RELATED PARTY TRANSACTIONS |
6 Months Ended |
|---|---|
Jun. 30, 2025 | |
| Related Party Transactions [Abstract] | |
| RELATED PARTY TRANSACTIONS | NOTE K — RELATED PARTY TRANSACTIONS
AFG Reseller Agreement
On August 19, 2023, the Company entered into the Reseller Agreement, providing for, among other things, AFG to act as the Company’s exclusive reseller of certain products on terms and conditions set forth therein and, as partial consideration to AFG for such services, the Company issued shares of Common Stock with an aggregate fair value of $13,475,000 based on the closing stock price on the date of the Merger. Additionally, the Company issued AFG a warrant to purchase up to 3,750,000 shares of Common Stock, with each warrant exercisable for one share of Common Stock at an exercise price of $10.00 and a fair value of $2.52 per warrant (Note H). The Company terminated the Reseller Agreement in January 2025, resulting in the forfeiture of the warrants.
Advances to Officers and Directors
Certain officers and directors advanced funds to or were advanced from the Company on an undocumented, non-interested bearing, due on demand basis. As of June 30, 2025, $0 and $56,682 of amounts owed to related parties were included within accrued expenses and accounts payable, respectively, in the accompanying unaudited condensed consolidated balance sheet. As of December 31, 2024, $0 and $185,029 of amounts owed to related parties were included within accrued expenses and accounts payable, respectively, in the accompanying consolidated balance sheet. During the six months ended June 30, 2025 and 2024, the Company recorded professional and other fees and cost related to consulting services from related parties of $77,299 and $58,785, respectively, within general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations. Related Party Advance
The Company received non-interest bearing and payable upon demand related party advances from DHC’s Sponsor in connection with the Merger. During the three and six months ended June 30, 2025, the Company wrote off the balance owed, which resulted in a gain on debt extinguishment of $693,036 in the accompanying unaudited condensed consolidated statement of operations. As of June 30, 2025 and December 31, 2024, the Company had $0 and $693,036 in related party advances in the accompanying unaudited consolidated balance sheets. AFG Claims Assignment
In January 2025, the Company entered into a Claims Assignment Agreement with a related party that is also party to the May SPA. Pursuant to the Claims Assignment Agreement, the Company purchased the related party’s rights to damages related to the AFG litigation (Note L) for $525,000 which satisfied the related party’s obligations under the May SPA. The Company expensed the $525,000 within general and administrative expenses during the three months ended June 30, 2025.
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