Note 5 — Revenue and Contract Balances

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Following the Merger, the Company’s revenue is derived from IPG’s cricket commercialization operations, comprising production and technical services, franchise fees, sponsorship, and media rights relating to the Lanka Premier League and other cricket properties.

Disaggregation of Revenue

Revenue recognized during the period relates to production and technical services performed under the Sri Lanka Cricket Future Tours Programme. Franchise fee, sponsorship and media rights revenue relating to Lanka Premier League Season 6 had not been recognized at June 30, 2026 because the related performance obligations are satisfied as the season is delivered, which commenced in July 2026. All revenue is recognized at a point in time or over time as services are performed, and all revenue was generated outside the United States.

Contract Balances

Contract liabilities represent consideration received or receivable from customers in advance of the satisfaction of the related performance obligations. Changes in contract liabilities were as follows:

Amounts billed in advance of performance during the period comprise franchise fees of $900,000, sponsorship of $677,600, and production fees of $280,682 relating to Lanka Premier League Season 6, together with other amounts billed in advance. No revenue was recognized during the six months ended June 30, 2026 from amounts included in the contract liability balance at the beginning of the period.

Deferred Contract Costs

Costs incurred to fulfill contracts with customers that relate directly to a contract, generate or enhance resources used in satisfying performance obligations, and are expected to be recovered are capitalized in accordance with ASC 340-40. Deferred contract costs of $3,715,500 at June 30, 2026 relate to Lanka Premier League Season 6 and consist principally of league rights fees of $3,313,348 and media rights fees of $368,000, together with production, draft and player costs incurred in advance of the season.

These costs will be recognized in cost of revenue as the related performance obligations are satisfied during the third quarter of 2026, consistent with the pattern of transfer of the related services. The Company assessed the recoverability of the capitalized costs at June 30, 2026 by reference to the total consideration expected to be received in respect of Season 6, and concluded that no impairment was required. No impairment loss was recognized during the three or six months ended June 30, 2026.

Remaining Performance Obligations

At June 30, 2026 the aggregate amount of the transaction price allocated to performance obligations that were unsatisfied or partially unsatisfied was $3,378,745, substantially all of which the Company expects to recognize as revenue during the third quarter of 2026 as Lanka Premier League Season 6 is delivered. The Company applies the practical expedient in ASC 606-10-50-14 and does not disclose information about remaining performance obligations with an original expected duration of one year or less.