NOTE 4. RELATED PARTY TRANSACTIONS

Loan Receivable – Related Party

On June 12, 2025, the Company entered into an agreement (the “Assignment Agreement”) with Cádiz CF for the assignment of a participative loan agreement (the “Participative Loan”) to the Company. The Participative Loan was previously held between Cádiz CF and Sportech. Pursuant to the Assignment Agreement, the Company became the new lender and Sportech remained as the borrower.

The Participative Loan is denominated in Euros (€) and had an outstanding principal balance of €6.8 million at the time of assignment, which was approximately $7.9 million USD based on the exchange rate on the assignment date. The Participative Loan is due on February 23, 2027 and carries a fixed interest rate of 3% per annum, plus a variable interest rate equivalent to 1.5% of the EBITDA of the previously completed fiscal year of the borrower. Interest earned on the Participative Loan is payable upon maturity.

The Company acquired the Participative Loan through a non-monetary exchange, which was accounted for at fair value on the assignment date. The fair value of the Participative Loan was determined to be $8,711,035, which equals the aggregate fair value of the consideration transferred. The difference between the fair value of the Participative Loan and its outstanding principal balance was recognized as a premium of $787,675. The premium is being amortized over the term of the Participative Loan. During the year ended December 31, 2025, the Company recorded amortization of the premium of $255,569 on the accompanying statement of operations.

In exchange for the Participative Loan, the Company issued 750,000 shares of Class A Common Stock and agreed to a deferred cash payment of $1,000,000, denominated in US Dollars, due within 24 months, or June 2027. The shares of Class A Common Stock had a fair value of $7,884,589. The deferred payment was initially recorded at its present value of $826,446 using the effective interest method. The deferred payment is being accreted monthly and is presented as deferred liability – related party on the accompanying balance sheet. During the year ended December 31, 2025, the Company repaid $207,603 of the deferred payment.

For the year ended December 31, 2025, the Company recorded $48,024 of accretion expense, respectively, as a result of the deferred payment. The accretion expense is presented as a component of interest expense – related party in the accompanying statement of operations.

Because the Participative Loan is denominated in Euros, its carrying value is remeasured at each reporting period using the applicable exchange rate. For the year ended December 31, 2025, the Company recognized a gain on foreign currency remeasurement of $57,545. The gain on foreign currency remeasurement of the Participative Loan is presented in (gain) loss on foreign currency transactions, net in the accompanying statement of operations.

The Company recognized interest income – related party of $134,837 during the year ended December 31, 2025, related to the fixed interest rate on the Participative Loan in the accompanying statement of operations.

Stockholder Loan

On September 1, 2023, the Company entered into a line of credit (the “stockholder loan”) with its majority stockholder Sportech. The aggregate outstanding borrowings under the agreement, as amended, with Sportech will not exceed $1,000,000 and will maintain an interest rate of 4.19%. There were no upfront fees or commitment fees paid by the Company in connection with the stockholder loan. Individual draws and repayments are planned to be transacted in U.S. Dollars (“USD”).

During the year ended December 31, 2025, the Company repaid $488,664 on the stockholder loan. During the year ended December 31, 2024, the Company drew $453,469 on the stockholder loan. The stockholder loan is carried at cost until repayment and has a maturity date of December 31, 2029. The Company incurred $8,819 and $8,162 of interest expense during the year ended December 31, 2025 and 2024, respectively, in connection with interest due on the stockholder loan. The interest expense is presented as part of Interest expense – related party in the statements of operations. The total amount of interest due is $0 and $7,897 as of December 31, 2025 and 2024, respectively.

Exclusive License Agreements

Pursuant to the HPT Agreement, Cádiz CF has planned and developed the HPT program which provides the opportunity for youth fútbol players to become immersed in La Liga First Division fútbol club where they receive access to training methods and coaching. Cádiz CF declares to be the holder of the know-how and practical knowledge necessary for the standardized development of the HPT program. Through the licensing agreement, Cádiz CF grants the Company the right to use the HPT know-how as described in Note 2.

Prior to the Mágico González Agreement, Cádiz CF exclusively owned and had the right to manage the brand rights derived from the nickname by which the former fútbol player Mr. González Barillas is internationally known, “Mágico González,” and also owns the Spanish trademark, “Mágico González.” Pursuant to the Mágico González Agreement, the Company is granted the right to use the trademark exclusively for the following products and services: sports and non-sports clothing, sports equipment, nonalcoholic beverages, stationery products, merchandising products, household items, exploitation of bars and restaurants, sports events, cultural and musical events, and for commercial, advertising, and any other activities related to the Company’s business worldwide except in Spain. The initial term of the Mágico González Agreement is twenty years from the effective date of the contract. See Note 2 for additional details.

Contribution Capital Received in Advance for Stock Payable

In November 2024, the Company entered into a binding capital contribution agreement (the “Contribution Agreement”) with Sportech, as amended in June 2025, pursuant to which Sportech has agreed to provide or arrange for $10 million to fund the business and operations of the Company through 2027, in each case conditioned on the then-current listing of the Company on a U.S. national stock exchange.

On each funding date, in consideration for the cash contribution on such funding date, the Company will issue to Sportech a number of shares of Common Stock, calculated based on the current trading price of our Common Stock, pursuant to the applicable rules of the exchange. During the year ended December 31, 2025, the Company received $2,261,175 in capital contributions and issued 260,433 shares of Common Stock to Sportech.

On February 27, 2026, the Company entered into a subscription agreement with an unaffiliated third-party, pursuant to which the investor agreed to purchase, and the Company agreed to sell, up to $5.4 million of the Company’s Class A common stock, in one or more closings, at a price per share equal to $3.65, representing the issuance of up to 1,480,937 shares of Common Stock, in three separate tranches. On March 3, 2026, the Company closed the first tranche of the offering, and issued 584,969 shares of Common Stock to the investor at the per share purchase price. The second tranche of the offering closed on March 30, 2026, and the Company issued 447,983 shares to the investor as a result. The third tranche of the offering is scheduled to close on April 30, 2026. This investor was brought to the Company by Sportech as part of the fulfillment of the terms of the Contribution Agreement, with the remaining amount to be contributed under the Contribution Agreement of $0.4 million (Note 12).

Stadium Agreement

The Company entered into the Stadium Agreement with Cádiz CF whereby Cádiz CF granted the Company with temporary, non-exclusive rights to use the JP Financial Stadium and organize events to be held at the Stadium. The Stadium Agreement has a duration of ten years and may be extended for additional periods upon agreement of the parties. Refer to Note 2 for additional information.