Related Party Transactions |
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Jun. 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||
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| Related Party Transactions | Note 9 - Related Party Transactions
Partner Colorado Credit Union (“PCCU”) - Related Party Status
The Company identifies related parties in accordance with ASC 850 and Rule 1-02(u) of Regulation S-X.
PCCU is a related party because it held approximately 8.8% and 25.2% of the Company’s Common Stock as of June 30, 2026 and December 31, 2025, respectively. PCCU is also the largest holder of the Company’s Series B Convertible Preferred Stock and holds approximately % of outstanding Series B Preferred shares and % of the associated Series B Warrants as of June 30, 2026; these figures were both approximately % on December 31, 2025. These factors give PCCU the ability to significantly influence the Company’s management and operating policies.
Debt Cancellation Agreement
On September 30, 2025, the Company and PCCU entered into a Debt Cancellation Agreement under which the approximately $10.7 million outstanding principal balance on the Senior Secured Promissory Note (originally dated March 29, 2023) was fully satisfied. In exchange, PCCU received:
PCCU’s conversion and warrant exercise rights are subject to a 4.99% beneficial ownership cap.
Commercial Alliance Agreement (“CAA”) - Major Customer Concentration
The Company derives substantially all of its revenue from services provided to PCCU. Revenue generated under the Second Amended CAA and the Amended CAA, as applicable, totaled $3.6 million and $3.2 million, representing 92.7% and 83.8% of total revenue for the six months ended June 30, 2026 and June 30, 2025, respectively. For the three months ended June 30, 2026 and June 30, 2025, revenue under these agreements totaled $1.9 million and $1.6 million, respectively, accounting for 95.7% and 85.4% of total revenue. Amounts due from PCCU represented 97.0% and 97.0% of total accounts receivable for the periods ended June 30, 2026 and December 31, 2025. The loss of, or a material change to, this relationship could have a material adverse effect on the Company’s results of operations and financial condition.
Related Party Balances
The following amounts with PCCU are included in the unaudited condensed consolidated balance sheets:
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