, accountants, consultants, successors and assigns, directly or indirectly, which occurred, existed, was taken, permitted or begun prior to the execution of this Amendment, arising out of, based upon, or in any manner connected with (i) any transaction, event, circumstance, action, failure to act or occurrence of any sort or type, whether known or unknown, with respect to the Credit Agreement, any other Credit Document and/or the administration thereof or the Obligations created thereby; (ii) any discussions, commitments, negotiations, conversations or communications with respect to the refinancing, restructuring or collection of any Obligations related to the Credit Agreement, any other Credit Document and/or the administration thereof or the Obligations created thereby, or (iii) any matter related to the foregoing, in each case, prior to the execution of this Amendment.

[signature pages follow]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

LENDER:

CP BF LENDING, LLC

By: CP Business Finance GP, LLC, its manager,

By: Columbia Pacific Advisors, LLC, its manager

By: /s/ Brad Shain

Name: Brad Shain

Title: Manager

[Signature Page to Third Amendment to Credit Agreement]

BORROWER:

EBET, INC. F/K/A ESPORTS TECHNOLOGIES, INC.

By: /s/ Aaron Speach

Name: Aaron Speach

Title: CEO

[Signature Page to Third Amendment to Credit Agreement]

	GUARANTORS:

	GLOBAL E-SPORTS ENTERTAINMENT GROUP LLC

	By:		/s/ Aaron Speach
	Name:		Aaron Speach
	Title:		CEO

	ESPORTSBOOK TECHNOLOGIES LIMITED

	By:		/s/ Aaron Speach
	Name:		Aaron Speach
	Title:		CEO

	ESEG LIMITED

	By: GLOBAL E-SPORTS ENTERTAINMENT GROUP LLC, its Director

	By:		/s/ Aaron Speach
	Name:		Aaron Speach
	Title:		CEO

	ESPORTS PRODUCT TECHNOLOGIES MALTA LTD

	By:		/s/ Aaron Speach
	Name:		Aaron Speach
	Title:		CEO

	ESPORTS MARKETING TECHNOLOGIES LIMITED

	By:		/s/ Aaron Speach
	Name:		Aaron Speach
	Title:		CEO

[Signature Page to Third Amendment to Credit Agreement]

	GOGAWI ENTERTAINMENT GROUP LIMITED

	By:		/s/ Aaron Speach
	Name:		Aaron Speach
	Title:		CEO

	KARAMBA LIMITED

	By:		/s/ Aaron Speach
	Name:		Aaron Speach
	Title:		CEO

	ESPORTS PRODUCT TRADING MALTA LIMITED

	By:		/s/ Aaron Speach
	Name:		Aaron Speach
	Title:		CEO

	ESPORTS TECHNOLOGIES (ISRAEL) LTD

	By:		/s/ Aaron Speach
	Name:		Aaron Speach
	Title:		CEO

	EBET CURACAO N.V.

	By:		/s/ Aaron Speach
	Name:		Aaron Speach
	Title:		CEO

[Signature Page to Third Amendment to Credit Agreement]

EXHIBIT 10.21

SECOND AMENDED AND RESTATED

NOTE CONVERSION OPTION AGREEMENT

THIS SECOND AMENDED AND RESTATED NOTE CONVERSION OPTION AGREEMENT (this “Agreement”) is effective as of January 9, 2024, by and among EBET, Inc. (formerly, eSports Technologies, Inc.), a Nevada corporation (the “Company”) and CP BF LENDING, LLC, a Delaware limited liability company (together with its successors, assigns and Related Parties, “Lender”), each a “Party” and collectively the “Parties”, upon the following premises:

WHEREAS, the Parties entered into that certain Note Conversion Option Agreement, dated June 7, 2022, as amended by that certain Amendment to Note Conversion Option Agreement dated June 15, 2022, and further amended and restated by that certain Amended and Restated Note Conversion Option Agreement, dated October 1, 2023 (the “NCOA”), in connection with that certain Credit Agreement, dated November 29, 2021 (the “Credit Agreement”) pursuant to which Lender made a single loan to the Company of $30.0 million (the “Term Loan”);

WHEREAS, the Lender previously extended a discretionary revolving line of credit to the Company for up to $4.0 million dollars and Lender has agreed to increase the revolving line of credit to the Company for up to $6.5 million dollars (the “Revolving Loan”, with the aggregate amount outstanding under the Term Loan and the Revolving Loan referred to herein as the “Convertible Debt”);

WHEREAS, the Company has agreed to amend and restate the NCOA to permit Lender to convert the entire Convertible Debt, including accrued interest thereon, into shares of Company common stock (the “Common Stock”) as set forth herein. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in the Credit Documents (as such term is defined in the Credit Agreement); and

WHEREAS, this Agreement, constitutes a “Credit Document” as defined in the Credit Agreement, as the same may be amended from time to time.

NOW THEREFORE, on the stated premises and for and in consideration of the mutual covenants and agreements hereinafter set forth and the mutual benefits to the Parties to be derived herefrom, it is hereby agreed as follows:

ARTICLE I

REPRESENTATIONS AND WARRANTIES OF LENDER

As an inducement to and to obtain the reliance of the Company, Lender represents and warrants as follows:

Section 1.01Organization; Authorization. Lender has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement by Lender and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of Lender and no further action is required by Lender in connection therewith. This Agreement has been duly executed by the Lender and, when delivered in accordance with the terms hereof will constitute the valid and binding obligations of Lender enforceable against Lender in accordance with its terms.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

As an inducement to, and to obtain the reliance of Lender, the Company represents and warrants as follows:

Section 2.01Organization; Authorization. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement by the Company and the consummation by them of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Company and, except as set forth herein, no further action is required by the Company in connection therewith. This Agreement has been duly executed by the Company and, when delivered in accordance with the terms hereof will constitute the valid and binding obligations of the Company enforceable against the Company in accordance with its terms.

ARTICLE III

CONVERSION TERMS

Section 3.01The Conversion.

(a) At any time prior to the indefeasible repayment of the Obligations in full, Lender shall have the right at any time, subject to the limitations set forth in Sections 3.03 and 3.05, to convert all or any portion of the principal balance and accrued interest of the Convertible Debt into Common Stock (the “Conversion Shares”) at the Conversion Price (as defined below).

(b)Exercise of the conversion right set forth in Section 3.01(a) may be made on one or more occasions by delivery to the Company of notice (a “Conversion Notice”) of Lender’s intention in accordance with Section 9.2 of the Credit Agreement. Within two (2) Business Days following the receipt of the foregoing notice, the Company shall cause the Conversion Shares to be transmitted by the Company’s transfer agent to Lender via book-entry confirmation.

(c)“Conversion Price” shall, with respect to each Conversion Share issued pursuant to a Conversion Notice, mean the lower of (a) $0.1289, (b) the closing price of the Common Stock on a national securities exchange or other market system on which the Common Stock is listed, quoted or trading on the trading day immediately prior to the date of first public announcement of this Agreement, or (c) the lowest per share price referenced in any equity or equity related instrument issued to any other Person until Lender has fully exercised its conversion rights pursuant to the terms of this Agreement. The Conversion Price shall be subject to adjustment resulting from a stock split, stock distribution, stock subdivision, stock combination, reclassification and other similar corporate actions.

Section 3.02Principal repayment; No Prepayment Penalty. Upon the issuance of the Conversion Shares, in Lender’s sole and absolute discretion, the principal amount of one or both of the Term Loan and the Revolving Loan shall be reduced by the amount that Lender elects to convert pursuant to this Agreement, until the Obligations are repaid in full. Lender agrees that the exercise of its conversion rights hereunder shall not be deemed to be a prepayment pursuant to the Credit Documents that would require the Company to pay the Applicable Prepayment Premium or any other amounts due in connection with a prepayment.

Section 3.03Insufficient Authorized Shares.

(a)So long as Convertible Debt remains outstanding, the Company shall at all times keep reserved for issuance under this Agreement a number of shares of Common Stock at least equal to 100% of the maximum number of Conversion Shares as shall be necessary to satisfy the Company’s obligation to issue shares of Common Stock under this Agreement (the “Required Reserve Amount”).

(c) The Company shall promptly notify Lender of any failure by the Company to maintain the Required Reserve Amount. In the event of any such failure, upon the Lender’s request, the Company shall promptly seek, and use its reasonable best efforts to obtain, approval from the Company’s board of directors and stockholders for the increase of the Company’s authorized shares of Common Stock by an amount sufficient to cover the Required Reserve Amount (the “Increase to Authorized Shares Approval”). If the Company is not successful in attaining any Increase to Authorized Shares Approval, then the Company shall continue to use its reasonable best efforts, no less frequently than every ninety (90) calendar days, to obtain the Increase to Authorized Share Approval.

(d)Except as required by this Agreement, for so long as the Company does not have sufficient authorized shares to meet the Required Reserve Amount, or if any action proposed to be undertaken by the Company would result in a failure by the Company to meet the Required Reserve Amount, unless consented to by Lender (which consent may be withheld for any reason), the Company shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its subsidiaries of Common Stock or any securities of the Company or its subsidiaries which entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive Common Stock.

(e)The Company and Lender hereby declare that it is impossible to measure in money the damages which will accrue to the parties hereto by reason of the failure of any party to perform any of its obligations set forth in this Section 3.03. Therefore, Lender shall have the right to seek specific performance of such obligations, and if Lender shall institute any action or proceeding to enforce the provisions hereof, the Company hereby waives the claim or defense that the party instituting such action or proceeding has an adequate remedy at law.

Section 3.04Resale Registration. Within thirty (30) calendar days of Lender’s request (the “Resale Registration Request”), the Company shall file a customary resale registration statement (the “Resale Registration Statement”) providing for the resale by Lender of the Conversion Shares issued and issuable upon full exercise of the conversion right. The Company shall use commercially reasonable efforts to cause such Resale Registration Statement to become effective within ninety (90) days following the Resale Registration Request and to keep such Resale Registration Statement effective at all times until the later of the date (i) the Obligations are paid in full, or (ii) the Lender has fully exercised its conversion rights and sold all Conversion Shares available to it pursuant to the terms of this Agreement.

Section 3.05Limitations on Conversion. Notwithstanding any other provision herein, Lender shall not have the right to convert any portion of the Convertible Debt into Conversion Shares to the extent that, after giving effect to such conversion, Lender, together with its affiliates would beneficially own (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules thereunder) in excess of 9.99% of the then issued and outstanding shares of Common Stock of the Company (the “Beneficial Ownership Blocker”). The Beneficial Ownership Blocker may be adjusted at the written request of Lender, provided such adjustment shall not become effective for a period of 61 days after such written request.

Section 3.06Short Sales. Until such time as Lender no longer holds any Conversion Shares, Lender agrees not to effect any “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act.

Section 3.07[RESERVED].

Section 3.08Successors and Assigns. In the event that Lender sells, transfers, or otherwise disposes of all or any portion of the Convertible Debt, the Company hereby agrees that, at the request of Lender, it shall enter into a new note conversion option agreement with the purchaser or transferee of the Convertible Debt on terms and conditions identical to those set forth in this Agreement. Lender shall provide the Company with written notice of any transfer of Convertible Debt, including the identity of the new holder, within two (2) Business Days of such transfer.

ARTICLE IV

MISCELLANEOUS

Section 4.01Governing Law. This Agreement shall be governed by, enforced, and construed under and in accordance with the laws of the State of New York without giving effect to principles of conflicts of law thereunder.

Section 4.02Entire Agreement. This Agreement represents the entire agreement between the parties relating to the subject matter thereof and supersedes all prior agreements, term sheets, understandings and negotiations, written or oral, with respect to such subject matter.

Section 4.03Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which taken together shall be but a single instrument.

Section 4.04Construction. The Parties acknowledge that each of them has had the benefit of legal counsel of its own choice and has been afforded an opportunity to review this Agreement with its legal counsel and that this Agreement shall be construed as if jointly drafted by the Parties hereto. In this Agreement, the word “include”, “includes”, “including” and “such as” are to be construed as if they were immediately followed by the words, without limitation.

Section 4.05Severability. The invalidity or unenforceability of any term, phrase, clause, paragraph, restriction, covenant, agreement or other provision of this Agreement shall in no way affect the validity or enforcement of any other provision or any part thereof.

Section 4.06Headings. The paragraph headings contained in this Agreement are for convenience only, and shall in no manner be construed as part of this Agreement.

Section 4.07Effect of PDF and Photocopied Signatures. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. A copy of this Agreement signed by one Party and scanned and emailed to another Party (as a PDF or similar image file) shall be deemed to have been executed and delivered by the signing Party as though an original. A photocopy or PDF of this Agreement shall be effective as an original for all purposes.

[Remainder of page left intentionally blank. Signature page follows.]

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date first-above written.

(“Company”)

EBET, Inc.


	By:	/s/ Aaron Speach

	Its:	CEO

	Printed Name:	/s/ Aaron Speach

(“Lender”)

CP BF LENDING, LLC

By: CP Business Finance GP, LLC, its manager,

By: Columbia Pacific Advisors, LLC, its manager


	By:		/s/ Brad Shain

	Its:		Manger

	Printed Name:		Brad Shain

[signature page to Second Amended and Restated Note Conversion Option Agreement]

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Forms S-8 (File Nos. 333-256062 and 333-266678), Forms S-3 (File Nos. 333-265538 and 333-266677) and Forms S-1 (File Nos. 333-262228 and 333-270668) of our report dated January 12, 2024, relating to the consolidated financial statements of EBET, Inc. as of September 30, 2023 and 2022 and to all references to our firm included in this Annual Report on

Form 10-K.

/S BF Borgers CPA PC

Certified Public Accountants

Lakewood, CO

January 12, 2024

EXHIBIT 31.1

CERTIFICATION BY OFFICER

I, Aaron Speach, certify that:

1.	I have reviewed this Form 10-K for the year ended September 30, 2023 of EBET, Inc.;

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

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

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

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

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

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

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

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

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

	b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 12, 2024	By:	/s/ Aaron Speach
		Aaron Speach
		Chief Executive Officer

EXHIBIT 31.2

CERTIFICATION BY OFFICER

I, Matthew Lourie, certify that:

1.	I have reviewed this Form 10-K for the year ended September 30, 2023 of EBET, Inc.;

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

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

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

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

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

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

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

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

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

	b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 12, 2024	By:	/s/ Matthew Lourie
		Matthew Lourie
		Chief Financial Officer

EXHIBIT 32.1

CERTIFICATION OF OFFICER

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

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

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

The Form 10-K for the year ended September 30, 2023 (the “Report”) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: January 12, 2024	By:	/s/ Aaron Speach
		Aaron Speach
		Chief Executive Officer

EXHIBIT 32.2

CERTIFICATION OF OFFICER

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

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

Date: January 12, 2024	By:	/s/ Matthew Lourie
		Matthew Lourie

Cover - USD ($)	12 Months Ended
Cover - USD ($)	Sep. 30, 2023	Jan. 11, 2024	Mar. 31, 2023
Cover [Abstract]
Document Type	10-K
Amendment Flag	false
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--09-30
Entity File Number	001-40334
Entity Registrant Name	EBET, Inc.
Entity Central Index Key	0001829966
Entity Tax Identification Number	85-3201309
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	3960 Howard Hughes Parkway, Suite 500
Entity Address, City or Town	Las Vegas
Entity Address, State or Province	NV
Entity Address, Postal Zip Code	89169
City Area Code	(888)
Local Phone Number	411-2726
Title of 12(g) Security	Common Stock, par value $0.001
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Public Float			$ 5,189,593
Entity Common Stock, Shares Outstanding		14,979,642
ICFR Auditor Attestation Flag	false
Document Financial Statement Error Correction [Flag]	false
Auditor Name	BF Borgers CPA PC
Auditor Firm ID	5041
Auditor Location	Lakewood, CO

CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Current assets:
Cash	$ 304,709	$ 5,486,210
Accounts receivable, net	643,254	1,647,345
Prepaid expenses and other current assets	1,331,201	1,772,332
Derivative asset	0	1,116,153
Right of use asset, operating lease, current portion	0	129,975
Total current assets	2,279,164	10,152,015
Long term assets:
Fixed assets, net	161,213	546,408
Intangible assets, net	3,701,609	27,545,329
Goodwill	8,962,652	30,657,460
Total assets	15,104,638	68,901,212
Current liabilities:
Accounts payable and accrued liabilities	22,775,031	14,273,249
Current lease liabilities	0	129,974
Borrowings, current portion	39,252,130	21,202,585
Liabilities to users	937,948	1,272,308
Total current liabilities	62,965,109	36,878,116
Long-Term Liabilities:
Borrowings, net of current portion	559,597	10,257,520
Total liabilities	63,524,706	47,135,636
COMMITMENTS AND CONTINGENCIES
Stockholders' equity (deficit):
Preferred Stock, $0.001 par value, 10,000,000 shares authorized, 0 and 37,700 issued and outstanding as of September 30, 2023 and 2022, respectively	0	38
Common Stock; $0.001 par value, 500,000,000 shares authorized 14,979,642 and 555,153 shares issued and outstanding as of September 30, 2023 and 2022, respectively	14,980	555
Additional paid-in capital	103,255,793	91,957,856
Accumulated other comprehensive (deficit) income	(532,401)	(7,365,129)
Accumulated deficit	(151,158,440)	(62,827,744)
Total stockholders’ equity (deficit)	(48,420,068)	21,765,576
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)	$ 15,104,638	$ 68,901,212

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2023	Sep. 30, 2022
Statement of Financial Position [Abstract]
Preferred Stock, Par or Stated Value Per Share		$ 0.001
Preferred Stock, Shares Authorized		10,000,000
Preferred Stock, Shares Outstanding	0	37,700
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	14,979,642	555,153
Common stock, shares outstanding	14,979,642	555,153

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Revenue	$ 39,177,504	$ 58,596,620
Cost of revenue	(21,974,147)	(36,014,055)
Gross profit	17,203,357	22,582,565
Operating expenses:
Sales and marketing expenses	10,743,972	27,500,618
General and administrative expenses	26,100,283	17,640,728
Product and technology expenses	1,149,717	3,993,846
Impairment loss	44,917,891	3,851,503
Acquisition costs	0	2,240,147
Total operating expenses	82,911,863	55,226,842
Loss from operations	(65,708,506)	(32,644,277)
Other income (expenses):
Interest expense	(17,113,413)	(9,894,531)
Gain (loss) on derivative instruments	(142,187)	1,239,510
Fair value of warrant liability	1,114,925	0
Foreign currency loss	(2,394,696)	(128,311)
Total other expense	(18,535,371)	(8,783,332)
Loss before provision for income taxes	(84,243,877)	(41,427,609)
Provision for income taxes	0	0
Net loss	(84,243,877)	(41,427,609)
Preferred stock dividends	(4,086,819)	(4,750,585)
Net loss attributable to common shareholders	(88,330,696)	(46,178,194)
Other comprehensive income:
Foreign currency translation income (loss)	6,832,727	(7,419,040)
Total other comprehensive income	6,832,727	(7,419,040)
Comprehensive loss	$ (81,497,969)	$ (53,597,234)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical) - $ / shares	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Net loss per common share - basic	$ (32.23)	$ (93.35)
Net loss per common share - diluted	$ (32.23)	$ (93.35)
Weighted average common shares outstanding - basic	2,740,990	494,655
Weighted average common shares outstanding - diluted	2,740,990	494,655

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT) - USD ($)	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Sep. 30, 2021	$ 0	$ 444	$ 26,847,225	$ 53,911	$ (16,649,550)	$ 10,252,030
Beginning balance, shares at Sep. 30, 2021	0	443,848
Shares and warrants issued for cash, net		$ 32	3,492,418			3,492,450
Shares and warrants issued for cash, net, shares		32,587
Preferred shares issued for cash, net	$ 38		33,515,962			33,516,000
Preferred shares issued for cash, net, shares	37,700
Shares issued to for acquisition of Aspire B2C business		$ 6	5,665,364			5,665,370
Shares issued to for acquisition of Aspire B2C business, shares		6,228
Cashless exercise of warrants		$ 29	(29)
Cashless exercise of warrants, shares		28,643
Shares issued for conversion of borrowings		$ 28	412,472			412,500
Shares issued for conversion of borrowings, shares		27,500
Exercise of stock options for cash		$ 2	20,194			20,196
Exercise of stock options for cash, shares		1,960
Stock-based compensation		$ 14	5,447,358			5,447,372
Stock-based compensation, shares		14,387
Preferred share dividends			4,750,585		(4,750,585)
Stock warrants issued in connections with Senior Notes			11,806,307			11,806,307
Net loss					(41,427,609)	(41,427,609)
Comprehensive income				(7,419,040)		(7,419,040)
Ending balance, value at Sep. 30, 2022	$ 38	$ 555	91,957,856	(7,365,129)	(62,827,744)	21,765,576
Ending balance, shares at Sep. 30, 2022	37,700	555,153
Shares issued for conversion of borrowings		$ 75	1,127,582			1,127,657
Shares issued for conversion of borrowings, shares		75,179
Common stock issued for cash		$ 212	5,921,770			5,921,982
Stock-based compensation		$ 5	1,290,786			1,290,791
Stock-based compensation, shares		4,076
Preferred share dividends			4,086,819		(4,086,819)
Net loss					(84,243,877)	(84,243,877)
Comprehensive income				6,832,728		6,832,728
Common stock issued for cash, shares		212,418
Reclassification of warrants as liabilities			(1,114,925)			(1,114,925)
Conversion of preferred stock	$ (38)	$ 14,133	(14,095)
Conversion of preferred stock, shares converted	(37,700)
Conversion of preferred stock, shares issued		14,132,816
Ending balance, value at Sep. 30, 2023	$ 0	$ 14,980	$ 103,255,793	$ (532,401)	$ (151,158,440)	$ (48,420,068)
Ending balance, shares at Sep. 30, 2023	0	14,979,642

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Cash flow from operating activities:
Net loss	$ (84,243,877)	$ (41,427,609)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount	11,012,829	4,778,405
(Gain) loss on derivative instruments	142,187	(1,116,153)
Change in fair value of warrant liabilities	(1,114,925)	(0)
Depreciation and amortization	6,971,311	6,377,301
Amortization of right of use assets	142,444	175,497
Stock-based compensation	1,290,791	5,447,372
Impairment loss	44,917,891	3,851,503
Foreign exchange loss	2,394,696	128,092
Gain on cryptocurrency settlement	0	(428)
Changes in operating assets and liabilities:
Accounts receivable	1,155,206	(1,793,198)
Prepaid expenses	569,573	(1,128,372)
Accounts payable and accrued liabilities	7,351,432	11,988,008
Right of use lease liabilities	(142,443)	(14,969)
Liabilities to users	(453,365)	1,339,717
Net cash used in operating activities	(10,006,250)	(11,394,834)
Cash flow from investing activities:
Purchase of software and equipment	(11,390)	(1,200,882)
Acquisition of Aspire B2C business	0	(56,235,526)
Proceeds from sale of fixed assets	23,770	0
Net cash used by investing activities	12,380	(57,436,408)
Cash flow from financing activities:
Proceeds from settlement of derivative instruments	973,965	0
Repayment of notes payable	(5,000,000)	0
Proceeds from debt issuance, net of issuance costs	0	26,627,111
Proceeds from revolving line of credit	1,650,000	0
Proceeds from equity issuances, net of costs of capital	5,921,982	37,028,646
Net cash provided by financing activities	3,545,947	63,655,757
Effect of foreign exchange rates on cash	1,266,422	1,596,836
NET CHANGE IN CASH	(5,181,501)	(3,578,649)
CASH AT BEGINNING OF PERIOD	5,486,210	9,064,859
CASH AT END OF PERIOD	304,709	5,486,210
Supplemental disclosure of cash flow information:
Cash paid for interest	4,011,085	3,575,349
Cash paid for income taxes	0	0
Non-cash transactions
Preferred shares issued for dividends	4,086,819	4,750,585
Stock warrants issued in connection with Senior Notes	0	7,661,382
Common stock issued for acquisition of Aspire B2C business	0	5,665,370
Promissory note issued for acquisition of Aspire B2C business	0	11,330,740
Stock issued for conversion of borrowings	1,127,657	412,500
Capitalized interest and waiver fees on Senior Notes and Revolving Loan	832,184
Stock issuable for intangible assets	0	1,513,902
Stock issued for conversion of preferred stock	422,837	0
Reclassification of warrant as liabilities	$ 1,294,638	$ 0

ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN

12 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN

NOTE 1 – ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN

Organization

Acquisition of the B2C business of Aspire Global plc

Going Concern

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Basis of Presentation and Consolidation

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

Business combinations

Use of Estimates

Cash and Cash Equivalents

Accounts Receivable

Fixed Assets, net

Intangible Assets

Impairment of Long-Lived Assets

Leases

The following table summarizes the lease-related assets and liabilities recorded in the consolidated balance sheets at September 30, 2023 and 2022:


	September 30, 2023		September 30, 2022
Operating Leases:
Operating lease right-of-use assets	$	–	$	129,975
Right of use liability operating lease current portion	$	–	$	129,974
Right of use liability operating lease long term		–		–
Total operating lease liabilities	$	–	$	129,974

Operating lease expense was $142,375 and $201,978 during the years ended September 30, 2023 and 2022, respectively.

Liabilities to Users

Revenue Recognition

·	Identification of the contract with a customer

·	Identification of the performance obligations in the contract

·	Determination of the transaction price

·	Allocation of the transaction price to the performance obligations in the contract

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

Performance Obligations

Transaction Price Considerations

Cost of Revenue

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

Sales and Marketing Expenses

Product and Technology Expenses

General and Administrative Expenses

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

Income Taxes

Fair value of financial instruments

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

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

Fair Value Measurements at September 30, 2023

Level 1

Level 2

Level 3

Assets

Cash

304,709

–

Total assets

304,709

–

Liabilities

Senior Notes, net of discount

–

26,350,630

–

Revolving line of credit

–

1,690,000

–

Note due to Aspire

–

10,594,000

–

Convertible notes payable, net of discount

–

617,500

–

Other notes payable, net of discount

–

559,597

–

Total liabilities

–

39,811,727

–

Fair Value Measurements at September 30, 2022

Level 1

Level 2

Level 3

Assets

Cash

5,486,210

–

Derivative asset

–

1,116,153

–

Total assets

5,486,210

1,116,153

–

Liabilities

Senior Notes, net of discount

–

19,595,694

–

Note due to Aspire

–

9,748,000

–

Convertible notes payable, net of discount

–

1,606,891

–

Other notes payable, net of discount

–

509,520

–

Total liabilities

–

31,460,105

–

Derivative Instruments

Foreign Currency

Earnings per share

Embedded Conversion Features

Recently Issued Accounting Pronouncements

BUSINESS COMBINATION

12 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

BUSINESS COMBINATION

NOTE 3 – BUSINESS COMBINATION

Acquisition of the B2C business of Aspire Global plc

The acquired assets were recorded at their estimated fair values. The purchase price of this acquisition was allocated follows:


	Fair Value
Trademarks	$	21,836,528
Customer relationships		16,162,202
Goodwill		35,620,270
Total	$	73,619,000

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

Schedule of acquisition costs
Debt issuance costs	$	3,372,889
Equity issuance costs	$	4,184,000
Transaction expenses	$	2,240,147

Unaudited proforma information


	Fiscal Year Ended
	September 30, 2023			September 30, 2022
Revenue	$	39,177,504		$	68,628,158
Operating loss		(65,708,506	)		(32,488,215	)
Net loss		(84,243,877	)		(42,698,109	)
Net loss attributable to common shareholders		(88,330,696	)		(48,398,814	)
Loss per common share - basic and diluted	$	(32.23	)	$	(97.84	)

BORROWINGS

12 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

BORROWINGS

NOTE 4 – BORROWINGS

The following is a summary of borrowings outstanding as at September 30, 2023 and 2022:

Schedule of borrowings outstanding
				September 30, 2023
	Contractual Interest		Principal outstanding balance		Principal outstanding balance	Unamortized debt discount		Issuance costs	Issuance costs	Accrued Interest
	rate	Cur	Local		USD	USD		USD	USD	USD
Senior Note	15.0%	USD	26,350,630		26,350,630	–		–	26,350,630	–
Revolving Note	15.0%	USD	1,690,000		1,690,000	–		–	1,690,000	–
Note due to Aspire	10%	EUR	10,000,000		10,594,000	–		–	10,594,000	2,049,029
Convertible notes	10%	USD	617,500		617,500	–		–	617,500	62,681
Other	0%	USD	675,000		675,000	(115,403	)	–	559,597	–
Total borrowings					39,927,130	(115,403	)	–	39,811,727	2,111,710

Current									39,252,130	2,111,710
Long-term									559,597	–
Total borrowings									39,811,727	2,111,710

				September 30, 2022
	Contractual Interest		Principal outstanding balance	Principal outstanding balance	Unamortized debt discount		Issuance costs		Carrying Amount	Accrued Interest
	rate	Cur	Local	USD	USD		USD		USD	USD
Senior notes	15%	USD	30,558,446	30,558,446	(8,526,776	)	(2,435,976	)	19,595,694	–
Note due to Aspire	10%	EUR	10,000,000	9,748,000	–		–		9,748,000	888,343
Convertible notes	10%	USD	1,606,891	1,606,891	–		–		1,606,891	200,947
Other	0%	USD	675,000	675,000	(165,480	)	–		509,520	–
Total borrowings				42,588,337	(8,692,256	)	(2,435,976	)	31,460,105	1,089,290

Current									21,202,585	1,089,290
Long-term									10,257,520	–
Total borrowings									31,460,105	1,089,290

Senior Notes

On October 1, 2023, the Company, the subsidiaries of the Company and the Lender entered into an amendment number 2 to the Forbearance Agreement (the “Forbearance Amendment No. 2”). The Forbearance Amendment No. 2 extended the Forbearance Date from October 31, 2023 until June 30, 2025, and provides that instead of interest being payable monthly in cash, such interest shall accrue in arrears and can be added to the outstanding principal balance of the Loan and Revolving Note. The interest rate on the Loan and the Revolving Note was increased to 16.5% per annum. The Forbearance Amendment No. 2 further adds that the Company’s suspension from trading or failure to be listed on the Nasdaq Capital Market for more than 30 calendar days will constitute a Termination Event under the Forbearance Agreement as amended. On November 11, 2023, Lender provided the Company with an extension of the Nasdaq Capital Market delisting/suspension Termination Event for an additional 40 calendar days up to December 23, 2023, and on December 19, 2023, the Lender provided the Company with an additional extension of 40 days. Pursuant to Forbearance Amendment No. 2, the Company agreed that to the extent it receives net proceeds from or in connection with a judgment, settlement or other in or out of court resolution of a commercial tort claim, the Company will: (i) make a prepayment on the Loan or the Revolving Note (discussed below) of 100% of such net proceeds; and (ii) make an additional payment to the Lender equal to 5% of any such net proceeds (prior to the payments set forth in subsection (i)) in excess of $50.0 million.

Note due to Aspire

Convertible Notes and other

STOCKHOLDERS’ EQUITY

12 Months Ended

Sep. 30, 2023

Equity [Abstract]

STOCKHOLDERS’ EQUITY

NOTE 5 – STOCKHOLDERS’ EQUITY

Pursuant to such authority granted by the Company’s stockholders, the Company’s board of directors approved a one-for-thirty (1:30) reverse stock split (the “Reverse Stock Split”) of the Company’s common stock and the filing of the Amendment to effectuate the Reverse Stock Split. The Amendment was filed with the Secretary of State of the State of Nevada and the Reverse Stock Split became effective in accordance with the terms of the Amendment at 4:01 p.m. Eastern Time on September 29, 2023 (the “Effective Time”). The Amendment provides that, at the Effective Time, every thirty shares of the Company’s issued and outstanding common stock will automatically be combined into one issued and outstanding share of common stock, without any change in par value per share, which will remain $0.001. The Reverse Stock Split is presented retroactively.

June 2022 Private Placement

February 2023 Private Placement

The Company received gross proceeds of $6,500,000 and paid fees and expenses of $577,018.

Acquisition of the B2C segment of Aspire Global plc

2020 Stock Plan

Common Stock Awards

Warrants

Schedule of warrant activity
	Common Stock Warrants
	Shares			Weighted Average Exercise Price	Weighted average Remaining Life in years

Outstanding at September 30, 2021	73,321		$	27.76	4.04
Granted	158,730			344.92	5.00
Cancelled	–			–	–
Expired	–			–	–
Exercised	(30,914	)		53.30	–
Outstanding at September 30, 2022	201,137		$	274.05	4.01
Granted	234,354			75.32	5.00
Cancelled	–			–	–
Expired	–			–	–
Exercised	–			–	–
Outstanding at September 30, 2023	435,491		$	122.04	3.91
Exercisable at September 30, 2023	435,491		$	122.04	3.91

The outstanding and exercisable common stock warrants as of September 30, 2023 had no intrinsic value.

Options

The following table summarizes option activity during the years ended September 30, 2023 and 2022:

Schedule of option activity
	Common Stock Options
	Shares			Weighted Average Exercise Price	Weighted average Remaining Life in years
Outstanding at September 30, 2021	82,489		$	84.27	7.95
Granted	1,837			841.90	10.00
Cancelled/Forfeited	(16,525	)		244.50	–
Exercised	(1,894	)		7.50	–
Outstanding at September 30, 2022	65,907		$	67.41	7.33
Granted	–			–	–
Cancelled/Forfeited	(45,620	)		46.90	–
Exercised	–			–	–
Outstanding at September 30, 2023	20,287		$	113.55	5.37
Exercisable at September 30, 2023	17,830		$	94.83	5.07

LONG-LIVED ASSETS

12 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

LONG-LIVED ASSETS

NOTE 6 – LONG-LIVED ASSETS

Fixed Assets

The Company’s fixed assets consisted of the following as of September 30, 2023 and 2022:

Schedule of fixed assets
	September 30, 2023			September 30, 2022
Software	$	264,850		$	391,851
Furniture and fixtures		388,226			368,432
Total fixed assets		653,076			760,283
Accumulated depreciation		(491,863	)		(213,875	)
Fixed assets, net	$	161,213		$	546,408

Depreciation expense was $432,164 and $146,797 for the year ended September 30, 2023 and 2022, respectively.

Intangible Assets – Aspire b2C Acquisition

As disclosed in Note 3, the Company acquired intangible assets as part of the Aspire B2C Business acquisition. The acquired intangibles consisted of the following as of September 30, 2023 and 2022:

Schedule of intangible assets acquired
	September 30, 2023			September 30, 2022
Trademarks and tradenames, indefinite lives	$	2,210,000		$	14,232,080
Trademarks and tradenames, three year lives		4,533,030			4,562,064
Customer relationships		–			13,910,396
Other		12,693			10,493
Total acquired intangibles		6,755,723			32,715,033
Accumulated amortization		(3,054,114	)		(5,169,704	)
Acquired intangible assets, net	$	3,701,609		$	27,545,329

Intangible Assets – Domain Names

Intangible Assets - License Agreement

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 7 – COMMITMENTS AND CONTINGENCIES

Financial Advisor’s Claims

Other Contingencies

On September 28, 2023, EBET, INC. filed a lawsuit in the State of Nevada against Aspire Global PLC, AG Communications and affiliated entities asserting damages in an amount of no less than 65,000,000 Euro plus punitive and other damages proven at trial (“Aspire Litigation”) and including causes of action against Aspire and the other defendants for fraud and material breach of the share purchase agreement whereon the Company had acquired the i-gaming B2C assets including the Karamba, Hopa, Griffon Casino, BetTarget, Dansk777, and GenerationVIP domains, sites, player database and other related assets and also related to the operator service agreements and Promissory Note entered concurrent with the closing of the share purchase agreement. On November 7, 2023, Aspire and the other defendants removed the subject matter to the United States District Court for the District of Nevada. The Aspire Litigation is material to the Company and the result of such litigation is highly likely to have a material impact on the Company going forward.

Other Commitments

Pursuant to the Retention Letters,

	(a)	Mr. Speach will be entitled to receive a cash retention bonus of $175,000 payable 20% upon execution of the Retention Letter, 40% after three months, and the remainder after six months, and

	(b)	Mr. Lourie will be entitled to an increase in his base salary to $320,000 and to receive a cash retention bonus of $240,000 payable 20% upon execution of the Retention Letter, 30% after three months, 30% after six months, and the remainder after nine months.

Any unpaid retention bonus will be paid earlier if the Company completes a strategic transaction (a “Transaction”), or if the executive is terminated without “cause”.

If Mr. Speach and Mr. Lourie are terminated without “cause” prior to June 30, 2024, the Company agreed to pay a cash severance payment of:

	(a)	with respect to Mr. Speach, the greater of 1.0 times Mr. Speach’s base salary or the severance payable pursuant to Mr. Speach’s current employment agreement; and

	(b)	with respect to Mr. Lourie, 0.5 times Mr. Lourie’s base salary.

TRANSACTION WITH RELATED PARTIES

12 Months Ended

Sep. 30, 2023

TRANSACTION WITH RELATED PARTIES

NOTE 8 – TRANSACTION WITH RELATED PARTIES

INCOME TAXES

12 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 9 – INCOME TAXES

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


	Year Ended September 30, 2023			Year Ended September 30, 2022
Income tax benefit computed at the statutory rate	$	17,691,000		$	8,700,000
Non-deductible expenses		(12,221,000	)		(2,696,000	)
Return to provision adjustment		(175,000	)		–
Change in valuation allowance		(5,295,000	)		(6,004,000	)
Provision for income taxes	$	–		$	–

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

Schedule of deferred tax assets
	As of September 30, 2023			As of September 30, 2022
Deferred income tax assets:
Net operating losses	$	13,295,000		$	8,000,000
Valuation allowance		(13,295,000	)		(8,000,000	)
Net deferred income tax assets	$	–		$	–

LOSS PER COMMON SHARE

12 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

LOSS PER COMMON SHARE

NOTE 10 – LOSS PER COMMON SHARE

Schedule of loss per common share
	Year Ended
	September 30, 2023			September 30, 2022
Numerator:
Net income (loss)	$	(84,243,877	)	$	(41,427,609	)
Preferred stock dividends		(4,086,819	)		(4,750,585	)
Net income (loss) attributable to common stockholders	$	(88,330,696	)	$	(46,178,194	)

Denominator:
Basic and diluted weighted average common shares		2,740,990			494,655
Basic and diluted net income (loss) per common share	$	(32.23	)	$	(93.35	)

SUBSEQUENT EVENTS

12 Months Ended

Sep. 30, 2023

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 11 – SUBSEQUENT EVENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation and Consolidation

Basis of Presentation and Consolidation

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

Business combinations

Business combinations

Use of Estimates

Use of Estimates

Cash and Cash Equivalents

Cash and Cash Equivalents

Accounts Receivable

Accounts Receivable

Fixed Assets, net

Fixed Assets, net

Intangible Assets

Intangible Assets

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

Leases

Leases

The following table summarizes the lease-related assets and liabilities recorded in the consolidated balance sheets at September 30, 2023 and 2022:


	September 30, 2023		September 30, 2022
Operating Leases:
Operating lease right-of-use assets	$	–	$	129,975
Right of use liability operating lease current portion	$	–	$	129,974
Right of use liability operating lease long term		–		–
Total operating lease liabilities	$	–	$	129,974

Operating lease expense was $142,375 and $201,978 during the years ended September 30, 2023 and 2022, respectively.

Liabilities to Users

Liabilities to Users

Revenue Recognition

Revenue Recognition

·	Identification of the contract with a customer

·	Identification of the performance obligations in the contract

·	Determination of the transaction price

·	Allocation of the transaction price to the performance obligations in the contract

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

Performance Obligations

Transaction Price Considerations

Cost of Revenue

Cost of Revenue

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

Sales and Marketing Expenses

Sales and Marketing Expenses

Product and Technology Expenses

Product and Technology Expenses

General and Administrative Expenses

General and Administrative Expenses

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

Income Taxes

Income Taxes

Fair value of financial instruments

Fair value of financial instruments

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

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

Fair Value Measurements at September 30, 2023

Level 1

Level 2

Level 3

Assets

Cash

304,709

–

Total assets

304,709

–

Liabilities

Senior Notes, net of discount

–

26,350,630

–

Revolving line of credit

–

1,690,000

–

Note due to Aspire

–

10,594,000

–

Convertible notes payable, net of discount

–

617,500

–

Other notes payable, net of discount

–

559,597

–

Total liabilities

–

39,811,727

–

Fair Value Measurements at September 30, 2022

Level 1

Level 2

Level 3

Assets

Cash

5,486,210

–

Derivative asset

–

1,116,153

–

Total assets

5,486,210

1,116,153

–

Liabilities

Senior Notes, net of discount

–

19,595,694

–

Note due to Aspire

–

9,748,000

–

Convertible notes payable, net of discount

–

1,606,891

–

Other notes payable, net of discount

–

509,520

–

Total liabilities

–

31,460,105

–

Derivative Instruments

Derivative Instruments

Foreign Currency

Foreign Currency

Earnings per share

Earnings per share

Embedded Conversion Features

Embedded Conversion Features

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Schedule of lease-related assets and liabilities


	September 30, 2023		September 30, 2022
Operating Leases:
Operating lease right-of-use assets	$	–	$	129,975
Right of use liability operating lease current portion	$	–	$	129,974
Right of use liability operating lease long term		–		–
Total operating lease liabilities	$	–	$	129,974

Schedule of fair value of financial assets and liabilities

Fair Value Measurements at September 30, 2023

Level 1

Level 2

Level 3

Assets

Cash

304,709

–

Total assets

304,709

–

Liabilities

Senior Notes, net of discount

–

26,350,630

–

Revolving line of credit

–

1,690,000

–

Note due to Aspire

–

10,594,000

–

Convertible notes payable, net of discount

–

617,500

–

Other notes payable, net of discount

–

559,597

–

Total liabilities

–

39,811,727

–

Fair Value Measurements at September 30, 2022

Level 1

Level 2

Level 3

Assets

Cash

5,486,210

–

Derivative asset

–

1,116,153

–

Total assets

5,486,210

1,116,153

–

Liabilities

Senior Notes, net of discount

–

19,595,694

–

Note due to Aspire

–

9,748,000

–

Convertible notes payable, net of discount

–

1,606,891

–

Other notes payable, net of discount

–

509,520

–

Total liabilities

–

31,460,105

–

BUSINESS COMBINATION (Tables) - Aspire Related Companies [Member]

12 Months Ended

Sep. 30, 2023

Business Acquisition [Line Items]

Schedule of allocation of purchase price


	Fair Value
Trademarks	$	21,836,528
Customer relationships		16,162,202
Goodwill		35,620,270
Total	$	73,619,000

Schedule of acquisition costs

Schedule of acquisition costs
Debt issuance costs	$	3,372,889
Equity issuance costs	$	4,184,000
Transaction expenses	$	2,240,147

Schedule of business combination proforma results


	Fiscal Year Ended
	September 30, 2023			September 30, 2022
Revenue	$	39,177,504		$	68,628,158
Operating loss		(65,708,506	)		(32,488,215	)
Net loss		(84,243,877	)		(42,698,109	)
Net loss attributable to common shareholders		(88,330,696	)		(48,398,814	)
Loss per common share - basic and diluted	$	(32.23	)	$	(97.84	)

BORROWINGS (Tables)

12 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of borrowings outstanding

Schedule of borrowings outstanding
				September 30, 2023
	Contractual Interest		Principal outstanding balance		Principal outstanding balance	Unamortized debt discount		Issuance costs	Issuance costs	Accrued Interest
	rate	Cur	Local		USD	USD		USD	USD	USD
Senior Note	15.0%	USD	26,350,630		26,350,630	–		–	26,350,630	–
Revolving Note	15.0%	USD	1,690,000		1,690,000	–		–	1,690,000	–
Note due to Aspire	10%	EUR	10,000,000		10,594,000	–		–	10,594,000	2,049,029
Convertible notes	10%	USD	617,500		617,500	–		–	617,500	62,681
Other	0%	USD	675,000		675,000	(115,403	)	–	559,597	–
Total borrowings					39,927,130	(115,403	)	–	39,811,727	2,111,710

Current									39,252,130	2,111,710
Long-term									559,597	–
Total borrowings									39,811,727	2,111,710

				September 30, 2022
	Contractual Interest		Principal outstanding balance	Principal outstanding balance	Unamortized debt discount		Issuance costs		Carrying Amount	Accrued Interest
	rate	Cur	Local	USD	USD		USD		USD	USD
Senior notes	15%	USD	30,558,446	30,558,446	(8,526,776	)	(2,435,976	)	19,595,694	–
Note due to Aspire	10%	EUR	10,000,000	9,748,000	–		–		9,748,000	888,343
Convertible notes	10%	USD	1,606,891	1,606,891	–		–		1,606,891	200,947
Other	0%	USD	675,000	675,000	(165,480	)	–		509,520	–
Total borrowings				42,588,337	(8,692,256	)	(2,435,976	)	31,460,105	1,089,290

Current									21,202,585	1,089,290
Long-term									10,257,520	–
Total borrowings									31,460,105	1,089,290

STOCKHOLDERS’ EQUITY (Tables)

12 Months Ended

Sep. 30, 2023

Equity [Abstract]

Schedule of warrant activity

Schedule of warrant activity
	Common Stock Warrants
	Shares			Weighted Average Exercise Price	Weighted average Remaining Life in years

Outstanding at September 30, 2021	73,321		$	27.76	4.04
Granted	158,730			344.92	5.00
Cancelled	–			–	–
Expired	–			–	–
Exercised	(30,914	)		53.30	–
Outstanding at September 30, 2022	201,137		$	274.05	4.01
Granted	234,354			75.32	5.00
Cancelled	–			–	–
Expired	–			–	–
Exercised	–			–	–
Outstanding at September 30, 2023	435,491		$	122.04	3.91
Exercisable at September 30, 2023	435,491		$	122.04	3.91

Schedule of option activity

Schedule of option activity
	Common Stock Options
	Shares			Weighted Average Exercise Price	Weighted average Remaining Life in years
Outstanding at September 30, 2021	82,489		$	84.27	7.95
Granted	1,837			841.90	10.00
Cancelled/Forfeited	(16,525	)		244.50	–
Exercised	(1,894	)		7.50	–
Outstanding at September 30, 2022	65,907		$	67.41	7.33
Granted	–			–	–
Cancelled/Forfeited	(45,620	)		46.90	–
Exercised	–			–	–
Outstanding at September 30, 2023	20,287		$	113.55	5.37
Exercisable at September 30, 2023	17,830		$	94.83	5.07

LONG-LIVED ASSETS (Tables)

12 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of fixed assets

Schedule of fixed assets
	September 30, 2023			September 30, 2022
Software	$	264,850		$	391,851
Furniture and fixtures		388,226			368,432
Total fixed assets		653,076			760,283
Accumulated depreciation		(491,863	)		(213,875	)
Fixed assets, net	$	161,213		$	546,408

Schedule of intangible assets acquired

Schedule of intangible assets acquired
	September 30, 2023			September 30, 2022
Trademarks and tradenames, indefinite lives	$	2,210,000		$	14,232,080
Trademarks and tradenames, three year lives		4,533,030			4,562,064
Customer relationships		–			13,910,396
Other		12,693			10,493
Total acquired intangibles		6,755,723			32,715,033
Accumulated amortization		(3,054,114	)		(5,169,704	)
Acquired intangible assets, net	$	3,701,609		$	27,545,329

INCOME TAXES (Tables)

12 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Schedule of reconciliation of provision for income taxes


	Year Ended September 30, 2023			Year Ended September 30, 2022
Income tax benefit computed at the statutory rate	$	17,691,000		$	8,700,000
Non-deductible expenses		(12,221,000	)		(2,696,000	)
Return to provision adjustment		(175,000	)		–
Change in valuation allowance		(5,295,000	)		(6,004,000	)
Provision for income taxes	$	–		$	–

Schedule of deferred tax assets

Schedule of deferred tax assets
	As of September 30, 2023			As of September 30, 2022
Deferred income tax assets:
Net operating losses	$	13,295,000		$	8,000,000
Valuation allowance		(13,295,000	)		(8,000,000	)
Net deferred income tax assets	$	–		$	–

LOSS PER COMMON SHARE (Tables)

12 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Schedule of loss per common share

Schedule of loss per common share
	Year Ended
	September 30, 2023			September 30, 2022
Numerator:
Net income (loss)	$	(84,243,877	)	$	(41,427,609	)
Preferred stock dividends		(4,086,819	)		(4,750,585	)
Net income (loss) attributable to common stockholders	$	(88,330,696	)	$	(46,178,194	)

Denominator:
Basic and diluted weighted average common shares		2,740,990			494,655
Basic and diluted net income (loss) per common share	$	(32.23	)	$	(93.35	)

ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN (Details Narrative)			12 Months Ended
	Sep. 29, 2023	Oct. 02, 2021 GBP (£)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)
Restructuring Cost and Reserve [Line Items]
Stockholders' Equity, Reverse Stock Split	one-for-thirty (1:30) reverse stock split
Payments to Acquire Businesses, Gross \| $			$ (0)	$ 56,235,526
Aspire Related Companies [Member]
Restructuring Cost and Reserve [Line Items]
Business Combination, Consideration Transferred		£ 65,000,000
Payments to Acquire Businesses, Gross		50,000,000
Notes Issued		10,000,000
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable		£ 5,000,000

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Lease-related assets and liabilities) - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Operating Leases:
Operating lease right-of-use assets	$ 0	$ 129,975
Right of use liability operating lease current portion	0	129,974
Right of use liability operating lease long term	0	0
Total operating lease liabilities	$ 0	$ 129,974

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Fair Value of assets and liabilities) - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Fair Value, Inputs, Level 1 [Member]
Assets
Cash	$ 304,709	$ 5,486,210
Derivative asset		0
Total assets	304,709	5,486,210
Liabilities
Senior Notes, net of discount	0	0
Revolving line of credit	0
Note due to Aspire	0	0
Convertible notes payable, net of discount	0	0
Other notes payable, net of discount	0	0
Total liabilities	0	0
Fair Value, Inputs, Level 2 [Member]
Assets
Cash	0	0
Derivative asset		1,116,153
Total assets	0	1,116,153
Liabilities
Senior Notes, net of discount	26,350,630	19,595,694
Revolving line of credit	1,690,000
Note due to Aspire	10,594,000	9,748,000
Convertible notes payable, net of discount	617,500	1,606,891
Other notes payable, net of discount	559,597	509,520
Total liabilities	39,811,727	31,460,105
Fair Value, Inputs, Level 3 [Member]
Assets
Cash	0	0
Derivative asset		0
Total assets	0	0
Liabilities
Senior Notes, net of discount	0	0
Revolving line of credit	0
Note due to Aspire	0	0
Convertible notes payable, net of discount	0	0
Other notes payable, net of discount	0	0
Total liabilities	$ 0	$ 0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Aug. 01, 2021
Impairment Effects on Earnings Per Share [Line Items]
Allowance for doubtful accounts	$ 0	$ 0
Impairment loss	44,917,891	3,851,503
Operating lease liability	0	129,974
Operating lease expense	142,375	201,978
Derivative instruments notional amount		16,050,000
Derivative loss on derivative	142,187
Derivative gain on derivative	1,239,510
Malta Office Space [Member]
Impairment Effects on Earnings Per Share [Line Items]
Operating lease liability			$ 381,346
Property And Equipment [Member]
Impairment Effects on Earnings Per Share [Line Items]
Impairment loss	20,127,658	569,260
Intangible Assets [Member]
Impairment Effects on Earnings Per Share [Line Items]
Impairment loss		$ 3,282,243
Goodwill [Member]
Impairment Effects on Earnings Per Share [Line Items]
Impairment loss	$ 24,790,233

BUSINESS COMBINATIONS - (Details) - USD ($)	Sep. 30, 2023	Sep. 30, 2022	Oct. 02, 2021
Business Acquisition [Line Items]
Goodwill	$ 8,962,652	$ 30,657,460
Total	$ 6,755,723	$ 32,715,033
Aspire Related Companies [Member]
Business Acquisition [Line Items]
Trademarks			$ 21,836,528
Customer relationships			16,162,202
Goodwill			35,620,270
Total			$ 73,619,000

BUSINESS COMBINATIONS - (Details 1)	Oct. 02, 2021 USD ($)
Business Combination and Asset Acquisition [Abstract]
Debt issuance costs	$ 3,372,889
Equity issuance costs	4,184,000
Transaction expenses	$ 2,240,147

BUSINESS COMBINATIONS - (Details 2) - USD ($)	12 Months Ended
BUSINESS COMBINATIONS - (Details 2) - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Business Combination and Asset Acquisition [Abstract]
Revenue	$ 39,177,504	$ 68,628,158
Operating loss	(65,708,506)	(32,488,215)
Net loss	(84,243,877)	(42,698,109)
Net loss attributable to common shareholders	$ (88,330,696)	$ (48,398,814)
Loss per common share - basic and diluted	$ (32.23)	$ (97.84)

BUSINESS COMBINATION (Details Narrative)		12 Months Ended
BUSINESS COMBINATION (Details Narrative)	Oct. 02, 2021 GBP (£)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)
Business Acquisition [Line Items]
Payments to Acquire Businesses, Gross \| $		$ (0)	$ 56,235,526
Aspire Related Companies [Member]
Business Acquisition [Line Items]
Business Combination, Consideration Transferred	£ 65,000,000
Payments to Acquire Businesses, Gross	50,000,000
Notes Issued	10,000,000
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable	£ 5,000,000

BORROWINGS (Details)	Sep. 30, 2023 USD ($)	Sep. 30, 2023 EUR (€)	Sep. 30, 2022 USD ($)	Sep. 30, 2022 EUR (€)
Debt Instrument [Line Items]
Current	$ 39,252,130		$ 21,202,585
Long-term	559,597		10,257,520
Total borrowings	39,811,727		31,460,105
Accrued Liabilities [Member]
Debt Instrument [Line Items]
Current	2,111,710		1,089,290
Long-term	0		0
Total borrowings	$ 2,111,710		$ 1,089,290
Senior Notes [Member]
Debt Instrument [Line Items]
Contractual interest rate	15.00%	15.00%	15.00%	15.00%
Principal outstanding balance	$ 26,350,630		$ 30,558,446
Unamortized debt discount	0		(8,526,776)
Issuance costs	0		(2,435,976)
Carrying amount	26,350,630		19,595,694
Accrued Interest	$ 0		$ 0
Revolving Note [Member]
Debt Instrument [Line Items]
Contractual interest rate	15.00%	15.00%
Principal outstanding balance	$ 1,690,000
Unamortized debt discount	0
Issuance costs	0
Carrying amount	1,690,000
Accrued Interest	$ 0
Note Due To Aspire [Member]
Debt Instrument [Line Items]
Contractual interest rate	10.00%	10.00%	10.00%	10.00%
Principal outstanding balance	$ 10,594,000	€ 10,000,000	$ 9,748,000	€ 10,000,000
Unamortized debt discount	0		0
Issuance costs	0		0
Carrying amount	10,594,000		9,748,000
Accrued Interest	$ 2,049,029		$ 888,343
Convertible Notes [Member]
Debt Instrument [Line Items]
Contractual interest rate	10.00%	10.00%	10.00%	10.00%
Principal outstanding balance	$ 617,500		$ 1,606,891
Unamortized debt discount	0		0
Issuance costs	0		0
Carrying amount	617,500		1,606,891
Accrued Interest	$ 62,681		$ 200,947
Other Borrowings [Member]
Debt Instrument [Line Items]
Contractual interest rate	0.00%	0.00%	0.00%	0.00%
Principal outstanding balance	$ 675,000		$ 675,000
Unamortized debt discount	(115,403)		(165,480)
Issuance costs	0		0
Carrying amount	559,597		509,520
Accrued Interest	0		0
Total Borrowings [Member]
Debt Instrument [Line Items]
Principal outstanding balance	39,927,130		42,588,337
Unamortized debt discount	(115,403)		(8,692,256)
Issuance costs	0		(2,435,976)
Carrying amount	39,811,727		31,460,105
Accrued Interest	$ 2,111,710		$ 1,089,290

BORROWINGS (Details Narrative) - USD ($)						10 Months Ended	12 Months Ended
BORROWINGS (Details Narrative) - USD ($)	Dec. 29, 2023	Sep. 29, 2023	Feb. 02, 2023	Nov. 29, 2021	Sep. 02, 2020	Jun. 30, 2023	Sep. 30, 2023	Sep. 29, 2023	Sep. 30, 2022	Sep. 30, 2021	Sep. 01, 2025	Feb. 28, 2023
Debt Instrument [Line Items]
Proceeds from Issuance or Sale of Equity			$ 6,500,000				$ 6,500,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Forfeited in Period	77,082
Repayment of notes payable							5,000,000		$ (0)
Lender fee		$ 40,000						$ 40,000
Outstanding principal amount							617,500
Accrued interest							62,681
Amortization of debt discount							11,012,829		4,778,405
Forbearance Agreement [Member]
Debt Instrument [Line Items]
Repayment of credit line							2,000,000
Revolving Note [Member]
Debt Instrument [Line Items]
Line of credit amount maximum borrowing availability		$ 4,000,000						$ 4,000,000
Line of credit maturity date		Nov. 29, 2024
Line of credit interest rate								15.00%
Line of credit, amount outstanding							1,690,000
Senior Notes [Member]
Debt Instrument [Line Items]
Debt instrument face amount				$ 30,000,000
Payments of Debt Issuance Costs				$ 750,000
Debt Instrument, Unamortized Discount							(0)		8,526,776
Debt issuance costs							$ (0)		$ 2,435,976
Debt Instrument, Interest Rate, Stated Percentage							15.00%		15.00%
Senior Notes [Member] \| Warrant [Member]
Debt Instrument [Line Items]
Warrants outstanding												77,082
Class of Warrant or Right, Exercise Price of Warrants or Rights												$ 508.50
Senior Note [Member]
Debt Instrument [Line Items]
Proceeds from notes payable						$ 609,558
Repayment of notes payable						$ 3,000,000
Interest Expense, Debt							$ 10,962,752		$ 4,216,442
Debt Instrument, Unamortized Discount							0
Debt issuance costs							0
E S E G Promissory Notes [Member]
Debt Instrument [Line Items]
Debt Instrument, Unamortized Discount					$ 2,100,000
Convertible principal amount					$ 2,100,000
Debt Instrument, Interest Rate, Stated Percentage					10.00%
Debt Instrument, Maturity Date					Mar. 01, 2022
Principal amount converted									$ 305,609	$ 187,500
Principal amount converted into shares									27,500	12,500
Accrued interest									$ 106,891
Amortization of debt discount							50,077		$ 561,963
E S E G Promissory Notes [Member] \| Common Stock [Member]
Debt Instrument [Line Items]
Principal amount converted							$ 989,391
Principal amount converted into shares							75,179
Accrued interest							$ 138,266
E S E G Promissory Notes [Member] \| Two Lenders [Member] \| Forecast [Member]
Debt Instrument [Line Items]
Payments from lenders											$ 675,000
E S E G Promissory Notes [Member] \| Warrants [Member]
Debt Instrument [Line Items]
Warrants issued shares					67,167

STOCKHOLDERS' EQUITY (Details - Warrant activity) - Warrants [Member] - $ / shares	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Warrants outstanding	201,137	73,321
Warrants outstanding, weighted average exercise price	$ 274.05	$ 27.76
Warrants outstanding, weighted averare remaining life	3 years 10 months 28 days	4 years 3 days	4 years 14 days
Warrants granted	234,354	158,730
Warrants granted, weighted average exercise price	$ 75.32	$ 344.92
Warrants granted, weighted averare remaining life	5 years	5 years
Warrants cancelled	0	0
Warrants exercised, weighted average exercise price	$ 0	$ 0
Warrants expired	0	0
Warrants expired, weighted average exercise price		$ 0
Warrants exercised	0	(30,914)
Warrants exercised, weighted average exercise price		$ 53.30
Warrants outstanding	435,491	201,137	73,321
Warrants outstanding, weighted average exercise price	$ 122.04	$ 274.05	$ 27.76
Warrants exercisable	435,491
Warrants exercisable, weighted average exercise price	$ 122.04
Warrants exercisable, weighted averare remaining life	3 years 10 months 28 days

STOCKHOLDERS' EQUITY (Details - Option Activity) - Stock Options [Member] - $ / shares	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options outstanding	65,907	82,489
Options outstanding, weighted average exercise price	$ 67.41	$ 84.27
Options outstanding, weighted average remaining life	5 years 4 months 13 days	7 years 3 months 29 days	7 years 11 months 12 days
Options granted	0	1,837
Options granted, weighted average exercise price	$ 0	$ 841.90
Options granted, weighted average remaining life		10 years
Options cancelled/forfeited	(45,620)	(16,525)
Options cancelled/forfeited, weighted average exercise price	$ 46.90	$ 244.50
Options exercised	0	(1,894)
Options exercised, weighted average exercise price	$ 0	$ 7.50
Options exercised	0	1,894
Options outstanding	20,287	65,907	82,489
Options outstanding, weighted average exercise price	$ 113.55	$ 67.41	$ 84.27
Options exercisable	17,830
Options exercisable, weighted average exercise price	$ 94.83
Options exercisable, weighted average remaining life	5 years 25 days

STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($)						12 Months Ended
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($)	Sep. 29, 2023	Jul. 26, 2023	Feb. 02, 2023	Jun. 16, 2022	Oct. 02, 2021	Sep. 30, 2023	Sep. 30, 2022
Accumulated Other Comprehensive Income (Loss) [Line Items]
Common stock, shares authorized						500,000,000	500,000,000
Common stock, par value						$ 0.001	$ 0.001
Preferred stock, shares authorized							10,000,000
Preferred stock, no par value							$ 0.001
Stockholders' Equity, Reverse Stock Split	one-for-thirty (1:30) reverse stock split
Fees and other expenses						$ 577,018
Proceeds from sale of equity			$ 6,500,000			$ 6,500,000
Preferred stock shares outstanding						0	37,700
Stock-based compensation expense						$ 1,290,791	$ 5,447,372
Reclassification from APIC to warrant liability		$ 1,294,638
Fair value warrants issued		$ 179,713				$ (1,114,925)	(0)
Unvested options outstanding						2,457
Options expected to vest						667
Senior Notes [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Debt discount						$ (0)	8,526,776
Common Stock Awards [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock-based compensation expense						939,915	4,000,578
Additional compensation cost not yet recognized						1,541,232
Warrants [Member] \| Senior Notes [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Fair value warrants issued						19,467,688
Debt discount						11,806,307
Common Stock Options [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock-based compensation expense						1,288,432	$ 1,446,794
Additional compensation cost not yet recognized						$ 1,332,132
Plan 2020 [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock authorized under plan		250,000
Stock awarded under the plan						46,192
Shares remaining under the plan						203,808
Placement Agent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Fees and other expenses			$ 50,000
Preferred Stockholders [Member] \| Warrants [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Fair value warrants issued						$ 24,171,423
Private Placement [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Proceeds from issuance of private placement				$ 3,500,000
Securities Purchase Agreements [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock issued new, shares issued			212,418
Warrants issued new, shares			212,418
June 2022 Private Placement [Member] \| Preferred Stockholders [Member] \| Warrants [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Fair value warrants issued						$ 504,952
Common Stock [Member] \| Conversion Of Preferred Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock converted, shares issued						14,132,816
Common Stock [Member] \| Private Placement [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock issued new, shares issued				32,587
Warrants [Member] \| Private Placement [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Warrants issued new, shares				32,587
Series A Convertible Preferred Stock [Member] \| Aspire Global [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Proceeds from issuance of private placement					$ 37,700,000
Stock issued for acquisition, shares					37,700
Stock price					$ 1,000.00
Series A Preferred Stock [Member] \| Conversion Of Preferred Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock converted, shares converted						37,700
Restricted Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock converted, shares converted						4,080
Common Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Common stock, shares authorized		500,000,000
Common stock, par value		$ 0.001
Stock issued new, shares issued						212,418
Stock issued for acquisition, shares							6,228
Stock converted, shares issued						14,132,816
Preferred Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Preferred stock, shares authorized		10,000,000
Preferred stock, no par value		$ 0.001
Stock converted, shares converted						37,700
Preferred stock shares outstanding						0

LONG-LIVED ASSETS (Details - Fixed Assets) - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 653,076	$ 760,283
Accumulated depreciation	(491,863)	(213,875)
Property and equipment, net	161,213	546,408
Software [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	264,850	391,851
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 388,226	$ 368,432

LONG-LIVED ASSETS (Details - Intangible assets) - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Finite-Lived Intangible Assets [Line Items]
Total acquired intangibles	$ 6,755,723	$ 32,715,033
Accumulated amortization	(3,054,114)	(5,169,704)
Acquired intangible assets, net	3,701,609	27,545,329
Trademarks And Tradenames Indefinite Lives [Member]
Finite-Lived Intangible Assets [Line Items]
Total acquired intangibles	2,210,000	14,232,080
Trademarks And Tradenames Three Year Lives [Member]
Finite-Lived Intangible Assets [Line Items]
Total acquired intangibles	4,533,030	4,562,064
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Total acquired intangibles	0	13,910,396
Other Intangible Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Total acquired intangibles	$ 12,693	$ 10,493

LONG-LIVED ASSETS (Details Narrative) - USD ($)				12 Months Ended
LONG-LIVED ASSETS (Details Narrative) - USD ($)	May 03, 2021	Oct. 02, 2020	Sep. 02, 2020	Sep. 30, 2023	Sep. 30, 2022
Offsetting Assets [Line Items]
Useful life				3 years
Impairment loss				$ 44,917,891	$ 3,851,503
Depreciation expense				432,164	146,797
Finite-Lived Intangible Asset, Expected Amortization, Year Two				1,267,642
Finite-Lived Intangible Asset, Expected Amortization, Year Three				$ 211,274
Trademarks Tradenames And Customer Relationships [Member]
Offsetting Assets [Line Items]
Intangible useful life				3 years
Aspire Assets [Member]
Offsetting Assets [Line Items]
Amortization of intangible assets				$ 6,539,147	5,949,143
Karamba Trademarks And Tradenames [Member]
Offsetting Assets [Line Items]
Intangible useful life				3 years
Online Betting Technology [Member]
Offsetting Assets [Line Items]
Impairment loss					1,042,637
Amortization of intangible assets					573,451
Stock issued during period shares purchase of assets	2,167
Stock issued during period value purchase of assets	$ 1,456,650
Intangible assets license agreements	$ 1,876,748
Goodwill [Member]
Offsetting Assets [Line Items]
Impairment loss				$ 24,790,233
Other Intangible Assets [Member]
Offsetting Assets [Line Items]
Impairment loss				$ 20,127,658
Internet Domain Names [Member]
Offsetting Assets [Line Items]
Impairment loss					2,239,606
Debt instrument face amount			$ 2,100,000
Debt maturity date			Mar. 01, 2022
Debt interest rate			10.00%
Debt balloon payment			$ 675,000
Debt balloon payment date				Sep. 01, 2025
Unamortized discount			535,394
Internet Domain Names [Member] \| E S E G Limited [Member]
Offsetting Assets [Line Items]
Investment owned at cost			$ 2,239,606
Property And Equipment [Member]
Offsetting Assets [Line Items]
Impairment loss				$ 20,127,658	$ 569,260
Upon Execution Of Agreement [Member] \| Online Betting Technology [Member]
Offsetting Assets [Line Items]
Payment for option		$ 133,770
Upon Exercise Of Option [Member] \| Online Betting Technology [Member]
Offsetting Assets [Line Items]
Payment for option		$ 286,328

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
General and Administrative Expense	$ 26,100,283	$ 17,640,728
Two Committee Members [Member]
Monthly retainer	12,000
Mr Lourie [Member]
Additional retention bonuses	310,000
Net proceeds from transaction	26,000,000
Chairman [Member]
Monthly retainer	15,000
Boustead Securities [Member]
General and Administrative Expense	$ 11,597,240

TRANSACTION WITH RELATED PARTIES (Details Narrative) - USD ($)	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Related Party Transactions [Abstract]
Consulting fees	$ 72,658	$ 18,273

INCOME TAXES (Details - Income tax expense) - USD ($)	12 Months Ended
INCOME TAXES (Details - Income tax expense) - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Income tax benefit computed at the statutory rate	$ 17,691,000	$ 8,700,000
Non-deductible expenses	(12,221,000)	(2,696,000)
Return to provision adjustment	(175,000)	0
Change in valuation allowance	(5,295,000)	(6,004,000)
Provision for income taxes	$ (0)	$ (0)

INCOME TAXES (Details - Deferred tax assets) - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Deferred income tax assets:
Net operating losses	$ 13,295,000	$ 8,000,000
Valuation allowance	(13,295,000)	(8,000,000)
Net deferred income tax assets	$ 0	$ 0

INCOME TAXES (Details Narrative)	Sep. 30, 2023 USD ($)
Income Tax Disclosure [Abstract]
Operating loss carry forward	$ 52,595,000

LOSS PER COMMON SHARE (Details) - USD ($)	12 Months Ended
LOSS PER COMMON SHARE (Details) - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Numerator:
Net income (loss)	$ (84,243,877)	$ (41,427,609)
Preferred stock dividends	(4,086,819)	(4,750,585)
Net income (loss) attributable to common stockholders	$ (88,330,696)	$ (46,178,194)
Denominator:
Basic weighted average common shares	2,740,990	494,655
Diluted weighted average common shares	2,740,990	494,655
Basic net income (loss) per common share	$ (32.23)	$ (93.35)
Diluted net income (loss) per common share	$ (32.23)	$ (93.35)

LOSS PER COMMON SHARE (Details Narrative) - shares	12 Months Ended
LOSS PER COMMON SHARE (Details Narrative) - shares	Sep. 30, 2023	Sep. 30, 2022
Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive shares	0	50,361
Convertible Debt [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive shares	113,567	171,733
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive shares	20,287	65,907
Common Stock Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive shares	435,491	201,137