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

NOTE 12 – STOCKHOLDERS’ EQUITY

 

Preferred Stock

 

The Amended and Restated Charter authorizes the issuance of 8,500,000 shares of preferred stock, 7,500,000 shares of which have been designated as Series C Redeemable Convertible Preferred Stock (“Series C Preferred Stock”), and 1,000,000 shares of which will be undesignated (see Note 11 – Mezzanine Equity).

 

The Series C Preferred Stock has the following rights:

 

  I. Ranking. The Series C Preferred Stock will rank senior to the IAC common stock and other classes of IAC preferred stock with respect to rights upon liquidation, winding up or dissolution.
     
  II. Voting. Each share of Series C Preferred Stock shall entitle the holder to one vote on all matters submitted to the vote of IAC’s shareholders;

 

 

  III. Dividends. The Series C Preferred Stock shall be treated pari passu with the IAC common stock except that the dividends per share payable on the Series C Preferred Stock shall equal the dividend per share declared on each share of IAC common stock multiplied by $10.00 (the “Face Value”) and divided by the applicable Conversion Price (as defined below). “Conversion Price” means a price per share equal to the lesser of either the Face Value, or (a) if no Trigger Event (as defined below) has occurred, 100% of the average of the 5 lowest closing bid prices of the IAC common stock during the 10 days preceding the conversion notice date (the “Measurement Period”), not to exceed 100% of the lowest sales price on the last day of the Measurement Period, or (b) following any Trigger Event, 50.0% of the average of the lowest closing bid prices of the common stock during the Measurement Period, not to exceed 50.0% of the lowest sales price on the last day of such Measurement Period. “Trigger Event” generally means (a) a failure of a holder of Series C Preferred Stock to receive conversion shares when required or any agreement between IAC and the Series C Preferred Stockholder that is either (x) related to the payment of cash or delivery of conversion shares, or (y) curable, has not occurred before, and is not cured within 5 trading days of notice; (c) IAC’s suspension from trading or delisting from its principal trading exchange or market; (d) notification of an intention for IAC or its transfer agent not to comply with a conversion notice; (e) IAC’s bankruptcy, insolvency, reorganization, liquidation or similar proceedings; (f) the appointment of a custodian, receiver or similar official for IAC; (g) the entry of judgments against IAC in excess of $500,000 which are not stayed or satisfied within 30 days of entry; (h) IAC’s failure to comply with reporting requirements of Securities Exchange Act; (i) the initiation of any regulatory, administrative or enforcement proceeding against IAC; or (j) any material provision of the designation of the Series C Preferred Stock ceases to be valid or is contested.

 

  IV. Liquidation. Upon any liquidation, dissolution or winding up of IAC, holders of Series C Preferred Stock shall be paid the Face Value per share, plus any accrued but unpaid dividends (the “Liquidation Value”).
     
  V. Redemption. IAC shall be obligated to pay holders the Liquidation Value to redeem the Series C Preferred Stock upon the occurrence of a Deemed Liquidation Event (as defined below) or Trigger Event (as defined below). “Deemed Liquidation Event” generally means (a) a merger or consolidation where IAC or a subsidiary is a party to the merger and IAC issues shares of stock (except for domicile mergers and mergers not constituting a change of control); (b) IAC issues convertible or equity securities that senior to the Series C Preferred Stock in any respect; (c) a holder does not receive conversion shares upon conversion of the Series C Preferred Stock within 5 trading days due to the occurrence of an event that is solely within the control of IAC; (d) trading of the common stock is halted or suspended for 10 or more consecutive trading days due to the occurrence of an event that is solely within the control of IAC; or (e) a sale or other disposition of substantially all the assets of IAC that is not approved by the holders of the Series C Preferred Stock.
     
  VI. Conversion. Shares of Series C Preferred Stock are not convertible until 18 months following Closing of the Business Combination so long as a Trigger Event has not occurred. Beginning 18 months following Closing of the Business Combination, or following the occurrence of a Trigger Event, shares of Series C Preferred Stock are convertible at election of the holder at the then-applicable Conversion Price.

 

Common Stock

 

Class A Common Stock -The Company is authorized to issue 228,500,000 shares of Class A common stock with a par value of $0.0001 per share. As of June 30, 2026 and December 31, 2025, there were 4,993,091 and 1,064,255 shares of Class A common stock issued and outstanding, respectively.

 

The Company enacted a reverse stock split of the Company’s issued and outstanding shares of common stock, par value $0.0001 per share (the “Common Stock”), at a ratio of 1-for-40 (the “Reverse Stock Split”). The Reverse Stock Split became effective on June 15, 2026 (the “Effective Date”). All share amounts have been retroactively adjusted.

 

On January 5, 2025, the Company issued 66 shares of Class A common stock to each of the four non-employee directors for the quarterly issuance set out in the director agreements. These shares were valued as of the closing price of the Company’s common stock on January 5, 2025 at $108 per share. The Company recognized $28,425 in stock-based compensation expense.

 

 

On January 5, 2025, the Company issued 275 shares of Class A common stock to two individuals for services rendered as a bonus for their diligence and efforts with the merger. These shares were valued of the closing price of the Company’s common stock on January 5, 2025 at $108 per share. The Company recognized $29,700 in stock-based compensation expense.

 

On April 28, 2025, the Company issued 31,250 shares of Class A common stock to Streeterville Capital, LLC as a financing incentive in association with the note amendment entered into by the lender and the Company. These shares were valued as of the closing price of the Company’s common stock at $46 per share. Streeterville Capital, LLC paid $125 for these shares and the Company recognized $1,437,375 as a debt discount against the convertible note and will amortize the discount over the remaining life of the convertible note. On August 5, 2025, these shares were repurchased by the Company for $125 and immediately cancelled.

 

On April 29, 2025, the Company issued 392 shares of Class A common stock to each of the four non-employee directors for the quarterly issuance set out in the director agreements. These shares were valued as of the closing price of the Company’s common stock on April 29, 2025 at $48.80 per share. The Company recognized $76,567 in stock-based compensation expense.

 

On April 29, 2025, the Company issued 982 shares of Class A common stock to the Company’s Chief Revenue Officer, Thomas Gallagher, in consideration of his $62,500 quarterly fee pursuant to his employment agreement. These shares were valued as of the closing price of the Company’s common stock on April 29, 2025 at $48.80 per share. The Company recognized $47,905 in stock-based compensation expense.

 

On May 27, 2025, the Company entered into an exchange agreement (the “Exchange Agreement”) with four family trusts of the Company’s CEO, William Alessi, pursuant to which the trusts would exchange an aggregate of 3,200,000 shares of Series C Preferred Stock (800,000 shares held in the name of The WRA 2023 Irrevocable Trust, 800,000 shares held in the name of The Janet Alessi 2023 Irrevocable Trust, 800,000 shares held in the name of The Isabella Alessi 2023 Irrevocable Trust, and 800,000 shares held in the name of The Kim Alessi Richter Irrevocable Trust, all of which are deemed to be beneficially owned by Mr. Alessi as Mr. Alessi’s spouse is the trustee of each of the trusts) for an aggregate of 651,997 shares of Class A common stock (with each of the trusts being issued 162,999 shares of common stock). In the Exchange Agreement, each of the trusts agreed not to sell or otherwise transfer the shares of common stock to be received in the exchange until June 13, 2026 (except for permitted transfers to an affiliate). On or about June 30, 2025, the trusts’ preferred shares were cancelled, and 651,997 shares of Class A common stock were issued to the trusts. These shares carrying value was $30,638,517, which was moved from mezzanine equity to shareholders’ equity.

 

On May 29, 2025, the Company issued 15,340 shares of Class A common stock to Streeterville Capital, LLC pursuant to its partial conversion of the Note issued by the Company to Streeterville Capital, LLC on or about December 13, 2024, described above. The lender converted $767,000 in principal and accrued interest.

 

On June 11, 2025, the Company issued 2,500 shares of Class A common stock to Streeterville Capital, LLC pursuant to its partial conversion of the Note issued by the Company to Streeterville Capital, LLC on or about December 13, 2024, described above. The lender converted $125,000 in principal and accrued interest.

 

On July 1, 2025, the Company issued 528 shares of Class A common stock to each of the four non-employee directors for the quarterly issuance set out in the director agreements. These shares were valued as of the closing price of the Company’s common stock on July 1, 2025 at $46.40 per share. The Company recognized $97,964 in stock-based compensation expense.

 

On July 10, 2025, the Company issued 3,250 shares of Class A common stock to Streeterville Capital, LLC pursuant to its partial conversion of the Note issued by the Company to Streeterville Capital, LLC on or about December 13, 2024, described above. The lender converted $162,500 in principal and accrued interest.

 

On July 16, 2025, the Company issued 3,000 shares of Class A common stock to Streeterville Capital, LLC pursuant to its partial conversion of the Note issued by the Company to Streeterville Capital, LLC on or about December 13, 2024, described above. The lender converted $150,000 in principal and accrued interest.

 

 

On July 17, 2025, the Company issued 1,321 shares of Class A common stock to the Company’s Chief Revenue Officer, Thomas Gallagher, in consideration of his $62,500 quarterly fee pursuant to his employment agreement. These shares were valued as of the closing price of the Company’s common stock on July 17, 2025 at $51.60 per share. The Company recognized $68,153 in stock-based compensation expense.

 

On July 17, 2025, the Company issued 650 shares of Class A common stock to two individuals for services rendered to the Company. These shares were valued of the closing price of the Company’s common stock on July 17, 2025 at $51.60 per share. The Company recognized $33,540 in stock-based compensation expense.

 

On July 17, 2025, the Company issued 3,450 shares of Class A common stock to a noteholder for $16,042 in accrued interest. These shares were valued as of the closing price of the Company’s common stock on July 17, 2025 at $51.60 per share for a total of $178,020. The Company recognized a loss of settlement of debt of $161,978.

 

On July 23, 2025, the Company issued 50,910 shares of Class A common stock to Streeterville Capital, LLC pursuant to its partial conversion of the Note issued by the Company to Streeterville Capital, LLC on or about December 13, 2024, described above. The lender converted $2,545,500 in principal and accrued interest.

 

On September 30, 2025, the Company issued 523 shares of Class A common stock to each of the four non-employee directors for the quarterly issuance set out in the director agreements. These shares were valued as of the closing price of the Company’s common stock on September 30, 2025 at $47.60 per share. The Company recognized $99,503 in stock-based compensation expense.

 

On September 30, 2025, the Company issued 1,307 shares of Class A common stock to the Company’s Chief Revenue Officer, Thomas Gallagher, in consideration of his $62,500 quarterly fee pursuant to his employment agreement. These shares were valued as of the closing price of the Company’s common stock on September 30, 2025 at $47.60 per share. The Company recognized $62,187 in stock-based compensation expense.

 

On September 30, 2025, the Company issued 379 shares of Class A common stock to the Company’s Chief Financial Officer, Rodney Sperry, in consideration of his $18,000 quarterly fee pursuant to his employment agreement. These shares were valued as of the closing price of the Company’s common stock on September 30, 2025 at $47.60 per share. The Company recognized $18,000 in stock-based compensation expense.

 

On December 31, 2025, the Company issued 1,146 shares of Class A common stock to each of the four non-employee directors for the quarterly issuance set out in the director agreements. These shares were valued as of the closing price of the Company’s common stock on December 31, 2025 at $18.40 per share. The Company recognized $84,322 in stock-based compensation expense.

 

On December 31, 2025, the Company issued 2,864 shares of Class A common stock to the Company’s Chief Revenue Officer, Thomas Gallagher, in consideration of his $62,500 quarterly fee pursuant to his employment agreement. These shares were valued as of the closing price of the Company’s common stock on December 31, 2025 at $18.40 per share. The Company recognized $52,701 in stock-based compensation expense.

 

On December 31, 2025, the Company issued 978 shares of Class A common stock to the Company’s Chief Financial Officer, Rodney Sperry, in consideration of his $18,000 quarterly fee pursuant to his employment agreement. These shares were valued as of the closing price of the Company’s common stock on December 31, 2025 at $18.40 per share. The Company recognized $18,000 in stock-based compensation expense.

 

On December 31, 2025, the Company issued 2,994 shares of Class A common stock to the Company’s VP of Technology, Puneet Vij, in consideration of his $56,250 quarterly fee pursuant to his employment agreement. These shares were valued as of the closing price of the Company’s common stock on December 31, 2025 at $18.40 per share. The Company recognized $55,098 in stock-based compensation expense.

 

On October 24, 2025, the Company entered into consulting agreements with Rucus Holdings LLC (“Rucus”) and Leron Group LLC (“Leron”), pursuant to which Rucus and Leron would provide marketing and sales services to the Company in connection with the rollout of the Company’s financial services kiosks with a major US retailer, and the Company would issue Rucus 6,250 shares of Class A common stock, and the Company would issue Leron 100,000 shares of Class A common stock. Such shares were issued to Rucus and Leron on January 20, 2026. These shares were valued at $32.20 on January 20, 2026 for a total value of $3,420,825. The Company recognized stock compensation expense of $2,640,802. As of June 30, 2026, there is $780,023 of stock compensation included in prepaid expenses.

 

 

On January 16, 2026, the Form S-3 filed with the SEC by the Company was declared effective. The Company made an agreement with HC Wainwright & Co., LLC to sell stock under the “At the Market” plan setforth in the Form S-3. During the six months ended June 30, 2026, the Company issued 160,262 shares of Class A common stock for $2,991,650 in cash. Selling costs of these shares amounted to $117,499 and the Company received $2,874,151 in cash.

 

On January 20, 2026, the Company issued 10,000 shares of Class A common stock to Maxim Partners, LLC for the conversion of $368,750 on accounts payable. These shares were valued at $32.20 on January 20, 2026 for a total value of $321,960. The Company recognized a gain on settlement of debt of $46,790.

 

On February 20, 2026, the Company issued 19,419 shares of Class A common stock to Loeb & Loeb, LLP pursuant to its conversion of the Note issued by the Company to Loeb & Loeb, LLP on December 13, 2024. The lender converted $325,000 of principal. These shares were valued at $19.76 on February 20, 2026 for a total value of $383,719. The Company recognized a loss on settlement of debt of $58,719.

 

On February 27, 2026, the Company issued 3,646 shares of Class A common stock to two individuals for services rendered as a bonus for their diligence and efforts for the Company. These shares were valued at $20.06 on February 27, 2026 for a total value of $73,128. The Company recognized stock compensation expense of $73,128.

 

On February 27, 2026, the Company issued 2,375 shares of Class A common stock to two individuals pursuant to two consulting agreements. These shares were valued at $20.06 on February 27, 2026 for a total value of $47,633. The Company recognized stock compensation expense of $47,633.

 

On March 31, 2026, the Company issued 1,719 shares of Class A common stock to each of the four non-employee directors for the quarterly issuance set out in the director agreements. These shares were valued as of the closing price of the Company’s common stock on March 31, 2026 at $14.71 per share. The Company recognized $101,143 in stock-based compensation expense.

 

On March 31, 2026, the Company issued 4,298 shares of Class A common stock to the Company’s Chief Revenue Officer, Thomas Gallagher, in consideration of his $62,500 quarterly fee pursuant to his employment agreement. These shares were valued as of the closing price of the Company’s common stock on March 31, 2026 at $14.71 per share. The Company recognized $63,213 in stock-based compensation expense.

 

On March 31, 2026, the Company issued 1,224 shares of Class A common stock to the Company’s Chief Financial Officer, Rodney Sperry, in consideration of his $18,000 quarterly fee pursuant to his employment agreement. These shares were valued as of the closing price of the Company’s common stock on March 31, 2026 at $14.71 per share. The Company recognized $18,000 in stock-based compensation expense.

 

On March 31, 2026, the Company issued 3,868 shares of Class A common stock to the Company’s VP of Technology, Puneet Vij, in consideration of his $56,250 quarterly fee pursuant to his employment agreement. These shares were valued as of the closing price of the Company’s common stock on March 31, 2026 at $14.71 per share. The Company recognized $56,892 in stock-based compensation expense.

 

On June 29, 2026, the Company entered into a subscription agreement with Streeterville Capital, LLC (“Streeterville”), in which Streeterville agreed to purchase 450,000 shares of Class A common stock for $45. The Company recognized an addition to the discount associated with this pre-paid purchase agreement of $222,546 and recorded this directly against additional paid-in capital.

 

On June 30, 2026, the Company issued 5,974 shares of Class A common stock to each of the four non-employee directors for the quarterly issuance set out in the director agreements. These shares were valued as of the closing price of the Company’s common stock on June 30, 2026 at $4.26 per share. The Company recognized $101,143 in stock-based compensation expense.

 

 

On June 30, 2026, the Company issued 14,935 shares of Class A common stock to the Company’s Chief Revenue Officer, Thomas Gallagher, in consideration of his $62,500 quarterly fee pursuant to his employment agreement. These shares were valued as of the closing price of the Company’s common stock on June 30, 2026 at $4.26 per share. The Company recognized $63,213 in stock-based compensation expense.

 

On June 30, 2026, the Company issued 13,441 shares of Class A common stock to the Company’s VP of Technology, Puneet Vij, in consideration of his $56,250 quarterly fee pursuant to his employment agreement. These shares were valued as of the closing price of the Company’s common stock on June 30, 2026 at $4.26 per share. The Company recognized $56,892 in stock-based compensation expense.

 

On June 30, 2026, the Company issued 4,226 shares of Class A common stock to the Company’s Chief Financial Officer, Rodney Sperry, in consideration of his $18,000 quarterly fee pursuant to his employment agreement. These shares were valued as of the closing price of the Company’s common stock on June 30, 2026 at $4.26 per share. The Company recognized $18,000 in stock-based compensation expense.

 

Class B Common Stock - The Company is authorized to issue 20,000,000 shares of Class B common stock with a par value of $0.0001 per share. As of June 30, 2026 and December 31, 2025, there were zero shares of Class B common stock issued and outstanding.

 

Common stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Holders of Class B common stock and holders of Class A common stock will vote together as a single class, except as required by applicable law or stock exchange rule.

 

Warrants

 

On October 16, 2025, the Company issued warrants to purchase 9,091 shares of Class A Common Stock of the Company at $44 per share in connection with a convertible note payable (see Note 4). These warrants expire on October 15, 2030. The Company valued these warrants at $297,151 using a binomial model and recorded this amount as in increase in additional paid-in capital. The binomial valuation model was based on the following assumptions: (1) expected volatility of 93.23%, (2) weighted average risk-free interest rate of 3.55% and (3) expected life of 5.00 years.

 

On October 31, 2025, the Company issued warrants to purchase 25,000 shares of Class A Common Stock of the Company at $40.00 per share in connection with a convertible note payable (see Note 4). These warrants expire on October 30, 2030. The Company valued these warrants at $250,000 using a binomial model and recorded this amount as in increase in additional paid-in capital. The binomial valuation model was based on the following assumptions: (1) expected volatility of 92.98%, (2) weighted average risk-free interest rate of 3.71% and (3) expected life of 5.00 years.

 

As of June 30, 2026 and December 31, 2025, the Company had 34,091 warrants issued and outstanding.