STOCKHOLDERS’ EQUITY |
6 Months Ended | |||||||||||||||
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Jun. 30, 2026 | ||||||||||||||||
| Stockholders' Equity Note [Abstract] | ||||||||||||||||
| STOCKHOLDERS’ EQUITY | NOTE 11 – STOCKHOLDERS’ EQUITY
Authorized Capital. The Company is authorized to issue 160,000,000 shares of capital stock, consisting of 150,000,000 shares of common stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share. As of June 30, 2026 and December 31, 2025, the Company had 53,000,397 and 43,877,497 shares of common stock issued and outstanding, respectively, and no shares of preferred stock issued or outstanding. As described in Note 1, the number of shares of common stock outstanding for periods prior to the Closing Date has been retroactively adjusted to reflect the shares of the Company’s common stock issued to the former securityholders of OpCo in the Merger.
Common Stock Issued in Connection with the Merger. At the Closing Date, the shares of the Company’s common stock held by the Company’s pre-Merger stockholders (representing the equity interests deemed acquired by OpCo for accounting purposes in the reverse acquisition), totaling 6,553,996 shares, were recognized in stockholders’ equity at their acquisition-date fair value of $107,485,534, representing the consideration deemed transferred in the reverse acquisition described in Note 4.
Spin-Out Share Distribution. In connection with the Spin-Out, the Company issued 1,000,000 shares of common stock to the Spin-Out subsidiary as consideration for its foregone interest in GEAR. Because the shares were issued as part of the overall Spin-Out distribution to the Company’s pre-Merger stockholders, the issuance was recorded as a distribution, resulting in a reduction to additional paid-in capital equal to the par value of the shares issued and no net effect on total stockholders’ equity. See Note 4.
Capital Contribution – Mining Equipment. In connection with the transfer of assets between entities under common control described in Note 4, the Company recognized the cryptocurrency mining machines contributed by BSG Series CM LLC at the Transferor’s carrying amount of $12,438,900, with a corresponding increase to additional paid-in capital. No shares of common stock were issued on the date of contribution.
Standby Equity Purchase Agreement. In connection with the Merger, the Company assumed the Standby Equity Purchase Agreement (the “SEPA”) originally entered into on November 1, 2024 with YA II PN, Ltd. (“Yorkville”), pursuant to which the Company had the right to sell to Yorkville up to $20,000,000 of shares of its common stock, subject to the terms and conditions set forth therein. During the period from the Closing Date through June 30, 2026, the Company issued 1,302,806 shares of common stock under the SEPA for aggregate gross proceeds of $15,418,839. Following such issuance, the SEPA was terminated, and no shares remained issuable and no amounts were outstanding thereunder as of June 30, 2026.
Committed Equity Forward Purchase Agreement. On May 29, 2026, the Company entered into a Committed Equity Forward Purchase Agreement (the “Forward Purchase Agreement”) with LucentHash / Data Part Capital, a trading name of Translucent Matter Inc. (“Translucent Matter”), pursuant to which the Company had the right, but not the obligation, to require Translucent Matter to purchase up to $50,000,000 of shares of the Company’s common stock from time to time over an 18-month commitment period. The purchase price for each draw was 95% of the volume-weighted average price of the Company’s common stock over a five-trading-day pricing period, subject to a floor price of $5.00 per share, and aggregate issuances would have been limited by an exchange cap of 19.99% of the shares of common stock outstanding immediately prior to execution, unless stockholder approval was obtained under the applicable Nasdaq listing rules. The Company agreed to pay a commitment fee of $500,000, payable in shares of common stock in five equal installments at the closing of each of the first five draws, and was required to reserve 10,000,000 shares of common stock for issuance under the Forward Purchase Agreement. No draw notices were delivered and no shares of common stock were issued under the Forward Purchase Agreement, and no amounts were outstanding thereunder, as of June 30, 2026. Subsequent to June 30, 2026, the Company delivered written notice terminating the Forward Purchase Agreement. See Note 19.
Common Stock Warrants. The following table summarizes the Company’s common stock warrants outstanding, exclusive of the derivative liability warrants discussed in Note 9:
At June 30, 2026, the Company had 543,619 equity-classified warrants outstanding. The exercise prices of these warrants range from $12.00 to $59.40, with expiration dates ranging from July 2026 to January 2030.
Shares Issued for Services. During the period from the Closing Date through June 30, 2026, the Company issued 242,514 shares of common stock to non-employees in exchange for services rendered. The shares were measured at their fair value on the respective issuance dates, totaling $3,552,213, which was recognized in professional services expense in the condensed consolidated statements of operations.
Shares Issued Upon Conversion of Convertible Note. On June 30, 2026, the Company issued 23,584 shares of common stock upon the conversion of the outstanding principal balance of, and accrued interest on, a convertible promissory note, in the aggregate amount of $275,226. See Note 10.
Stock-Based Compensation. During the period from the Closing Date through June 30, 2026, the Company recognized $7,033,939 of stock-based compensation expense, which was credited to additional paid-in capital. See Note 12.
Preferred Stock. As of June 30, 2026 and December 31, 2025, no shares of preferred stock were issued or outstanding, and no dividends were declared or paid on any class of the Company’s capital stock during the periods presented.
Noncontrolling Interests. Changes in noncontrolling interests during the period are described in Note 13. |