Stockholders’ Equity |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholders’ Equity | Stockholders’ Equity Common Stock On January 22, 2026, the Company issued 2,000,000 shares of its common stock to Robinpaws LLC pursuant to an asset purchase agreement originally entered into in December 2023, in connection with the acquisition of certain operating assets related to a proprietary funding and call center platform. The issuance was approved by the Company’s Board of Directors, the shares were issued as restricted securities, and the consideration for the issuance was deemed fully paid and non-assessable based on the agreed acquisition value set forth in the underlying asset purchase agreement. During the six months ended June 30, 2026, the Company issued shares of restricted common stock in a private placement at a purchase price of $3.00 per share, raising aggregate gross proceeds of $1.98 million through subscriptions received during May and June 2026. The shares were recorded at par value of $0.0001 per share, with the balance recorded to additional paid-in capital. Additional subscriptions of $50 thousand were received in July 2026. On June 30, 2026, the Company issued 1,372,811 shares of restricted common stock to two exiting EB-5 investors in exchange for their Class B Preferred Units in Block 40, LLC, valued at $1.04 million in the aggregate and exchanged at $0.76 per share. The issuance was authorized by written consent of the Board of Directors effective as of June 30, 2026 and executed on July 7, 2026. See Note 17, Redeemable Nonparticipating Noncontrolling Interest and Nonparticipating Noncontrolling Interest. Series A Preferred Stock As of June 30, 2026 and December 31, 2025, the Company was authorized to issue 71,250,000 shares of Series A Preferred Stock, all of which were issued and outstanding. The following is a description of the material rights of the Company’s Series A Preferred Stock: Voting - The holders of Series A Preferred Stock vote together with the holders of common stock and any other class or series of stock entitled to vote thereon as a single class on an as-converted basis. Dividend - Each holder is entitled to receive an annual dividend of six percent (6%) of the Stated Value times the number of Preferred Shares held by such holder payable on a quarterly basis beginning at the end of the Company’s fiscal quarter following the original issue date. Dividends on the Preferred Shares are payable, at the Company’s option, in (a) cash or (b) shares of the Company’s common stock, or a combination thereof. Liquidation Preference – Each holder receives, before Junior Stock (which includes Common Stock and Series C Preferred Stock), an amount per preferred share equal to what they would receive if they converted to Common Stock immediately prior to the liquidation payment Conversion Rights - After twenty-four months, each share of Series A Preferred Stock may be converted into shares of common stock, the number of which is determined according to the following formula, subject to adjustments for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events. Each Series A Preferred Stock converts at a “Conversion Rate” equal to Conversion Amount / Conversion Price. In connection with any conversion, each holder of Series A Preferred Stock is subject to a beneficial ownership limitation of 9.99% of our outstanding common stock. Redemption - The Company may, in its sole discretion, elect to redeem all or a portion of the outstanding Preferred Shares at the Redemption Amount. The “Redemption Amount” equals the Stated Value. If the Company does not redeem all of the outstanding Preferred Shares, but instead opts for a partial redemption, it must be done in at least $250 increments, and for every $250 redeemed, the Company will issue to the holder a warrant to purchase 1,000 shares of the Company’s common stock at an exercise price of $0.25 per share. Series B Preferred Stock On August 25, 2025, the Board of Directors and shareholders of the Company approved the creation of Series B Preferred Stock. Also on August 25, 2025, the Company entered into a Conversion Agreement with Forfront, LLC, an affiliate of the Company, for it to convert 10,000,000 shares of Series A Preferred Stock into 10,000,000 shares of the newly created Series B Preferred Stock. The conversion was treated as preferred stock extinguishment where the fair value of Series B preferred stock was recognized and the carrying value of Series A Preferred Stock was derecognized with the difference of $700 treated as a deemed dividend recorded in accumulated deficit. Finally, on August 25, 2025, the Company entered into a Voting Agreement with Forfront, LLC, the sole holder of the Series B Preferred Stock, in which Forfront agreed to vote its shares of Series B Preferred Stock in accordance with the direction of a majority vote of the Company’s three founders, which includes Vincent Napolitano, Shaun Quin and Glen Steward, with the Company’s President receiving an irrevocable proxy to vote the shares. The term of the irrevocable proxy under the Voting Agreement terminates upon the earlier of (i) a period of (15) years from August 25, 2025, with the ability to extend; (ii) mutual written agreement of the parties to terminate the Voting Agreement; (iii) when there are no shares of Series B Preferred Stock outstanding; or (iv) the dissolution or liquidation of the Company. The conversion to Series B Preferred Stock and the Voting Agreement are part of a strategic initiative to streamline the Company’s capital structure, enhance governance control during a critical phase involving corporate rebranding, and align leadership with long-term objectives without diluting economic interests of non-affiliate shareholders. The Board determined this related-party transaction to be fair under Nevada law and ratified it by majority voting power. The following is a description of the material rights of the Company’s Series B preferred stock: Voting - The Series B Preferred Stock shall vote on any matter that may from time to time be submitted to the Company’s shareholders for a vote, on a 50-for-one basis. Conversion - The Series B Preferred Stock shall be convertible, at the option of the holder thereof, at any time after five years from the date of issuance of such share, at the office of the Company or any transfer agent for such stock, into such number of fully paid and non-assessable shares of common stock on a one-to-one basis. Dividend - The holders of shares of Series B Preferred Stock shall not be entitled to receive any dividends. Liquidation Preference - The Series B Preferred Stock shall not have any value in the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary. Series C Preferred Stock On May 9, 2025, pursuant to Certificate of Designation for the Series C Preferred Stock, 18,750,000 Series C Preferred Stocks were converted into 18,750,000 shares of common stock at par value $0.0001 of Stewards, Inc. On August 25, 2025, the Company filed a withdrawal to the Certificate of Designation, as amended, for the Series C Preferred Stock. Common Warrants and Prefunded Warrants On September 9, 2024, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain purchasers (the “Purchasers”) for the sale of the Company’s securities and, in connection therewith, entered into a registration rights agreement with the Purchasers. In an initial closing on December 12, 2024 (the “Initial Closing”), the Company issued 8,000,000 common units (the “Common Units”). Each Common Unit consisted of (i) one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), (ii) one common warrant to purchase one share of Common Stock (the “Common Warrant”), and (iii) one pre-funded warrant to purchase 3/200th of a share of Common Stock (the “Pre-funded Warrant”). The Common Units were sold at a purchase price of $0.25 per share of Common Stock. Gross proceeds from the Initial Closing were approximately $2.0 million, before placement agent fees and expenses and other offering costs of $208 thousand. These proceeds have been allocated between the Common Stock, Common Warrant and Pre-funded Warrant issued as part of the offerings. In a second closing on August 14, 2025 (the “Second Closing”), the Company issued 1,750,000 Common Units on substantially the same terms as the Initial Closing. The Common Units were sold at a purchase price of $0.25 per share of Common Stock. The Common Warrants have a five-year term and an exercise price of $0.40 per share, and the Pre-funded Warrants have an exercise price of $0.0001 per share. Gross proceeds from the Second Closing were approximately $438 thousand, before placement agent fees and expenses and other offering costs of $51 thousand. These proceeds have been allocated between the Common Stock, Common Warrant and Pre-funded Warrant issued as part of the offerings. On June 4, 2025, the Company issued 487,500 shares of common stock and common warrants to the Purchasers in connection with an amendment to the registration rights agreement. The fair value of the instruments issued was $329 thousand, which the Company recognized as expense during the year ended December 31, 2025. On December 12, 2025, the Company issued an additional 146,250 Pre-Funded Warrants as a delay payment in accordance with the Registration Rights Agreement with the investors. The Common Warrants have an exercise price of $0.40 per share and are exercisable from the date of issuance for a term of five years. As of December 31, 2025, there were 10,237,500 Common Warrants outstanding. The Pre-Funded Warrants have a nominal exercise price of $0.0001 per warrant share and are exercisable such that one-sixth (1/6) of the warrant shares becomes exercisable on or after the date that is six months from the issuance date, with an additional one-sixth (1/6) becoming exercisable each month thereafter. The warrants remain exercisable during this exercise period until the earlier of (i) the warrants being exercised in full or (ii) the Company’s common stock being uplisted, which earlier event serves as the termination date after which the warrants are no longer exercisable. As of June 30, 2026 and December 31, 2025 there were 10,237,500 Common Warrants and 292,500 Pre-Funded Warrants outstanding, respectively, with no warrant issuances, exercises or expirations during the six months ended June 30, 2026. Both the Common Warrants and Prefunded Warrants are equity-classified. The fair values at issuance date were determined using Black-Scholes model, based on the following assumptions at the time of issuance:
Restricted Stock Units On May 8, 2026 (the “Grant Date”), the Company granted an aggregate of 135,000 restricted stock units (“RSUs”) under its 2024 Incentive Plan to its three non-employee directors (45,000 RSUs to each director). Each RSU entitles the holder to receive one share of the Company’s common stock upon vesting. The RSUs cliff-vest 100% on the first anniversary of the Grant Date (May 8, 2027), subject to the director’s continued service on the Board of Directors through that date. These RSUs were the only share-based payment awards granted, outstanding, or modified during the six months ended June 30, 2026. The Compensation Committee of the Board of Directors determined the grant-date fair value of the RSUs to be $3.00 per share, resulting in an aggregate grant-date fair value of $405 thousand. Because the Company’s common stock is thinly traded, quoted market prices were determined not to be a reliable indicator of fair value. Accordingly, the Company measured the awards using the pending acquisition price of $3.00 per share, which management and the Compensation Committee determined to be the most reliable indicator of the fair value of the Company’s common stock at the Grant Date. The Company recognizes stock-based compensation expense on a straight-line basis over the one-year requisite service period. For each of the three and six months ended June 30, 2026, the Company recognized $59 thousand of stock-based compensation expense related to these RSUs, which is included in general and administrative expenses in the condensed consolidated statements of operations. As of June 30, 2026, there was $346 thousand of unrecognized stock-based compensation cost related to these unvested RSUs, which the Company expects to recognize over a weighted-average remaining period of approximately 0.85 years. The Company accounts for forfeitures of share-based awards as they occur. The following table summarizes RSU activity for the six months ended June 30, 2026:
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