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STOCKHOLDERS’ EQUITY
 3 Months Ended
Mar. 31, 2026
Equity [Abstract]  
STOCKHOLDERS’ EQUITY STOCKHOLDERS’ EQUITY
November 2025 Stock Split - On September 18, 2025, the Company’s stockholders approved an amendment to the Second Amended and Restated Certificate of Incorporation, as amended, to effect a reverse stock split of the Company’s common stock at a reverse stock split ratio ranging from 1:5 to 1:20, without reducing the authorized number of shares of common stock or changing the par value per share of the common stock, and to authorize the Board to determine, at its discretion, the timing of the amendment and the specific ratio of the reverse stock split, without further approval or authorization of the Company’s stockholders. On October 16, 2025, the Board approved, and on November 5, 2025 the Company effected, a 1-for-20 reverse stock split. All share and per share numbers included in these financial statements as of and for all periods presented reflect the effect of that stock split unless otherwise noted.
April 2026 Stock Split - On March 20, 2026, the Company received a notice from Nasdaq, indicating that the Company’s common stock did not meet the Minimum Bid Price Requirement, as the closing bid price for the common stock was below $1.00 per share for thirty (30) consecutive business days (See Note 9 - Commitments and Contingencies - March 2026 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard, and April 2026 Stock Split). Accordingly, on March 20, 2026, the Company filed with the SEC a proxy statement for a special meeting of its stockholders as of record on March 19, 2026 to be held on April 10, 2026 to consider a proposal to authorize a reverse stock split of the common stock at a ratio ranging from 1:3 to 1:20, the actual ratio to be determined by the Board.
On April 10, 2026, the Company’s stockholders approved an amendment to the Certificate of Incorporation to effect a reverse stock split of the Company’s common stock at a reverse stock split ratio ranging from 1:3 to 1:20, without reducing the authorized number of shares of common stock or changing the par value per share of the common stock, and to authorize the Board to determine, at its discretion, the timing of the amendment and the specific ratio of the reverse stock split, without further approval or authorization of the Company’s stockholders. On April 17, 2026, the Board approved, and on April 23, 2026, the Company effected, a 1-for-20 reverse stock split. All share and per share numbers included in these financial statements as of and for all periods presented also reflect the effect of that stock split unless otherwise noted.
Share Repurchase Program — On February 19, 2026, the Company announced the Board has authorized a share repurchase program whereby the Company may buy back up to 50,000 shares of its outstanding shares of common stock through December 31, 2026. As of March 31, 2026, the Company had 514,171 shares of its common stock outstanding. Assuming the full execution of buying back 50,000 shares, this would constitute an approximately 9.72% reduction in the number of outstanding shares of common stock. The Company may acquire shares through open market purchases or privately negotiated transactions, including through a Rule 10b5-1 plan, at the discretion of management and on terms that management determines to be advisable. As of March 31, 2026, the Company repurchased no shares of common stock under the share repurchase program.
Common stock — As of March 31, 2026, the Company had 514,171 shares of common stock issued and outstanding. During the three months ended March 31, 2026 and year ended December 31, 2025, respectively, the Company repurchased 0 and 0 shares of common stock and 24,011 and 400,505 warrants to purchase common stock were exercised.
In the second quarter of 2025, the Board and stockholders took certain actions and approved an amendment to the Company’s Second Amended and Restated Certificate of Incorporation, as amended. These actions and amendments included, among other things:
•filing a Certificate of Amendment to the Certificate of Designations, Preferences, Powers and Rights of the Series B Convertible Preferred Stock on June 12, 2025 to increase the number of authorized shares of Series B Preferred Stock from 750,000 shares to 850,000 shares; and
•filing a First Amendment to the Company’s Second Amended and Restated Certificate of Incorporation on June 24, 2025 to increase the total number of authorized shares of capital stock of the Company to 495,000,000 shares, consisting of 490,000,000 shares of common stock and 5,000,000 shares of preferred stock, each with a par value of $0.0001 per share.
The Company’s stockholders approved certain amendments to the Company’s Second Amended and Restated Certificate of Incorporation, as amended, at a September 18, 2025 special meeting. The Board later effectuated the amendments as follows:
•via a September 26, 2025 Second Amendment to the Company’s Second Amended and Restated Certificate of Incorporation, as amended, to increase the number of authorized shares of capital stock from 495,000,000 shares to 995,000,000 shares, consisting of 985,000,000 shares of common stock and 10,000,000 shares of preferred stock, each with a par value of $0.0001 per share; and
•via an October 31, 2025 Third Amendment to the Company’s Second Amended and Restated Certificate of Incorporation, as amended, to effectuate a 1-for-20 reverse stock split, effective November 5, 2025.
At the special meeting, the Company’s stockholders also approved an amendment to the Company’s 2024 Equity Incentive Plan, as amended, to increase the shares available for issuance under the 2024 Plan from 12,500 shares to 87,500 shares.
Prepaid, Pre-Funded, and Common Warrants to Purchase Common Stock — In 2024 and prior, certain holders of shares of common stock agreed to exchange shares of their common stock into a like number of prepaid warrants (the “2024 Prepaid Warrants”). Additionally, certain holders of convertible notes agreed to convert certain convertible notes into prepaid warrants. Certain 2024 Prepaid Warrants were also then exercised in exchange for common stock in 2024. Such 2024 Prepaid Warrants were eligible for exercise without the payment of additional consideration at any time that the respective holder beneficially owns a number of shares of common stock that is less than 9.99% of the Company’s outstanding shares of common stock for a number of shares that would cause the holder to beneficially own 9.99% of the Company’s outstanding shares of common stock, and having no expiration date. As of March 31, 2026, none of the 2024 Prepaid Warrants remained outstanding.
The following sets forth the outstanding: 2024 Prepaid Warrants; Pre-Funded Warrants (See Note 6 - Intangible Digital Assets); and Common Warrants (See Note 1 - Description of Operations and Basis of Presentation - Initial Public Offering) as of March 31, 2026 and December 31, 2025:
2024 Prepaid WarrantsPre-Funded WarrantsCommon Warrants
Balance December 31, 20249,679—955
Issuance of Pre-Funded Warrants in PIPE Offerings— 925,947 — 
Exercise of Pre-Funded Warrants in Exchange for Common Stock— (359,041)— 
Prepaid Warrants Issued with Series B Preferred Stock819 — — 
Exercise of Prepaid Warrants in Exchange for Common Stock(7,929)— (955)
Exchange of Prepaid Warrants for Series B Preferred Stock(2,569)— — 
Balance December 31, 2025—566,906—
Exercise of Pre-Funded Warrants in Exchange for Common Stock— (4,185)— 
Balance March 31, 2026—562,721—
In addition to the 2024 Prepaid Warrants and Common Warrants in the table above, 298 warrants to purchase common stock at $4 per share were issued in connection with the initial aggregate $250,000 of non-ELOC Investor Series B Preferred Stock subscriptions (see Preferred Stock - Series B below).
In the three months ended March 31, 2026, 4,185 Pre-Funded Warrants (with an exercise price of $0.04 each) were exercised cashlessly for 4,185 shares of common stock leaving 562,721 pre-funded warrants remaining outstanding.
In the year ended December 31, 2025:
•819 prepaid warrants were issued with Series B Preferred Stock; 7,679 prepaid warrants (with an exercise price of $0.40 each) were exercised cashlessly for 7,666 shares of common stock (including related party cashlessly exercised 5,803 prepaid warrants for 5,793 shares of common stock); and 2,569 prepaid warrants (with an exercise price of $0.40 each) were exchanged for 55,917 shares of Series B Preferred Stock, leaving no prepaid warrants remaining outstanding;
•925,947 Pre-Funded Warrants were issued in the PIPE Offering, and 359,041 of those Pre-Funded Warrants were exchanged for common stock, leaving 566,906 Pre-Funded Warrants outstanding; and
•955 Common Warrants were exercised for common stock, leaving no Common Warrants remaining outstanding.
Subsequent to March 31, 2026, through May 18, 2026, 3,034 warrants were exercised (with an exercise price of $4.00 each); 1,809 prepaid warrants were exercised (with an exercise price of $0.04 each); 23,940 Pre-Funded Warrants were exercised for common stock; 496,002 warrants were exercised (with an exercise price of $6.00); and 4,136 shares of common stock were exchanged for prepaid warrants.
Stock options — The Company’s 2018 Equity Incentive Plan was approved by the HDC Board of Directors and the HDC shareholders in March 2018. On April 27, 2019, in anticipation of the Company’s reorganization on May 1, 2019, the Company’s Board and its sole stockholder approved the Company’s 2019 Equity Incentive Plan (the “2019 Plan”).
Upon the closing of the Company’s initial public offering (which occurred on November 25, 2024), the 2024 Plan became effective, authorizing the issuance of up to 87,500 shares of common stock. As of March 31, 2026, the Company had made 54,969 grants under the 2024 Plan.
The 2024 Plan allows for the grant of incentive stock options (“ISOs”), nonqualified stock options (“NQSOs”), stock appreciation rights (“SARs”), restricted stock, RSU awards, performance shares, and performance units to eligible participants for ten (10) years (until November 2034).
The 2019 Plan allows for the grant of ISOs, NQSOs, SARs, restricted stock, RSU awards, performance shares, and performance units to eligible participants for ten (10) years (until April 2029). The cost of awards under the 2019 Plan generally is based on the fair value of the award on its grant date. The maximum number of shares that could be utilized for awards under the 2019 Plan as of March 31, 2026 was 641.
The following sets forth the outstanding ISOs and related activity for the three months ended March 31, 2026:
Options OutstandingNumber of
Shares		Weighted-
Average
Exercise Price
Per Share		Weighted-
Average
Remaining
Contractual
Term (in years)		Aggregate
Intrinsic Value
Outstanding at December 31, 20253 $63,156.00 0.42 years$0.00 
Exercisable at December 31, 20253 $63,156.00 0.42 years$0.00 
Remaining unvested at December 31, 20250 $63,156.00 
     Forfeited0 $63,156.00 
Outstanding at March 31, 20263 $63,156.00 0.18 years$0.00 
Exercisable at March 31, 20263 $63,156.00 0.18 years$0.00 
Remaining unvested at March 31, 20260 $63,156.00 
ISOs require a recipient to remain in service to the Company. ISOs generally vest ratably over periods ranging from one to four years from the vesting start date of the grant and vesting of ISOs ceases upon termination of service to the Company. Vested ISOs generally are exercisable for three months after the date of termination of service. The terms and conditions of any ISO shall comply in all respects with Section 422 of the Code, or any successor provision, and any applicable regulations thereunder. The exercise price of each ISO is the fair market value of the Company’s stock on the applicable date of grant. The Company used the mean volatility estimate from Varga’s 409A valuation based on the median 5-year volumes of select peer companies. Fair value was estimated based on a combination of shares being sold at $63,156 up through February of 2019 and the most recent 409A completed when these ISOs were issued in April of 2018 valuing the Company’s stock at $63,156 per share. No ISOs may be granted more than ten (10) years after the earlier of the approval by the Board, or the stockholders, of the 2019 Plan.
There were no grants of stock options in the three months ended March 31, 2026 and the year ended December 31, 2025. As of March 31, 2026, the Company had $0 of unrecognized compensation expense related to ISOs expected to vest over a weighted average period of 0.0 years. At March 31, 2026, the weighted average remaining contractual life of outstanding and exercisable ISOs was 0.18 years.
Restricted stock units — The RSU awards granted in 2019 under the 2019 Plan were granted at the fair market value of the Company’s stock on the applicable date of grant. RSU awards generally vest ratably over periods ranging from one to four years from the grant’s start date. Upon termination of service to the Company, vesting of RSU awards ceases, and most RSU grants are forfeited by the participant, unless the award agreement indicates otherwise. The majority of RSU awards are “double trigger” and both the service-based component, and the liquidity-event component (including applicable lock-up periods) must be satisfied prior to an award being settled. Upon settlement, the RSU awards are paid in shares of common stock. The Company recognizes the compensation expense for the restricted stock units based on the fair
value of the shares at the grant date amortized over the stated period for only those shares that are not subject to the double trigger.
The following table summarizes the RSU activity for the three months ended March 31, 2026 and 2025:
Restricted
Stock
Units		Weighted Average
Exercise Price
Per Share
Vested and Outstanding at December 31, 2024592 $4,372.33 
Granted—$— 
Vested—$— 
Forfeited/Canceled/Expired—$— 
Vested and Outstanding at March 31, 2025592$4,372.33 
Vested and Outstanding at December 31, 202525,862 $160.40 
Granted18,975 $22.46 
Vested(9,878)$(119.26)
Forfeited/Canceled/Expired— $— 
Unvested and Outstanding at March 31, 202634,959 $123.89 
Vested and Outstanding at March 31, 2026— $— 
During the three months ended March 31, 2026 and 2025, the Company recognized $942,909 and $0, respectively, of stock-based compensation expense in connection with RSU awards granted under the plans. Compensation expense for RSU awards is recognized upon meeting both the time-vesting condition and the triggering event condition. During the three months ended March 31, 2026, 0 RSUs were forfeited, 18,975 RSUs were issued with a weighted average grant value of $22.46 per RSU, with 9,878 of such RSUs vesting and settling during the period, leaving 34,959 RSUs unvested and outstanding as of March 31, 2026. During the three months ended March 31, 2025, 0 RSUs were forfeited, 0 RSUs were issued, with 0 of such RSUs vesting and settling during the period, leaving 592 vested and outstanding as of March 31, 2025.
Equity-Based (Non-Cash) Compensation — The Company recorded equity-based (non-cash) compensation for employees (personnel) and consultants for the three months ended March 31, 2026 and 2025 as follows:

Three Months Ended March 31,
20262025
Production / Cost of Revenue
$5,313 $— 
Sales and Marketing91,432 — 
General and Administrative391,164 — 
Subtotal Employee Compensation487,909 — 
Professional Fees455,000 — 
Total Non-Cash Share-Based Compensation$942,909 $— 
Equity-classified warrants — The Company estimates the fair values of equity warrants using the Black-Scholes option-pricing model on the date of issuance with Monte Carlo simulations to determine the probability of warrants being exercisable.
Contingent Legacy Shareholder Warrants — On October 30, 2024, the Company issued warrants to purchase common stock that became contingently exercisable upon the closing of an initial public offering (which occurred on November 25, 2024), at the price per share of the Company’s initial public offering (or $1,600 per share) to its common
shareholders of record as of May 31, 2023 (the “Contingent Legacy Shareholder Warrants”), that will be exercisable, if at all, provided / contingent upon: if the warrant holder continuously holds the shares such holder owned on May 31, 2023 through the date the warrant is exercised; and if the common stock attains a specified volume weighted average price per share (“VWAP”) over a 10-trading-day period (the “10-Trading-Day VWAP”) before expiring:
•Tranche 1 - for up to 1,906 shares of common stock (of which up to 320 were to a related party) when the 10-Trading-Day VWAP of the common stock reaches 200% of the $1,600 per share initial public offering price (or $3,200 per share), and that will expire on the 24-month anniversary of the Company’s initial public offering (the “Tranche 1 Contingent Legacy Shareholder Warrants”);
•Tranche 2 - for up to 3,812 shares of common stock (of which up to 641 were to a related party) when the 10-Trading-Day VWAP of the common stock reaches 300% of the $1,600 per share initial public offering price (or $4,800 per share), and that will expire on the 42-month anniversary of the Company’s initial public offering (the “Tranche 2 Contingent Legacy Shareholder Warrants”); and
•Tranche 3 - for up to 4,765 shares of common stock (of which up to 802 were to a related party) when the 10-Trading-Day VWAP of the common stock reaches 500% of the $1,600 per share initial public offering price (or $8,000 per share), and that will expire on the 60-month anniversary of the Company’s initial public offering (the “Tranche 3 Contingent Legacy Shareholder Warrants”).
The Company recorded a value of $8,828 for the Contingent Legacy Shareholder Warrants as of the October 30, 2024 grant date based on a Black Scholes option pricing model. The assumptions used in the Black-Scholes option pricing model for the Contingent Legacy Shareholder Warrants were as follows:
Weighted Average Expected Volatility70 %
Expected Dividends— %
Weighted Average Expected Term (in years)5
Risk-Free Interest Rate4.22 %
Probability Scenarios of meeting contingencies
Shareholder holds shares owned on May 31, 2023 through warrant exercise date
95% to 75%
Common stock attains a specified 10-Trading-Day VWAP price before expiring
0.025% to 2.25%
As of March 31, 2026, there were outstanding and exercisable: 1,245 Tranche 1 Contingent Legacy Shareholder Warrants; 2,495 Tranche 2 Contingent Legacy Shareholder Warrants; and 3,120 Tranche 3 Contingent Legacy Shareholder Warrants, with weighted-average remaining contractual terms of 0.58 years, 2.08 years, and 3.59 years, respectively.
Whiskey Note Shareholder Warrants — On April 1, 2025, the Company issued warrants with an expiration date of April 1, 2028 to purchase 2,210 shares of common stock with an exercise price of $1,600 per share to common shareholders of record who acquired their common stock through the exchange of Whiskey Notes and whose shares were subject to 100% lockup for 6 months post-IPO (the “Whiskey Note Shareholder Warrants”). Certain holders of the Whiskey Note Shareholder Warrants forfeited their warrants to purchase 763 shares of common stock, leaving warrants to purchase 1,445 shares of common stock remaining as of December 31, 2025. The Whiskey Note Shareholder Warrants will be exercisable if the warrant holder continuously holds all shares of common stock such holder owned on the date of the Company’s IPO through the date the warrant is exercised, and then only if the common stock attains a 10-Trading-Day VWAP of $3,200 per share before expiring. The Company recorded the fair value of the Whiskey Note Shareholder Warrants of $152.90 in the three months ended September 30, 2025 based on a Black Scholes option pricing model and Monte Carlo simulation analysis.
Debtor Exchange Warrants — Between July 30, 2025 and August 14, 2025, the Company issued warrants with an expiration date of July 30, 2030 to purchase 12,694 shares of common stock with an exercise price of $4 per share and 1,125 shares of common stock with an exercise price of $48 per share to contractors pursuant to Debtor Exchange Agreements.
Series B Exchange Warrants — On August 8, 2025, the Company issued pre-funded warrants with an expiration date of August 8, 2030 to purchase 42,505 shares of common stock with an exercise price of $0.04 per share (the “Series B Exchange Warrants”) in exchange for shares of Series B Preferred Stock pursuant to an Exchange Subscription Agreement dated July 30, 2025. The Series B Exchange Warrants vest pursuant to the following schedule:
•Tranche 1 - for up to 22,371 shares of common stock (of which up to 10,794 were to a related party) at the earlier of 3-months from the issue date or when the closing price of the common stock equals or exceeds $600 per share; and
•Tranche 2 - for up to 20,134 shares of common stock (of which up to 9,715 were to a related party) at the earlier of 6-months from the issue date or when the closing price of the common stock equals or exceeds $800 per share.
Advisor Warrants — On August 10, 2025, the Company issued pre-funded warrants with an expiration date of August 10, 2030 to purchase 43,750 shares of common stock with an exercise price of $4 per share (the “Advisor Warrants”) in connection with various Advisor/Consulting Agreements dated between June 19, 2025 and August 10, 2025. The Advisor Warrants vested or will vest pursuant to the following schedule:
•Tranche 1 - up to 9,687 shares of common stock at the earlier of 3-months from the issue date or when the closing price of the common stock equals or exceeds $400 per share;
•Tranche 2 - up to 10,187 shares of common stock at the earlier of 6-months from the issue date or when the closing price of the common stock equals or exceeds $600 per share;
•Tranche 3 - up to 10,750 shares of common stock at the earlier of 6-months from the issue date or when the closing price of the common stock equals or exceeds $800 per share; and
•Tranche 4 - up to 13,125 shares of common stock vesting equally over 12 months from the date the Company received approval of its stockholders which was September 18, 2025.
Pre-Funded Warrants — see Note 6 - Intangible Digital Assets.
Other equity classified warrants — During the three months ended March 31, 2026, the Company issued 0 additional warrants. Subsequent to March 31, 2026, 4,137 shares of an investor’s common stock was exchanged for prepaid warrants that are exercisable at $0.002 per share, of which, the investor retained 2,068 and assigned 2,068 to Story Foundation.
In addition to the Contingent Legacy Shareholder Warrants, Whiskey Note Shareholder Warrants, Debtor Exchange Warrants, Series B Exchange Warrants, Advisor Warrants, and Pre-Funded Warrants discussed above, during the year ended December 31, 2025, the Company issued additional warrants totaling 13,066, including: 2,130 warrants to purchase common stock at $4 per share issued in connection with the issuance of Series B Preferred Stock (of which, 256 were to a related party); 167 Commitment Warrants to purchase common stock at $4 per share issued in connection with the ELOC Agreement (that were exercised in February 2025); and 10,768 warrants to purchase common stock at $4 per share issued in connection with the PIPE transaction pursuant to that certain Placement Agency Agreement dated August 11, 2025 in connection with the PIPE transaction.
The assumptions used in the Black-Scholes option pricing model were as follows:
Weighted Average Expected Volatility70 %
Expected Dividends— %
Weighted Average Expected Term (in years)5
Risk-Free Interest Rate4.12 %
The Underwriting Agreement and the related warrants granted to the underwriter equal 5% of the total proceeds raised in the Company’s November 25, 2024 initial public offering at an exercise price equal to the offering price, or warrants for 210 shares at $1,600 per share. As of December 31, 2025, the underwriter has not exercised any such warrants.
Correction for Missed Warrants. — Subsequent to the closing of the August 15, 2025 PIPE Offering, and after consultation with Roth Capital Partners, LLC, the Company was notified by Roth that certain 2022 warrants promised to Roth related to the 2022 Convertible Note financing had not been issued yet. The Company and Roth are in the process of reaching agreement on the number of warrants due and will update those details in a future filing. The Company does not anticipate the number of warrants to be issued would be material relative to the total number of other common stock, warrants or other securities authorized or outstanding.
Deferred Compensation — Beginning in May 2023, certain senior level employees elected to defer a portion of their salary until such time as the Company completed a successful public registration of its stock (which occurred on November 25, 2024). Upon success of the Company's initial public offering, each employee was then to be paid their deferred salary plus a range of matching dollars in RSUs (under the new 2024 Plan noted above) for every $1 dollar of deferred salary. As of December 31, 2025, the Company recorded $848,908 of such deferred payroll expense, including $457,730 paid in cash in December 2024, and $391,179 remaining to be paid which was included in accrued liabilities as of December 31, 2024. Accordingly, as of June 30, 2025, upon the expiration of the 6 month post-IPO lockup period (in May 2025) the Company issued approximately $1,894,615 in equity compensation (in the form of 1,184 RSUs in settlement of the deferred compensation). During the six months ended June 30, 2025, certain senior level employees elected to defer an additional $79,275 of their salary. As of December 31, 2025, the Company had paid $580,463 of the deferred compensation, leaving a balance of $119,586 remaining to be paid as of December 31, 2025.