Related Party Transactions (ASC 850) |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions (ASC 850) | (19) Related Party Transactions (ASC 850)
The Company engages in transactions with related parties in the ordinary course of business, including financing arrangements, consulting services, and equity transactions involving entities and individuals affiliated with the Company’s management. The Company engages MIS Consulting, Inc., an entity controlled by the Company’s Chief Executive Officer, to provide management and consulting services. The Company also engages Abstract Concepts 1618 LLC, an entity owned by a significant shareholder of the Company, to provide consulting services.
During the reporting period, the Company maintained multiple line of credit arrangements, including two with related parties. Borrowings under one such related party arrangement increased during the period, while the other related party and unrelated party arrangements remained unchanged. As of March 31, 2026, the outstanding balances under the related party lines of credit were approximately $29,000 and $5,600, respectively, and are included in the Company’s total outstanding lines of credit as disclosed in Note 12.
During the reporting period, the Company repaid a short-term advance received from an affiliated entity near the end of the prior period.
The Company maintained accounts payable and other obligations to related parties, including entities affiliated with the Company’s Chief Executive Officer and other related parties, arising from consulting services and other arrangements. Such balances were outstanding during the period and are included within accounts payable and accrued expenses in the accompanying financial statements. As of March 31, 2026, amounts due to related parties were approximately $37,500.
In addition, the Company issued equity securities to certain related parties in connection with consulting services and other arrangements, including the exercise of previously issued options, whereby amounts owed to related parties for services were applied toward the exercise price of such options, as well as the exercise of options for cash by related parties. These transactions were recorded at fair value in accordance with the Company’s accounting policies.
The Company’s Chief Executive Officer has provided a personal guarantee in connection with certain of the Company’s obligations with its financial institutions.
Certain related party transactions were not negotiated at arm’s length; however, the Company believes that all such transactions were conducted on terms that are reasonable based on the facts and circumstances at the time they were entered into. The Company has not obtained independent valuations or third-party comparisons to confirm that such terms are consistent with arm’s-length transactions. |