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| STOCKHOLDERS' EQUITY | F. Shareholders’ Equity
Effective December 30, 2025, the Company amended its articles of incorporation to convert existing common shares outstanding prior to the amendment to a new Class A common stock, to create a Class B common stock, to create a preferred stock and increase the authorized shares of all classes of stock from 75,000,000 to 800,000,000. Class A common stockholders have a voting right of 1 vote per share held. Class B common shareholders have a voting right of 10 votes per share held.
As a result of the amendment, the Company has three classes of stock, Class A, Class B and Preferred. All classes carry a par value of $0.0001 per share. As of December 31, 2025 and 2024, the Company’s authorized capital consists of 566,000,000 shares of Class A common stock. As of December 31, 2025 and 2024, the Company’s authorized capital consists of 224,000,000 shares of Class B common stock. As of December 31, 2025 and 2024, the Company’s authorized capital consists of 10,000,000 shares of preferred stock.
On December 30, 2025, the Company approved a 7 for 1 forward stock split of all classes of issued and outstanding common stock and warrants. The forward stock split became effective February 7, 2026. As such, all outstanding shares in the consolidated financial statements are presented as if the forward stock split occurred at the beginning of each fiscal year.
Pursuant to the Merger Agreement, the Company issued 224,000,000 shares of Class B common stock of the Company to Independence Investors in exchange for all outstanding common shares of Independence Power. Independence Power became a wholly owned subsidiary of IPHI. Class B shares can be converted to Class A shares at any time by Class B shareholders at a one-to-one ratio. Pursuant to the Merger Agreement, the Company issued 41,650,000 Class A common shares to existing shareholders of record. The Company incurred transaction costs of $347,096.
During 2025 and prior to the Merger Agreement, the Company received $5,005,000 in contributions from Independence Investors and the Company paid a distribution to Independence Investors of $3,150,000.
As of December 31, 2025 and 2024, the Company had a total of 41,650,000 and no shares of Class A common stock issued and outstanding, respectively. As of December 31, 2025 and 2024, the Company had a total of 224,000,000 and 224,000,000 shares of Class B common stock issued and outstanding, respectively. As of December 31, 2025 and 2024, the Company had no preferred shares issued and outstanding.
On December 30, 2025, the Company issued warrants to purchase 62,312,964 Class A common shares of the Company on December 30, 2025. The warrants meet the requirements of equity classification due to their provisions that do not require cash settlement or variable settlement features. At the time of issuance, the Company utilized a Black-Scholes model to estimate the fair value of the warrants, which included assumptions such as risk-free interest rate, volatility, and expected term to estimate the fair value of the warrants. The most sensitive assumption the Company used in determining the fair value of the warrants is volatility. The Company developed a comparable volatility using publicly available data of peer group companies. The Company notes that that an increase or decrease in expected volatility could have a material impact on the fair value of the warrants, and the Company's actual volatility may differ from the assumption used. The following assumptions were used to fair value the warrants:
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