Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Certain statements made in this quarterly report on Form 10-Q are "forward-looking statements" (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the registrant to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company's plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this quarterly report will prove to be accurate. Considering the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the registrant or any other person that the objectives and plans of the registrant will be achieved.

The forward-looking statements are not meant to predict or guarantee actual results, performance, events, or circumstances and may not be realized because they are based upon our current projections, plans, objectives, beliefs, expectations, estimates, and assumptions and are subject to a number of risks and uncertainties and other influences, many of which we have no control over. Actual results and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements as a result of these risks and uncertainties. Factors that may influence or contribute to the accuracy of the forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation:

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Market acceptance of our products and services;

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Competition from existing products or new products that may emerge;

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The implementation of our business model and strategic plans for our business and our products;

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Estimates of our future revenue, expenses, capital requirements and our need for financing;

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Our financial performance;

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Current and future government regulations regarding the sports betting industry;

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Developments relating to our competitors; and

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Other risks and uncertainties.

Readers are cautioned not to place undue reliance on forward-looking statements because of the risks and uncertainties related to them and the risk factors. We disclaim any obligation to update the forward-looking statements contained in this Report to reflect any new information or future events or circumstances or otherwise, except as required by law.

Readers should read this Report in conjunction with the discussion under the caption "Risk Factors," our financial statements and the related notes thereto in this Report, and other documents that we may file from time to time with the SEC.

The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this annual report.

Our audited and unaudited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

Overview

AiS has been engaged in the development of a digital sports betting and gaming platform. Our platform, when complete, will provide users with sports content, racing, and sports betting, and sport streaming solutions. We aim to create excitement and engagement and deliver the best experiences that enhance sports fandom. Users can access our products via multiple devices, including the web and mobile devices.

Apple iSports is at the forefront of the convergence between technology, gaming, media, and entertainment, particularly as the boundaries between sports, wagering, and entertainment continue to blur. Through our strategic business acquisitions, and partnerships, we aim to address the critical infrastructure and connectivity gaps in today's rapidly evolving digital landscape. As demand for high-speed access to content via broadband, cellular, and satellite networks continues to surge, our mission is to enhance and expand the underlying systems that power next-generation media consumption. This investment in infrastructure not only ensures seamless streaming and interactive experiences for fans but also empowers athletes and content creators with the tools and platforms to reach broader audiences and unlock new monetization opportunities, such as iGaming opportunities and other forms of engagement.

AiS is seeking an Online Bookmaking License in Australia through the Northern Territory Racing Commission, which will enable racing and sports betting throughout the country, one of the most mature legal betting markets in the world. In addition, we are licensed in North Dakota as an (ADW) provider, subject to completion of the TRPB examination, which will allow us to provide pari-mutuel betting on racing in North Dakota and up to an additional 20 states that do not have specific regulations. NFL and other sports bets in the US are regulated separately from racing wagering. We will seek market access licenses for several states that offer sports betting licenses over a three-year timeline.

	·	Since the inception of AiS through September 30, 2025, we (i) established a core team with the industry skills and experience to manage the Company, and (ii) we received approximately $3,023,397 in private placement funding and the current outstanding balance to related parties in excess of $2,810,039.
	·	From December 2021 to October 2022, we developed our Go-to-Market outline and marketing strategy, including identifying preferred suppliers for each product and initiating relationships with key suppliers and consultants.

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	·	In June 2022, we submitted our application to the North Dakota Racing Commission for an (ADW) license, subject to the approval of the Thoroughbred Racing Protective Bureau. Completion of the TRPB examination is required to receive a state-issued ADW. This will be concluded after closing the capital raising.
	·	Effective March 23, 2023, we completed a change of control transaction pursuant to a Stock Exchange Agreement (the "Stock Exchange Agreement") with AiS and the shareholders of AiS. The stock exchange was accounted for under the business combination under the common control of accounting. Consequently, the assets and liabilities, as well as the historical operations, reflected in the financial statements before the stock exchange liabilities and the historical operations that are reflected in the financial statements prior to the stock exchange are those of AiS and the Company combined. They are recorded at the historical cost basis, and the condensed consolidated financial statements after completion of the stock exchange include the combined assets and liabilities of AiS and the Company from the closing date of the stock exchange, as a result of the issuance of the shares of our common stock pursuant to the stock exchange, a change in control of the Company occurred as of the date of consummation of the transaction.
	·	In May 2023, we began brand awareness activities by advertising around Australia on SEN Radio, the largest sports radio network in Australia. As of September 2025, the contract was suspended until the Company moves closer to going live.
	·	In April 2025, we entered into a strategic and financial agreement with Pacifico Financial Group to accelerate various capital raising activities.
	·	In May 2025, we entered into a letter of intent to purchase AmeriCrew Inc, a leading telecommunications infrastructure provider. On or about July 13, 2025, the proposed transaction of AmeriCrew, is no longer viable and will not be purchased.
	·	In July 2025, we entered into a binding agreement to purchase Lucky Bet, a fully operational gaming platform provider with significant customer base and revenue.
	·	In August 2025, we entered into an Equity Backstop agreement with LDA Capital Group allowing draw-down of up to $25 million, with an ability to extend the draw-down up to $50 million based on completion of a Registration Statement and trade volume metrics.

Effective March 23, 2023, we completed a change of control transaction pursuant to a Stock Exchange Agreement (the "Stock Exchange Agreement") with AiS and the shareholders of AiS. The stock exchange was accounted for under the business combination under the common control of accounting. Consequently, the assets and liabilities and the historical operations that are reflected in the financial statements before the stock exchange are those of AiS and the Company combined. They are recorded at the historical cost basis and the condensed consolidated financial statements after completion of the stock exchange include the combined assets and liabilities of AiS and the Company from the closing date of the stock exchange, as a result of the issuance of the shares of our common stock pursuant to the stock exchange, a change in control of the Company occurred as of the date of consummation of the transaction.

Our address is 100 Spectrum Center Dr., Suite 900, Irvine, CA 92612, and our phone number is (949) 247-4210. We also maintain satellite offices at Level 1, Paspalis Centrepoint, 48-50 Smith Street Mall, Darwin NT 0800 Australia, and Lonsdale Street, Level 7, Melbourne, Australia 3000. In addition, as mentioned, we have two websites (which do not form a part of these filings): www.appleisports.com in the U.S. and www.appleisports.com.au in Australia.

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Our corporate structure is depicted below:

Results of Operations

For the Nine Months Ended September 30, 2025, Compared to the Nine Months Ended September 30, 2024

Revenues

During the Nine Months Ended September 30, 2025, and 2024, the Company had no revenues.

Operating Expenses

During the Nine Months Ended September 30, 2025, and 2024, the Company had total operating expenses of $6,067,188 and $2,602,391, respectively. During the Nine Months Ended September 30, 2025, operating expenses consisted of corporate expenses of $402,871, consulting and professional fees of $5,561,355, and selling, general, and administrative expenses of $102,962. During the Nine Months Ended September 30, 2024, operating expenses consisted of corporate expenses of $546,019, consulting and professional fees of $1,528,580, and selling, general, and administrative expenses of $527,792. The 133% increase in operating expenses during the Nine Months Ended September 30, 2025, compared to the Nine Months Ended September 30, 2024, is primarily due to an increase in Consulting and professional fees. This is attributed to an increase of $4,373,843 from the stock options which were granted during the nine months, $2,566,695 related to the US plan and $1,807,148 related to the Australian Plan. See Note 9 of the unaudited financial statements included herein for additional detail on the stock incentive plan. This was offset by a decrease in marketing-related expenses during the Nine Months Ended September 30, 2025, until the Company moves closer to the Go Live date.

Other Income (Expenses)

During the Nine Months ended September 30, 2025, and 2024, we had $2,295,042 and $0 respectively, in issuance cost related to equity contract. The significant increase in issuance cost was a result of the common stock purchase agreement entered into on August 4, 2025. See note 7 for further details.

During the Nine Months Ended September 30, 2025, and 2024, we had $30,905 and $65,492, respectively, in interest expense attributable to related party debt, net of interest income. The significant decrease in interest expense is attributable to the conversion of the related party Cres loan on January 9, 2025, which resulted in a reduction of interest expense for the Nine Months Ended September 30, 2025.

During the Nine Months Ended September 30, 2025, and 2024, the company had $141,394 and ($3,124), respectively, in Foreign exchange gain (loss). This was attributable to international exposure to exchange rate fluctuations resulting in fluctuations that impact our results of operations

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During the Nine Months Ended September 30, 2025 and 2024, the company had a total of $0 and $658,533 related to forgiveness of debt. This was related to the Company's rescission of the third-party intellectual property and reversal of 1,000,000 AUD of accounts payable and recognized forgiveness of debt income of 1,000,000 AUD ($658,533) during the Nine Months Ended September 30, 2024.

During the Nine Months Ended September 30, 2025, and 2024, we had a net loss of $8,251,741 and $2,012,474, respectively, for the reasons discussed above.

For the Three Months Ended September 30, 2025, Compared to the Three Months Ended September 30, 2024

Revenues

During the three months ended September 30, 2025, and 2024, the Company had no revenues.

Operating Expenses

During the three months ended September 30, 2025, and 2024, the Company had total operating expenses of $2,238,807 and $723,929, respectively. During the three months ended September 30, 2025, operating expenses consisted of corporate expenses of $137,256, consulting, and professional fees of $2,058,803, and selling, general, and administrative expenses of $42,748. During the three months ended September 30, 2024, operating expenses consisted of corporate expenses of $185,410, consulting, and professional fees of $421,759, and selling, general, and administrative expenses of $116,760. The 217% increase is primarily related to an increase of $1,807,148 from the stock options which were granted during the three months. See Note 9 of the unaudited financial statements included herein for additional detail on the stock incentive plan. This was offset by the decrease in marketing-related expenses until the Company moves closer to the Go Live date.

Other Income (Expenses)

During the three months ended September 30, 2025, and 2024, we had $2,295,042 and $0 respectively, in issuance cost related to equity contract. The significant increase in issuance cost was a result of the common stock purchase agreement entered into on August 4, 2025. See note 7 for further details.

During the three months ended September 30, 2025, and 2024, we had $13,031 and $20,756, respectively, in interest expense attributable to related party debt, net of interest income. The significant decrease in interest expense is attributable to the conversion of the related party Cres loan on January 9, 2025, which resulted in a reduction of interest expense for the three months.

During the three months ended September 30, 2025, and 2024, the company had $33,468 and $3,475, respectively, in Foreign exchange gain (loss). This was attributable to international exposure to exchange rate fluctuations resulting in fluctuations that impact our results of operations

During the three months ended September 30, 2025, and 2024, the company had a total of $0 and $600 related to forgiveness of debt. This was related to the Company's rescission of the third-party intellectual property and reversal of 1,000,000 AUD of accounts payable and recognized forgiveness of debt income of 1,000,000 AUD ($658,533) during the three months ended September 30, 2024.

During the three months ended September 30, 2025, and 2024, we had a net loss of $4,513,412 and $748,760, respectively, for the reasons discussed above.

Liquidity and Capital Resources

As of September 30, 2025, the Company had a working capital deficit of $6,073,549 compared with a working capital deficit of $6,124,806 as of December 31, 2024. The decrease in working capital deficit is primarily a result of a decrease in related party loans for the Nine Months Ended September 30, 2025, due to the conversion of certain outstanding related party loans.

The Company can provide no assurance that it can continue to satisfy its cash requirements for at least the next twelve months. The following is a summary of the Company's cash flows provided by (used in) operating, investing, and financing activities for the Nine Months Ended September 30, 2025, and 2024:

		September 30,				September 30,
		2025				2024
Net Cash Used in Operating Activities		$	(3,935,587	)		$	(1,909,836	)
Net Cash Used in Investing Activities			(600	)			(80,000	)
Net Cash Provided by Financing Activities			3,903,199				1,944,271
Effect of changes in exchange rate on cash and cash equivalents			125				51,758
Net Change in Cash		$	(32,863	)		$	6,193

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Operating Activities

During the Nine Months Ended September 30, 2025, the Company incurred a net loss of $8,251,741 which after adjusting for decrease in goods and services tax receivable of $41,416, foreign exchange gain of $141,394, accrued payroll of $92,095, and prepaid and other assets of $4,060 offset by an increase in accounts payable and accrued expenses of $320,493, accounts payable and accrued expenses to related parties $264,111, accrued interest to related party of $33,385, accrued interest income of $2,992, and an increase in Deposits of $149,900 stock based compensation of $1,807,148, and issuance cost of $2,240,042 resulted in net cash of $3,935,587 being used in operating activities during the period. By comparison, during the Nine Months Ended September 30, 2024, the Company incurred a net loss of $2,012,474 which after adjusting for decreases in goods and services tax receivable of $22,369, accrued payroll of $236,924, foreign exchange gain of $3,124, accounts payable and accrued expenses of $415,675, and non cash expenses from stock issuance modification of $80,000 increase in accrued interest of $1,990, in accrued interest to related party of $60,701, prepaid and other assets of $16,120, deposits of $39,512, and forgiveness of debt of $658,533 resulted in net cash of $1,909,836 being used in operating activities during the period. The primary cause for the year-over-year change in operating activities was related to the increase in expenses related to stock-based compensation for the company's stock incentive plan. Additionally, there was an increase in liabilities related to common stock that were subscribed but not issued during the nine months. This was offset by forgiveness of debt for intellectual property from the prior year.

Investing Activities

During the Nine Months Ended September 30, 2025, the Company had a receivable of $600 for proceeds owed by a related party. By comparison, during the Nine Months Ended September 30, 2024, the Company loaned $80,000 to SeaPort, Inc.

Financing Activities

During the Nine Months Ended September 30, 2025, the Company incurred $3,903,199 from financing activities by way of an increase of $162,409 from payments to related parties' loans payable, offset by $1,220,409 of proceeds from related parties loans payable, $2,845,199 from stock issuances. By comparison, during the Nine Months Ended September 30, 2024, the Company received $1,944,271 from financing activities by way of $599,371 from proceeds from loans payable from related parties, net, $1,344,900 from stock issuances. The year-over-year changes were primarily related to the issuance of shares of common stock.

The Company is dependent upon the receipt of capital investment or other financing to fund its ongoing operations and to execute its business plan of seeking a combination with a private operating company. In addition, the Company is dependent upon certain related parties to provide continued funding and capital resources. No assurances can be given that the Company will be successful in locating or negotiating with any target company or that the related parties will continue to fund the Company's working capital needs. As a result, there is substantial doubt about the Company's ability to continue as a going concern.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Contractual Obligations

None.

Critical Accounting Estimates

The preparation of financial statements in conformity with generally accepted accounting principles of the United States ("GAAP") requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses in the financial statements and accompanying notes. Critical accounting estimates are those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are likely to have a material impact on the financial condition or results of operations of the Company. We identified that the assumptions and estimates associated with the valuation of stock option grants are a critical accounting estimate. We also have other key accounting policies, which involve the use of estimates, judgments, and assumptions that are significant to understanding our results, which are found in Note 3 - Summary of Significant Accounting Policies and Basis of Presentation of the accompanying condensed consolidated financial statements. Although we believe that our estimates, assumptions, and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments, or conditions.