Convertible Debts, Net |
6 Months Ended | ||||||
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Jun. 30, 2026 | |||||||
| Convertible Debts, Net [Abstract] | |||||||
| CONVERTIBLE DEBTS, NET | NOTE 9 — CONVERTIBLE DEBTS, NET
In connection with the Merger Transaction, the Company assumed the liabilities of Triller Corp, which includes convertible notes issued to Total Formation Inc. (“TFI”), stockholder of the Company, with a total principal balance of approximately $35.3 million and fair value of approximately $46.3 million (the “TFI Note”) as of the Acquisition Date. The TFI Note bears 15% annual interest and payable on demand by TFI at any time on or after August 1, 2024. The Company may prepay any amount owed under the note in whole or in part at any time without penalty or premium, plus unpaid accrued interest as of the date of such repayment. In the event that the Company fails to pay any amount due under this note when due or if the Company commences any case, proceeding, or other action relating to bankruptcy, insolvency, or reorganization, these events will constitute an event of default. An event of default will result in TFI having the option, by written notice to the Company, to declare the entire principal amount, together with all accrued but unpaid interest, payable immediately. If any amount payable under this TFI Note is not paid when due, such overdue amount shall bear interest at the default rate of 16% from the date of such non-payment until such amount is paid in full.
As of June 30, 2026 and December 31, 2025, the TFI Note was reported at a fair value of approximately $59.7 million and $59.7 million, respectively, which is included in convertible debts under current liabilities in the unaudited condensed consolidated balance sheets. For the three and six months ended June 30, 2026 and 2025, there was change in fair value of convertible debts in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss.
As of the date of issuance of these unaudited condensed consolidated financial statements, the Company has not repaid the amount due and considered default of settlement.
On October 16, 2024, the Company issued an exchangeable note of approximately $5.4 million to Giant Wisdom Ventures Limited which bears interest at a fixed rate of 15% per annum and mature on January 16, 2025. The note is secured by a pledge of 5,000,000 shares of common stock of BKFC owned by the Company.
As of June 30, 2026 and December 31, 2025, the fair value of the note is approximately $7.0 million and $7.0 million, respectively. As of the date of issuance of these unaudited condensed consolidated financial statements, the Company has not repaid the amount due and considered default of settlement.
On April 25, 2024, the Company entered into an amended and restated standby equity purchase agreement (the “First A&R SEPA”) with YA II PN, LTD, a Cayman Islands exempt limited partnership (“Yorkville”), and Triller Corp.
In connection with the A&R SEPA, Yorkville agreed to an advance to the Triller Corp in the form of convertible promissory notes in a principal amount up to approximately $8.51 million (the “First Pre-Paid Advance”). The First Pre-Paid Advance amounted to 94.0% of the principal amount to be drawn down. Interest shall accrue on the outstanding balance at an annual rate of 5%, subject to an increase to 18% upon an event of default as described in the agreement. The maturity date is 12 months after its issuance date.
On June 28, 2024, the Company, Triller Corp and Yorkville entered into the Second A&R SEPA to modify the First A&R SEPA dated April 25, 2024. Pursuant to the Second A&R SEPA, Yorkville provides to the Company financing in the principal amount of $25 million (the “Second Pre-Paid Advance”) in the form of an additional convertible promissory note, subject to the same terms in interest charge and maturity under the First Pre-Paid Advance. The Second Pre-Paid Advance amounted to 94.0% of the principal amount to be drawn down.
Yorkville may convert the First Pre-Paid Advance and Second Pre-Paid Advance into the common shares at any time after the Merger at a fixed conversion price equal to (i) the principal amount and interests, divided by (ii) the determination of the lower of (a) 100% of the volume weighted average price (“VWAP”) during the trading days preceding the closing date of the Merger (the “Fixed Price”), or (b) 92.5% of the lowest daily VWAP during the 10 consecutive trading days immediately preceding the conversion date or other date of determination (the “Variable Price”), provided that the Variable Price shall not be lower than the Floor Price. The “Floor Price”, solely with respect to the Variable Price, shall be equal to (i) a price equal to 40% of the average of the VWAPs during the ten (10) trading days immediately preceding the closing date of the Merger, and (ii) from and after the date of effectiveness of the initial registration statement, 40% of the VWAP of the trading day immediately prior to the date of effectiveness of the initial registration statement, if such price is lower than the price in part (i) of this sentence.
On July 2, 2024, the Company received approximately $23.35 million, net of approximately $0.15 million legal and professional fee as direct issuance costs incurred in arranging the Second A&R SEPA, from Yorkville.
On June 20, 2025, Yorkville effected a foreclosure under the Triller Pledge Agreement. This action was undertaken by Yorkville following its allegations of various events of default by the Company under the terms of the Yorkville Convertible Promissory Note, dated June 28, 2024, and other related transaction documents, including the Second A&R SEPA. Yorkville had previously sought to accelerate payment of all amounts due under the Yorkville Convertible Promissory Note. Although the Company has not received a formal notice of foreclosure from Yorkville, the Company became aware through a transfer agent statement that 3,000,000 shares of common stock of BKFC, previously pledged by Triller Hold Co LLC as collateral, were transferred to Yorkville on June 20, 2025. These 3,000,000 shares represented a 17.66% ownership interest in BKFC as specifically pledged to Yorkville as of June 20, 2025. As a direct result of this transfer, the Company’s beneficial ownership in BKFC became 38.13%, based on BKFC’s total outstanding common shares. Following this change in ownership, the majority stockholders of BKFC approved amendments to BKFC’s certificate of incorporation and its Stockholders Agreement, which included the removal of the Company’s board designation rights. These amendments became effective on July 1, 2025.
As of June 30, 2026 and December 31, 2025, the Company issued convertible promissory notes in an aggregate of approximately $37.1 million and $36.3 million to Yorkville, respectively.
Common Warrants to Yorkville
Also, pursuant to the First A&R SEPA and Second A&R SEPA, the Company issued a warrant (the “Common Warrant”) to Yorkville to purchase up to a number of shares of common stock of the Company equal to 25% of the principal amount of the aggregated pre-paid advances divided by a price equal to the Fixed Price, each such Common Warrant with an exercise price equal to the Fixed Price. On June 28, 2024, the Company issued 1,431,561 common warrants to Yorkville at a fixed exercise price of $5.85 per share (see Note 10).
The Company analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815 and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to a variable conversion rate. The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own shares and is therefore not afforded equity treatment.
The Company recorded amortization of debt discount and direct issuance costs and accrued interest of convertible promissory notes payable in interest expense in the unaudited condensed consolidated statements of operations and comprehensive loss of approximately $0.4 million and $0.8 million for the three and six months ended June 30, 2026 and $1.4 million and $2.8 million for the three and six months ended June 30, 2025, respectively.
On November 26, 2024, Yorkville initiated litigation against Triller, Triller Corp., Triller Hold Co LLC, and Convoy Global Holdings Limited (“Defendants”) by filing a motion for summary judgment in lieu of a complaint pursuant to NY CPLR 3213 (the “Motion”), seeking a judgment finding Defendants liable for all amounts allegedly owed under the convertible promissory note, including interest, plus costs, legal fees, and expenses incurred by Yorkville (see Note 16). As of the date of issuance of these unaudited condensed consolidated financial statements, the Company has not repaid the amount due and considered default of settlement. |