NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Use of Estimates

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the SEC. The accompanying unaudited condensed financial statements have been prepared by the Company. These statements include all adjustments (consisting only of normal recurring adjustments) which management believes necessary for a fair presentation of the statements and have been prepared on a consistent basis using the accounting policies described in Note 2 Significant Accounting Policies included in the Notes to Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 31, 2026 (the “2025 Annual Report”). Certain financial information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the accompanying disclosures are adequate to make the information presented not misleading. The Notes to Financial Statements included in the 2025 Annual Report should be read in conjunction with the accompanying interim financial statements. The interim operating results for the three and six months ended June 30, 2026 may not be necessarily indicative of the operating results expected for the full year or any future period.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Risks and Uncertainties

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgements that affect the application of accounting policies and the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations regarding future events that are believed to be reasonable under the circumstances. Actual results may differ significantly from these estimates.

Significant estimates made by management include, but are not limited to: economic lives of leased assets; impairment assessment of long-lived assets; depreciable lives of property, plant and equipment; useful lives of intangible assets; accruals for contingencies including tax contingencies; valuation allowances for deferred income tax assets; estimates of fair value of identifiable assets and liabilities acquired in business combinations; initial measurement (and any subsequent remeasurement) of operating right-of-use assets and lease liabilities, including the discount rate used in the present value calculation of future payments, and estimates of fair value used in the private stock valuations used for equity-based compensation of warrants and stock options.

Liquidity and Capital Resources

The Company has devoted substantially all its efforts to developing and implementing its business plan, raising capital, opening, planning and operating its restaurants and event venues in Colorado, Georgia, Oklahoma, Texas, and Tennessee. The accompanying consolidated financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business.

The accompanying consolidated financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. As of the issuance of these financials, management has concluded that substantial doubt about the Company’s ability to continue as a going concern for the next twelve months has been alleviated.

The Company had an accumulated deficit of $123,098,229 and $91,454,930 as of June 30, 2026 and December 31, 2025, respectively, and incurred net losses of $34,177,639 and $31,736,344 for the six months ended June 30, 2026 and 2025, respectively. These conditions raised substantial doubt about the Company’s ability to continue as a going concern; however, based on management’s expectations that the Company will add additional venue locations and continue its business operations, Venu believes that such substantial doubt has been alleviated.

The Company believes that cash on hand from its prior equity offerings, its sale lease-back arrangements, revenues from operating venues and restaurants in Colorado Springs, Colorado and Gainesville, Georgia, on-going sales of interests in Luxe FireSuites, the operations at the Ford Amphitheater campus (including Roth’s Sea & Steak and Brohan’s), the anticipated opening of the Regent Bank Amphitheater in Broken Arrow, Oklahoma in Fall 2026, debt facilities the Company closed on subsequent to June 30, 2026 and expects to close on later in 2026, and potentially other additional capital raising and debt financing transactions or the use of the Company’s at-the-market sales program from time to time will allow the Company to continue its business operations for at least 12 months from the date of this Quarterly Report. Nonetheless, the Company’s continued implementation of its business plan to open under-development venues and add additional locations is dependent on its future engagement in strategic locations, real estate transactions, capital raising, and debt financing. There is no guarantee that the Company will be able to execute on these plans. If the Company is unable to enter into strategic relationships and transactions, the Company may be required to delay its business plan implementation for future expansion, which would have a material adverse impact on the Company’s growth plan.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, majority-owned subsidiaries, and variable interest entities. For those entities that aren’t wholly owned by Company, the Company assesses the voting and management control to confirm the Company is the primary beneficiary of the majority-owned subsidiaries and variable interest entities. All intercompany accounts and transactions have been eliminated upon consolidation. See “Organization” and “Non-Controlling Interest and Variable Interest Entities” for further discussions of the entities that are majority-owned subsidiaries and variable interest entities. Investments for which the Company exercises significant influence but does not have control are accounted for under the equity method. See Note 8 – Investments in Related Parties for further discussion.

Fair Value Measurements

Fair values have been determined for measurement and/or disclosure purposes based on the following methods. The Company characterizes inputs used in determining fair value using a hierarchy that prioritizes inputs depending on the degree to which they are observable. The levels of the fair value hierarchy are as follows:

● Level 1 – fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

● Level 2 – fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

● Level 3 – fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The carrying values of cash and cash equivalents, inventories, prepaid expenses and other current assets, payables and accrued liabilities approximate their fair values because of the short-term nature of these financial instruments. Balances due to and due from related parties do not have specific repayment dates and are payable on demand, thus are also considered current and short-term in nature, hence carrying value approximates fair value and are included in current assets or liabilities.

Cash and Cash Equivalents

The Company considers cash and cash equivalents to include all highly liquid investments with an original maturity of three months or less. Our cash and cash equivalents include bank accounts as well as interest-bearing accounts consisting primarily of bank deposits and money market accounts managed by third-party financial institutions. As of June 30, 2026, the Company had $1,362,248 of cash and cash equivalents in the form of money market accounts that earned interest income of $181,651 and $309,322 for the three and six months ended June 30, 2026, respectively. As of December 31, 2025, the Company had $23,095,342 of cash and cash equivalents in the form of money market accounts that earned interest income of $24,293 and $127,486 for the three and six months ended June 30, 2025, respectively. Cash and cash equivalents may exceed federally insured limits.

Inventories

Inventories, consisting principally of food, beverages and supplies, are stated at the lower of cost (determined by the first-in, first-out method) or net realizable value. The Company reviews inventory on a weekly basis and determines if slow-moving or obsolete inventory exists. No allowance was deemed necessary as of June 30, 2026 and December 31, 2025.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Investments in related parties

The Company currently accounts for certain investments using a practical expedient to measure these investments that do not have a readily determinable fair value in accordance with Accounting Standards Codification (“ASC”) 321, Investments - Equity Securities; ASC 325, Investments – Other; ASC 810, Consolidation; and ASC 820, Fair Value Measurement. The investments are initially recognized at cost. Any income or loss from these investments is recognized on the Unaudited Condensed Consolidated Statements of Operations, net of operating expenses. The carrying value of the Company’s investments are assessed for indicators or impairment at each balance sheet date. Under this method of accounting, the investment is derecognized once the Company’s interest in the investment is sold or impaired. Upon sale, any proportionate gain or loss is recognized in the Unaudited Condensed Consolidated Statements of Operations as other income. See Note 8 – Investments in Related Parties and Note 15 – Related Party Transactions for further discussion.

Property and Equipment

Property and equipment are recorded at historical cost net of accumulated depreciation and amortization, write-downs and impairment losses. Property and equipment are recorded as construction in progress until they are placed in service and are depreciated or amortized once placed in service. Depreciation and amortization are calculated on a straight-line basis over the following periods:

The estimated useful lives are:

SCHEDULE OF PROPERTY AND EQUIPMENT ESTIMATED USEFUL LIVES  

Property and equipment costs directly associated with the acquisition, development and construction of operating venues and restaurants are capitalized. Expenditures for major improvements and betterments are capitalized while expenditures for maintenance and repairs are expensed as incurred. Upon retirement or disposal of assets, the accounts are relieved of cost and accumulated depreciation and amortization and the related gain or loss is reflected in earnings.

Capitalization of Interest Costs of Real Estate Projects

The Company acquires real estate for the construction and development of future venues. Interest costs incurred over the period in which the construction and development of the venue are substantially complete are recorded as part of the historical cost of the real estate asset and depreciated under the same method as property and equipment.

Intangible Assets

Intangible assets with a finite life are recorded at cost and are amortized on a straight-line basis over estimated useful lives. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. The Company currently has naming rights that are amortized on a straight-line basis over six years.

The Company reviews the carrying values of its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group might not be recoverable.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Impairment Assessment of Long-Lived Assets

Long-lived assets are tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An evaluation for impairment is performed at the lowest level of identifiable cash flows. An impairment loss is recognized in an amount equal to the excess of the carrying value over the estimated fair value. No impairment loss was recognized during the three and six months ended June 30, 2026 and 2025, respectively.

Provision for Uncollectible Accounts

See “Recently Issued and Adopted Accounting Pronouncements” herein for additional information on the adoption of ASU 2025-05 and the practical expedient related to credit losses. The Company’s customers include attendees of concerts, shows and events (collectively “event centers”), restaurant diners and sponsors. The collection of payments for event centers and restaurants is handled at point of sale. Sponsors sign a contract that commits them to sponsorship payments over the contract term. Based on historical collection experience and other factors, the Company has determined that a provision for uncollectible accounts is not necessary. Circumstances that could affect this estimate include, but are not limited to, customer credit issues and general economic conditions. The Company writes off customer accounts when they are deemed to be uncollectible, which have historically been infrequent. The Company has elected the practical expedient to assume that current conditions as of the balance sheet date will remain unchanged for the remaining life of the receivables when estimating expected credit losses. For all periods presented, there were no uncollectible accounts.

Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) ASC 606, Revenue from Contracts with Customers. This ASC requires an entity to allocate the transaction price received from customers to each separate and distinct performance obligation and recognize revenue as these performance obligations are satisfied. The Company recognizes revenue from restaurant sales when food and beverage products are transferred to the customer. Revenue from a venue rental, concert or show is recognized when the event, concert or show occurs. Amounts collected in advance of the event are recorded as deferred revenue until the event occurs. Amounts collected from sponsorship agreements, which are not related to a single event, are classified as deferred revenue and recognized over the term of the agreements as the benefits are provided to the sponsors. As of June 30, 2026 and December 31, 2025, deferred revenue totaled $1,977,456 and $1,542,564, respectively. As of June 30, 2025 and December 31, 2024, deferred revenue totaled $1,888,889 and $1,528,159, respectively. During the three and six months ended June 30, 2026, the Company recognized $351,787 and $911,264, respectively, in revenue from its deferred revenue balance as of December 31, 2025. During the three and six months ended June 30, 2025, the Company recognized $686,696 and $1,405,418, respectively, in revenue from its deferred revenue balance as of December 31, 2024. There are no refunds or allowance for refunds in accordance with the Company’s reservation policies.

Long-term Licensing Agreement

The Company accounts for suite licensing agreements for NHC and its owners club memberships for the Regent Bank Amphitheater, The Sunset McKinney, and The Sunset Houston as long-term licensing liabilities. The suite licensing agreements for NHC grants the licensee with the exclusive access to a Luxe FireSuite over a 99-year lease term commencing on the date of the first ticketed event. The agreements require a one-time upfront fee of $200,000, which is amortized over 30 years, representing the estimated useful life of the amphitheater and the period over which the licensee is expected to utilize the suite. The amortization of these suite license fees started to be recognized in June 2025 when NHC fully opened its suites in Colorado Springs, Colorado. For the three and six months ended June 30, 2026, the Company recognized rental income totaling $55,833 and $111,667, respectively, from prepaid licenses. For the three and six months ended June 30, 2025, the Company recognized rental income totaling $18,611 and $18,611, respectively, from prepaid licenses.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Each owners club membership for the Regent Bank Amphitheater, The Sunset McKinney, and The Sunset Houston entitles each member to perpetual access to two tickets to a Luxe FireSuite and requires a one-time upfront deposit, ranging from $25,000 to $50,000 under a financing option, or $100,000 to $200,000 for a fully prepaid membership. Members who elect the financing option are required to pay the membership fee in six installments, with the initial deposit of $25,000 or $50,000 due upon execution of the membership agreement, followed by five equal installments of the remaining balance due annually on or before 120 days prior to the first scheduled public event at each of the amphitheaters in each subsequent year from 2026 to 2030. The owners club membership fees are expected to begin amortization for the Regent Bank Amphitheater in Fall 2026, The Sunset McKinney in Q1 2027, and The Sunset Houston in Spring 2028, when these venues are currently projected to open, and continue in perpetuity for the lifetime of the amphitheater.

Operator Agreements

The Company contracted with a subsidiary of the Anschutz Entertainment Group, AEG Presents-Rocky Mountains, LLC (“AEG Presents”), a major music and entertainment events presenter, to operate Ford Amphitheater in Colorado Springs, Colorado, which opened in August 2024. Within the Company’s Amphitheater Operations, its pre-sells naming rights to its amphitheater(s) by partnering with industry-leading brands under naming-rights agreements. The Company generates net profits that are split with AEG Presents through: (i) ticket sales, fees and rebates on tickets for concerts and events held at Ford Amphitheater; (ii) parking fees; (iii) venue rentals, which may occur for a variety of corporate and personal events; (iv) food and beverage sold at the shows and events; and (v) sponsorship sales, which allow brands to advertise at the Company’s venue by showcasing their names and logos on a variety of sponsorship inventory curated for the venue and at each event the Company promotes and hosts, all of which are offset by operating expenses, artist expenses, supplies, security, utilities, insurance, overhead, etc. within the Company’s net amphitheater revenue recognition from AEG Presents. In May 2026 the Company and certain of its wholly owned subsidiaries restructured the form of their relationships and arrangements with AEG Presents. In that restructuring the respective parties entered into the following arrangements: (i) a Venue Lease Agreement between SunsetAmp, acting in its capacity as the “Landlord,” and Notes Live Foundation, a non-profit organization operating under the trade name Venu Arts & Culture Foundation (the “Foundation”) and SunsetOps, acting in their capacities as the “Tenants” thereunder; and (ii) a Lease Agreement between the Foundation and SunsetOps, acting in their capacities as the “Landlords,” and AEG Presents, acting in its capacity as the “Tenant” thereunder (such agreements, collectively, the “New Amphitheater Agreements”). Although the New Amphitheater Agreements restructured the form of the contractual relationships among the parties thereto, they substantially preserved the economic and operational terms of prior agreements related to the operation of the Ford Amphitheater. As of June 30, 2026 and December 31, 2025, the Company had a net receivable of $217,334 and $225,822, respectively. There was no allowance for credit losses as the Company believes any receivable balance is fully collectible or will be offset by operating expenses owed by the Company to AEG Presents.

On January 1, 2025, the Company entered into a Multi-Event Incentive Agreement with Live Nation Worldwide, Inc. (“Live Nation”) in connection with the Regent Bank Amphitheater being developed in Broken Arrow, Oklahoma. The agreement provides incentives to Live Nation to book and promote live music concerts, comedy events and other mutually approved entertainment events at the Regent Bank Amphitheater. The incentive payment is based on the number of tickets sold at each event during each contract year, which is based on a tiered chart with varying incentive payments per ticket sold depending on the range of total tickets sold per contract year. A bonus payment will be paid to Live Nation for one dollar for each ticket sold at each event where the gross revenue of ticket sales for an event equal to or is greater than specified thresholds. The incentive and bonus payments payable to Live Nation will begin when the first event is held at the Regent Bank Amphitheater, which is anticipated to open in Fall 2026.

On December 10, 2025, the Company entered into an Operator Agreement with Live Nation to lease the premises on which The Sunset McKinney amphitheater is being developed in McKinney, Texas. The agreement provides for a revenue-sharing arrangement whereby Live Nation will pay the Company a percentage of the net profits generated from Live Nation’s events at The Sunset McKinney, after deducting applicable event-related expenses and other costs and expenses chargeable to the parties’ co-promotion of events. The agreement also names Live Nation as the exclusive third-party booking agency for all events held at The Sunset McKinney. The agreement may be terminated without penalty if certain conditions are not satisfied or may otherwise be terminated upon an uncured event of default.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

NNN FireSuite Liability

The Company accounts for its NNN FireSuite transactions as financing arrangements rather than as sales of equity interests. Because the Company does not transfer control of the suites, no revenue or gain is recognized on the upfront cash proceeds. In substance, the buyer/lessor provides financing to the Company, with the Luxe FireSuite as collateral. Accordingly, at inception, the Company continues to carry the Luxe FireSuite assets on its Unaudited Condensed Consolidated Balance Sheets at their existing carrying amount and records the cash proceeds from the buyer/lessor as a long-term financing liability (reported as “NNN firesuite liability”). The Company does not derecognize any of its real estate or equipment as a result of these transactions, since they do not qualify as sales under the applicable accounting guidance. The monthly payments made by the Company under the leaseback are not recorded as rent expense. These payments represent interest and principal payments on the financing liability.

Leases

Operating and Finance Leases

The Company accounts for its leases in accordance with ASC 842, Leases (“ASC 842”). Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded in the Unaudited Condensed Consolidated Balance Sheets as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term, including any renewal options that are reasonably certain to be exercised, at the rate implicit in the lease. Lease liabilities are increased by the principal amount due and reduced by payments each period, and the right-of-use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. In calculating the right-of-use asset and lease liability, the Company elects to combine lease and non-lease components as permitted under ASC 842. The Company excludes short-term leases having initial terms of 12 months or less as an accounting policy election and expenses payments on these short-term leases as they are made.

Sale-Leaseback Arrangements

For sale-leaseback arrangements, the Company evaluates whether the arrangement qualifies as a sale and leaseback under ASC 842. If the arrangement qualifies as a sale, then the Company derecognizes the asset, recognizes any resulting gain or loss on the sale, and accounts for the lease based on its classification under ASC 842. If the arrangement does not qualify as a sale, the Company evaluates whether the transaction should be accounted for as a financing arrangement. In such cases, the asset is not derecognized and, accordingly, no gain or loss is recognized on the transfer. The net consideration received is recorded as a financing liability, measured based on the relative fair value allocation of proceeds using the present value of the fixed payments over the financing term, including any renewal options that are reasonably certain to be exercised, at the rate implicit in the lease. The Company allocates each lease payment between interest expense and a reduction of the financing liability using an imputed interest rate. The Company does not recognize lease expense or a right-of-use asset during the financing period, because the arrangement is accounted for as a financing transaction rather than a lease. The underlying asset remains on the Company’s balance sheet and the Company continues to evaluate the asset for impairment throughout the term of the financing arrangement.

Advertising Expenses

Advertising costs are expensed as incurred and included in operating expenses in the accompanying Unaudited Condensed Consolidated Statements of Operations. Total advertising expenses were $3,635,988 and $4,847,091 for the three and six months ended June 30, 2026 and $1,526,311 and $3,020,767 for the three and six months ended June 30, 2025, respectively.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Pre-Opening Expenses

Non-capital expenditures associated with opening a new restaurant, event center, or amphitheater are expensed as incurred. These costs consist of expenses incurred before the opening of a new location and include occupancy, labor, travel, training, food, beverage, marketing and other initial supplies and expenses. These costs are included in general and administrative expenses reported in our Unaudited Condensed Consolidated Statements of Operations.

Debt Issuance Costs

Debt issuance costs incurred in connection with the issuance of long-term debt are recorded as reductions of long-term debt and are amortized over the term of the related debt. Amortization of debt issuance costs were $281,540 and $383,008 for the three and six months ended June 30, 2026 and $1,248,449 and $1,890,061 for the three and six months ended June 30, 2025, respectively. These costs are included in interest expense in the accompanying Unaudited Condensed Consolidated Statements of Operations.

Equity Compensation

The Company recognizes equity compensation expense based on the fair value of the warrants or stock options at the time of the grant or issuance. Share-based compensation includes warrants and stock options issued to the Company’s employees. These may vest immediately, over a specified period, or upon the achievement of certain market performance conditions. The exercise price of a warrant or stock option is the fair value of the Company’s stock price on the grant date.

Equity Issuance Costs

Equity issuance costs represent amounts paid for legal, consulting, and other offering expenses in conjunction with the future raising of additional capital to be performed within one year. These costs are netted against additional paid-in capital as a cost of the stock issuance upon closing of the respective stock placement.

Stock Options and Warrants

The Company accounts for stock options and warrants as either equity-classified or liability-classified instruments based on an assessment of the stock options’ and warrant’s specific terms and applicable authoritative guidance. The assessment considers whether the stock options and warrants are freestanding financial instruments, meet the definition of a liability, and whether the warrants meet all the requirements for equity classification, including whether the stock options and warrants are indexed to the Company’s own stock and whether the stock options and warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of the stock option and warrant issuance and as of each subsequent balance sheet date while the warrants are outstanding. For issued or modified stock options and warrants that meet all of the criteria for equity classification, the stock options and warrants are required to be recorded as a component of stockholders’ equity at the time of issuance.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Equity Awards with Market Performance Conditions

The fair value and derived service period of performance-based awards granted with market performance conditions are estimated on the grant date using a Monte Carlo simulation model. A Monte Carlo simulation model requires inputs such as the risk-free interest rate, expected award term, and expected share price volatility. These inputs, which are subjective and generally require significant judgment, are unique to each award based on the best available information at the valuation date. For such awards, equity-based compensation is recognized straight-line over the derived service period, which is the median period over which each individual market performance milestone is achieved. Equity-based compensation expense will continue to be recognized over the expected achievement period for the market performance milestone as the service condition continues to be satisfied, unless the market performance milestone is achieved earlier than its expected achievement period, in which a cumulative expense adjustment would be recognized for the remaining portion of unrecognized equity-based compensation.

Sale of Subsidiary Class B and Class C Units

The Company accounts for the sale of Class B and Class C non-voting units through its subsidiary companies as permanent equity. Holders of Class B and Class C non-voting units are granted exclusive access to designated Luxe FireSuites at the Sunset Amphitheaters located in Broken Arrow, El Paso, McKinney, and Houston. Purchasers are required to pay either a cash deposit upfront or make a cash deposit under a 20-year financing arrangement.

Income Taxes

The Company is subject to federal and state income taxes. A proportional share of the Company’s subsidiaries’ provisions is included in the consolidated financial statements. Deferred income tax assets and liabilities are computed for differences between the asset and liability method and financial statement amounts that will result in taxable or deductible amounts in the future. The Company computes deferred balances based on enacted tax laws and applicable rates for the periods in which the differences are expected to affect taxable income.

A valuation allowance is recognized for deferred tax assets if it is more likely than not that some portion or all of the net deferred tax assets will not be realized. In making such a determination, all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and results of recent operations is considered. If the Company determines it will be able to realize the deferred tax assets for which a valuation allowance had been recorded, then it will adjust the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company evaluates the tax positions taken on income tax returns that remain open and positions expected to be taken on the current year tax returns to identify uncertain tax positions.

Unrecognized tax benefits on uncertain tax positions are recorded on the basis of a two-step process in which (1) an assessment is made as to whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the largest amount of tax benefit that is more than 50 percent likely to be realized is recognized. Interest and penalties related to unrecognized tax benefits are recorded in income tax benefit.

The Company is a C corporation, while the Company’s subsidiaries (except for Notes CS I, DST) are limited liability companies (“LLCs”) that have elected to be taxed as partnerships. As LLCs, management believes that these subsidiaries are not subject to income taxes, and such taxes are the responsibility of the respective members. The subsidiary LLCs are still in place, with the parent Company filing as a corporation.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Non-Controlling Interest and Variable Interest Entities

The non-controlling interest (“NCI”) represents capital contributions and distributions, income and loss attributable to the owners of less than wholly owned consolidated entities and are reported in equity. NCIs are evaluated by the Company and are shown as permanent equity. Net income (loss) attributable to NCIs reflects the portion of the net income (loss) of consolidated entities applicable to the NCI stockholders in the accompanying Unaudited Condensed Consolidated Statements of Operations. The net income (loss) attributable to NCIs is classified in the Unaudited Condensed Consolidated Statements of Operations as part of consolidated net income (loss) and deducted from total consolidated net income (loss) to arrive at the consolidated net income (loss) attributable to the Company. The Company has evaluated its investments in its consolidated entities in order to determine if they qualify as variable interest entities (“VIEs”).

The Company is the entity that holds the majority, and only, voting interests and is also the primary beneficiary of the VIEs. The Company monitors these investments and, to the extent it has determined that it owns a majority of the controlling class of securities of a particular entity, analyzes the entity for potential consolidation. The Company will continually analyze investments, including when there is a reconsideration event, to determine whether such investments are VIEs and whether such VIE should be consolidated. These analyses require considerable judgment in determining the primary beneficiary of a VIE and could result in the consolidation of an entity that would otherwise not have been consolidated or the non-consolidation of an entity that would have otherwise been consolidated.

The Company accounts for the change in its ownership interest while it retains its 100% controlling financial interest, as the Company owns 100% of the voting membership interest, in all of its majority-owned subsidiaries and VIEs as equity transactions. As such, the Company is the entity that holds the majority, and only, voting interests and is also the primary beneficiary of the VIEs. The VIEs meet or will meet the definition of a business once open for operations and each VIE’s assets can be used for purposes other than the settlement of the VIE’s obligations. The Company is the holder of controlling variable interests in its VIEs and is also the holder as the primary beneficiary of all of its VIEs. The VIEs exist for the Company’s operations and purposes. The Company is the sole manager of the legal entity and operating manager of the VIEs. The Company would provide support to the VIEs, including events that may expose the Company to the VIEs reporting losses. The Company directly controls each VIE’s financial position in terms of operations, construction, acquisition of real estate, financial performance and directs its cash flows. As the VIEs issue voting equity interests to the Company, the Company holds 100% voting interest and is also the primary beneficiary of each VIE.

The carrying value of the NCI should be adjusted to reflect the change in the Company’s ownership interest in the subsidiary, and differences between the fair value of the consideration received and the amount by which the NCI is adjusted should be recognized in equity attributable to the Company. This may be shown as NCI and as additional paid in capital to the Company when combined agree to the subsidiary issuance of shares as shown in the Unaudited Condensed Consolidated Statements of Change in Stockholders’ Equity. If a change in ownership of a consolidated subsidiary results in a loss of control or deconsolidation, any retained ownership interests are remeasured with the gain or loss reported to net earnings. These may be majority-owned subsidiaries or VIEs that the Company has 100% voting control of.

During 2025, the Company bought 5,100,000 membership units of SHC. This purchase transaction did not result in a change in control of SHC. In June 2026, the Company, through the Trust, redeemed 100% of the beneficial interests in the Trust, and the Trust ceased to have any third-party interest holders. This transaction did not result in a change in control of the Trust.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The following table shows the classification and carrying value of assets and liabilities of consolidated VIEs as of June 30, 2026:

SCHEDULE OF CARRYING VALUE OF ASSETS AND LIABILITIES OF CONSOLIDATED VARIABLE INTEREST ENTITIES  

The following table shows the classification and carrying value of assets and liabilities of consolidated VIEs as of December 31, 2025:

The following table is a summary of the Company’s non-controlling interests for the three and six months ended June 30, 2026 and 2025:

SCHEDULE OF NON CONTROLLING INTERESTS 

Revision of Non-Controlling Interest Presentation in Previously Issued Financial Statements

The Company revised the presentation of subsidiary issuance of shares, net of Venu contributions, to properly reflect the allocation between NCI and additional paid-in capital within consolidated equity. As a result, NCI increased and additional paid-in capital decreased by $20,864,007 in the Consolidated Statements of Changes in Stockholders’ Equity for the year ended December 31, 2025. This revision had no impact on total consolidated equity.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Segment Reporting

The Company considers our restaurant and event center operations as similar, in close proximity, and have aggregated them into a single reportable segment. Revenue from customers is derived principally from food and beverage services with a portion being served in conjunction with live entertainment. Our chief operating decision maker (the “CODM”) is the Chief Executive Officer. The CODM makes operating performance assessment and resource allocation decisions on a consolidated basis. The CODM does not receive discrete financial information about asset allocation, expense allocation or profitability by product or geography.

Recently Issued and Adopted Accounting Pronouncements

On December 14, 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 amends ASC 740, Income Taxes to expand income tax disclosures and requires that the Company disclose (i) the income tax rate reconciliation using both percentages and reporting currency amounts; (ii) specific categories within the income tax rate reconciliation; (iii) additional information for reconciling items that meet a quantitative threshold; (iv) the composition of state and local income taxes by jurisdiction; and (v) the amount of income taxes paid disaggregated by jurisdiction. The Company has elected to adopt this guidance prospectively beginning January 1, 2025.

On November 4, 2024, the FASB issued ASU No. 2024-03, Expense Disaggregation Disclosures (“ASU 2024-03”). ASU 2024-03 amends ASC 220, Comprehensive Income to expand income statement expense disclosures and require disclosure in the notes to the financial statements of specified information about certain costs and expenses. ASU 2024-03 is required to be adopted for fiscal years commencing after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of adopting the standard on its consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”), which allows the Company to elect a practical expedient for measuring expected credit losses on current accounts receivable and current contract assets arising from transactions accounted for as revenues from contracts with customers. This expedient allows the Company to assume that current economic conditions as of the balance sheet date do not change for the remaining life of the asset. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025 and interim periods within fiscal years beginning after December 15, 2026. As permitted, the Company has elected to early adopt the practical expedient as of December 31, 2025 and applied its provisions prospectively to the provision for uncollectable accounts. The adoption of ASU 2025-05 did not have a material impact on the consolidated results of operations, cash flows or financial condition of the Company.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities (“ASU No. 2025-10”), which establishes authoritative guidance for accounting for government grants received by business entities. Under the new guidance, a government grant is not recognized until it is probable that the Company will comply with the conditions attached to the grant and the grant will be received, and recognition guidance is met. A grant related to an asset is recognized on the balance sheet as the Company incurs the related costs for which the grant is intended to compensate. ASU No. 2025-10 is effective for annual reporting periods beginning after December 15, 2028, with early adoption permitted. Adoption of this ASU can be applied on a modified prospective approach, a modified retrospective approach, or a retrospective approach. The Company is currently evaluating the impact of adopting the standard on its consolidated financial statements.

Reclassifications for Presentation

Certain prior year amounts have been reclassified to conform to the current year presentation. In the Unaudited Condensed Consolidated Statements of Cash Flows included in the 2025 Annual Report, the Company reclassified $100,000 of equity-based compensation to equity issued for services. These reclassifications will be applied consistently in the Company’s upcoming quarterly and annual filings.