NOTE 6 – INVESTMENTS

218 LLC

On September 15, 2025, the Company entered into an agreement for the acquisition of 100% of the membership interests of 218 LLC, a limited liability company whose sole asset is a 20,829 square foot, four-story commercial retail building located at 218 3rd Avenue North, Nashville, Tennessee (the “Property”). The total purchase price for the acquisition was $14,100,000, payable in a combination of Series D Convertible Preferred Stock, cash, and a promissory note. The Property is presented within Property and Equipment, net in the accompanying consolidated balance sheets. Rental income earned from the Property was approximately $155,000 and $0 for the year ended December 31, 2025 and 2024, respectively.

Pursuant to the Membership Interest Purchase Agreement, the Company issued 280,000 shares of Series D Convertible Preferred Stock, valued at $7.50 per share ($2,100,000 in aggregate), to acquire 100% of the membership interests of 218 LLC. The Company also agreed to pay the Seller $300,000 in three non-refundable $100,000 installments, each payment acquiring an additional 1% of the membership interests. The remaining $11,700,000 of the purchase price was funded through a 12-month promissory note bearing interest at 6% per annum. The Seller may, from time to time, convert portions of principal and interest under the note into Series D Convertible Preferred Stock, which may subsequently be converted into common stock and applied toward the note balance, subject to a 4.99% beneficial ownership limitation. Any conversion of the promissory note balance would result in additional membership interests in 218 LLC being issued to the Company.

The Company also agreed to issue an additional 18,800 shares of Series D Convertible Preferred Stock, valued at $141,000, as a convenience fee. The acquisition was accounted for as an asset acquisition. The assets acquired are presented within property and equipment in the consolidated balance sheet.

Minority Investment in RAEK Data, LLC

On September 30, 2025, the Company entered into a Membership Interest Purchase Agreement with RAEK Data, LLC (“RAEK”) to acquire a 3% minority membership interest in RAEK. As consideration, the Company issued 200,000 shares of Series D Convertible Preferred Stock, valued at $7.50 per share, for an aggregate transaction value of $1,500,000. The investment provides the Company with additional exposure to data and analytics capabilities supporting its brand and marketing strategy.

On December 26, 2025, the Company exercised its option to purchase additional membership interests of RAEK pursuant to Section 1.06 of that certain Minority Membership Interest Purchase Agreement. The Company purchased from RAEK additional membership interests in RAEK equal to a fully diluted ownership interest percentage of two percent (2.0%) (the “Additional Interests”). The purchase price for the Additional Interests was $1,000,000 (the “Option Purchase Price”). The Company paid the Option Purchase Price in shares of its Series D Convertible Preferred Stock, with a stated value of $7.50 per share. Based on such stated value, the Company delivered 133,334 shares of Series D Preferred (aggregate stated value $1,000,005), the additional $5.00 shall be documented as an administrative fee for the transaction.

The investment in RAEK is accounted for using the measurement alternative basis of accounting. As of December 31, 2025 and December 31, 2024, the Company had an equity method investment in RAEK of $2,500,000 and $0, respectively, recorded on the condensed consolidated balance sheets. In accordance with ASC 323, the Company uses the equity method of accounting for its investments in an unconsolidated entity over which it does not have a controlling interest. The measurement alternative basis of accounting requires the investment to be initially recorded at cost and subsequently adjusted for impairment or observable changes in price. For the year ended December 31, 2025, no such adjustments were recognized.

Minority Investment in Schmitty’s Herbal Snuff and Pouches

On September 2, 2025, the Company entered into a Membership Interest Purchase Agreement with Sydona Enterprises, LLC, doing business as Schmitty’s Herbal Snuff and Pouches (“Schmitty’s”), to acquire a 19.01% ownership interest. The consideration for the investment consisted of 11 shares of common stock and a prefunded warrant to purchase 30 shares of common stock at an exercise price of $0.01 per share, valued in total at approximately $1,990,000. This strategic investment provides the Company with a platform to participate in the growing smokeless market and expand its portfolio under the “America’s Patriotic Brand” umbrella. 

The investment in Schmitty’s is accounted for using the equity method of accounting. As of December 31, 2025 and December 31, 2024 the Company had an equity method investment in Schmitty’s of $1,999,850 and $0, respectively, recorded on the consolidated balance sheets. In accordance with ASC 323, the Company uses the equity method of accounting for its investments in an unconsolidated entity over which it does not have a controlling interest and has significant influence. The equity method of accounting requires the investment to be initially recorded at cost and subsequently adjusted for the Company’s share of equity in the unconsolidated entity’s earnings or losses. The Company evaluates the carrying amount of this investment for impairment in accordance with ASC 323. If the Company determines that a loss in the value of the investment is other than temporary, the Company writes down the investment to its estimated fair value. Any such losses are recorded in the Company’s consolidated statements of operations. The Company has made an election to report on a one-quarter lag the unconsolidated entity’s earnings or losses. The Company estimated its share of share of equity in the unconsolidated entity’s earnings or losses to be immaterial for the year ended December 31, 2025.

Damon Note Purchase Agreement

On August 22, 2025, the Company entered into a note purchase agreement (the “NPA”) with Streeterville Capital, LLC, a Utah limited liability company (“Streeterville”), for the purchase by the Company of a portion of a certain $6,470,000 secured promissory note dated June 26, 2024 (the “Damon Note”) in Damon, Inc., a British Columbia corporation (“Damon”) held by Streeterville. Damon is a public company, registered as a foreign private issuer with the SEC, with its common shares traded on the OTCID Basic Market under the symbol “DMNIF”.

Upon the terms and conditions set forth in the NPA, Streeterville sold, transferred and assigned to the Company, and the Company agreed to purchase from Streeterville, $2,000,000 of the Damon Note in consideration for the issuance to Streeterville of 2,000 shares of the Company’s newly authorized Series E Preferred Stock, par value $0.001 per share. In the event the Company’s common stock is ever delisted from Nasdaq, Streeterville will have the right to repurchase the portion of the purchased Damon Note from the Company in exchange for cancellation of the shares of Series E Preferred Stock.

The Damon Note is secured by certain collateral of Damon as set forth in the transaction documents between Streeterville and Damon. The Company and Streeterville agreed that the security interest held in the collateral by Streeterville will be held pari passu for benefit of both parties. Any and all rights, benefits and proceeds of the collateral will be shared pro rata by the Company and Streeterville (based on the then-outstanding balances of the Damon Note and the portion of the Damon Note purchased by the Company). Any decision regarding when, how and whether to pursue collections or other actions against Damon will be determined by Streeterville in consultation with the Company. The Company covenanted and agreed that it will not pursue any collections or other action against Damon without Streeterville’s consent.

Investments includes the following:

 SCHEDULE OF INVESTMENTS