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STOCKHOLDERS’ EQUITY (DEFICIT)
 12 Months Ended
Dec. 31, 2025
Equity [Abstract]  
STOCKHOLDERS’ EQUITY (DEFICIT)

NOTE 10: STOCKHOLDERS’ EQUITY (DEFICIT)

 

Amendments to Certificate of Incorporation and Reincorporation

 

Effective December 29, 2025, the Company reincorporated from the State of Delaware to the State of Nevada pursuant to a plan of conversion approved by the Board of Directors. The reincorporation did not affect the Company’s authorized capital structure, par values, or outstanding equity.

 

Common Stock

 

As of December 31, 2025, the Company had 1,000,000,000 shares of common stock, $0.0001 par value per share, authorized. As of December 31, 2025 and December 31, 2024, there were 8,788,335 and 838,583 shares of common stock issued and outstanding, respectively.

 

Common stockholders have voting rights of one vote per share. The voting, dividend, and liquidation rights of the holders of common stock are subject to and qualified by the rights, powers, and preferences of preferred stockholders.

 

2025 Common Stock Transactions

 

During the year ended December 31, 2025, the Company issued common stock and equity instruments in the following transactions:

 

  ● In January 2025, the Company issued 2,068,965 pre-funded warrants to MavDB Consulting LLC as consideration for a two-year marketing services agreement. The fair value of those warrants ($2,689,656) was recorded as a prepaid marketing asset. See Note 5.
     
  ● In February 2025, the Company issued 125,535 shares of common stock and 11,239,805 pre-funded warrants for net proceeds of $6,642,433. See the February 2025 Offering section below. During 2025, 4,012,375 shares were subsequently issued upon exercise of those pre-funded warrants.
     
  ● In April 2025, the Company issued 344,827 shares as consideration for the acquisition of technology assets from Open Daily Technologies Inc., at a fair value of $2,948,276. See Note 4.
     
  ● In August and September 2025, the Company raised $11,387,000 in net proceeds through the Series D Convertible Preferred Stock offering. See the Series D section below.
     
  ● In 2025, the Company issued 1,721,000 shares under the four collegiate apparel agreements (AAA Tuscaloosa 285,714; Traffic Holdco 857,143; The Grove Collective 385,107; Learfield/Buffalo Sports 193,036). The shares were valued at their accounting grant-date fair value and recorded as prepaid marketing assets. See Note 5.
     
  ● The Company issued 11,582 shares to settle $113,851 of outstanding accounts payable to vendors. The Company also issued 44,988 shares to consultants for services performed for a fair value of $145,226.
     
  ●

During 2025, warrant holders exercised an aggregate of 5,701,820 Common Share Purchase Warrants, resulting in the issuance of shares of common stock and aggregate proceeds of $5,807,576 to the Company. See Note 11.

     
  ● During August 2025, certain warrant holders exercised Common Share Purchase Warrants at $0.66 per share generating aggregate proceeds of approximately $5.0 million for which the underlying shares had not been issued as of December 31, 2025. These proceeds are reflected as stock payable on the consolidated balance sheet.

 

February 2025 Offering

 

On February 13, 2025, the Company entered into securities purchase agreements with certain accredited investors, pursuant to which the Company agreed to issue and sell in a best efforts offering 11,365,340 units at a purchase price of $0.66 per unit, including: (i) 125,535 units consisting of one share of common stock and two common stock purchase warrants; and (ii) 11,239,805 units consisting of one pre-funded warrant (exercisable at $0.0001 per share with no expiration) and two common stock purchase warrants. The common stock purchase warrants are exercisable for an aggregate of 22,730,680 shares of common stock at $0.66 per share. The February 2025 Offering closed on February 18, 2025, generating net proceeds of $6,642,433 after placement agent fees and expenses.

 

Pre-Funded Warrants were offered to purchasers whose purchase of common stock would have resulted in beneficial ownership exceeding 4.99% (or 9.99% at the purchaser’s election) of outstanding common stock. Pre-Funded Warrants are immediately exercisable, do not expire, and may be exercised on a cashless basis if no effective registration statement is available.

 

Stock Payable

 

As of December 31, 2025, stock payable of $4,951,128 represents amounts received from warrant holders for exercises in which the underlying shares of common stock had not yet been issued as of December 31, 2025. During August 2025, certain warrant holders exercised Common Share Purchase Warrants at $0.66 per share for aggregate proceeds of approximately $5.0 million; the shares had not been issued as of December 31, 2025 and accordingly the proceeds were recorded as stock payable. As of December 31, 2025, the Company had exercised warrants representing an obligation to issue shares of common stock. Upon issuance, the balance will be reclassified to stockholders’ equity. See Note 17 for shares issued subsequent to December 31, 2025.

 

 

2024 Common Stock Transactions

 

Offerings

 

On May 3, 2024, the Company entered into that certain inducement offer to exercise common stock purchase warrants with the Investor (the “Inducement Agreement”), pursuant to which (i) the Company agreed to lower the exercise price of the Existing Warrants to $156.50 per share and (ii) the Investor agreed to exercise the Existing Warrants into 20,555 shares of common stock (the “Exercise Shares”) by payment of the aggregate exercise price of $3,216,857. The closing occurred on May 7, 2024. The Company has issued all of the 20,555 shares of common stock underlying the Existing Warrants. The Company received the entire gross proceeds of $3,216,857 in May 2024, which represents the exercise of the entire 20,555 warrants at the $156.50 exercise price. The Company received net proceeds of $2,877,475 after placement agent fees and expenses. In addition, pursuant to the Inducement Agreement, the Company issued to the Investor a Series A-1 common share purchase warrant to purchase up to 20,555 shares of Common Stock (“Series A-1 Warrant”) and Series B-1 common share purchase warrant to purchase up to 20,555 shares of Common Stock (“Series B-1 Warrant”, and collectively with the Series A-1 Warrant, the “Warrants”) on May 7, 2024, each at an initial exercise price equal to $144 per share of Common Stock. The Series A-1 Warrant are exercisable immediately upon issuance and expires five and one-half (5.5) years following the issuance date and the Series B-1 Warrant are exercisable immediately upon issuance and expires fifteen (15) months following the issuance date. In connection with the Inducement Agreement, we entered into an engagement agreement with H.C. Wainwright & Co., LLC (“Wainwright”), pursuant to which we have, among other things, issued to Wainwright’s designees warrants to purchase up to 1,541 shares of Common Stock (the “Wainwright Warrants”). The terms of the Wainwright Warrants are substantially the same as the terms of the Series A-1 Warrant except that they have an exercise price of $195.63 per share.

 

Between July 1, 2024 and October 22, 2024, the Company issued and sold 105,125 shares of Common Stock (the “Recent ATM Share Sales”) to H.C. Wainwright & Co., LLC (the “Agent”) as sales agent or principal, pursuant to the terms of the Company’s previously announced At-The-Market Offering Agreement, dated December 27, 2023, between us and the Agent (the “Sales Agreement”). The Company received net proceeds of $2,063,386 from the Recent ATM Share Sales. Between October 23, 2024 and December 17, 2024, the Company issued and sold 65,236 shares of Common Stock to the Agent as sales agent or principal, pursuant to the terms of the Sales Agreement, and received net proceeds of $278,160.

 

On October 28, 2024, the Company entered into securities purchase agreements (the “Purchase Agreements”) with certain accredited investors named therein (the “Purchasers”), pursuant to which the Company agreed to issue and sell, in a best efforts offering (the “Offering”): (i) 124,673 shares of common stock (the “Common Stock”), at a purchase price of $5.00 per share of Common Stock, and (ii) 482,187 pre-funded warrants (“Pre-Funded Warrants”) to purchase Common Stock, at a purchase price of $4.995 per Pre-Funded Warrant, immediately exercisable at an exercise price of $0.005 per share. The Purchase Agreement contained customary representations and warranties and agreements of the Company and the Purchasers and customary indemnification rights and obligations of the parties. The Offering closed on October 30, 2024.

 

The Offering resulted in gross proceeds to the Company of approximately $3,000,000, before deducting placement agent fees and commissions and other offering expenses, and excluding proceeds to the Company, if any, that may result from the future exercise of the Pre-Funded Warrants issued in the Offering. As compensation to the Placement Agent, as the exclusive placement agent in connection with the Offering, the Company paid to the Placement Agent a cash fee of 8.0% of the aggregate gross proceeds raised in the Offering, a non-accountable expense allowance of 1.0% of the aggregate gross proceeds raised in the Offering, reimbursement of up to $50,000 for expenses of legal counsel and other actual out-of-pocket expenses, and up to $15,950 for clearing agent closing costs. The Company received net proceeds of approximately $2,546,213 from the Offering (the “Public Offering Proceeds”).

 

During the year ended December 31, 2024, the Company issued an aggregate of 806,754 shares of common stock pursuant to the offerings detailed above for net proceeds of $9,374,441.

 

 

Series A Convertible Preferred Stock

 

On September 29, 2022, the Company designated up to 6,800 shares of Series A Convertible Preferred Stock, par value $0.0001, with a stated value of $1,000 per share. Each share of Series A Preferred Stock is convertible at the holder’s option into a number of shares of common stock determined by dividing the stated value ($1,000) by the conversion price of $9.30 (the closing price on September 29, 2022). Series A holders are entitled to vote with the holders of common stock on an as-converted basis. Series A Preferred Stock ranks senior to common stock and junior to Senior Securities as to dividends and liquidation.

 

As of December 31, 2025 and December 31, 2024, there were 6,300 shares of Series A Convertible Preferred Stock issued and outstanding, with an aggregate liquidation preference of $6,300,000.

 

Series C Convertible Preferred Stock

 

On June 21, 2023, the Company issued 5,761 shares of Series C Convertible Preferred Stock, par value $0.0001, with a stated value of $1,000 per share, to the Sundry sellers in exchange for cancellation of promissory notes issued in December 2022. Each share of Series C Preferred Stock is convertible at the holder’s option into common stock at a conversion price of $0.717 per share (the lower of the closing price on June 20, 2023 and the five-day average preceding the issuance date). The Company may redeem all or any portion of the outstanding Series C shares at 112% of the then-current stated value at any time after June 21, 2023, provided an effective registration statement is in place. Series C holders are entitled to vote with common stockholders on an as-converted basis. Series C ranks pari passu with Series A and senior to common stock.

 

As of December 31, 2025 and December 31, 2024, there were 1,344 shares of Series C Convertible Preferred Stock issued and outstanding, with an aggregate liquidation preference of $1,344,000.

 

Series D Convertible Preferred Stock

 

2025 Transactions

 

On August 13, 2025, the Company completed the initial closing of a private placement, issuing 14,031.25 shares of Series D Convertible Preferred Stock, par value $0.0001 per share, with a stated value of $1,000 per share, for gross cash proceeds of approximately $11.2 million (aggregate stated value of $14.0 million).

 

On September 26, 2025, pursuant to an amendment to the Securities Purchase Agreement, the Company issued an additional 1,875 shares of Series D Preferred Stock to an investor for gross cash proceeds of $1.5 million, at a stated value of $1,150 per share (aggregate stated value of $2.16 million for this tranche).

 

Total gross proceeds from the Series D offerings were $12.7 million. Net proceeds received, after deducting offering costs, were $11.4 million.

 

As of December 31, 2025, there were 15,906 shares of Series D Convertible Preferred Stock issued and outstanding.

 

Conversion: Each share of Series D Preferred Stock is convertible at the holder’s option into common stock at a price equal to 80% of the lowest closing price of the Company’s common stock for the five trading days immediately preceding the conversion date, subject to beneficial ownership limitations of 4.99% (adjustable to 9.99%).

 

Dividends: Series D holders are entitled to receive dividends equal (on an as-converted basis) to dividends paid on common stock, when and if declared. No dividends have been declared or paid.

 

Voting: Series D holders vote with holders of common stock on an as-converted basis, subject to ownership limitations.

 

Liquidation Preference: Series D ranks senior to common stock and Junior Securities, pari passu with Series A and Series C, and junior to Senior Securities. Upon liquidation, each Series D holder is entitled to receive the greater of: (i) the stated value plus accrued dividends, or (ii) the amount such holder would receive if Series D were converted to common stock immediately prior to such liquidation. As of December 31, 2025, the aggregate liquidation preference of the Series D Preferred Stock was approximately $23,859,375.

 

The Company is required to hold the offering proceeds in a segregated bank account. As of December 31, 2025, $5,744,174 remains in the segregated account as restricted cash, pending release upon: (i) shareholder approval of the reverse stock split and 20% rule, and (ii) SEC effectiveness of the resale registration statement. See Note 3.

 

ASC 480 and 815 Analysis

 

The Company evaluated the Series D Convertible Preferred Stock under ASC 480, ASC 815, and ASC 480-10-S99-3A.

 

Under ASC 480, the Series D does not meet the definition of a mandatorily redeemable instrument, as there are no mandatory redemption provisions or obligations requiring the Company to deliver cash or other assets to holders. The instrument is therefore not classified as a liability under ASC 480.

 

Under ASC 815, the Company evaluated all embedded features of the Series D Preferred Stock, including the conversion option, participating dividends, price protection, protective rights, and liquidation preference. The Company determined that all such features are clearly and closely related to the equity host and do not require bifurcation as separate derivative instruments. The conversion option is equity-settled, the ownership limitations maintain equity characteristics, and there are no put features, mandatory repurchase provisions, or redemption rights exercisable at the option of holders or upon events outside the Company’s control.

 

 

Under ASC 480-10-S99-3A, the Company evaluated whether the Series D should be classified as temporary equity. Because there are no redemption features exercisable at the option of the holder or upon the occurrence of events not solely within the Company’s control, the Series D Preferred Stock does not meet the criteria for temporary equity classification. Accordingly, the Series D is classified as permanent equity in the Consolidated Balance Sheets.

 

Modification

 

On September 23, 2025, the Company amended the Certificate of Designations for the Series D Convertible Preferred Stock to increase the stated value from $1,000 to $1,150 per share and expand the authorized shares from 15,000 to 17,500. The amendment was accounted for as a modification by analogy to ASC 718-20, and the Company recognized a deemed dividend of $2,104,688, representing the aggregate increase in stated value transferred to preferred shareholders.

 

Liquidation Preferences

 

As of December 31, 2025, the aggregate liquidation preferences of the Company’s preferred stock were as follows:

 

Series  Liquidation Preference 
Series A Convertible Preferred Stock  $6,300,000 
Series C Convertible Preferred Stock   1,344,000 
Series D Convertible Preferred Stock   23,859,375 
Total  $31,503,375