v3.26.1
STOCKHOLDERS’ EQUITY
 6 Months Ended
Jun. 30, 2026
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 7 – STOCKHOLDERS’ EQUITY

 

Common Stock

 

The Company’s authorized capital stock includes Class A Common Stock and Class B Common Stock. The rights of the holders of both classes are identical, including rights to dividends and distributions upon liquidation, except with respect to voting and conversion. Holders of Class A Common Stock are entitled to one vote per share on all matters submitted to a vote of stockholders, while holders of Class B Common Stock are not entitled to voting rights, except as required by applicable law. Additionally, each share of Class A Common Stock is convertible at any time, at the option of the holder, into one share of non-voting Class B Common Stock on a one-for-one basis.

 

January 2026 Public Offering

 

On January 26, 2026, the Company closed a registered public offering, issuing 4,500,000 shares of Class B Common Stock and accompanying common stock warrants to purchase up to 4,500,000 shares of Class B Common Stock (“Existing Warrants”). The combined public offering price was $2.00 per share and accompanying warrant, resulting in gross proceeds of approximately $9.0 million, before deducting placement agent fees and other offering expenses of approximately $0.8 million. The warrants were issued with an exercise price of $2.00 per share, became exercisable immediately, and expire five years from the issuance date.

 

In connection with the January 2026 registered public offering, the Company issued to A.G.P./Alliance Global Partners, as placement agent, warrants to purchase up to 135,000 shares of Class B Common Stock (the “Placement Agent Warrants”). The Placement Agent Warrants have an exercise price of $2.10 per share, become exercisable approximately 181 days after the issuance date, and expire five years from the issuance date.

 

March 2026 Warrant Inducement

 

On March 12, 2026, the Company entered into a warrant inducement agreement with certain holders of the warrants previously issued in the January 2026 public offering. Pursuant to the agreement, the holders exercised Existing Warrants to purchase 3,167,500 shares of Class B Common Stock for gross cash proceeds of approximately $6.3 million, before deducting placement agent fees and other offering expenses of approximately $0.4 million. As consideration for the immediate cash exercise of these warrants, the Company issued new, warrants to purchase up to 4,751,250 shares of Class B Common Stock (“New Warrants”). The New Warrants have an exercise price of $3.50 per share, are immediately exercisable, and expire five years from the date of issuance. The issuance of the New Warrants was accounted for as an equity issuance cost associated with the exercise of the Existing Warrants, which had no net impact on equity as the New Warrants conveyed were determined to be equity classified.

 

Warrant Activity

 

The following table summarizes the Company’s warrant activity for the six months ended June 30, 2026:

  

   Warrants  

Weighted average

exercise price

  

Weighted Average

remaining

contractual term

 
Balance at December 31, 2025   866,667   $15.36    8.4 
Issued   9,596,250    2.76    4.6 
Exercised   (4,076,580)   2.00    4.6 
Expired   -    -    - 
Outstanding at June 30, 2026   6,386,337    4.96    5.2 

Exercisable at June 30, 2026

   

6,251,337

    

5.02

    

5.2

 

 

 

Equity Line of Credit (ELOC)

 

In October 2025, the Company entered into a Share Purchase Agreement with New Circle Principal Investments LLC, providing the Company with the right, but not the obligation, to sell up to $75.0 million of its Class B Common Stock over a 36-month period. Shares are sold at the Company’s discretion at a purchase price based on the Volume Weighted Average Price (VWAP) during a specified pricing period, less a negotiated discount.

 

The Company’s ability to access capital under the ELOC is subject to the following primary constraints:

 

  ● Exchange Cap: Total shares issued under the facility cannot exceed 19.99% of the shares outstanding as of October 13, 2025, unless stockholder approval is obtained or is not required under applicable Nasdaq rules.

 

  ● Ownership Cap: The investor cannot beneficially own more than 4.99% (or 9.99% upon notice) of the Company’s outstanding Class B Common Stock at any given time.

 

  ● Registration Requirement: Accessing the facility requires the Company to maintain an effective resale registration statement covering the shares.

 

In connection with the January 2026 Public Offering, the Company’s utilization of the ELOC became subject to a 45-day lock-up period, which expired on March 12, 2026. As of June 30, 2026, $70.7 million remained available for future utilization under the facility.

 

During the three months ended June 30, 2026, the Company sold 605,000 shares of Class B Common Stock under the ELOC facility for aggregate net proceeds of approximately $1.3 million, of which $0.2 million is outstanding as a subscription receivable. As of June 30, 2026, the Company had issued an aggregate of 1,170,000 shares of Class B Common Stock under the ELOC facility since inception. Aggregate issuances under the ELOC are limited to 5,471,846 shares (19.99% of the Company’s combined Class A and Class B outstanding as of October 13, 2025, the effective date of the facility). As of June 30, 2026, approximately 4,301,846 of the shares registered in connection with the ELOC remain available for issuance. Subsequent to June 30, 2026, the Company sold an additional 100,000 shares under the ELOC facility for aggregate net proceeds of approximately $0.2 million.

 

Contracts Containing Share-Based Considerations

 

During the three months ended June 30, 2026, the Company settled previously accrued liabilities of $0.2 million through issuance of Class B Common Stock. Additionally, the Company settled a previously accrued loss contingency for litigation of $0.6 million by executing a settlement agreement providing for the issuance of a fixed quantity of Class B Common Stock and warrants that was evaluated and determined to be an equity-classified contract.