Discontinued Operations

6 Months Ended

Jun. 30, 2026

Discontinued Operations [Abstract]

Discontinued Operations

Note 6 — Discontinued Operations

Background and Classification

On February 17, 2026, the Company completed the Merger with Flash. As a result, the Company’s revenue-generating operations are now conducted principally through Flash and IPG in the sports, media, and experiential marketing industry.

During the year ended December 31, 2025, the Company (i) disposed of its Services segment (comprising 2WR of Georgia, Inc., the 2WR of Colorado customer list, 2WR of Mississippi assets, and UG Engineering) pursuant to a Stock and Asset Purchase Agreement consummated on August 27, 2025, which was classified as discontinued operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025; (ii) experienced the loss of substantially all operating assets of UG Construction, Inc. d/b/a Emerald Construction Management, Inc. (“UG Construction”) to Gemini Finance Corp. in an Article 9 foreclosure on September 4, 2025, following the Company’s default under the UG Construction line of credit; and (iii) terminated its equipment sales force during the third quarter of 2025.

During the year ended December 31, 2025, the Company’s legacy Equipment Systems and Construction Design-Build operations (collectively, the “Legacy CEA Operations”) were retained in continuing operations. At that time, management had not made a definitive, irrevocable decision to permanently exit those operations; the Company preserved the option to pursue alternative strategic transactions, including an alternative capital raise and a potential restart of construction operations, if the Merger did not close.

Upon the closing of the Merger on February 17, 2026, each of the conditions that supported continuing-operations treatment of the Legacy CEA Operations at December 31, 2025 was resolved. The Board of Directors confirmed that the Company will not continue the Legacy CEA Operations and authorized the orderly wind-down of residual matters relating thereto. Accordingly, the Company has classified the Legacy CEA Operations as a single disposal group and has presented the Legacy CEA Operations as discontinued operations in the accompanying unaudited condensed consolidated financial statements commencing with the quarterly period ended June 30, 2026, in accordance with ASC 205-20, Presentation of Financial Statements — Discontinued Operations.

The classification of the Legacy CEA Operations as discontinued operations represents a strategic shift that has, and will have, a major effect on the Company’s operations and financial results. Comparative prior-period amounts have been reclassified to conform to the current-period presentation, in accordance with ASC 205-20-45-3.

Components of Loss from Discontinued Operations

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2026				2025				2026				2025
Revenues
Equipment		$	-			$	3,128,746			$	-			$	7,827,323
Services			-				1,099,378				-				2,748,476
Construction design-build			-				3,512,650				-				6,634,948
Other			-				25,328				-				69,430
Total revenues			-				7,766,102				-				17,280,177
Cost of revenue
Equipment			-				2,995,183				-				7,339,790
Services			-				1,060,162				-				2,111,308
Construction design-build			-				3,646,334				-				7,120,721
Other			-				19,680				-				53,593
Total cost of revenue			-				7,721,359				-				16,625,412
Gross profit			-				44,743				-				654,765
Operating expenses:
General and administrative			-				5,805,180				1,136,063				9,703,782
Depreciation and amortization			-				147,587				-				315,281
Business development			-				47,950				-				47,950
Total operating expenses			-				6,000,717				1,136,063				10,067,013

Loss from discontinued operations			-				(5,955,974	)			(1,136,063	)			(9,412,248	)

Non-operating income (expense):
Interest expense			-				(260,590	)			(276,427	)			(715,214	)
Interest income			-				201				-				469
Gain on extinguishment of debt			-				7,476				-				7,476
Gain on settlement			-				-				402,554				-
Other income (expense)			-				4,743				57,815				485,754
Total non-operating income (expense)			-				(248,170	)			183,942				(221,515	)

Loss before income taxes			-				(6,204,144	)			(952,121	)			(9,633,763	)
Income tax benefit			-				-				-				14,608
Net loss from discontinued operations, net of tax		$	-			$	(6,204,144	)		$	(952,121	)		$	(9,619,155	)

Net loss per share from discontinued operations-basic and diluted		$	-			$	(10.64	)		$	(0.20	)		$	(16.59	)
Weighted average common shares outstanding - basic and diluted			8,763,066				583,352				4,768,135				579,962

Assets and Liabilities of Discontinued Operations

		June 30,				December 31,
		2026				2025

Prepayments and other assets		$	207,708			$	-
Total current assets of discontinued operations		$	207,708			$	-

Accounts payable		$	17,405,856			$	17,337,858
Contract liabilities			13,457,357				13,457,357
Accrued expenses			5,158,048				5,157,679
Customer deposits			2,735,167				2,740,640
Notes payable, current			937,979				3,533,255
Operating lease liabilities, current			-				17,978
Total current liabilities of discontinued operations		$	39,694,407			$	42,244,767

As a result of the foreclosure of UG Construction assets on September 4, 2025, the write-off of substantially all other Legacy CEA assets during 2025, and the continued wind-down during the six months ended June 30, 2026, the residual assets of the disposal group are de minimis. Residual liabilities reflect directly attributable obligations of the Legacy CEA Operations that have not yet been settled, paid, or otherwise extinguished.