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Preferred Stock Liability | 6 Months Ended
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Jun. 30, 2025
Preferred Stock Liability |
Preferred Stock Liability | Note 13 - Preferred Stock Liability In connection with the acquisition of GTG Financial and the transaction with MMC, the Company issued a total of 264,063 shares of Series A Preferred Stock with a stated value of $20 per share. The agreements pursuant to which these shares of Series A Preferred Stock were issued subject these shares to certain conversion features, including a shortfall settlement feature, whereby the Company may be required to pay cash or issue shares of common stock if the aggregate value of the conversion shares issuable upon the automatic conversion of the Series A Preferred Stock is less than the paid consideration for such shares of Series A Preferred Stock. In accordance with ASC 480, Distinguishing Liabilities from Equity, and ASC 815, the Company bifurcated the value of the issued Series A Preferred Stock between (i) the liability component of the Series A Preferred Stock and (ii) an embedded derivative liability representing the fair value of the shortfall settlement feature. The classification was based on the fact that the instruments obligate the Company to potentially settle the conversion at a fixed monetary value through a variable number of shares of common stock, which does not meet the criteria for equity classification. As of June 30, 2025, the bifurcated values are as follows:
|  | Gross Amount |  |  | Change in fair value |  |  | Net value |
Balance as on December 31, 2024 |  |  | — |  |  |  |  |  |  | — |
Preferred stock liability – GTG Financial acquisition |  |  | 59,492 |  |  |  | (43,860 | ) |  |  | 15,632 |
Preferred stock liability – MMC transaction |  |  | 897,500 |  |  |  | (713,223 | ) |  |  | 184,277 |
Accrued interest on preferred stock |  |  | 185 |  |  |  | 49,364 |  |  |  | 49,549 |
Balance as on June 30, 2025 |  | $ | 957,177 |  |  | $ | (707,719 | ) |  | $ | 249,458 |
These instruments are classified as liabilities under U.S. GAAP due to redemption features and shortfall settlement provisions associated with the Series A Preferred Stock issued in connection with the acquisition of GTG Financial and the MMC transaction. The liability classification reflects the presence of an embedded derivative feature under applicable accounting guidance and is therefore not included in the diluted earnings per share (“EPS”) calculation. The Series A Preferred Stock and its embedded derivative liability were excluded from the diluted EPS calculation as their inclusion would have been anti-dilutive, consistent with ASC 260, Earnings per Share. (“ASC 260”)

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- Definition The entire disclosure for terms, amounts, nature of changes, rights and privileges, dividends, and other matters related to preferred stock. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 480 -SubTopic 10 -Name Accounting Standards Codification -Section S50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479857/480-10-S50-1 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 505 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/505/tableOfContent + Details
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