NOTE 8 – INTANGIBLE ASSETS – SOFTWARE, LICENSES, TRADEMARKS, DEVELOPED TECHNOLOGY, CUSTOMER RELATIONSHIPS, AND NON-COMPETE AGREEMENTS

Software represents software licenses as well as the costs of internally developed gaming software (e.g., a new sports betting platform which is classified as intangible construction in process). Capitalized software costs are amortized based on the straight-line method over the remaining estimated economic life of the product.

During the six months ended June 30, 2025, and 2024, respectively, software development costs of $1,146,753 and $3,993,875, were incurred and capitalized.

Intangible construction in process mainly represents the development of new software in Montenegro and Malta for a sports betting platform. During the six months ended June 30, 2025, and 2024, respectively, costs of $4,830,127 and $3,908,881 were incurred and capitalized, while a total of $3,442,266 was placed in service in 2025.

We anticipate that the majority of intangible construction in process will be placed in service in stages during the 2025, depending on the progress of the software development.

Licenses relate to operational gaming licenses issued in Bosnia, Cyprus and Brazil. During the six months ended June 30, 2025, and 2024, respectively, costs of $767,679 and $84,993, were incurred and capitalized. The licenses are amortized over the life of the licenses.

Other intangible assets relate to retail agent partner relationships and online customer relationships identified during the acquisition of Bit Tech Tanzania in the amount of $1,591,047, as well as the purchase of the domain magicbet777.com by Meridianbet Brazil LTDA in the amount of $2,312,837. Other intangible assets are amortized over 5 years.

Intangible assets related to software and website are amortized on a straight-line basis over their expected useful lives, estimated to be 5 years.

Amortization expenses related to intangible assets were $2,465,380 and $1,913,047 for the three months ended June 30, 2025, and 2024, respectively and $4,618,020 and $2,355,366 for the six months ended June 30, 2025, and 2024, respectively.

The following table details the carrying values of the Company’s intangible assets:

The table below shows expected amortization expenses for the next five years of intangible assets recorded as of June 30, 2025:

The following table identifies the intangible assets resulting from the Meridian Purchase, as described in greater detail in “NOTE 22 – MERIDIANBET GROUP PURCHASE AGREEMENT”:

The fair value estimate for all identifiable intangible assets is based on assumptions that market participants would use in pricing an asset, based on the most advantageous market for the asset (i.e., its highest and best use).