Note 15 - Related Party Transactions |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Notes to Financial Statements | |
| Related Party Transactions Disclosure [Text Block] |
NOTE 15. RELATED PARTY TRANSACTIONS
January 2026 Private Placement
In connection with the January 2026 Private Placement, each Purchaser was granted, for a period of 24 months following the closing and for so long as such Purchaser holds at least 50% of the aggregate number of pre-funded warrants and/or shares of common stock originally purchased by it, a consent right over any material amendment, modification, addition or revocation of the Company's digital asset strategy. In addition, pursuant to the Investors’ Rights Agreement accompanying the January 2026 Private Placement, each of R01, Framework and SFF received the right to nominate one individual for election to the Company's Board of Directors. Tether did not receive a board nomination right. Michael Kazley, the Company's Chief Executive Officer and Chairman of the Board, is the Managing Member of R01 Capital Manager LLC, the investment manager of R01. See Note 8, "Financing Activities," for additional information.
As a result of the rights granted in connection with the January 2026 Private Placement, the Company has concluded that, in addition to R01 and Framework, SFF and Tether are also related parties of the Company within the meaning of ASC 850.
Sky Frontier Foundation
SFF is an independent foundation organized to support the development of the Sky Protocol ecosystem. SFF participates in Sky Protocol governance and holds SKY tokens separate from its investment in the Company. Because the Company holds SKY tokens and participates in Sky Protocol governance, transactions and governance decisions affecting the Sky Protocol may involve both the Company and SFF, which could be deemed to create potential conflicts of interest. As of June 30, 2026, no transactions between the Company and SFF have occurred other than the January 2026 Private Placement and the rights granted in connection therewith as described above.
June 2026 Pre-Funded Warrant Amendments
On June 12, 2026, the Company agreed with R01, and on June 15, 2026, the Company agreed with Framework, in each case, to amend such holder's October 2025 Pre-Funded Warrants to remove the beneficial ownership limitation and the delayed initial exercise date provision that had previously restricted the holder's ability to exercise. Following such amendments, on June 15, 2026, each of R01 and Framework fully exercised their respective October 2025 Pre-Funded Warrants on a cashless basis, receiving an aggregate of 22,614,600 shares of Common Stock, representing approximately 45% of the Company's common stock outstanding immediately following such exercises. See Note 10, "Common Stock Warrants and Warrant Liabilities," for additional information regarding the accounting treatment of this transaction.
Consulting agreement
R01 has provided certain consulting services to the Company through one of its employees. During the three months ended March 31, 2026, the Company engaged this individual directly to provide consulting services related to general corporate matters and digital asset treasury operations. The consulting agreement provides for a monthly fee of $25 thousand. The consulting agreement with this individual was terminated as of March 31, 2026. Total fees paid by the Company for these services were approximately $75 thousand for the six months ended June 30, 2026.
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