VIP Play, Inc. (VIPZ)

VIP Play, Inc. is a Nevada corporation incorporated on April 16, 2020, that completed a strategic transition during fiscal year 2026 from operating an online sportsbook business to focusing on the development of proprietary artificial intelligence technologies, software, and related intellectual property. The Company operates in the highly competitive and rapidly evolving markets for artificial intelligence software and technology solutions, competing with numerous public and private technology companies, software developers, AI platform providers, and emerging technology businesses, many of which possess substantially greater financial, technical, marketing, and operational resources. The Company's ability to compete depends primarily upon the quality of its proprietary technology, its ability to develop commercially viable software applications, the protection of its intellectual property, strategic partnerships, and its ability to attract and retain qualified technical personnel.

The Company's primary competitors are numerous public and private technology companies, software developers, artificial intelligence platform providers, and emerging technology businesses, many of which possess substantially greater financial, technical, marketing, and operational resources. Management believes that the Company's ability to compete will depend primarily upon the quality of its proprietary technology, its ability to develop commercially viable software applications, the protection of its intellectual property, strategic partnerships, and its ability to attract and retain qualified technical personnel. The Company operates as a single operating and reportable segment, with the Chief Executive Officer serving as the Chief Operating Decision Maker.

The Company's core business model is centered on the development of proprietary artificial intelligence technologies that management believes have the potential to address a variety of enterprise software and workflow automation opportunities. The Company intends to continue investing in internally developed software, artificial intelligence technologies, and related intellectual property while evaluating opportunities to commercialize these technologies through licensing arrangements, strategic collaborations, and other commercial relationships. As of June 30, 2026, the Company's AI and software technologies remained in the development stage and had not generated revenue from commercial operations, and the Company may experience a period of limited or no revenue while development and commercialization efforts continue.

The Company's current activities are focused on developing proprietary AI platforms, software solutions, and related intellectual property that management believes may be commercialized through licensing arrangements, strategic partnerships, enterprise software offerings, or other technology-based business opportunities. The Company develops proprietary software using internal personnel and specialized third-party consultants, with development activities including software architecture, artificial intelligence technologies, machine learning applications, workflow automation tools, and other internally developed software designed to support future commercial offerings. In June 2026, the Company transferred certain early-stage and pre-production artificial intelligence intellectual property and related development materials to FuzeBox AI, Inc., a related party, in exchange for a secured promissory note, and the Company continues to develop software and AI technologies through its internal personnel and third-party service providers.

The Company historically operated an online mobile sportsbook in the State of Tennessee under a Tennessee Sports Gaming Operator license until April 2026, when management approved a plan to discontinue the sportsbook business as part of a broader strategic realignment. Customer wagering operations ceased on April 30, 2026, and the Company's Tennessee Sports Gaming Operator license expired on May 24, 2026, and was not renewed. The Company also previously received interim regulatory approval in West Virginia in connection with a potential expansion of its gaming operations; however, operations never commenced, the related market access agreement was terminated, and the interim regulatory approval has since expired. The Company no longer conducts sportsbook operations.

During fiscal year 2026, the Company completed a significant strategic transformation, discontinuing its Tennessee online sportsbook operations and redirecting its resources toward the development of proprietary artificial intelligence technologies, software applications, and related intellectual property. The Company recognized impairment expense of approximately $831 thousand during the year ended June 30, 2026, related to the developed technology and other intangible assets associated with the Company's VIP Play gaming application, and wrote off $1.2 million of prepaid assets related to its gaming operations. The Company also transferred certain early-stage artificial intelligence intellectual property to FuzeBox AI, Inc. in exchange for a secured promissory note with a principal balance of $1.38 million, and continued to rely on related-party financing, with approximately $10.2 million of borrowings under its related-party line of credit during fiscal 2026.

Net loss for fiscal 2026 totalled approximately $9.5 million, compared to approximately $19.2 million during fiscal 2025, with the decrease primarily attributable to a $5.7 million non-cash gain recognized on the change in fair value of derivative liabilities and a decrease in impairment expense from approximately $5.9 million in fiscal 2025 to approximately $0.8 million in fiscal 2026. Gaming revenue was approximately $184 thousand for the year ended June 30, 2026, compared to negative gaming revenue of approximately $86 thousand for the year ended June 30, 2025, and the Company incurred a net gaming loss of approximately $1.0 million during fiscal 2026 compared to approximately $596 thousand during fiscal 2025. As of June 30, 2026, the Company had an accumulated deficit of $72.6 million, current assets of approximately $887 thousand, current liabilities of $42.2 million, and a working capital deficit of $41.3 million.

The Company's future operating results will depend largely upon its ability to successfully commercialize its AI technology, and the timing and extent of commercialization will depend on the successful development of the Company's technologies and its ability to identify and secure customers and other commercial opportunities. The Company may experience a period of limited or no revenue while these development and commercialization efforts continue, and operating results during this period are not necessarily indicative of future operating performance. Management expects to continue funding operations through a combination of cash on hand, borrowings under related-party financing arrangements, primarily with Excel Family Partners, LLLP, and additional capital raising activities as necessary.

The Company's primary growth vector is the development and commercialization of proprietary artificial intelligence technologies and software applications, which management believes have the potential to address a variety of enterprise software and workflow automation opportunities. Management intends to continue investing in internally developed software, artificial intelligence technologies, and related intellectual property while evaluating opportunities to commercialize these technologies through licensing arrangements, strategic collaborations, and other commercial relationships. The Company continues to develop and evaluate potential applications and commercialization opportunities for these technologies, and its future liquidity requirements are expected to be driven primarily by software development activities, corporate operating expenses, working capital requirements, and investments in new technologies.

The Company's growth strategy also involves leveraging related-party relationships for administrative, technology, operational, and management support services, with certain personnel and related costs shared or allocated among the entities, and the Company's Chief Technology Officer providing services to the Company through FuzeBox AI, Inc. The Company supplements these arrangements with its own employees and other third-party consultants and advisors. The Company believes that ownership of proprietary software and related intellectual property will remain an important component of its long-term business strategy, and management believes continued investment in internally developed software and related intellectual property will remain an important element of the Company's long-term strategy.

The Company's cost structure is expected to be driven primarily by software development activities, corporate operating expenses, working capital requirements, and investments in new technologies. Salaries and wages increased to approximately $5.2 million for the year ended June 30, 2026 from approximately $4.5 million during the prior year, primarily attributable to personnel costs associated with the Company's software development activities, including artificial intelligence initiatives, together with stock-based compensation recognized during the year. General and administrative expenses increased to approximately $3.8 million for the year ended June 30, 2026, compared to approximately $2.6 million for the prior year, primarily due to a $1.2 million write-off of prepaid assets related to the Company's gaming operations.

The Company's operational outlook is focused on software development activities, corporate administration, financing activities, and the continued development of proprietary AI technologies. As of June 30, 2026, the Company had five full-time employees, and it engages independent consultants and advisors with specialized expertise to support software development, technology, finance, legal, and other corporate functions. The Company leases shared office space on a month-to-month basis located at 8400 West Sunset Road, Suite 300, Las Vegas, Nevada 89113, which serves as its principal executive offices, and management believes its current facilities are adequate to meet its present operating requirements.

The Company's capital allocation strategy is focused on funding operations through a combination of cash on hand, borrowings under related-party financing arrangements, primarily with Excel Family Partners, LLLP, and additional capital raising activities as necessary. During fiscal 2026, the Company's financing activities primarily consisted of approximately $10.2 million of borrowings under the Company's related-party line of credit and $100 thousand of proceeds from convertible notes, partially offset by approximately $500 thousand of convertible note repayments and $858 thousand of repayments of other notes payable. The Company has never declared or paid cash dividends on its common stock and currently intends to retain any future earnings to fund the development and growth of its business, and does not anticipate paying cash dividends in the foreseeable future.

The Company faces significant headwinds and constraints, including its substantial indebtedness to a related party, Excel Family Partners, LLLP, which is payable on demand, with approximately $29.8 million of principal outstanding and approximately $4.8 million of accrued interest as of June 30, 2026. The Company is dependent on continued related-party financing to fund a significant portion of its operating and liquidity needs, and if such financing were reduced, terminated, or otherwise unavailable, the Company would need to obtain alternative sources of financing and/or reduce or delay expenditures. The Company also faces an unresolved dispute with Wheeling Island Gaming, Inc. relating to the termination of its Casino and Sportsbook Online Operations Agreement, which could result in significant liability, with Wheeling Island demanding payment of a $4.5 million termination fee.

The Company's ability to continue as a going concern is dependent upon its ability to obtain additional financing, generate future cash flows from operations, and successfully execute its business strategy, and there can be no assurance that additional financing will be available on acceptable terms, or at all. The Company has incurred recurring operating losses since inception and has generated negative cash flows from operations, and as of June 30, 2026, had an accumulated deficit of $72.6 million and limited liquidity. The Company's independent registered public accounting firm has included an explanatory paragraph regarding substantial doubt about the Company's ability to continue as a going concern.

Management's message to shareholders emphasizes the Company's significant strategic transformation during fiscal year 2026, completing the exit from its online sportsbook operations and redirecting resources toward the development of proprietary artificial intelligence technologies, software applications, and related intellectual property. Management determined that concentrating the Company's financial and operational resources on AI development represented the most effective long-term strategic direction, and intends to continue investing in internally developed software, artificial intelligence technologies, and related intellectual property while evaluating opportunities to commercialize these technologies through licensing arrangements, strategic collaborations, and other commercial relationships. The Company's strategic priorities for the period ahead are to continue developing its technology platform, pursue commercialization opportunities, and secure adequate financing to fund its operations, with management expecting to continue funding operations through existing related-party financing arrangements and additional equity or debt financings.

Total gaming revenue was approximately $184 thousand for the year ended June 30, 2026, compared to negative gaming revenue of approximately $86 thousand for the year ended June 30, 2025 . Net loss totalled approximately $9.5 million for fiscal 2026, compared to approximately $19.2 million during fiscal 2025 . The Company reported a net gaming loss of approximately $1.0 million during fiscal 2026 compared to approximately $596 thousand during fiscal 2025 . Cost of gaming revenue was approximately $1.2 million for the year ended June 30, 2026, compared to approximately $510 thousand for the year ended June 30, 2025 . Salaries and wages increased to approximately $5.2 million for the year ended June 30, 2026 from approximately $4.5 million during the prior year . General and administrative expenses increased to approximately $3.8 million for the year ended June 30, 2026, compared to approximately $2.6 million for the prior year ⁶. Depreciation and amortization expense decreased to approximately $458 thousand for the year ended June 30, 2026 from approximately $993 thousand during the prior year ⁷. The Company recognized impairment expense of approximately $831 thousand during the year ended June 30, 2026, related to the developed technology and other intangible assets associated with the Company's VIP Play gaming application, compared to approximately $5.9 million during the year ended June 30, 2025, related to the intangible assets associated with the Company's former ZenSports application ⁸. Sales and marketing expense totalled approximately $590 thousand during fiscal 2026 compared to $1.1 million during fiscal 2025 ⁹. Interest expense totalled approximately $173 thousand, while related-party interest expense totalled approximately $3.2 million during the current year, compared to approximately $483 thousand and $3.0 million, respectively, during the prior year ¹⁰. The Company recognized a gain on the change in fair value of derivative liabilities of approximately $5.7 million during fiscal 2026 compared to approximately $47 thousand during fiscal 2025 ¹¹. As of June 30, 2026, the Company had current assets of approximately $887 thousand, current liabilities of $42.2 million, and a working capital deficit of $41.3 million, compared to current assets of $2.9 million, current liabilities of $35.5 million, and a working capital deficit of $32.7 million as of June 30, 2025 ¹². Net cash used in operating activities during the year ended June 30, 2026 was $8.9 million, compared to $10.4 million during the year ended June 30, 2025 ¹³. Net cash used in investing activities during the year ended June 30, 2026 was $406 thousand, compared to $1.0 million during the year ended June 30, 2025 ¹⁴. Net cash provided by financing activities during the year ended June 30, 2026 was $9.0 million, compared to $11.4 million during the year ended June 30, 2025 ¹⁵. As of June 30, 2026, the Company had an accumulated deficit of $72.6 million ¹⁶.

The Company faces substantial doubt regarding its ability to continue as a going concern, having incurred recurring operating losses since inception, an accumulated deficit of $72.6 million as of June 30, 2026, and negative cash flows from operations ¹. The Company's substantial indebtedness to a related party, Excel Family Partners, LLLP, is payable on demand, with approximately $29.8 million of principal outstanding and approximately $4.8 million of accrued interest as of June 30, 2026, and a demand for repayment could materially adversely affect liquidity ². The Company is involved in an unresolved dispute with Wheeling Island Gaming, Inc., which has demanded payment of a $4.5 million termination fee, and if the dispute is resolved adversely, the Company could be required to pay all or a substantial portion of this fee ³. The Company's transition to an AI-focused business involves substantial risks, including developing commercially viable technologies, obtaining customer acceptance, competing against significantly larger companies, protecting proprietary technology, securing adequate financing, and generating sustainable revenues, and the Company currently generates no revenue from its AI-focused operations ⁴. The Company's outstanding convertible debt and related-party financing could result in substantial dilution, as approximately $29.8 million of principal was outstanding under related-party line of credit facilities, certain of which are convertible into shares of common stock ⁵.